Norway prepares for ratification of the Nairobi Wreck Removal Convention

Wikborg Rein law office in Oslo has noted that the Norwegian Parliament recently decided that Norway would be ratifying the Nairobi Wreck Removal Convention. The Convention will be given effect not only in Norway’s exclusive economic zone, but also in its territorial waters. The Norwegian Parliament also adopted legislation to implement the Wreck Removal Convention into Norwegian law once ratified.

The legislation, which was adopted in December 2018, will introduce a dual system where the national rules on wreck removal will continue to be in effect and the Convention rules will be introduced as a parallel set of rules.

Under the dual system the relevant authorities can on a case-by-case basis choose whether wreck removal should be ordered on the basis of the Convention, as incorporated in the Norwegian Maritime Code, or on the basis of the current national legislation found in the Norwegian Harbour and Waterways Act and the Pollution Act.

Wikborg Rein observed that there were a number of differences between the existing national legislation and the Convention. Although the provisions are all based on strict liability, the Convention channels liability solely to the registered owner of the vessel, whereas the national legislation has a broader definition of the liable party.

Furthermore, under the Convention, the threshold for ordering a wreck removal on the basis of environmental concerns is that the wreck “may reasonably be expected to result in major harmful consequences to the marine environment, or damage to the coastline or related interests” of one or more states. The threshold in the Pollution Act lower; it is sufficient that the wreck “may” cause “damage or inconvenience” to the environment.

A third difference is that a reimbursement claim under the Convention becomes time-barred three years after a hazard has been determined in accordance with the Convention. The Pollution Act has a five year deadline from the date when a final administrative decision on reimbursement has been made. Wikborg Rein said that it remained to be seen how these differences would play out in practice.

Ratification of the Convention will establish an obligation on the part of the owner to take out insurance against wreck removal liability and will create an automatic right for the authorities to claim directly against the vessel’s insurer for reimbursement of wreck removal costs.

This requires that the costs have in fact been incurred by the claimant, and the insurers can rely on the owner’s right to limit liability under the applicable global limitation of liability rules.

No automatic right of direct action exists under the current legislation, so claims are likely to be based on the Convention, provided the stricter requirements under the Convention are met.

Wikborg Rein said that it was important to note that the duty to remove a wreck could not be enforced against the insurers; “their liability is of a financial indemnity nature only”.

The entry into force of the newly adopted legislation is awaiting the adoption of various regulations, related to practicalities concerning mandatory insurance certificates. For the same reason the formal ratification of the Convention has not yet taken place. Wikborg Rein said that it understood that ratification of the Convention could be expected in the near future.