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May 15, 2002

IMO legal panel ducks "transparency" issue
People who own ships but don't want that fact publicly known can breathe a sigh of relief. IMO's Legal Committee has concluded that, for maritime security purposes, the central or fundamental question in matters relating to ownership and control of vessels is who has effective operational control of the ship. It believes it has identified a number of ways in which this can be determined.

After an extensive discussion about the definition of the terms "ownership" and "control" of ships in the context of detecting or deterring unlawful acts involving the use of a ship, the panel concluded that answers to the following three questions would be relevant:

  1. Who appoints the crew?
  2. Who fixes the use of the ship?
  3. Who signs the charterparty on behalf of the owner?

Getting answers to these questions falls a long way short of having anything like true "transparency" of ownership.

The legal panel came up with its three questions after a request from an IMO working group. The legal panel's recommendation is now being considered by IMO's Maritime Safety Committee (MSC), which is meeting this month.

During the Legal Committee's discussions, there was general support for an approach which focused on practical information that could be used to identify the person who was in effective operational control of the ship. One delegation said the focus should be on the practical information which might be made available to a port state by the ship or the ship's agent prior to port entry, rather than on the more complex issues relating to beneficial ownership.

Another said that the most pertinent and complete information relating to ship-board security or the use of the vessel may be obtained by identifying the managers or operators of a vessel, possibly with particular reference to an individual designated as responsible for ship-board security, along lines similar to the ISM Code.

The committee also noted article 6(2) of the UNCTAD Convention on Ship Registration of 1986. That article provides that, "The State of Registration will take such measures as are necessary to ensure that the owner or owners, the operator or operators, or any other person or persons who can be held accountable for the management and operation of ships flying its flag can easily be identified by persons having a legitimate interest in obtaining such information."

In its recommendations to the MSC, the panel noted that information required to be documented under the ISM Code is pertinent to the identification process because it involves identification of the person responsible for operation of the ship. The committee noted the broad definition of the term "company" as used in the ISM Code, as well as the provisions on company responsibilities and authority in section 3 of that Code. The committee thought that these and other provisions of the ISM Code could be used as a model for guidelines focused on maritime security.

The committee further noted that certain relevant information - notably that related to the ISM Code, was routinely made available to the flag state, and this information might be provided by means of cooperation between the port state and the flag state.

Review of SUA Convention and Protocol

The Legal Committee has also started to consider possible amendments to the Convention for the Suppression of Unlawful Acts against the Safety of Navigation, 1988 and its Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms Located on the Continental Shelf, 1988 (the SUA Convention and Protocol).

It agreed to establish a Correspondence Group with the short-term aim of developing a working paper on the scope of possible amendments for consideration at the next session of theLegal Committee. The longer term aim would be a recommendation to the 23rd session of the IMO Assembly to convene a conference to consider amendments to these instruments.

Wreck removal

The Legal Committee considered the revised text of a draft wreck removal convention drawn up by the Netherlands. The committee agreed to address some fundamental issues such as the definitions of "wreck" and "hazard", the "convention area", the "State whose interests are most directly threatened by the wreck" and issues concerning liability, compensation and financial security. There was general agreement that the definition of "hazard" should include a reference to damage to the marine environment.

There was general acceptance that the future wreck removal convention should include provisions on liability and compensation. There was also considerable support for including provisions on financial security.

Draft protocol to amend the 1992 Fund Convention

The Committee approved the draft text of a protocol to amend the 1992 Convention on the establishment of an International Fund for Compensation for Oil pollution Damage. The protocol had been drawn up by an intersessional working group established by the 1992 IOPC Fund Assembly in April 2000. If adopted, the protocol would establish an optional supplementary Fund open to States Parties to the 1992 Fund Convention to pay compensation for claims exceeding the limits established in the 1992 CLC and 1992 Fund Convention, which were thought by some to be too low.

The draft protocol had been approved by the 1992 IOPC Fund Assembly. However, before it could be adopted by a diplomatic conference, it was necessary for the Legal Committee to approve the text. In view of the fact that the draft protocol had been extensively discussed by the 1992 Fund Members, the Committee felt that it was not necessary to discuss it article by article. It was noted that the diplomatic conference would decide on the issues in the text that were still unresolved including limits of compensation and entry into force criteria. The Committee approved the draft text and concluded that the draft protocol was ready for submission to a diplomatic conference and that it had good prospects both for adoption by the conference and subsequent implementation by States.

The Committee adopted the proposal by one delegation to amend the title of the draft protocol to read "Draft protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992".

Places of Refuge

After hearing from the Secretariat that no legal barriers had been identified to the development by IMO of guidelines on this subject, the Committee recognized that the principal challenge was to find the proper balance between the duty of States to render assistance to ships in distress and the right of States to regulate entry into their ports and to protect their coastlines from pollution or the threat of pollution.

Several delegations noted that there was no specific reference to places of refuge in international conventions, including UNCLOS, and no specific obligation on coastal states to provide places of refuge to a ship in distress. Many delegations said the paramount consideration had to be the safety of persons in distress at sea.

Most delegations supported the development of guidelines on places of refuge to assist masters and coastal States. It was agreed there was no obstacle in international law to the development of such guidelines provided they respected the principles of international law including those relating to the balance of interests between the ship in distress and the coastal State. It was also agreed that such guidelines must be voluntary in nature, and sufficiently flexible to take into account the wide variety of circumstances that might arise. The guidelines should allow for case-by-case analysis and application. In this regard, although the view was expressed that pre-designation of places of refuge might be useful, several delegations said they did not believe that pre-designation of places of refuge was appropriate. Such places could only be determined case by case.

Some delegations noted that the issue of displacing or transferring or "exporting" the problems posed by a ship in distress from one State to another by refusing entry also had to be addressed.The committee discussed a number of other issues related to the issue of places of refuge, including the liability and compensation aspects and the decision-making process. The committee was updated on the work being carried out by IMO's navigation subcommittee on operational guidelines on places of refuge and it was suggested that the MSC might be invited to provide the draft guidelines, once developed, to the Legal Committee for a final review of the legal aspects.

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