HNS Convention (Hazardous and Noxious Substances Liability Convention) Legal Regulations
Interlink編集部What is the HNS Convention?
The HNS Convention (Hazardous and Noxious Substances Liability and Compensation Convention) is an international treaty that establishes a system of liability and compensation for damages caused by accidents involving hazardous and noxious substances (HNS) during maritime transport.
The official title is the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea. It sets up a compensation framework for incidents involving chemicals, liquefied gases, certain oils, hazardous liquid bulk cargoes, hazardous containerized cargoes, and hazardous solid bulk cargoes that result in fire, explosion, pollution, personal injury, property damage, or preventive measures costs.
A key feature of the HNS Convention is that it does not handle claims solely through the contractual relationship between shipper and carrier as with regular cargo incidents. Instead, it combines shipowner liability with compensation from the HNS Fund to address large-scale third-party damages. Because not only cargo owners but also coastal residents, port facilities, other vessels, fisheries, stevedores, crew members, and environmental stakeholders may become victims, this system is intended to cover accidents beyond the scope of individual B/L clauses or marine cargo insurance.
Scope Covered in This Article
| Scope | Explanation in This Article | Practical Contact Points |
|---|---|---|
| Basic Structure of the HNS Convention | Explains the two-tier compensation system involving shipowner liability and the HNS Fund. | Shipping companies, P&I insurers, insurance practitioners |
| Applicable Substances | Clarifies HNS applicability based on the IMDG Code, IBC Code, IGC Code, MARPOL-related regulations, IMSBC Code, etc. | Shippers, SDS issuers, hazardous materials personnel, shipping companies |
| Applicable Damages | Describes personal injury, third-party property damage, environmental pollution, preventive measures costs, and more. | Shipowners, P&I insurers, authorities, surveyors |
| Exclusions and Differentiation from Other Systems | Clarifies relationships with the CLC Convention, Bunker Oil Convention, Athens Convention, marine cargo insurance, and P&I insurance. | Insurance companies, P&I clubs, lawyers, shipping companies |
| Practical Handling of Consignees and Contributing Cargo | Explains contributions to the HNS Fund, reporting of received quantities, and consignee-side management systems. | Consignees, importers, chemical companies, liquefied gas handling operators |
| Points of Attention for Freight Forwarders and NVOCCs | Summarizes key check points for hazardous cargo declarations, SDS, DGD, B/L, and information communication to shipping companies. | Freight forwarders, NVOCCs, shippers, shipping companies |
Purpose and Background of the System
The HNS Convention was created against the backdrop that accidents involving hazardous and noxious substances in maritime transport have the potential to cause large-scale third-party damages far beyond typical cargo losses. Incidents involving chemicals, liquefied gases, hazardous liquids, and hazardous containers may simultaneously result in fire, explosion, toxic leaks, marine pollution, port shutdowns, fisheries damage, and harm to coastal areas.
In normal cargo incidents, marine cargo insurance, B/L clauses, carrier liability limits, and P&I insurance usually form the basis of compensation. However, HNS accidents may affect victims beyond the cargo owners. Third parties with no contractual relationship — including port facilities, other vessels, crew members, stevedores, coastal residents, government agencies, and environmental restoration parties — may suffer damages that individual contracts cannot adequately cover.
Therefore, the HNS Convention establishes strict liability and compulsory insurance obligations on shipowners, coupled with additional compensation via the HNS Fund, to ensure victim protection and international compensation stability.
Status of Entry into Force
Adopted in 1996, the HNS Convention did not enter into force initially. Later, in 2010, a protocol was adopted to address practical issues that hindered its enforcement. The 2010 Protocol amends the 1996 Convention to resolve problems related to cargo reporting and fund administration that prevented activation.
Once the 2010 Protocol enters into force, the 1996 Convention will operate as amended, known as the 2010 HNS Convention. After enforcement, shipowner compulsory insurance, contributions to the HNS Fund, reporting of contributing cargo volumes, and accuracy of hazardous cargo declarations will become critical in actual logistics practice.
As of 2026, the 2010 HNS Convention is near the final stage towards enforcement, with an anticipated entry date of November 29, 2027. However, in practical terms, continuous monitoring of each country’s domestic implementation laws, reporting systems, certification schemes, and insurance practices remains necessary.
Main Situations Where the System Applies
| Situation | Potential Accident | Relevant Damages | Practical Check Points |
|---|---|---|---|
| Accidents Involving Liquefied Gas Carriers | Leakage, fire, explosion of LNG, LPG, etc. | Personal injury, port facility damage, evacuation costs, preventive costs | Cargo classification, shipowner insurance, consignees, contributing cargo management |
| Chemical Tanker Leakages | Marine spill of hazardous liquid substances | Environmental pollution, fishery losses, port shutdowns, cleanup costs | IBC Code, MARPOL classification, P&I insurance, authority notification |
| Fires Involving Hazardous Containers | Ignition, explosion, and fire spread of IMDG cargoes | Damage to adjacent cargo, hull damage, crew injuries, port damage | DGD, SDS, UN number, B/L cargo description, stowage information |
| Accidents Involving Hazardous Solid Bulk Cargo | Spontaneous heating, chemical reactions, gas generation | Ship damage, personal injury, voyage disruption, removal costs | IMSBC Code, cargo properties, loading conditions, declaration contents |
| HNS Accidents During Port Cargo Handling | Leakages, container damages, fires during cargo handling | Stevedore damages, port facility damage, operational downtime losses | Liability determination, insurance notification, authority response, survey |
| Cargo with Unclear HNS Applicability | Accidents involving chemicals declared as general cargo | Claims, errors in entrustment decisions, insurance disputes | SDS, UN number, transport mode, shipping company confirmation |
Applicable HNS Substances
HNS substances under the HNS Convention do not simply mean all materials commonly referred to as "dangerous goods." The substances covered are organized based on international classifications of dangerous and hazardous substances such as the IMDG Code, IBC Code, IGC Code, MARPOL-related regulations, and IMSBC Code.
Typically, this includes certain oils, hazardous liquid substances, liquefied gases, liquids with low flash points, substances transported as dangerous goods packaged or in containers, and chemically hazardous solid bulk cargoes. When determining HNS applicability, it is necessary to check not only the product name but also the UN number, IMDG classification, SDS, mode of transport, whether the cargo is packaged or bulk, and its relationship with the oil pollution regime.
Application Requirements & Exclusions
| Category | Concept of Application / Exclusion | Documents to Confirm | Points to Note |
|---|---|---|---|
| Applicable Cargo | Maritime transport of dangerous and hazardous substances that meet the HNS definition under the Convention | SDS, UN number, IMDG Code, IBC Code, IGC Code, IMSBC Code | Do not rely solely on product names; confirm based on transport classification. |
| Applicable Damages | Personal injury, property damage outside the ship, environmental pollution, costs of preventive measures | Accident reports, Survey Reports, official records, insurance notifications | This scheme does not cover damage to the cargo itself only. |
| Shipowner Liability | The shipowner is liable under the Convention up to the liability limit for HNS incidents | Vessel information, insurance certificates, P&I insurance details | Compulsory insurance or financial guarantees are critical. |
| HNS Fund Compensation | The Fund provides additional compensation if damages exceed the shipowner’s liability limit | Damage amount, liability limits, fund scheme, receipt quantity reports | The total compensation limit is 250 million SDRs per incident. |
| Separation from Oil Pollution Regime | Oil pollution damages covered mainly by the CLC Convention and IOPC Funds are handled under separate regimes | Cargo type, details of oil pollution damage, applicable conventions | Decisions are made while avoiding overlap between the HNS and oil pollution regimes. |
| Damage from Ship Fuel Oil | Damage caused by bunker fuel oil may fall under the Bunker Oil Convention | Type of fuel oil, vessel details, cause of damage | Distinguish whether it concerns HNS cargo or ship fuel oil. |
| Passengers & Baggage | Passenger death/injury or baggage issues may be governed by separate regimes such as the Athens Convention | Passenger contracts, cause of accident, damage details | Even in HNS incidents, systems are separated by damage type. |
Two-Tier Compensation System
The HNS Convention’s compensation system has a two-tier structure where shipowner liability is the first tier and HNS Fund compensation is the second. In the first tier, the shipowner bears strict liability and is responsible for compensation up to the liability limit set by the Convention for damages caused by HNS incidents. The shipowner must maintain compulsory insurance or financial guarantees covering vessels transporting HNS cargo.
In the second tier, the HNS Fund provides additional compensation if the damages exceed the shipowner’s liability limit or if adequate compensation cannot be secured from the shipowner. This two-tier system ensures that victims can receive compensation within a certain scope even in large-scale accidents where shipowner liability alone is insufficient.
Shipowner Liability Limits and HNS Fund Caps
The HNS Convention defines shipowner liability limits based on accident types. For damage caused by bulk HNS, the shipowner’s liability limit is up to 100 million SDRs. For damage caused by packaged HNS or damage involving both bulk and packaged HNS, the limit is up to 115 million SDRs.
Damages exceeding the shipowner liability limits are covered under the second-tier compensation provided by the HNS Fund. The total compensation limit including the HNS Fund is 250 million SDRs per incident. These liability limits are key practical components for P&I insurance, compulsory insurance certificates, and risk assessments by shippers and consignees regarding the HNS Convention.
What is the HNS Fund?
The HNS Fund is a compensation fund that provides additional compensation when shipowner liability is insufficient. The Fund is financed through contributions from those receiving HNS cargo. These contributions are designed to ensure the necessary compensation funds are secured after an incident occurs.
The HNS Fund structure includes a general account as well as special accounts for oil, LNG, LPG, and other cargo types. This structure helps prevent unreasonable cost shifting between different types of HNS cargo. Companies importing or receiving large volumes of HNS cargo must focus on understanding receipt amounts, reporting, and establishing internal management systems after the Convention enters into force.
Comparison with Other Regimes
| System | Main Target | Focus of Compensation / Insurance | Difference from HNS Convention | Practical Confirmation Points |
|---|---|---|---|---|
| HNS Convention | Maritime transport accidents involving hazardous and noxious substances | Shipowner liability, compulsory insurance, HNS Fund | Widely covers fire, explosion, personal injury, third party property damage, and environmental damage. | HNS applicability, SDS, DGD, B/L, receipt volume report |
| CLC Convention & IOPC Funds | Tankers’ oil pollution damage | Shipowner liability, oil pollution compensation funds | Focuses on oil pollution damage and does not cover general HNS. | Type of oil, oil pollution damage, applicable conventions, fund compensation |
| Bunker Oil Convention | Pollution damage caused by ship fuel oil | Shipowner liability, compulsory insurance | Deals with damage caused by ship fuel oil, not HNS as cargo. | Fuel oil or cargo status, cause of damage, marine insurance |
| Athens Convention | Passenger death/injury and passenger baggage | Passenger carrier liability, insurance | Targets different incidents than third party damage from HNS cargo accidents. | Passenger contracts, passenger damages, cause of accident |
| Cargo Insurance | Damage to the shipper’s own cargo | Cargo insurance companies | The HNS Convention is not a cargo insurance system for shippers, but a compensation scheme including third party damages. | Insurance terms, deductibles, general average, salvage costs, subrogation |
| P&I Insurance | Shipowner’s third party liability | P&I Clubs, shipowner insurance | Practically supports shipowner liability and compulsory insurance under the HNS Convention. | Insurance certificates, notifications, liability limits, accident response |
Relationship with Dangerous Goods Declarations
In actual logistics practice under the HNS Convention, the accuracy of dangerous goods declarations is extremely important. Whether cargo qualifies as HNS is confirmed based on SDS, UN numbers, IMDG Code, IBC Code, IGC Code, IMSBC Code, and similar. If the shipper fails to correctly declare dangerous goods information, the shipping company, freight forwarder, port authorities, and shipowners cannot properly perform stowage, segregation, firefighting, or emergency response.
Failure to declare or misdeclaration of dangerous goods could lead to claims against the shipper in case of an incident, subrogation claims from insurance companies, or damage claims from shipping companies. After the HNS Convention comes into effect, the accuracy of dangerous goods declarations becomes important not only as a shipping operational matter but also in relation to the international compensation framework.
Relationship with B/L and Shipping Documents
When transporting HNS cargo, transport documents such as the B/L and Sea Waybill must accurately reflect cargo information. If cargo is classified as general cargo despite being dangerous goods, it affects the shipping company’s and forwarder’s acceptance decision, stowage judgment, and insurance underwriting.
It is necessary to verify consistency among cargo name, UN number, Class, Packing Group, quantity, and container/packing form with the SDS and dangerous goods declaration. Ambiguous cargo descriptions on the B/L could become a point of dispute over cargo hazards or declaration contents after an accident. Therefore, for HNS cargo, confirming consistency among B/L, DGD, SDS, invoice, and packing list is crucial.
Scope of Freight Forwarder / NVOCC Involvement
| Stage of Involvement | Role of Freight Forwarder / NVOCC | Documents to Watch | Response if Issues Arise |
|---|---|---|---|
| Before Booking | Check whether the cargo might be dangerous goods or fall under HNS. | SDS, product description, UN number, dangerous goods info | Request additional materials from the shipper and confirm acceptance with shipping company. |
| Upon Receipt of Dangerous Goods Declaration | Verify consistency between DGD, SDS, and cargo information. | DGD, SDS, IMDG classification, Packing Group | Submit corrected documents to the shipping company if inconsistencies exist. |
| When Issuing House B/L | Ensure seamless transmission of information from shipper to actual carrier. | House B/L, Master B/L, Shipping Instructions | Correct any discrepancies in cargo name, quantity, or dangerous goods information. |
| When Declaring to Shipping Company | Accurately transmit dangerous goods information received from the shipper to the shipping company. | Shipping company designated forms, DGD, Booking Confirmation | Obtain shipping company’s confirmation of dangerous goods acceptance. |
| When Incident Occurs | Organize documents, declaration history, communication records, and notify stakeholders. | B/L, DGD, SDS, email records, insurance certificates | Promptly notify shipper, shipping company, insurance company, and surveyor. |
| Post-Enforcement Management | Establish a practical system to grasp cargo information related to the HNS scheme. | Consignee information, cargo classification, receipt volume data | Confirm with consignee/importer whether they are a contributing party. |
Relationship with Cargo Insurance
The HNS Convention is a compensation system for third party damages and major accidents, and its role differs from the shipper’s cargo insurance. Cargo insurance typically covers physical damage to the shipper’s own cargo. In contrast, the HNS Convention is an international compensation scheme covering personal injury, third party property damage, environmental damage, prevention costs, and others resulting from HNS incidents.
Therefore, the presence of the HNS Convention does not mean the shipper can forgo cargo insurance. Shippers of HNS cargo should verify insurance program designs separately for their own cargo damage, general average, salvage costs, delays, additional expenses, claims from third parties, and subrogation risks.
Relationship with P&I Insurance
Under the HNS Convention, shipowner liability and compulsory insurance are key. In actual logistics practice, P&I insurance is the main coverage supporting shipowners’ HNS liabilities. P&I insurance covers shipowners’ third party liability, pollution liability, personal injury, damage to port facilities, removal costs, and related items.
After the HNS Convention is enforced, shipping companies transporting HNS cargo will be required to provide insurance certificates under the convention. Freight forwarders and shippers are not necessarily in a position to individually verify P&I insurance certificates, but in major HNS accidents, the relationship between P&I insurance and the HNS Fund becomes central to accident response.
System Application Flow
- Check whether the cargo may be classified as dangerous goods or hazardous substances.
- Review classification documents such as SDS, UN numbers, IMDG Code, IBC Code, IGC Code, IMSBC Code, etc.
- Clarify whether the cargo is packaged goods, containerized, liquid bulk, liquefied gas, or solid bulk.
- Verify if the cargo potentially falls under substances covered by the HNS Convention.
- Check if damages from the incident fall under personal injury, third-party property damage, environmental damage, or preventive costs.
- Delineate between other schemes such as oil pollution compensation systems, the Bunker Oil Convention, the Athens Convention, cargo insurance, and P&I insurance.
- Confirm first-level compensation possibilities under shipowner liability, compulsory insurance, and P&I insurance.
- If liability limits are exceeded or adequate compensation is not available, check the second-level compensation under the HNS Fund.
- Confirm whether the consignee must report receipt volumes and has contribution obligations for HNS cargoes.
- Organize roles of shippers, consignees, shipping lines, freight forwarders, NVOCCs, insurers, and authorities, and manage incident response and documentation accordingly.
Typical Problematic Cases
| Case | Key Issues | Documents to Check | Practical Response |
|---|---|---|---|
| Container carrying dangerous goods caught fire onboard | Issues involve dangerous goods declarations, stowage, segregation, B/L cargo descriptions, and shipper declaration responsibilities. | SDS, DGD, B/L, Booking Confirmation, Shipping Line acceptance confirmation | Organize declared information and communication history with the shipping line, then notify the insurer. |
| Chemicals were declared as general cargo | Issues include HNS applicability, shipper’s breach of declaration obligations, and freight forwarder’s verification shortcomings. | SDS, UN numbers, product descriptions, Shipping Instructions | Request supporting documents from the shipper and report factual details to the shipping line and insurer. |
| Hazardous liquid leaked from a chemical tanker | Environmental damage, port closures, fisheries damage, clean-up costs, and P&I insurance issues arise. | IBC Code classification, cargo details, incident report, official records | Check shipowner liability and HNS Fund compensation possibilities. |
| Explosion occurred on a liquefied gas carrier | Personal injury, damage to port facilities, evacuation costs, and liability limits are key concerns. | IGC Code related documents, shipowner insurance certificates, P&I information, cargo details | Confirm the relationship between shipowner’s compulsory insurance and HNS Fund compensation. |
| Consignee does not manage HNS contribution cargoes | Post-enforcement receipt reporting, contribution obligations, and internal management systems are problematic. | Import records, receipt data, cargo classification, accounting documents | Grasp receipt volumes of relevant cargoes and establish reporting systems per domestic implementing laws. |
| Oil pollution and HNS damages are mixed | Issues arise in distinguishing claims under the CLC Convention, IOPC Funds, HNS Convention, and Bunker Oil Convention. | Cargo types, fuel oil information, cause of damage, incident investigation materials | Separate damage causes and applicable schemes, and verify with insurers and specialists. |
| B/L cargo description is vague and does not match SDS | After the incident, disputes arise over cargo hazards, declaration contents, and acceptance judgment. | B/L, SDS, invoice, packing list, DGD | Cross-check descriptions, quantities, and classifications among documents and correct as needed. |
Four-Column Decision Checklist
| Verification Stage | Party to Check With | Items to Confirm | Actions if Problems Arise |
|---|---|---|---|
| Before Cargo Acceptance | Shipper | Whether the cargo may be dangerous goods or hazardous substances | Request submission of SDS, UN numbers, and dangerous goods classification documents. |
| At Dangerous Goods Declaration | Shipper / Dangerous Goods Responsible Person | Consistency among DGD, SDS, IMDG classification, and Packing Group | If inconsistencies exist, correct them before submitting to the shipping line. |
| At Shipping Line Booking | Shipping Line | Acceptance of dangerous goods, stowage conditions, required documentation | If acceptance is denied or conditional, consider alternative shipping lines or routes. |
| At B/L Issuance | Shipper, NVOCC, Shipping Line | B/L cargo description, quantity, dangerous goods info, consistency with DGD | Correct vague descriptions or incorrectly classified general cargo entries. |
| When Incident Occurs | Shipping Line, Insurer, Surveyor | Cause of incident, damage scope, HNS applicability, notification recipients | Prioritize human safety, notify authorities, inform insurers, and preserve evidence. |
| When Confirming Compensation Schemes | P&I Insurers, Lawyers, Insurance Practitioners | Shipowner liability, compulsory insurance, HNS Fund, distinction from other schemes | Organize applicable schemes by damage category. |
| When Managing Receipt Volumes | Consignee / Importer | Receipt volumes of HNS contribution cargoes, reporting obligations, internal controls | Establish reporting and management systems based on domestic implementing legislation. |
Documents to be Checked
| Document | Items to Confirm | Points of Caution |
|---|---|---|
| SDS | Hazardous properties, substance information, handling precautions, emergency response information | Old SDSs or SDSs without transport classification may not provide sufficient information for judgment. |
| Dangerous Goods Declaration | UN number, Class, Packing Group, Proper Shipping Name | Check consistency with SDS, B/L, and invoice. |
| B/L or Sea Waybill | Cargo name, quantity, shipper, consignee, transport route | Confirm the description is not vague as for general cargo. |
| Invoice and Packing List | Commercial product name, quantity, packaging type, weight | If the product name differs from DGD or SDS, it could become a point of dispute after an incident. |
| Booking Confirmation | Carrier's acceptance conditions, confirmation of dangerous goods acceptance | Confirm whether the carrier has accepted the shipment as dangerous goods. |
| Cargo Insurance Policy | Coverage for shipper's cargo damage, general average, salvage costs | Since its role differs from the HNS Convention, separate confirmation is necessary. |
| P&I Insurance Related Information | Shipowner liability, compulsory insurance, third-party liability | It plays a central role in responding to large-scale HNS incidents. |
| Receipt Volume Management Documents | Received volume of HNS cargo, recipient, cargo classification | Related to post-enforcement reporting and contribution obligations. |
Common Misunderstandings
| Misunderstanding | Correct Understanding | Practical Notes |
|---|---|---|
| The HNS Convention applies only to dangerous goods containers | It also covers packaged dangerous goods, liquid bulk, liquefied gases, and solid bulk cargo, among others. | Check the IMDG Code, IBC Code, IGC Code, IMSBC Code according to transport mode. |
| If the HNS Convention exists, cargo insurance is unnecessary | The HNS Convention is a compensation system including third-party damages, separate from cargo insurance for the shipper’s goods. | Confirm coverage of own cargo damage, general average, and salvage costs via cargo insurance. |
| Freight forwarders are unrelated to the HNS Convention | Even if not a contributor, they are involved in dangerous goods declarations and document consistency. | Verify SDS, DGD, B/L, and communication with the carrier. |
| The HNS applicability can be judged based solely on product name | Product name alone is insufficient; UN number, SDS, transport classification, and mode need to be checked. | If product names are vague, request classification basis from the shipper. |
| All oil-related incidents are handled under the HNS Convention | Other systems such as the CLC Convention, IOPC Funds, and Bunker Oil Convention may also be relevant. | Distinguish whether the oil is cargo or fuel, and if it falls under oil pollution compensation schemes. |
| The HNS Fund always provides compensation from the start | First, shipowner liability and compulsory insurance apply; if insufficient, the HNS Fund is involved as a second stage. | Check shipowner liability limits, compulsory insurance, and damages amount. |
| No preparation is needed because enforcement is not yet effective | Post-enforcement, reporting received volumes, compulsory insurance, and document checks become operational issues. | Companies handling HNS cargo should organize cargo classification and volume management before enforcement. |
Example 1: Explosion and Personal Injury in an Accident on an LPG/LNG Carrier
An accident involving an LPG or LNG carrier may cause explosion or fire damage to port facilities, crew members, stevedores, and coastal areas. In such cases, the first point is to confirm whether the cargo qualifies as substances covered by the HNS Convention, whether the accident stems from the nature of HNS cargo, and whether damages correspond to personal injury, third-party property damage, or preventive measures costs.
Next, check the possibility of first-stage compensation via the shipowner's compulsory insurance or P&I insurance. If damages exceed the shipowner liability limits, the second-stage compensation by the HNS Fund becomes relevant. Shippers and consignees must verify cargo classification, receipt volume management, and contribution cargo applicability.
Example 2: Dangerous Goods Declaration Issues Raised after Fire in a Chemical Container
A chemical container fire on board may damage surrounding containers and the ship’s structure. In such cases, the initial concern is whether the cargo was properly declared according to the IMDG Code, whether SDS and DGD contents matched, and whether the product names on the B/L were appropriate.
If the dangerous goods declaration was inaccurate, the carrier may claim improper stowage or segregation caused the incident’s escalation. This could lead to recourse claims or accountability issues directed at the shipper, freight forwarder, or NVOCC. It is necessary to verify whether the shipper submitted accurate SDS and dangerous goods declarations and whether the forwarder properly transmitted dangerous goods information to the carrier, by reviewing documents and communication records.
Example 3: Coastal Damage Caused by Leakage of Bulk Chemical Cargo
If a chemical tanker incident causes the spill of hazardous liquid substances into the sea, damage may occur to coastal facilities, fisheries, port operations, and environmental restoration. In such cases, the scale of third-party and environmental damage can exceed the cargo damage itself.
The assessment sequence includes confirming the cargo’s classification under IBC Code or MARPOL-related regulations, determining whether the damage is subject to the HNS Convention or other regimes such as the CLC Convention or Bunker Oil Convention, and then organizing shipowner liability, P&I insurance, and HNS Fund compensation aspects.
Example 4: Arranging as General Cargo without Confirming HNS Applicability
A shipper may declare chemical products as general cargo, and a freight forwarder may book the shipment without sufficiently verifying the SDS or UN number. If an accident occurs during transport, failure to communicate the cargo’s hazardous nature in advance becomes a significant issue.
In this case, not only the shipper’s obligation to declare but also the extent to which the freight forwarder or NVOCC should have verified the information will become a point of dispute. Freight forwarders are not in a position to make the final legal judgment on whether the cargo qualifies as substances covered under the HNS Convention, but for chemicals, liquids, powders, gases, or cargo suspected of being hazardous, they need to check the SDS, UN number, and hazard classification status, and have a system to accurately communicate this to the shipping company.
Points of Caution
The HNS Convention is currently in the process of coming into force, but the actual start date of application, domestic implementing legislation, certification system, and receipt quantity reporting system need to be continuously monitored. Whether cargo falls under HNS cannot be determined by product name alone. SDS, UN number, mode of transport, and relevant codes must be checked.
Omissions or errors in hazardous cargo declarations could lead to claims or liability pursuits against shippers, freight forwarders, and NVOCCs in case of accidents. Contributions to the HNS Fund will affect the consignee’s operational side, so companies that import or receive large volumes of HNS cargo should establish quantity management and reporting systems.
The HNS Convention does not replace marine cargo insurance. Risks relating to cargo owner’s own cargo damage, general average, additional expenses, third-party claims, and subrogation should be examined separately.
Summary
The HNS Convention is an international treaty establishing a two-tier compensation system involving the shipowner’s liability and the HNS Fund for large-scale damage occurring during the maritime transport of hazardous and noxious substances. Covered damages extend beyond the cargo itself to personal injury, third-party property damage, environmental pollution, and preventive costs.
After entering into force, mandatory insurance by the shipowner, contributions to the HNS Fund, reporting requirements on quantities of HNS cargo received, and accuracy of hazard declarations will be operationally important. Freight forwarders, NVOCCs, shippers, consignees, and insurance practitioners should distinctly understand the roles of the SDS, IMDG Code, B/L, hazardous cargo declarations, P&I insurance, marine cargo insurance, and the HNS Fund, and organize transport, receipt, and incident response related to HNS cargo accordingly.
