1 Insurance/Financial Security Aspects of the HNS Convention Prepared by CEFIC and Presented by CCPA June, 2003

2 Introduction CEFIC and CCPA support HNS Convention's increased shipowner liability limits We also support the compulsory insurance/financial security provisions We are interested in how these provisions will be implemented and enforced by State Parties

3 Chemical Shipments Are Diverse Trading practices in chemicals much less uniform than in oil Over 5,000 chemicals; at least 8,000 vessels; hundreds of receivers Majority of HNS not in tankers--some in general cargo vessels Verification of shipowner insurance/financial security considerably more complex than for oil

4 Mechanisms for Implementing Insurance/Financial Security A national agency within each state party (e.g., see the U.S. Coast Guard National Pollution Funds Center) to ensure compliance International guidelines for how State Parties should assess the soundness of insurers and re- insurers International guidelines for control procedures International agreement on how to deal with general cargo vessels carrying HNS

5 Conclusion CEFIC and CCPA recommend that each of these mechanisms should be developed and ready for implementation when the HNS Convention enters into force for a given State They will help to ensure that channeling of liability and consequent compensation work as intended by the HNS Convention