World Bunkering > News > Industry News > China's oil pollution laws 'worth watching'

Ship owners and operators trading in Chinese waters face an extensive set of new legal and regulatory requirements governing their roles and responsibilities in oil pollution incidents, according to the UK P&I Club’s July Legal Briefing.

China’s Prevention and Control of Marine Pollution from Ships Regulation was came into force  on 1 March and dovetails with the Marine Environment Protection Law of the People’s Republic of China, laying down the principles and outlining the country’s marine pollution legal system. However, UK Club notes, the detailed requirements under the Regulation have yet to be revealed.

Ships carrying polluting and hazardous cargoes in bulk and other ships above 10,000 gt must pre-contract with an approved Chinese oil spill response organisation (OSRO) before entering into a Chinese port. A list of approved OSROs has yet to be published.

Oil tankers’ liability limitation is the same as the scheme provided in 1992 CLC. Other ships may limit liability in accordance with the Chinese Maritime Code. According to the Regulation, clean up costs incurred by the Maritime Safety Administration should be compensated in priority to other claimants. This may conflict with the CLC and the Bunkers Convention which lays down that all admissible claims are to be treated equally and without priority for government claims.

A compulsory insurance regime for all ships (except those less than 1,000 gt and not carrying oil cargoes) will cover claims arising from oil pollution damage. This should provide the implementing legislation which will give effect to the insurance provisions of the 2001 Bunkers Convention and the 1992 International Convention on Civil Liability for Oil Pollution Damage (CLC), both of them ratified by China.

According to the Regulation, clean up costs incurred by the Maritime Safety Administration should be compensated in priority to other claimants. This may conflict with the CLC and the Bunkers Convention which lays down that all admissible claims are to be treated equally and without priority for government claims.

The UK Club says the Regulation makes no reference to direct action against insurers. As per PRC Special Maritime Procedure Law, oil pollution damage claims may be brought directly against the insurers or other persons providing financial security for owners’ liability. This means compulsory liability insurers for oil pollution damage can be sued directly under Chinese law and the CLC and Bunkers Convention.

The UK Club briefing warns that while the Regulation sets up the general framework of Chinese oil pollution law, “it cannot resolve all issues initially. There are difficult long term questions, such as the title to sue, the admissibility of compensation claims, methods of investigation and burden of proof, which remain to be clarified, either by supplementary regulations or rules of judicial practice”.