The International Maritime Organization (IMO) has announced that a long-awaited international compensation regime for hazardous and noxious substances (HNS) at sea will come into force in November 2027. This development marks a significant advancement in the shipping industry's liability framework, particularly as the trade of chemicals and alternative fuels continues to grow.
Treaty Overview
The 2010 HNS Convention establishes the first global liability and compensation regime for incidents involving over 2,000 hazardous substances, including chemicals, acids, fertilizers, alcohols, LNG, LPG, and other non-oil cargoes. Arsenio Dominguez, the IMO's secretary-general, emphasized the treaty's role in ensuring fair and timely compensation for those affected by hazardous cargo incidents, while providing legal certainty for the industry and governments.
"This treaty will ensure that those affected by hazardous cargo incidents can access fair and timely compensation, while providing legal certainty for industry and governments," said Arsenio Dominguez.
Impact on Shipping
The treaty's entry-into-force threshold was reached after Belgium, Germany, the Netherlands, and Sweden ratified the protocol, bringing the number of contracting states to 12. Cargo reporting data confirmed that more than 40 million tonnes of qualifying HNS cargo were received by participating states during 2025.
| Country | Ratification Status |
|---|---|
| Belgium | Ratified |
| Germany | Ratified |
| Netherlands | Ratified |
| Sweden | Ratified |
Shipper and Operator Implications
Under the new regime, shipowners will be subject to strict liability for damage arising from HNS incidents and must carry state-certified insurance or other financial security. Approximately 65,000 ships are expected to require HNS certificates. The convention also establishes an HNS Fund, financed by receivers of hazardous cargo in contracting states, to provide additional compensation once a shipowner's liability limit has been exhausted. Total compensation will be capped at 250 million special drawing rights, equivalent to roughly $360 million per incident.
Watch List
- Upcoming Ratifications: Additional countries may ratify the treaty, potentially expanding its scope.
- Insurance Market Adjustments: The requirement for state-certified insurance may lead to changes in the maritime insurance market.
- Regulatory Developments: Monitoring of how different countries implement and enforce the treaty's provisions.
The treaty complements existing international compensation frameworks covering oil pollution and hazardous wreck removal, extending similar protection to a broader range of dangerous cargoes increasingly carried by the global fleet.
