Main provisions of Annex VI
On 20 January 2021 the Chilean president sent the draft bill approving Annex VI of the Protocol on Environmental Protection to the Antarctic Treaty to the Chamber of Deputies. The draft bill was unanimously approved by the Senate Chamber on 25 May 2021 and is now ready to become law (pending its publication in the Official Gazette).
Annex VI of the protocol aims to establish obligations for Antarctic operators to adopt preventive measures, plans and actions in the face of environmental emergencies, as well as mechanisms to determine responsibility in cases of failure to adopt such actions.
This article focuses on what shipping operators should be aware of ahead of Annex VI coming into force.
The Antarctic Treaty was signed on 1 December 1959 by the 12 countries whose scientists had been active in and around Antarctica during the international geophysical year of 1957 to 1958.(1) It entered into force in 1961 and many other nations have since acceded to it; the total number of parties to the treaty is now 54.
The protocol was signed on 4 October 1991 and entered into force in 1998. It was ratified by Chile in 1995.(2) The protocol completed and developed the provisions of the Antarctic Treaty for the Protection of the Antarctic Environment in a comprehensive manner, covering dependent and associated ecosystems. It has five annexes currently in force – namely:
- Annex I – Environmental Impact Assessment;
- Annex II – Conservation of Antarctic Fauna and Flora;
- Annex III – Waste Disposal;
- Annex IV – Prevention of Marine Pollution; and
- Annex V – Area Protection and Management.
Chile has ratified all of these annexes.
Annex VI on Liability Arising from Environmental Emergencies was adopted by the 28th Antarctic Treaty Consultative Meeting in Stockholm in 2005 and will enter into force once approved by all consultative parties.(3)
Shipping operators should be aware of the following provisions of Annex VI.
Annex VI contains several definitions, including:
- operator – "any natural or juridical person, whether governmental or non-governmental, which organises activities to be carried out in the Antarctic Treaty area"; and
- ship – "a vessel of any type whatsoever operating in the marine environment and includes hydrofoil boats, air-cushion vehicles, submersibles, floating craft and fixed or floating platforms".
Operators should undertake reasonable preventative measures that are designed to reduce the risk of environmental emergencies and their potential adverse impact. Preventative measures may include:
- specialised structures or equipment incorporated into the design and construction of facilities and means of transport;
- specialised procedures incorporated into the operation or maintenance of facilities and means of transport; and
- specialised training of personnel.
Operators must take prompt and effective response action to environmental emergencies arising from their activities.
An operator that fails to take prompt and effective response action to environmental emergencies arising from its activities will be liable to pay the costs of the response action taken by parties of the Antarctic Treaty. When a state operator should have taken prompt and effective response action but did not, and no response action was taken by any party, the state operator will be liable to pay the costs of the response action that should have been undertaken into the fund referred to in article 12 of Annex VI. When a non-state operator should have taken prompt and effective response action but did not, and no response action was taken by any party, the non-state operator will be liable to pay an amount that reflects as much as possible the costs of the response action that should have been taken. Such money is to be paid directly to the fund referred to in article 12 of Annex VI which is used to pay:
- the party of that operator; or
- the party that enforces the mechanism referred to in article 7(3) of Annex VI.
A party receiving such money must make the best effort possible to contribute to the fund referred to in article 12 of Annex VI, which should at least equal the money received from the operator.
The liability will be strict.
When an environmental emergency arises from the activities of two or more operators, they will be jointly and severally liable, except when an operator can establish that only part of the environmental emergency resulted from its activities, in which case they are liable only for said part.
Exemptions from liability
An operator will not be liable if it proves that the environmental emergency was caused by:
- an act or omission necessary to protect human life or safety;
- an event constituting – within the context of Antarctica – a natural disaster of an exceptional character that could not have been reasonably foreseen, either generally or in the particular case, provided that all reasonable preventative measures were taken to reduce the risk of environmental emergencies and their potential adverse impact;
- an act of terrorism; or
- an act of belligerency against the operator's activities.
Limits of liability
The maximum amount for which each operator may be liable in respect of each environmental emergency arising from an event involving a ship will be as follows:
- 1 million special drawing rights (SDR) for a ship with a maximum tonnage of no more than 2,000 tons;(4)
- for a ship with a maximum tonnage of more than 2,000 tons, the following amounts will be added in addition to 1 million SDR:
- 400 SDR for each ton from 2,001 to 30,000 tons;
- 300 SDR for each ton from 30,001 to 70,000 tons; and
- 200 SDR for each ton in excess of 70,000 tons.
Notwithstanding the above, Annex VI will not affect:
- the liability or right to limit liability under any applicable international limitation of liability treaty; or
- the application of a reservation made under any such treaty to exclude the application of the limits therein for certain claims.
Liability will not be limited if it is proven that the environmental emergency resulted from the operator's actions or omissions and that such actions or omissions were committed either with the intent to cause such an emergency or recklessly and with the knowledge that such emergency would probably result.
Insurance and other financial security
Operators must maintain adequate insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover liability up to the applicable limits set out in Annex VI.(5)
The Secretariat of the Antarctic Treaty will maintain and administer a fund, in accordance with agreed decisions, including the terms of reference to be adopted by the parties, which will provide, among other things, for the reimbursement of the reasonable and justified costs incurred by a party or parties in taking response action.
Notwithstanding that Annex VI was finalised in June 2005 and will enter into force once approved by all consultative state parties, it places a proactive approach on operators in the Antarctic Treaty area, including tourist and cruise operators, to prevent and minimise any environmental issues under strict liability, subject to the limits outlined above and the requirement of adequate insurance to cover liability.
Therefore, owners and charterers that operate in the region, their protection and indemnity clubs and other insurers should monitor the implementation of Annex VI, other domestic laws and related regulations in the consultative state parties to ensure that they are in compliance with current applicable regulations and are ready for Annex VI.
For further information on this topic please contact Ricardo Rozas or Mayra Reyes at JJR Abogados by telephone (+56 2 2580 9300) or email ([email protected] or [email protected]). The JJR Abogados website can be accessed at www.jjr.cl.
(1) Argentina, Australia, Belgium, Chile, France, Japan, New Zealand, Norway, South Africa, United Kingdom, United States and Russia (the Soviet Union at the time of signing).
(2) Supreme Decree 396 of 3 April 1995 of the Foreign Affairs and published in the Official Gazette on 18 February 1998. This protocol is one of the instruments that are part of the Antarctic Treaty System, as is the 1972 Convention for the Conservation of Antarctic Seals and the 1980 Convention for the Conservation of Antarctic Marine Living Resources, to which Chile is also a party.
(3) The consultative parties comprise the original parties and other states that have become consultative parties by acceding to the treaty and demonstrating their interest in Antarctica by carrying out substantial scientific activity in the region.
(4) The ship's tonnage is the gross tonnage calculated in accordance with the tonnage measurement rules contained in Annex I of the International Convention on Tonnage Measurement of Ships 1969.