The International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention 1996, and the 2010 Protocol) establishes a liability and compensation regime for damage caused by the carriage of hazardous and noxious substances (HNS) by sea. Objectives:

• To ensure that adequate, prompt and effective compensation is available for damage (including pollution, loss of life/personal injury, property damage, and the cost of preventive measures) caused by HNS carried by sea.
• To place liability on the shipowner (strict liability) and to provide a second tier of compensation from an international HNS Fund financed by the receivers of HNS cargo, so that victims are compensated even where the shipowner's liability is insufficient or the ship is unidentified.
• To encourage safe carriage and to provide a clear legal framework for claims.

Scope: It applies to ships carrying HNS (defined by reference to the IMDG Code classes, the IBC Code, the IGC Code, and the bulk liquid substances) on international voyages, and covers damage caused by the HNS during carriage (including during loading/discharge and in the course of the voyage), including pollution damage, loss of life/personal injury, loss of/damage to property, and the costs of preventive measures. It does not apply to damage caused by oil (covered by the CLC/Fund conventions) or to certain other substances.

Types of HNS covered: the substances listed in the HNS Convention - those covered by the IMDG Code (dangerous goods in packaged form), the IBC Code (noxious liquid substances in bulk), the IGC Code (liquefied gases), and other bulk liquid substances; these include toxic, flammable, explosive, corrosive, oxidising and environmentally hazardous substances (e.g. chemicals, acids, liquefied gases, pesticides, and other hazardous cargoes).

Impact on marine ecosystem: HNS spills can be highly toxic to marine organisms (fish, plankton, shellfish), cause acute and chronic contamination of water and sediments, bio-accumulate in the food chain, damage habitats (coral, seagrass, wetlands), and can be flammable/explosive or corrosive, causing additional damage to the environment and to human health; some HNS are persistent and can contaminate fisheries and mariculture, affecting the ecosystem and the economy.

Compensation mechanism:

• Tier 1: The shipowner is strictly liable (with limited exceptions) for damage up to a limit based on the ship's tonnage (the HNS Convention limits, similar to the CLC).
• Tier 2: The HNS Fund (an international fund financed by contributions from the receivers of HNS cargo in the contracting States) provides additional compensation above the shipowner's limit, up to a higher overall limit, and also covers damage where the shipowner is not liable or the ship is unidentified.
• The Fund is administered by the IOPC Funds (the HNS Fund is established under the Convention and administered by the IOPC Funds secretariat).
• Claims are made against the shipowner and/or the Fund; the regime ensures that victims are compensated promptly and that the burden is shared between the shipping and the cargo (receiver) industries.

The 2010 Protocol (not yet in force) updates the HNS Convention to facilitate its entry into force and to align with the IBC/IMDG codes.