Business

Clyde & Co: After Wakashio, is the Bunker Convention fit for purpose?

It is time to reconsider the Bunker Convention’s applicable limits given the devastating effect that as little as 1,000 tonnes of heavy fuel oil can cause, says lawyer.

Published

6 years ago

August 19, 2020

Admin

Martin Hall, Head of Marine Casualty, Associate Legal Executive and Partner Equivalent at international law firm Clyde & Co on Tuesday (18 August) published an article explaining how the 2001 Bunker Convention is insufficient cover for clean-up operations and pollution damage and questions its relevance given the impact of Wakashio’s oil spill in a sensitive marine environment:

What has happened in the Indian Ocean provides confirmation that increased payouts cannot come soon enough, and governments of coastal states should enact any available increased limits in their own jurisdiction without delay.

As the ecological and environmental disaster that has resulted from the grounding of Wakashio unfolds in Mauritius, questions are already being raised as to how this could have happened.

But thoughts will ultimately turn towards compensation for those who are cleaning up the mess and have suffered the consequences of pollution from the vessel’s bunkers.

The owners have been quoted as saying that they will respond “in good faith” to any damages “in accordance with applicable law”. However, this may not be as comforting as it first seems.

As Wakashio is not a laden tanker, the well-established compensation regime under the Civil Liability Convention 1992 — as topped up if required by the IOPC Fund Convention 1992 — will not apply, and any compensation claims seem likely to be dealt with under the 2001 Bunker Convention.

The Bunker Convention applies to vessels carrying bunkers not covered by the CLC and IOPC Fund Conventions.

It provides for mandatory third-party insurance cover, and allows claims of third parties for clean-up expenses and other losses caused by pollution from bunkers to be made directly against the insurers.

The convention also imposes strict liability on the part of the vessel owners and their insurers for such losses, which means there is no need to prove responsibility for the pollution, only that the pollution emanated from the vessel.

Consequently, if more than one party was potentially involved in causing the pollution, there would be joint and several liability if the original source was from the stricken vessel (Article 3 of the convention).

The owners of the vessel are, under Article 6 of the convention, entitled to limit their liability in accordance with the Convention for Limitation of Liability for Maritime Claims 1976 or as amended.

Many countries have now enacted the 1996 Protocol, which significantly increases the limitation fund that was originally applied in the 1976 Limitation Convention.

The limit is based on the gross tonnage of the vessel, which in this case appears to be 101,932 tonnes.

That means that currently under the 1976 Limitation Convention the limit for third-party claims including costs of prevention and clean up following the grounding of Wakashio would be around $18m, whereas under the 1996 Protocol the limitation fund would be just over $43m.

By contrast, the IOPC supplementary fund can pay out as much as $1bn in certain circumstances.

All claims of third parties must be brought against the owner or directly against the insurer in the country where the pollution has occurred, in this case Mauritius. Therefore the law of Mauritius will apply.

According to the latest IMO published data, Mauritius has enacted the Bunker Convention and the 1976 Limitation Convention. It does not appear that Mauritius has enacted the 1996 Protocol.

If this is correct then the lower limit of around $18m would apply, which seems hardly enough to cover the sort of losses that might now be envisaged from the impact of some 1,000 tonnes of heavy fuel oil on the pristine ecological environment of Mauritius.

One can anticipate a significant impact not only on the environment but also the wildlife and fishing industry on which Mauritius so heavily relies, as well as on the tourist industry.

The logic behind the lower limits that apply under the Bunker Convention compared with the combination of CLC and IOPC Fund limits is, presumably, because the quantities of bunkers that could potentially cause pollution are significantly less than would be the case than for an oil cargo.

However, that is of no comfort to those in Mauritius who are already suffering the consequences and may continue to do so for a long time to come.

There is only one means of breaking the limit in the event that claims exceed the limitation fund under the 1976 Limitation Convention (or indeed under the 1996 Protocol if enacted).

That entails proving that “the loss resulted from his [the owner’s] personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result”. This is a very difficult burden to discharge.

The authorities’ investigations in Mauritius will presumably determine whether or not there is any prospect of breaking the limit, so that any compensation to be obtained could exceed the level of the limitation fund.

Although the Bunker Convention is dated 2001, it only came into force as recently as 2008.

Nevertheless, it is perhaps already time to reconsider the applicable limits, given the devastating effect that as little as 1,000 tonnes of heavy fuel oil can cause in a sensitive environment, as we are now seeing.

There has already been recognition that the 1996 Protocol limit is inadequate. The International Maritime Organization — in the 2016 edition of Limitation of Liability for Maritime Claims — advised that it had adopted a resolution increasing the limits under the 1996 Protocol.

This was due to the Pacific Adventurer incident, which occurred in the waters of southern Queensland in Australia in March 2009. In the case of Wakashio this would have increased the limit for pollution claims to almost $65.2m.

The UK enacted the increased limits to the 1996 Protocol in November 2016.

But what has happened in the Indian Ocean provides confirmation that such further increases cannot come soon enough, and highlights the need for governments of coastal states to enact any increased limits in their own jurisdiction without delay.

Source: Clyde & Co
Photo credit: International Maritime Organisation
Published: 19 August, 2020

Legal

Singapore police arrest eight over alleged illegal MGO transaction off Tuas

SPF says preliminary investigations found that crew members of a Singapore-registered tugboat misappropriated MGO worth about SGD 10,570 without their company’s knowledge and sold it illegally.

Published

2 days ago

August 14, 2026

Admin

Singapore police arrest eight over alleged illegal MGO transaction off Tuas

The Singapore Police Force (SPF) on Thursday (13 August) said it has arrested eight men, aged between 25 and 54, for their suspected involvement in an illegal transaction of Marine Gas Oil (MGO).

On 13 August 2026 at about 1.05am, officers from the Police Coast Guard (PCG) conducted a check on a Singapore-registered tugboat in the waters off Tuas and discovered that eight crew members were possibly involved in the illegal transaction of MGO.

“Preliminary investigations revealed that the crew members of the tugboats misappropriated MGO valued at about SGD 10,570 (USD 8,258), without their company’s knowledge,” SPF said in a statement.

“The MGO was sold illegally for their personal financial gain.”

The eight crew members will be charged in court on 14 August 2026 with the offence of theft by servant of property in possession of master under Section 381 of the Penal Code 1871 If convicted, they shall be punished with an imprisonment term that may extend to seven years and shall also be liable to fine.

“The Police take a serious view of illegal transaction of MGO in Singapore Territorial Waters and will continue to conduct enforcement and security checks to prevent, deter and detect such illicit activities in Singapore waters,” SPF added.

Photo credit: Singapore Police Force
Published: 14 August, 2026

Port & Regulatory

Gard: Sulphur-related bunker claims rise amid tighter China MSA enforcement

Claims involving excessive sulphur content in marine fuels have been rising, while stricter inspections by the China MSA have heightened the focus on sulphur compliance, particularly in the Bohai Sea.

Published

2 days ago

August 14, 2026

Admin

Maritime protection and indemnity (P&I) club Gard on Wednesday (12 August) highlighted that claims involving excessive sulphur content in marine fuels have been rising, while stricter inspections by the China MSA have heightened the focus on sulphur compliance, particularly in the Bohai Sea:

Rise in off-spec sulphur claims

Recent claims experience indicates that bunker quality continues to pose a significant operational risk for shipowners. In our earlier review of bunker-related claims during the first five months of 2026, we highlighted a rise in off-specification bunker incidents amid increased pressure on global fuel supply chains following the escalation of the conflict in the Middle East.

Specifically for Sulphur compliance, between January and June 2026, the number of sulphur-related cases increased by more than threefold compared with the same period in 2025. Notably, the number of cases recorded in the first six months of this year has already exceeded the total number reported during the whole of last year by approximately 40%.

While each case is fact-specific, the increase is notable because excessive sulphur content constitutes a MARPOL compliance issue. Unlike many other bunker quality problems, sulphur non-compliance identified through port state inspections can result in vessel delays, enforcement action, and substantial costs associated with debunkering and fuel disposal.

The map below illustrates the geographical distribution of sulphur-related claims recorded during the first six months of 2026, based on the location where the bunkers were stemmed.

Distribution of sulphur related claims

China MSA steps up sulphur compliance enforcement

According to our correspondent, Huatai, on 5 June 2026, the maritime authorities of Tianjin, Hebei, Liaoning and Shandong jointly launched a special campaign on ship pollution prevention and control in the Bohai Sea region. The campaign involves coordinated supervision by local MSA branches across the region and is expected to last nearly five months. It covers major ports and surrounding port areas in the Bohai Sea region, including Tianjin, Tangshan, Qinhuangdao, Huanghua, Jinzhou, Yingkou and Longkou.

While the initiative is broader than bunker sulphur compliance alone, its scope includes inspections relating to air pollution prevention, SOx emissions, fuel compliance and other high-pollution-risk operations. Enforcement measures are expected to comprise onboard inspections, cross-regional enforcement activities, unannounced spot checks and remote monitoring. These efforts will be supported by a combination of UAV patrols, maritime patrol vessels, shore-based monitoring systems and rapid on-site fuel testing.

As a result, vessels trading in the Bohai Sea region may experience increased scrutiny of fuel compliance documentation, fuel sampling records, onboard fuel management procedures, and the handling or disposal of suspected non-compliant fuel.

Documents typically requested by China MSA

Based on our recent experience, including the case discussed above, and subject to the specific requirements of the local MSA office, owners and operators may be requested to provide supporting documentation such as:

Bunker documentation – Bunker Delivery Notes (BDNs), MARPOL fuel sample records, fuel test reports, and relevant fuel quality certificates.
Statutory certificates – including the International Air Pollution Prevention (IAPP) Certificate and International Oil Pollution Prevention (IOPP) Certificate.
Operational records – engine logbooks, deck and navigation logbooks, Oil Record Book entries, and records relating to fuel transfers, storage and consumption.
Sampling documentation – the Master’s statement and any records demonstrating how fuel samples were drawn, sealed, labelled, handled and retained.
Correspondence records – communications with the authorities, bunker suppliers, charterers and other relevant stakeholders.
Fuel disposal records – approved disposal plans, debunkering documentation, receipts and evidence of final disposal, where applicable.

The exact documentation required will depend on the nature of the investigation, the findings of the inspection, and the requirements of the local enforcement authority.

Possible regulatory consequences in China

Under the Air Pollution Prevention and Control Law of the People’s Republic of China, ocean-going vessels are required to use fuel oil meeting atmospheric pollutant control requirements after berthing. Vessels operating within designated emission control areas must also comply with applicable emission standards. Article 106 provides that where vessel fuel oil fails to meet applicable standards or requirements, the competent maritime authorities may impose fines ranging from RMB 10,000 to RMB 100,000. Liability may extend to shipowners, ship operators and ship managers depending upon the circumstances of the case.

Recommendation

Sulphur compliance should be treated as both a fuel quality and regulatory risk. Owners and operators are encouraged to take preventive steps before bunkering, act promptly if non-compliant fuel is suspected, and preserve evidence carefully if an inspection or claim arises. Under amended

Resolution A.1206(34), Appendix 18, 2.1.5, if the BDN shows compliant fuel, but the master has independent test results of the fuel oil sample taken by the ship during the bunkering which indicates non-compliance, the master may document this by notifying the ship’s flag Administration, with copies to:

the competent authority of the relevant port of destination,
the Administration under whose jurisdiction the bunker deliverer is located,
and to the bunker deliverer.

Photo credit: shraga kopstein on Unsplash / Gard
Published: 14 August, 2026

LNG Bunkering

Shell expands LNG bunkering footprint in Spain with Valencia

As one of the region’s key maritime hubs, the company said Valencia expands the options available to shipowners seeking LNG supply along major shipping routes.

Published

2 days ago

August 14, 2026

Admin

Shell expands LNG bunkering footprint in Spain with Valencia

British oil giant Shell on Thursday (13 August) said Valencia has joined its growing network of bunkering locations, making LNG available as a marine fuel.

The successful completion of the first LNG bunkering operation in Valencia marked an important milestone for Spain and further strengthened Shell’s LNG supply capabilities across the Mediterranean.

In a video shared by the company, bunkering vessel Alice Consulich was shown supplying an undisclosed volume of LNG to the container ship MSC Sabrina.

“As one of the region’s key maritime hubs, Valencia expands the options available to shipowners seeking LNG supply along major shipping routes,” Shell said in a social media post.

Shell said the achievement reflected the strong collaboration across the maritime value chain, including MSC Mediterranean Shipping Company, the Port of Valencia and Fratelli Cosulich Group.

“We look forward to making more LNG bunker deliveries in Valencia and across the Mediterranean as LNG infrastructure and capabilities continue to expand,” the company said.

Photo credit: Shell
Published: 14 August, 2026