Maritime Law in Motion 9783030317492, 3030317498

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WMU Studies in Maritime Affairs 8

Proshanto K. Mukherjee Maximo Q. Mejia, Jr. Jingjing Xu Editors

Maritime Law in Motion

WMU Studies in Maritime Affairs Volume 8

Series Editors Maximo Q. Mejia, Jr. World Maritime University, Malmö, Sweden Aykut Ölçer World Maritime University, Malmö, Sweden Jens-Uwe Schröder-Hinrichs World Maritime University, Malmö, Sweden

WMU Studies in Maritime Affairs was launched in 2013 to inspire scholars from all walks of maritime life to contribute to the creation and advancement of knowledge in the numerous maritime disciplines through publications of the highest order of excellence. With this book series, the World Maritime University aims to lead an expansion of scholarly pursuits, particularly in the areas of maritime law and policy, maritime safety and environmental administration, maritime education and training, marine environmental and ocean management, port management, and shipping management.

More information about this series at http://www.springer.com/series/11556

Proshanto K. Mukherjee • Maximo Q. Mejia, Jr. • Jingjing Xu Editors

Maritime Law in Motion

With the Contribution of Huiru Liu

Editors Proshanto K. Mukherjee Faculty of Law Dalian Maritime University Dalian, China

Maximo Q. Mejia, Jr. Maritime Law and Policy World Maritime University Malmö, Sweden

Jingjing Xu Plymouth Business School University of Plymouth Plymouth, UK

ISSN 2196-8772 ISSN 2196-8780 (electronic) WMU Studies in Maritime Affairs ISBN 978-3-030-31748-5 ISBN 978-3-030-31749-2 (eBook) https://doi.org/10.1007/978-3-030-31749-2 © Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

In memory of our esteemed friends and colleagues Karl Laubstein (1937–2019) and Rajendra Prasad (1944–2019)

Foreword

If there were any doubts left about maritime law being a dynamic system, this exciting new book extinguishes such doubts quite firmly. For many of us, who have worked in the maritime sector during long and varied careers, it has also been quite clear for some time that maritime law has moved from its ancient, but rather narrowly defined, antecedents into a much broader perspective that today encompasses almost everything connected to the sea—no matter how remote. That is how it should be. After all the ocean system cannot really be viewed, studied or regulated in neatly compartmentalized sectors as most, if not all, maritime sectors interact and often affect one another. This has not always been entirely clear from the voluminous literature in the area that, to a great extent, still follows the more traditional sectoral system. Maritime Law in Motion very much breaks this pattern and is likely the first publication to clearly achieve this. Given the wide variety, extensive experience and skilled research of the 45 contributing authors, this is not surprising at all. For me, at the end of a very lengthy career in the maritime sector, this also provides an especially double delight in writing a Foreword. Firstly, the book provides a very significant and much-needed new direction in the maritime law area, especially in its focus on the importance of interdisciplinary approaches. However, secondly, I find it extremely satisfying that most of the authors are known to me as former students, colleagues and collaborators who have become distinguished scholars, practitioners and teachers in their own right. As a result, I would have not expected anything less than a first-class, innovative, far-reaching and thoughtful publication from this group, who clearly lead a new generation of maritime specialists. Furthermore, although the more traditional maritime literature generally originated in Europe and the United States, this book is compiled by authors from 22 countries, covering all parts of the global maritime world. This is a very positive development that illustrates the truly global reach of our industry. As already indicated, the scope of this book is ambitious and exhaustive. Even though many of the chapters break new ground, the more traditional aspects of international maritime law, such as the law of the sea, carriage of goods, marine insurance, arbitration, protection of the marine environment and marine collisions vii

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are still well covered. But the real core of many of the 37 chapters focusses on the numerous new developments faced by the modern maritime industry today and in the near future. Today’s global occupation with environmental issues, such as the maritime sector’s role in climate change, is addressed, as are other pressing issues related to maritime and cyber security, port sanctions, illegal immigration, waste management, decarbonization, maritime education and training, piracy, vessel abandonment, the development of “intelligent” and autonomous ships, application of blockchain technology to shipping and a number of other subjects all presented in an up-to-date form. Special recognition must be given to the co-editors of Maritime Law in Motion. I know from experience that compiling this type of multi-authored publication is complex and risky, especially with contributors scattered across the world. However, this Canadian-Filipino-Chinese trio of editors managed to carry it off with consummate skill. That they have done so is also not surprising. Professor Proshanto Mukherjee is at the culmination of a long and distinguished career that has taken him from command of a ship to law practice and then to professorships at the IMO International Maritime Law Institute, Malta, the World Maritime University (WMU) in Malmö, Sweden, and WMU’s sister institution in Dalian, China. After a career in the Philippines Coast Guard, Professor Max Mejia studied at and graduated from WMU where he now holds a high position. Professor Jingjing Xu also graduated from WMU and is now Head of the University of Plymouth’s Business School in the United Kingdom. I am delighted to acknowledge that all three are former students of mine and I am quite prepared to bask in the glow of what I expect to be an entirely successful venture! Canadian Maritime Law Association, Vancouver, BC, Canada Dalhousie University, Halifax, NS, Canada World Maritime University, Malmö, Sweden IMO International Maritime Law Institute, Msida, Malta University of Queensland, Brisbane, QLD, Australia Comité Maritime International, Antwerp, Belgium August 2019

Edgar Gold

Preface

The origins of maritime law are said to be “veiled in antiquity and lost in obscurity”. On the private maritime law side of the equation, it has meandered into the twentyfirst century from the Babylonian Code of Hamurrabi and the Manu Sanghita of an ancient bygone millennium, and latterly through the Rhodian Sea Law and the lex maritima and lex mercatoria of Roman law vintage through to the mediaeval Mediterranean maritime codes. Public maritime law evolved relatively later in time when states perceived it necessary and expedient to protect their national interests in seaborne trade and developed navies for that purpose. In the public law sphere, the concepts of res nullius, res publico and res communis began to unfold from Roman times in the west although in the eastern hemisphere, custom and practice embracing uses of the sea and corresponding rights had also taken shape in that era and before. In the contemporary milieu of public and private maritime law, age-old customs tempered by sophisticated treaty law have burgeoned into numerous legal regimes governing virtually every aspect of matters maritime. This book is the brainchild of the lead editor who felt committed to give to the younger genre of maritime law academics and scholars worldwide the opportunity to publish alongside their senior peers and mentors. The co-editors fully supported the proposition and an inter-generational team of authors was put together consisting of highly accomplished, versatile maritime law scholars and recent PhDs, junior academics, lecturers and doctoral candidates. The editorial team recognizing the intrinsically evolving nature of maritime law undertook to produce this book as an initiative under the auspices of the book series arrangement concluded between World Maritime University and Springer Publications. The book reflects the prodigious efforts of authors from a wide variety of maritime law disciplines and backgrounds representing no less than 22 nationalities. Collectively, they have contributed 37 chapters covering multifarious maritime law subject matters. It is noteworthy that the editors and authors hail from both civil and common law jurisdictions projecting their different and distinctive legal persuasions. This is particularly reflected in the works of authors comprising comparative legal analysis of selected public and private maritime law subjects viewed from contrasting perspectives. ix

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The most unique feature of the book is its anticipated global readership appeal by reason of the wide and comprehensive array of maritime law subjects covered in it, combined with the diversity of scholarship characterized by the national academic backgrounds of the authors. The public law features of the book include public international law of the sea and regulatory maritime law embracing IMO conventions and instruments. The private law subject matters comprise a variety of generic topics, the principal ones being commercial maritime law, admiralty and shipping law, and conflict of laws as well as new technological advancements such as the impacts and applications of blockchain and intelligent ships on maritime law. As well, current and contemporary discussions and discourses within IMO and other international maritime fora covering regulatory and private law matters are addressed in the chapters. The infusion of the public and private law dimensions of maritime law is evident in the chapters addressing maritime security, marine environmental law, the law respecting seafarers affairs and maritime pedagogics, port law, carriage of passengers, rail/sea carriage of goods under bills of lading, charterparties, marine insurance, limitation of liability, maritime trade law, taxation law in the maritime context, maritime arbitration, comparative law in the maritime field and recent case law analysis on relevant topics. Maritime law has its historical roots in ancient civilizations, but it is as dynamic today as it has always been. Inevitably and invariably, it will continue to evolve with the changing times and will remain in perpetual motion driven by technology moving at the speed of sound. It is hoped that readers, including teachers and students of maritime law and maritime professionals, will derive sufficient benefit from the book and inspire others. Bon voyage. Dalian, China Malmö, Sweden Plymouth, UK Beijing, China 31 July 2019

Proshanto K. Mukherjee Maximo Q. Mejia, Jr. Jingjing Xu Huiru Liu

Contents

The Effect of the Arbitration Clause Incorporated in a Bill of Lading to Third Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pinar Akan Regime Interaction and GAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gabriela Argüello

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Maritime Rules for Rail Carriage: China’s Initiative to Incorporate Rules from the Road to the Belt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Abhinayan Basu Bal and Trisha Rajput

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A Critical Analysis of Carriage of Passengers by Sea: Uniformity Through International and Regional Approaches . . . . . . . . . . . . . . . . . . Olena Bokareva

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Occupational Hazards in the Light of the Maritime Migration Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Laura Carballo Piñeiro

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Governance of International Shipping in the Era of Decarbonisation: New Challenges for the IMO? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aldo Chircop and Desai Shan

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Good Faith in Maritime Law Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 115 Shatarupa Choudhury and Pallab Das Legal Aspects of Green Shipping Finance: Insights from the European Investment Bank’s Schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Jason Chuah When Was the Last Time You Were Restrained by a Prince? Conservatism and the Development of Maritime Law . . . . . . . . . . . . . . 153 Martin Davies

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Private Maritime Security Companies Within the International Legal Framework for Maritime Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Osatohanmwen Anastasia Eruaga Compensation for Cargo Damage in International Maritime Transportation: Chinese Law Perspective . . . . . . . . . . . . . . . . . . . . . . . 207 Lixin Han and Shuang Cai Innocent Passage Under UNCLOS: An Exploration of the Tenets, Trials, and Tribulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Anish Hebbar What Challenges Lie Ahead for Maritime Law? . . . . . . . . . . . . . . . . . . 257 Måns Jacobsson Sanctions Compliance Risks in International Shipping: Closure of Five Crimean Ports, the Sanctions Regime in Respect of Ukraine/Russia and Related Compliance Challenges . . . . . . . . . . . . . 289 Henning Jessen Shipowner’s Implied Obligations in a Charterparty Relating to Lien on Cargo: English and Chinese Law Perspectives . . . . . . . . . . . . . . . . . . 311 Shengnan Jia and Haiyang Yu An Exposé of Canadian “Abandoned Vessels & Derelicts” Through a Legal Analysis of Doctrinal Silos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341 Tafsir M. Johansson Korean Collision Avoidance Rules and Apportionment of Liability . . . . 377 In Hyeon Kim The Application of Human Rights and Ethics Principles to Self-protection Measures by the Ship Against Pirates and Armed Robbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389 Khanssa Lagdami and Aref Fakhry Blockchain and Bills of Lading: Legal Issues in Perspective . . . . . . . . . . 413 Huiru Liu Environmental Challenge in Port Development: The Legal Perspective in Cross-Disciplinary Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437 Lars-Göran Malmberg Taxation and Ship Management: A Canadian Case Study . . . . . . . . . . . 457 F. Mikis Manolis and Ron L. Bozzer The Evolution of Seafarer Education and Training in International Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 Michael Ekow Manuel and Raphael Baumler

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Coastal, Flag and Port State Jurisdictions: Powers and Other Considerations Under UNCLOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495 Emmanuel Kofi Mbiah Air Pollution, Climate Change, and Port State Control . . . . . . . . . . . . . 525 Maximo Q. Mejia, Jr. A Century of Piracy Treaties: An Overview for the Future . . . . . . . . . . 547 Samuel Pyeatt Menefee Windfall in the Law of Subrogation: Marine Insurance in Motion . . . . . 563 Proshanto K. Mukherjee Ship Nationality, Flag States and the Eradication of Substandard Ships: A Critical Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581 Reshmi Mukherjee Pedagogies and Strategies in International Maritime Business . . . . . . . . 607 Fikile Portia Ndlovu Cyber Risks Insurance in the Maritime Sector: Growing Pains and Legal Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 Baris Soyer The Legal Concept and Significance of Clean Shipping Transport Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 643 D. Rhidian Thomas Liability Insurer’s Right to Limit Liability for Maritime Claims: English and Chinese Law Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . 657 Yuanjun Xia Shipowner Protection in the Wake of the Collapse of O.W. Bunker: The Second Circuit Approval of Interpleader Actions in Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC . . . . . . . . . . . . . . . . . . . . . . . 677 Jingchen Xu The International Legal Regime Governing Shipboard LNG . . . . . . . . . 691 Jingjing Xu and Proshanto K. Mukherjee Intelligent Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703 Tingting Yang The United Kingdom Tonnage Tax Regime: Compatibility with Relevant European Union Tax Law and Policy . . . . . . . . . . . . . . . 713 Yinan Yin

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Advisory Jurisdiction of the International Tribunal for the Law of the Sea as a Full Court: Legal Basis and Limits . . . . . . . . . . . . . . . . . 741 Minna Yu Lex Maritima in a Changing World: Development and Prospect of Rules Governing Carriage of Goods by Sea . . . . . . . . . . . . . . . . . . . . 761 Lijun Zhao

About the Authors

Pinar Akan graduated with an LLB from Istanbul University, Faculty of Law in 1993; received LLM from the University of Wales, Cardiff Law School, in 1995; and PhD from Marmara University. She has been a member of the Academic staff of Marmara University, Faculty of Law, since 1996 and was appointed Full Professor in 2013. She is Head of the Maritime and Insurance Law Department. She has been a visiting professor at Tulane University both in New Orleans and the Rhodes summer programme. She has also been a visiting professor at International Research Seminars on Maritime, Port and Transport law organized by Bologna University, Faculty of Law, and a visiting professor at Ca’Foscari University in Venice to give lecture at the PhD level. She has several published articles to her credit at both national and international levels and has authored books on shipwreck removal, liability of the carrier due to the breach of care of cargo and maritime mediation. Lately, she edited Liber Amicorum in Loving Memory of Prof. Athanassios Yiannopoulos. She continues to be the sole organizer of International Congress of Maritime and Admiralty Law since 2010 and of Bilateral Meetings between Italy and Turkey on Transport and Logistics. Gabriela Argüello holds a Doctor of Laws in maritime and transport law from the University of Gothenburg and a Master in Maritime Law from Lund University (Sweden). Her research interests relate to environmental global challenges in relation to the marine environment and the governance of the oceans. Currently, Gabriela is a Postdoctoral Research Fellow in Law with a focus on Large Scale Collective Action at the Centre for Collective Action Research (CeCAR). Gabriela has published refereed articles in areas of waste management and ship recycling in international journals. Abhinayan Basu Bal is Assistant Professor at the School of Business, Economics and Law, University of Gothenburg, in Sweden. He lectures in the field of international trade and maritime law. His research interest lies in commercial maritime law, digital trade, supply chain finance, trade facilitation, and the Belt and Road Initiative. Funding from the EU, national governments and industry bodies has supported some xv

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of his research endeavours. Since 2013, he is the accredited Swedish observer to the United Nations Commission on International Trade Law Working Group IV on Electronic Commerce. He has published monographs, chapters in books and articles in peer-reviewed journals. Earlier he worked at Lund University and was responsible for the delivery of the Master’s Programme in Maritime Law. He read for his PhD degree at the World Maritime University in Sweden. He did his LLM in Maritime Law from University College London in the UK and holds BSc, LLB and MBL degrees from India. He was admitted to the Bar Council of India in 2005. Raphael Baumler is Associate Professor and Head of the Maritime Safety and Environmental Administration at the World Maritime University, Sweden. Educated as dual officer, his sea life drove him to work as shipmaster on large containerships, staff captain on cruise ship, and various assignments as deck or engineer officer on ferries, VLCCs and supply vessels. He holds degrees in Crisis Management (MSc.) and Risk Management (PhD) from the University of Artois (France). Olena Bokareva is Associate Senior Lecturer in private law at the Faculty of Law at Lund University. She is currently working on a postdoctoral project financed by the Ragnar Söderberg Foundation on the topic of “Compensation and Liability for Passengers’ Claims in Sea and Air Transport”. She obtained her doctoral degree from Lund University in 2015 and holds her LLM degree from the same university. Her doctoral research was based on the analysis of the Rotterdam Rules. Her academic interest lies in maritime and commercial law, carriage of goods by sea, multimodal transport and the law of the sea. She teaches maritime and transportation law at the Faculty of law and selected topics in EU law. Ron L. Bozzer is legal counsel at DuMoulin Boskovich LLP and practices general business and corporate law, with emphasis on mergers and acquisitions, project finance, banking and financing transactions, regulation of financial institutions, captive insurance and public-private partnerships. Ron obtained his LLB from the University of British Columbia in 1975 and was admitted to the British Columbia Bar in 1975. Ron has extensive experience in project finance for major infrastructure initiatives across many sectors, including telecommunications, mining, real estate and forestry sectors. Ron is also involved in advising with respect to the development of infrastructure projects in developing and emerging markets around the world, including power projects, hospitals, airports and housing developments. Shuang Cai graduated from Dalian Maritime University with a Bachelor of Law degree in 2017. In September of the same year, she began to study for a master’s degree in maritime law, mainly engaged in the law of the contract for the carriage of goods by sea and the law of marine environmental damage. Laura Carballo Piñeiro joined the World Maritime University in February 2018 as Professor and holder of the Nippon Foundation Chair of Maritime Labour Law

About the Authors

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and Policy. Prior to joining WMU she worked at the Universities of Vigo and Santiago de Compostela in Spain, where she developed her expertise in private international law, international litigation, international insolvency and maritime law. She is admitted to practice as a lawyer and has worked as a deputy judge in Spain. Her research as a Fellow of the Alexander von Humboldt Foundation led to the publication of the book International Maritime Labour Law as part of the Hamburg Studies on Maritime Affairs Collection (Springer, 2015) edited by the International Max Planck Research School for Maritime Affairs at the Hamburg University. Professor Carballo has published in a number of international journals in English, German, Italian and Spanish. She has been visiting fellow at the Max Planck Institute for Comparative and Private International Law, Columbia Law School, the Institute of European and Comparative Law at Oxford University and UNCITRAL, and she has taught in a number of institutions in Europe and Latin America such as the Universities of Antioquia and Medellín in Colombia, the Central University of Venezuela, and the Hague Academy of International Law. Aldo Chircop JSD is Professor of Law and Canada Research Chair in Maritime Law and Policy, Schulich School of Law, Dalhousie University, Halifax, Nova Scotia, Canada. Professor Chircop’s research interests are in the fields of Canadian and international maritime law and international law of the sea. Professor Chircop is Chair of the International Working Group on Polar Shipping of the Comité Maritime International, Research Fellow at the Ocean Frontier Institute, Research Consultant to the Centre of International Law at the National University of Singapore, Senior Fellow at the Centre for International Governance Innovation (CIGI), Visiting Professor at Dalian Maritime University and member of the Nova Scotia bar. He has received several academic and professional awards. His numerous publications include: Canadian Maritime Law 2d (Irwin Law, 2016; with Moreira, Kindred and Gold eds); Places of Refuge for Ships: Emerging Environmental Concerns of a Maritime Custom (Martinus Nijhoff Publishers, 2006; with Linden eds); The Future of Ocean Regime-Building (Martinus Nijhoff Publishers, 2009; with McDorman and Rolston eds); The International Regulation of Shipping: International and Comparative Perspectives (Martinus Nijhoff Publishers, 2012; with McDorman, Letalik and Rolston eds). Professor Chircop is co-editor of the Ocean Yearbook since volume 13 (currently at 32). Shatarupa Choudhury is Legal Counsel with Swiss Singapore Overseas Pte Ltd, Aditya Birla Group, in Dubai. Shatarupa is a graduate of the National University of Juridical Sciences (NUJS), Kolkata. Her current work profile involves global commodity trading and shipping business in a multinational company. Her current work profile involves international arbitration especially in the Singapore International Arbitration Centre and the Hong Kong International Arbitration Centre. Her first international paper was in the field of space law; it was published in the Prague Yearbook of Comparative Law. She hails from Bhubaneswar, India, and is a passionate Odissi dancer.

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Jason Chuah is Professor and Head of Department at City, University of London and, currently, Guest Research Professor at the University of Gothenburg. He is also Director of the London Universities Maritime Law and Policy Group. He has published well over 200 articles and eleven books, including Law of International Trade (Sweet & Maxwell), Commercial Law (Pearson) with Prof. M. Furmston, Carriage of Goods by Sea (Routledge) with A. Rogers and Research Handbook on Maritime Law (as editor) (Edward Elgar). His works have been cited by institutions in the UK, US, EU and Asia. He has been involved in consultations with the UK Ministry of Justice, OECD, ICC, EU Commission, Association of British Insurers, UNCITRAL, among others. Pallab Das is Lecturer in Law at the National Law University of Odisha (NLUO) in India. He obtained his BSL and LLB from ILS Law College, Pune, ranking in 8th place at Pune University, and his LLM from Swansea University on an International Excellence Scholarship in 2015 specializing in International Commercial and Maritime Law. He has several publications to his credit and assisted with the authorship of the book Maritime Jurisdiction and Admiralty Law in India. He also compiled and edited two other special texts entitled Justice for Women: Legal Compendium and The Moot Compendium. He is a qualified Westlaw UK researcher. He is a member of the Chartered Institute of Arbitrators, London, and an Associate Member of the Asian Institute of Alternate Dispute Resolution, Malaysia. His areas of interests include International Maritime Law, International Commercial and Investment Arbitration, Air Law, Evidence Law and Transfer of Property Act. Prior to joining NLUO, he practiced in the High Court of Orissa and was also a Civil Judge in the Odisha Judicial Services. He is presently a Research Associate and Teaching Assistant at NLUO. He teaches Maritime law and International Commercial Arbitration to undergraduate students and is in charge of the Centre for Maritime Law at NLUO. He is also a knowledge partner with the Centre for Arbitration and Consultation Development (CACD), a non-profit organization in India. Martin Davies is Admiralty Law Institute Professor of Maritime Law at Tulane University Law School in New Orleans and Director of the Tulane Maritime Law Center. He holds the degrees of MA and BCL from Oxford University, England, and an LLM from Harvard Law School. Before joining Tulane, he was Harrison Moore Professor of Law at the University of Melbourne in Australia and before that he taught at Monash University, University of Western Australia and Nottingham University. He has also been a visiting professor at universities in China, Italy, Azerbaijan and Singapore. He has received several teaching awards, and in 2017, the editors of the law report series American Maritime Cases dedicated the 2016 bound volumes to him. He is author (or co-author) of books on maritime law, international trade law, conflict of laws and the law of torts. He has also published many journal articles on these topics. He has extensive practical experience as a consultant for over 30 years on maritime matters and general international litigation and arbitration, in Australia, Hong Kong, Singapore and the USA.

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Osatohanmwen Anastasia Eruaga is a Research Fellow with the Nigerian Institute of Advanced Legal Studies and a Doctoral Candidate of the World Maritime University, Sweden. She studied Law at the University of Benin, Nigeria, and subsequently obtained an LLM (Maritime Law) from the University of Nottingham, the United Kingdom, in 2009. She has been involved in extensive legal research and writing in the areas of public law, especially Maritime and Human Rights Law. Her current research brings her in close contact with maritime security-related issues. With several individual and co-authored peer-reviewed book chapters and journal articles to her credit, she has served as a speaker and guest lecturer at several conferences. She served as part of the support faculty for the 2015/2016 and 2018/ 2019 MSc class in Maritime Law and Policy (MLP) at the World Maritime University, Malmö, Sweden. Aref Fakhry joined WMU in 2014 as an Associate Professor. He mainly lectures in WMU’s MSc Maritime Law and Policy specialization. His areas of expertise are commercial maritime law, maritime security, marine environmental law, and ocean governance and policy. Aref carries 15 years’ experience as a lecturer at the IMO International Maritime Law Institute (IMLI) and the International Ocean Institute. He concurrently lectures at the Faculties of Law of the Holy Spirit University of Kaslik in Lebanon and the University of Malta. He has acted as a consultant for IMO, REMPEC, UNEP, UNCTAD and the European Commission. Aref earned his PhD from the University of Southampton where he studied the implications of piracy in the Horn of Africa on maritime contracts. He is an advocate registered at the Montreal Bar in Canada. He is also a member of the Canadian Maritime Law Association. He is a citizen of both Lebanon and Canada. He speaks fluently Arabic, English and French and has a good level of Spanish. Lixin Han is Vice Dean, Professor and Doctoral Tutor, Faculty of Law, Dalian Maritime University; PhD in law; Arbitrator, China Maritime Arbitration Commission; Arbitrator, China International Economic and Trade Arbitration Commission; Arbitrator, Dalian Arbitration Commission. Anish Hebbar serves as Assistant Professor of Maritime Safety and Environmental Administration at the World Maritime University. His doctoral work focused on governance of oil spill disasters and his master’s dissertation focused on risk communication. His current work focus includes risk assessment, maritime accident investigation, domestic ship safety and member state performance. As a practitioner of the law of the sea in his previous service of over twenty-eight years in the Indian Coast Guard, he gained deep insights into the several tenets of innocent passage described in this book chapter. Måns Jacobsson was Director and Chief Executive Officer of the International Oil Pollution Compensation Funds (IOPC Funds) from 1985 to 2006. In his earlier career he served in the Swedish judiciary at district court and appellate court levels,

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About the Authors

and he held the post of President of Division of the Stockholm Court of Appeal. He has also been Head of the Department of International Civil Law of the Swedish Ministry of Justice. He is a member of the Board of Governors of the World Maritime University (WMU) in Malmö (Sweden). He works as a consultant in maritime and environmental matters and as an academic lecturer at numerous institutions in a number of countries, inter alia, as Visiting Professor at the WMU and at the Maritime Universities in Dalian and Shanghai and as Visiting Fellow at the IMO International Maritime Law Institute (IMLI) in Malta. He has published three books and numerous articles in various fields of law. The University of Southampton has conferred upon him the Degree of Doctor of Laws honoris causa. In 2010 he was awarded the King of Sweden’s Gold Medal for significant achievements in the fields of marine environment and shipping. Henning Jessen is a fully qualified lawyer in his home jurisdiction in Germany. He graduated from the University of Kiel in 2001. Supported by a Fulbright Scholarship, he has undertaken postgraduate studies in Admiralty and Maritime Law in the United States (Tulane Law School, New Orleans) from 2003 to 2004. He started his legal career as a WTO lawyer in 2006 in the German Ministry for Economic Cooperation and Development. Since 2008, he has been working as a professor in the areas of Maritime Law and the Law of the Sea, at two universities in the German maritime hubs of Bremen (2008–2012) and Hamburg (2012–2016). Since 2016, Henning Jessen is an Associate Professor for Maritime Law and Policy at the World Maritime University (WMU) in Malmö, Sweden. His main areas of teaching and research are the Law of the Sea (UNCLOS), Legal Aspects of IMO Conventions and Related EU Law, Carriage of Goods by Sea Law/International Aspects of Transport Law, and Trade Facilitation and Related WTO Law. Henning has co-edited the book EU Maritime Transport Law and contributed several chapters to this extensive commentary (see: https://www.bloomsburyprofessional.com/uk/eu-maritime-transport-law-9781509905607/). Shengnan Jia obtained her Bachelor of Laws (LLB) from Beijing Union University, her first LLM degree from the Graduate School of the Chinese Academy of Social Sciences, specializing in Civil Commercial Law in 2009, and a second combined LLM degree in Maritime Law from Lund University and World Maritime University in Sweden, in 2013. She previously served as a partner with the Beidou Dinging Law Firm in Beijing and as Manager of International Business in the Zhongrui Law Firm in Beijing. She is a supporting member of London Maritime Arbitrators Association, a member of China Centre (Maritime) of Southampton Solent University, member of the Professional Committee of Maritime Law of Beijing Municipal Lawyers Association and a member of the editorial board of Journal of Shipping and Ocean Engineering. Tafsir Matin Johansson is Associate Research Officer at the WMU-Sasakawa Global Ocean Institute (Global Ocean Institute) in Malmö, Sweden. He is a policy analyst with a PhD in Maritime Affairs from WMU and an LLM in Maritime Law

About the Authors

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from Lund University in Sweden. Dr. Johansson has led research teams and worked proactively on regulatory development projects funded by Transport Canada (Government of Canada) since 2014 in diverse areas under Canada’s Oceans Protection Plan, including oil spill intervention, abandoned vessels and derelicts, ISPS Code, security in unmanned and remote facilities, impact mitigation and demand drivers in the context of anchorage, marine medical certificates for seafarers and aquaculture of salmonids. Dr. Johansson has published extensively in the field of ocean governance, corporate social responsibility, international law and environmental law. His key area of interest lies in developing policy briefs for government officials as well as applying “legal theory research” and “expository research” to determine the efficiency and effectiveness of national laws in dealing with contentious issues in the maritime and ocean domain. In Hyeon Kim is Professor of Maritime Law and Marine Insurance Law and Director of the Maritime Law Centre at the School of Law, Korea University. He studied nautical science in Korea Maritime University and was employed by the Sanko Steamship Co. Ltd. After discontinuing his service as ship master, he studied maritime law at Korea University and obtained his LLD in 1999 and his LLM from University of Texas at Austin in 2004. He also studied law at the Bachelor’s level at Korea University from 2005 to 2007 and was a visiting professor at National University of Singapore (2013). He served as a maritime consultant for Kim & Chang, the largest law firm in Korea from 1996 to 1999. He was the president of Korea Maritime Law Association. He acted as legal adviser for Korean government to UNCITRAL Transport Law Project (Rotterdam Rules) and the Legal Committee of IMO. He was also a member of revision committee for Korean Commercial Code Maritime Law Section. He is a member of Planning Committee of CMI. He has published several articles in English on maritime law in the Journal of Maritime Law and Commerce (JMLC), including Sewol Ferry Accident and Hanjin Shipping’s Rehabilitation case in Hong Kong Law Journal. He is the author of Transport Law in South Korea published by Kluwer. He is a listed member of Korea Commercial Arbitration Board and SCMA as well. He acted as the chairman for establishing Seoul Maritime Arbitration Association during 2017 and 2018. Khanssa Lagdami joined the World Maritime University as a Researcher in 2015. Her areas of expertise are law of the sea, marine environmental law, maritime governance and policy, maritime transport and new technologies. Khanssa carries over 10 years of experience as a researcher in maritime and ocean affairs. Her research interests involve project creation, project management as well as capacity building and training (especially for developing countries). Dr. Lagdami has had the opportunity to teach International Public Law, Law of the Sea and Maritime Law at the Faculty of Law of the University of Nantes in France and delivers training on maritime security for MSc Maritime Law and Policy at the World Maritime University. Dr. Khanssa Lagdami earned her doctorate from the University of Nantes where she studied maritime safety and security in the Mediterranean. Her multidisciplinary profile holds also an MSc in Maritime Affairs Management and

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About the Authors

an LLM in International Comparative Law from the University of Perpignan in France. She is fluent in English, French and Arabic. Huiru Liu was the recipient of the Juthika Memorial PhD fellowship Award during her doctoral research at WMU on “The Environmental Dimension of Salvage: Towards a New Legal Regime”. She was awarded a scholarship for attending the IFLOS Summer Academy in Hamburg in 2016 and served as an intern at the International Maritime Organization (IMO) in 2018. She also served an internship with the Intermediate People’s Court of Dalian, China, in September 2014 and the Yahetai law firm in Qingdao, China. She has several peer-reviewed publications to her credit including book chapters on various public and private maritime law topics including marine insurance, maritime safety and security, arctic shipping and law of the sea, both in English and Chinese. She has presented conference papers at World Maritime University and City University of London and has lectured at the National Judicial Institute of Ghana, Jimei University in China, National Law University of Odisha, India, Yangon University and Myanmar Maritime University. She is Assistant Consultant for Marine Care Ltd. for Review of the Merchant Shipping Ordinance 1983, of Bangladesh. Lars-Göran Malmberg holds the Torsten Petterson Chair as Professor in Maritime and Transportation Law at the School of Business, Economics and Law, University of Gothenburg. Professor Malmberg has specialized in public law matters concerning aviation, maritime and other transport-related activities. He has been representing the Swedish Government in the ICAO as a legal expert. Between 1994 and 2010, he participated in numerous committees and diplomatic conferences within the organization. He has also been active in legal development programmes in South-East Asia and has been a Visiting Professor at Nagoya University in 2012. He is presently participating in a number of cross-disciplinary research projects in both maritime and transport law and logistics within the University of Gothenburg and Chalmers University of Technology. F. Mikis Manolis is legal counsel at DuMoulin Boskovich LLP and a commercial litigator whose practice touches on a wide variety of matters including maritime, transportation, shareholder, insurance, product liability, securities, employment and professional negligence matters. Mikis completed an MA at Dalhousie University in 1996 with a focus on the Law of the Sea and related policy issues. He later obtained his LLB degree from Dalhousie University in 2001. Mikis was admitted to the British Columbia Bar in 2002. In 2009, Mikis completed a PhD in international commercial and maritime law in a programme run jointly by the University of Wales in Swansea and the World Maritime University in Malmö, Sweden. Mikis is also a member of the Canadian Maritime Law Association. Michael Ekow Manuel is Professor (Nippon Foundation Chair) and Head of the Maritime Education and Training Specialization at the World Maritime University, Sweden. He was previously the Dean of the Faculty of Maritime Studies at the

About the Authors

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Regional Maritime University in Ghana. He is a Master Mariner, with his work at sea culminating in an appointment as Master (Ship Captain). He holds degrees in Maritime Affairs (MSc) and Maritime Administration (PhD) from the World Maritime University with ITF and Sheldon Kinney Fellowships, respectively. Kofi Emmanuel Mbiah is a Barrister at Law. He holds a Master’s degree in Marine Management (MMM) from Dalhousie University, Canada, and a Master of Laws (LLM) from IMO International Maritime Law Institute (IMLI), Malta, where he graduated with distinction and was the recipient of the IMO Secretary General’s Award for Best Overall Performance. Dr. Mbiah also obtained a Master of Business Administration (MBA) from the Ghana Institute of Management and Public Administration in 2005. He obtained his PhD in Maritime Administration from World Maritime University, Sweden, in 2011. He is a member of the Chartered Institute of Arbitrators U.K. (MCIArb) and a Fellow of the Chartered Institute of Logistics and Transport (FCILT). He started his career at Ghana Shippers Authority in 1982 as an Assistant Legal Officer and rose through the ranks by dint of hard work to become the Chief Executive Officer in 1998, a position he held for 19 years. Dr. Mbiah is the immediate past Chairman of the Legal Committee of the International Maritime Organization, a position he held for 6 years. He also served as Chairman of the Union of African Shippers Councils from 2016 to 2017. Since 2006 to date, Dr. Mbiah has served at various times as a Visiting Professor at the World Maritime and Lund University in Sweden and at the IMO International Maritime Law Institute in Malta. He has also served as a resource person and maritime law expert at various international seminars and conferences including CMI conferences and Maritime Law seminars for judges in Kenya, Ghana and Nigeria. He has published articles in local and international journals. In 2015, the IMO appointed Dr. Mbiah to the Board of Governors of IMLI. He is a proud recipient of many awards for excellence including the IMLI International Achievement Award. He now works with Alliance Partners as a Private Legal Practitioner and a Maritime Law and Management Consultant with Shipman Consult. He is presently the CEO of the Ghana Chamber of Shipping. Maximo Q. Mejia, Jr. has been a member of the resident faculty at the World Maritime University (WMU) since 1998. He holds a BSc (US Naval Academy, Annapolis, Maryland), MALD (Fletcher School, Medford, Massachusetts), MSc (WMU, Malmö, Sweden) and PhD (Lund University, Lund, Sweden). Before joining WMU, he saw duty on board naval and coast guard vessels as well as in shore-based facilities in the Philippines. He went on leave from WMU to return to the Philippines to serve as Administrator (Director General) of the Maritime Industry Authority (MARINA) from May 2013 to July 2016. MARINA is the country’s maritime administration, responsible for integrating the development, promotion and regulation of the maritime industry. In 2013, Lloyd’s List included Dr. Mejia in its list of the world’s 100 Most Influential Persons in the Shipping Industry. Prof. Mejia’s teaching and research areas include maritime policy, law, human factors, safety and security-related issues. He is the editor/co-editor of 8 books and author/

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About the Authors

co-author of more than 60 published articles and book chapters. Prof. Mejia’s editorial responsibilities include the WMU Journal of Maritime Affairs (Associate Editor) and the WMU Studies in Maritime Affairs (Series Editor). At WMU, he currently serves as Director of the PhD Programme, Associate Academic Dean and Head of the Maritime Law and Policy specialization. Samuel Pyeatt Menefee has a background in anthropology and law and is Maury Fellow at UVA’s Center for Oceans Law and Policy. He holds degrees from Yale, Harvard, Oxford, Cambridge and the University of Virginia and has published extensively on piracy and maritime terrorism. Menefee has held several academic appointments and was formerly Rapporteur of the CMI’s Joint International Working Group on Uniformity of the Law of Piracy. The Mariners’ Museum made him a Huntingdon Fellow for his work in the field. Proshanto K. Mukherjee is Professor of Maritime Law, Dalian Maritime University; Professor Emeritus of Maritime Law and Policy, World Maritime University; Chancellor of CINEC, Colombo. He was previously Vice President (Research), Director of Doctoral Programmes, and ITF Professor of Maritime Safety and Environmental Protection at WMU; Director of LLM and PhD Programmes in Maritime Law at Lund University; IMO Legal Adviser for the Caribbean Region; Senior Adviser, Maritime Policy and International Affairs, Department of Fisheries and Oceans, Canada; and Senior Deputy Director and Professor of Maritime Law, International Maritime Law Institute (IMLI), in Malta. He is Honorary Research Fellow, Swansea University; Visiting Professor, Shanghai Maritime University and Jimei University; Visiting Professor, Graduate School of Human Resource Development, Chung-Ang University, Seoul; Visiting Professor, National University of Juridical Sciences, Kolkata; Visiting Professor and Senior Academic Adviser, National Law University of Odisha, Cuttack; and Visiting Professor, BSMR Maritime University, Dhaka. He spent 16 years in a seafaring career reaching the rank of Master before entering legal studies and the legal profession. He is a member of the Canadian Maritime Law Association and the CMI Working Group on Fair Treatment of Seafarers. He is on the editorial boards of several academic journals. He is author of Maritime Legislation and lead author of Farthing on International Shipping, Fourth Edition. He has numerous publications to his credit on virtually every aspect maritime affairs and public and private maritime law, and his works have been cited by the Federal Court of Australia. Reshmi Mukherjee is a solicitor within the jurisdiction of England and Wales. After completing a degree in Political Science at Carleton University in Ottawa, Canada, she pursued her LLB at the institution that was then called the University of Wales, Swansea (now Swansea University). Upon completing the LLB, Ms. Mukherjee studied for and completed the LLM in Maritime and Commercial Law, also at the University of Wales, Swansea. She then took the Legal Practice Course at the same law school, before qualifying as a solicitor. Ms. Mukherjee lives within the County of Swansea with her husband and young son.

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Fikile Portia Ndlovu is a Professor of International Maritime Business at the Massachusetts Maritime Academy, USA. Dr. Ndlovu specializes in publishing research and teaching of international trade laws, which directly includes subjects such as International Commerce, International Trade, the Law of the Sea, Marine Environmental Law and International Diamond Trade Law subjects. As a practicing Maritime Lawyer, Dr. Ndlovu has provided consultancy services to Government bodies such as the Ports Regulator, legal compliance advice and support to various commercial entities; she has also sat as an arbitrator and assessor in various tribunals bringing specialized academic and practical legal knowledge. Dr. Ndlovu’s Diamond Law Book, which investigates the use of natural resources, international financial systems and the mining of sea areas, has received a citation for “Most Notable Publication Received in the Journal of Energy and Natural Resources Law (JERL) Vol 31 No 3”. Trisha Rajput is Assistant Professor at the School of Business, Economics and Law, University of Gothenburg, where she lectures to both law and management students on international trade law. She holds a Doctorate in Law and Master’s in European and International Business Law from the University of Leeds, United Kingdom. She did her Bachelor’s degree in Law from India and was admitted to the Bar Council of India in 2005. Her research interest lies in the area of international economic law with particular focus on international trade law. Her current research considers the contribution of digital infrastructures and the impact of trade facilitation measures in enhancing the efficiency and predictability of global value chains. More recently, her research has focused on Belt and Road Initiative. She has worked on research projects funded by the Swedish government and the European Union. Desai Shan PhD, LLB is an Ocean Frontier Institute Postdoctoral Fellow at the Schulich Law School, Dalhousie University, Canada. Her research project is Regulating Maritime Occupational Health and Safety in the Canadian Arctic Gateway: Regulatory Divergence or Convergence between the Shipping and Fishing Sectors. Before joining Dalhousie University, Dr. Shan was a Postdoctoral Research Fellow at the Faculty of Law, University of Ottawa. She conducted a research project on Occupational Health and Safety Regulation and Management on the Great Lakes and St. Lawrence River. Funded by the Nippon Foundation, Dr. Shan completed her PhD in socio-legal studies at the Seafarers International Research Centre, Cardiff University, Wales. She is a maritime lawyer and a socio-legal researcher. She has published 13 articles, several of which in leading academic peer-reviewed journals, including Marine Policy, International Journal of Law and Psychiatry and Relations Industrielles/Industrial Relations. Baris Soyer is Professor and Director of the Institute of International Shipping and Trade Law at Swansea University; he is also a member of the British Maritime Law Association and British Insurance Law Association. He is the author of Warranties in Marine Insurance (2001), Marine Insurance Fraud (2014), and many articles

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published in journals such as Cambridge Law Journal, Law Quarterly Review, Edinburg Law Review, Lloyd’s Maritime and Commercial Law Quarterly, the Journal of Business Law, the Torts Law Journal and the Journal of Contract Law. Warranties in Marine Insurance won the Cavendish Book Prize 2001 and was awarded the British Insurance Law Association Charitable Trust Book Prize in 2002 for its contribution to insurance literature. Marine Insurance Fraud also won the latter prize in 2015. He has also edited large numbers of collections of essays on commercial, maritime and insurance law. In addition, he sits on the editorial boards of the Journal of International Maritime Law, Shipping and Trade Law and the Baltic Maritime Law Quarterly. Professor Soyer currently teaches Admiralty Law, Charterparties: Law and Practice and Marine Insurance on the LLM Programme at Swansea. D. Rhidian Thomas is Professor Emeritus of Maritime Law and Founder Director of the Institute of International Shipping and Trade Law at Swansea University, Wales, UK. He previously held academic posts at the Universities of Cardiff and East Anglia and visiting positions at universities in Europe, Scandinavia, Far East and North America. He held the Francqui Chair at the University of Leuven in 2010/ 2011 and is currently visiting professor at Gothenburg University, World Maritime University and Bologna University. In 2019 he was the recipient of an Honorary Doctorate of Law conferred by the University of Gothenburg. Professor Thomas is Editor-in-Chief of the Journal of International Maritime Law and a member of the editorial board of Shipping and Trade Law. He is a member of the Comité Maritime International and its International Standing Committee on Marine Insurance, British Maritime Law Association, Chartered Institute of Arbitrators and British Insurance Law Association. In 2016 he was made an Honorary Member of the Croatian Maritime Law Association. He was a member of the Departmental Advisory Committee on Arbitration Law which drafted the UK Arbitration Act 1996. His principal teaching and research interests are in the fields of maritime and shipping law, marine insurance law, international trade law and commercial arbitration. He has written, edited and contributed to many books and published widely in academic and professional journals. In particular he has edited and contributed to two books on the Rotterdam Rules, A New Convention for the Carriage of Goods by Sea – The Rotterdam Rules (2009, Law Text Publishing, UK) and The Carriage of Goods by Sea under the Rotterdam Rules (2010, Lloyd’s List Law, London, UK), and is editor and contributor to the Modern Law of Marine Insurance series of volumes (1996–2016) published by Informa Law from Routledge (UK). He is a frequent speaker at conferences and seminars and also acts as an expert witness and consultant. Yuanjun Xia is an associate professor in maritime law at Dalian Maritime University (DMU) Law School and a member of Liaoning International Maritime Law Institute and the China Maritime Law Association. He is also a part-time lawyer of Beijing Globe-Law Law Firm, Dalian Branch. His research interests are primarily in the fields of carriage of goods by sea, marine environmental law and private

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international maritime law. Yuanjun earned his LLB in 1998 and his LLM in 2001 from DMU and gained his PhD from Tsinghua University in 2011. He attended a short-term training programme at the World Maritime University in 2016 and conducted an academic visit in the Institute of Maritime Law at the University of Southampton from August 2018 to August 2019. Yuanjun has published a number of articles on maritime law in both English and Chinese academic journals, some of which were awarded prizes by different academic institutions. He has been both person-in-charge and participant in several research projects concerning maritime or shipping law. Jingchen Xu is currently a postdoctoral fellow at the Centre for Maritime Law, National University of Singapore, Faculty of Law. She obtained her SJD and LLM in Admiralty (with distinction) from Tulane University Law School and her LLB in Maritime Law from Dalian Maritime University. At Tulane, Jingchen was a Senior Editor for Volumes 40–41 of the Tulane Maritime Law Journal and a research assistant to Professor Robert Force. Jingchen’s work has been published in the American Bankruptcy Law Journal and the Journal of Maritime Law and Commerce, and she has presented papers at several conferences. She has interned with the American P & I Club and several US maritime law firms and is admitted to practice law in New York State and in China. Jingjing Xu is Head of Plymouth Business School at the University of Plymouth. She is Professor of Maritime Law and Economics, and before she took on the Head of School role, she was the Associate Dean for Research in the Faculty of Business and Director of the Institute for Social, Policy and Enterprise Research (iSPER). She has published extensively on issues relating to the law, policy and management of maritime transport and played a lead role, or acted as an Expert Advisor, in a significant number of EU/international projects. She sits on a number of national and international panels and committees as member or Expert Adviser, and she is an elected Fellow of the Royal Institute of Navigation. She is a member of the editorial board of a number of leading journals in her field and a regular reviewer for numerous journals and publishers. In addition to her role at the University of Plymouth, she is a Visiting Professor at World Maritime University and Lund University in Sweden, Shanghai Maritime University in China, and an Adjunct Professor at the University of Tasmania, Australia. Tingting Yang obtained her BSc and PhD degrees from Dalian Maritime University, China, in 2004 and 2010, respectively. She is currently Associate Professor at the School of Electrical Engineering and Intelligentization, Dongguan University of Technology, Dongguan, China. She has been honoured as one of the Outstanding Young Talents of Dalian, Young Talents in Liaoning Province and Standardization Specialist of Liaoning Province. Since September 2012, she has been a visiting scholar at the Broadband Communications Research (BBCR) Laboratory at the Department of Electrical and Computer Engineering, University of Waterloo, Canada. Her research interests are in the areas of maritime wideband communication

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networks, 6G/B5G wireless network and brain-inspired wireless networks. She serves as the associate Editor-in-Chief of the IET Communications, Advisory Editor for SpringerPlus and Guest Editor for Journal of Communications and Information Networks and Journal of Computer Networks and Communications. She also serves as ICCC2019 Co-chair of Wireless Communications Symposium, the workshop chair of FCST’15 and the TPC Member for IEEE Globecom ’16, Globecom ’17, Globecom ’18 Conferences, IEEE ICC’14, ICC’15 and ICC’16 Conferences, IEEE SmartGridComm’14 Symposium and IEEE ScalCom’14 Conference as well. Yinan Yin completed her PhD under the supervision of Professor Keyuan Zou at the University of Central Lancashire. She now is lecturer in law in Liverpool John Moore’s University. She teaches a range of subjects at both undergraduate and postgraduate levels and also undertakes module leadership of maritime law. The research questions of her PhD involve various current interdisciplinary issues of law and policy in relation to contract law and tort law in the context of international and Chinese law. She has presented at conferences and published journal papers and book chapters concerning issues on international law and international maritime law. She is carrying out a book project in relation to regionalism and international law as co-author for the Routledge publisher. Apart from being a lecturer in law, she also serves as arbitrator with Beihai Arbitration Commission. Haiyang Yu obtained his LLB degree from East China University of Political Science and Law (ECUPL) in Shanghai in 2016, his LLM in Commercial Law specializing in Maritime and Transport Law from Erasmus University Rotterdam in 2017 and is currently pursuing a PhD in law specializing in Maritime Law at the Institute of Transnational Legal Research, Faculty of Law, Maastricht University. He attended courses in Marine Insurance at the master’s level offered jointly by the Dutch P&I Insurance Group and Erasmus University Rotterdam and served a legal internship at Pfizer in Shanghai. He holds the Legal Professional Qualification of China and currently serves as Executive Editor-in-Chief of the CECCA Newsletter on Maritime and Commercial Law, London. Minna Yu is a doctoral student in Public International Law at Wuhan University. She received the degrees of Master of Laws (2016) and Bachelor of Laws (2014) from Dalian Maritime University. Minna has a well-rounded educational background encompassing both private and public maritime law. She served as a legal adviser with China National Cereals, Oils and Foodstuffs Corporation (COFCO Group) for one year. Her doctoral research focuses on jurisdictional issues involving various international judicial institutions and probes into Chinese perspectives towards legal methodologies for the settlement of maritime disputes. Lijun Zhao is Senior Lecturer at Middlesex University, London, specializing in international trade and maritime law and a Founding Director of CECCA. She has an interdisciplinary background in economics, business and management and is a Fellow of the Society of Legal Scholars, the British Institute of International and

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Comparative Law and the British Higher Education Association. She is a member of the Bar of P.R. China and specializes in commercial law. She was a practicing lawyer in Beijing. Dr. Zhao has acted as a consultant for several governmental law reform projects and has held visiting posts at various institutions including Harvard Law School, the Max Planck Institute for Comparative and Private Law in Hamburg, Swansea University, Cardiff University and Shanghai Maritime University. She was previously a Teaching Fellow and Liaison Officer at Bangor University and Executive Editor of the Journal of China University of Political Science and Law.

The Effect of the Arbitration Clause Incorporated in a Bill of Lading to Third Persons Pinar Akan

Abstract The validity of the arbitration clause in a bill of lading (liner and/or charterparty bills of lading) under Turkish law governed by various Acts. Conditions for the validity of foreign arbitration agreements are; (1) The arbitration agreement shall be in writing. (2) The parties to the arbitration agreement shall be competent. (3) The arbitration agreement shall be valid under the law, which the parties have chosen. The condition for the arbitration agreement to be in writing can be achieved in two ways. One of them is insertion of the arbitration clause among other existing terms and conditions of the bill of lading and the other way is incorporation to a charterparty provided that a copy of the charterparty is handed over to the holder of the bill of lading. Due to the following reasons those terms and conditions, including arbitration clause, either inserted or incorporated properly are exempted from the examination brought by the Art. 20 of Turkish Code of Obligations; (1) By virtue of a bill of lading having the characteristics of negotiable instruments, (2) The infeasibility of examination of generalized transaction terms in contracts between merchants, (3) Freedom of contract and the principle of diligent businessman in commercial law, (4) Article 55/1 of Turkish Commercial Code and the issue of constituting unfair competition already regulated, (5) The privity of practical commercial and customary application compared to Turkish Code of Obligations, (6) The effect of the compulsory provisions regarding maritime law under Turkish Commercial Code.

1 Introduction This chapter covers my legal assessment regarding whether or not the arbitration clause in a bill of lading is valid against third party holders in Turkey. In my opinion, the issue of validity of the arbitration clause in a bill of lading, which is a document of title, receipt and evidence for the contract of carriage, be it either liner or charter party, three separate but closely connected areas should be taken into consideration; P. Akan (*) Maritime Law Department, Marmara University, Faculty of Law, Istanbul, Turkey © Springer Nature Switzerland AG 2020 P. K. Mukherjee et al. (eds.), Maritime Law in Motion, WMU Studies in Maritime Affairs 8, https://doi.org/10.1007/978-3-030-31749-2_1

1

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P. Akan

International Private Law, Commercial Law and Law of Obligations. As a basis for the evaluation, bills of lading are discussed in this chapter under two separate classifications; namely, the “liner bill of lading” and the “charterparty bill of lading”.1

2 Assessment in Terms of Arbitration Legislation Arbitration is a widely invoked procedure due to its speedy and is a relatively inexpensive way of settling international commercial disputes. It is also suitable regarding to the resolution of issues with technical knowledge requirement. In the discussion below, first, the conditions of validity pertaining to an arbitration agreement are assessed in general terms and thereafter the validity of the arbitration clause or reference to another instrument containing an arbitration clause is examined.

2.1

Determining the Validity of Arbitration Agreement

At present, the principals for determining the validity of arbitration clauses are governed by the provisions of the laws enacted for the enforcement of arbitration awards. Within the scope of Turkish law, the legal provisions pertaining to arbitration may be enumerated as follows: 1. Dated 08.05.1991 and numbered 3731: “Convention on the Recognition and Enforcement of Foreign Arbitral Awards (dated 10th of June 1958)”, which entered into force through publication in the Official Gazette No. 20877 dated 21.05.1991. 2. International Arbitration Law (IAL), Law No. 4686, accepted on 21.06.2001, with the effective date 05.07.2001 through publication in the Official Gazette No. 24453. 3. Act on Private International and Procedural Law (APIPL), Law No. 5718 accepted on 27.11.2007, with the effective date 12.12.2007 through publication in the Official Gazette No. 26728. With regard to Turkish legislation, arbitral awards based on arbitration proceedings are divided into two types as follows:

1 Charter party bills of lading are assigned based on the charter parties that are set. In this type of bill of lading a reference is made to the charter party concerned and by that way the terms and conditions of the bill of lading are made enforceable for the charter party concerned. This type of bill of lading, is used for vessels of which their voyage is designated independently mostly called as “tramp service”. Liner bills of lading, instead, are used for vessels that are navigating in a designated route and within the scope of designated trip details and the clauses involved in the agreements concerning the conveyance that will be made by these vessels are not drawn up on a separate charter party, instead, they are drawn up directly on the reverse side of the bill of lading issued.

The Effect of the Arbitration Clause Incorporated in a Bill of Lading. . .

3

1. National arbitral awards 2. Non-national arbitral awards (hereinafter “foreign arbitral awards”). National arbitral awards, are sub-divided into two types as follows: (a) National Arbitral Awards given pursuant to International Arbitration Law, and (b) National arbitral awards given pursuant to the Turkish Civil Procedure Code No. 6100 (hereinafter TCPC) National arbitral awards given under the TCPC and excluding any foreign element, can be enforced without the need for an order of execution. But, for the enforcement of foreign and national arbitral awards given under any International Arbitration Law, a certificate or order of execution must be obtained.

2.2

Validity of Foreign Arbitration Agreement

In order for: (a) foreign arbitral awards to be enforced in Turkey, or (b) the defendant, depending on an arbitration agreement, to raise a valid arbitral opposition the arbitration agreement between the parties should be valid. In the event of the defendant, against whom an action has been brought in a Turkish court, raising an arbitral opposition, depending on the arbitration agreement drawn up with the plaintiff, the court verify the validity of the arbitration agreement, and if it is confirmed, Judge will dismiss the claim underground or existing an arbitration agreement. In a case filed in a Turkish court, if one of the parties asserts an arbitral opposition, the validity of the arbitration agreement shall be assessed on the basis of the arbitration legislation being valid in Turkey. In order to determine the validity of the arbitration agreement the Turkish court will examine the following issues; – Whether the counter party of a Turkish party is a foreigner or not, or – Whether the chosen arbitration place is at one of the New York Convention countries, or – Whether Turkey was chosen as arbitration place or not where the counter party of a Turkish entity or person is a foreigner. Also, the requirements and corresponding provisions of law set out below will apply: 1. If in an arbitration agreement, the counterparty to the Turkish party is a citizen of a country, which is a party to the New York Convention and if the place of arbitration is set as Turkey, then the validity of the arbitration agreement shall be examined on the basis of Law number 3731, which recognizes the New York Convention.

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According to this Law: i. The arbitration agreement shall be in writing. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams. (New York Convention Art. II-1,22) ii. The parties to the arbitration agreement must have legal capacity. [New York Convention Art. V-1(a)3] iii. The arbitration agreement shall be valid under the law to which the parties have subjected the agreement. In the case where the parties have not subjected the agreement to any applicable law, the validity examination shall be made under the law where the arbitral award is made. [New York Convention Art. V-1(a)4] 2. If in an arbitration agreement, the counterparty to the Turkish contractor, is a citizen of a country which is not a party to the New York Convention and the place of arbitration is set as Turkey, then the validity of the arbitration agreement shall be examined according to the Act on Private International and Procedural Law (hereinafter APIPL). According to this provision: i. The arbitration agreement shall be in writing, ii. The arbitral award shall not be contrary to public law or public order, iii. It shall be possible to settle the dispute subject to the arbitral award by way of arbitration under Turkish law, iv. The arbitration agreement or clause shall be valid pursuant to the governing law designated by the parties, or in the absence thereof, pursuant to the law of the place where the arbitral award is rendered. (APIPL Art. 625).

2

New York Convention Art. II 1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration. 2. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

3

New York Convention Art. V-1(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity.

4

New York Convention Art. V-1(a) . . . or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made. . .

5

APIPL Art. 62 The court shall dismiss the enforcement request of a foreign arbitral award, if,

The Effect of the Arbitration Clause Incorporated in a Bill of Lading. . .

5

3. If in an arbitration agreement, the counterparty to the Turkish party to the contract is a citizen of a country that is a contracting or non-contracting party to the New York Convention and the place of arbitration is set as Turkey, then the validity of the arbitration agreement shall be examined depending on the IAL. According to this provision: i. The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication, which provide a record of the agreement. The arbitration agreement is deemed to exist if one party in the statement of claim alleges it and the other in the statement of defence does not deny it. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the reference is such as to make that clause part of the contract (IAL Art. 4/26). ii. The arbitration agreement shall be valid under the law agreed by the parties, in the absence of such agreement shall be valid under Turkish Law (IAL Art. 4/37). In an action which includes a request for enforcement or arbitral opposition brought in a Turkish court, the validity of the arbitration agreement, as stated above, shall be examined according to whether or not the parties to the contract are parties to the New York Convention and the place of arbitration is Turkey.

a) An arbitration agreement is not executed or arbitration clause does not exist in the main agreement, b) The arbitral award is contrary to public morality or public order, c) It is not possible to settle the dispute subject to the arbitral award by way of arbitration under Turkish law, ... d) The arbitration agreement or clause is invalid pursuant to the governing law designated by the parties, or in the absence thereof, pursuant to the law of the place where the arbitral award is rendered, ... 6

IAL Art. 4/2 The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the reference is such as to make that clause part of the contract. (Also for detailed information, Kalpsuz, Türkiye’de Milletlerarası Tahkim, 2007)

7

IAL Art. 4/3 The validity of the arbitration agreement is subject to the law agreed by the parties, failing such agreement shall be valid under Turkish Law.

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After the determination of the criteria for the assessment of the validity of the arbitration agreement, the applicable law shall be determined. If this determination results in the applicable law being Turkish law (where the Turkish law is agreed by the parties or in the absence of such an agreement, the place of arbitration is agreed as Turkey), the validity of the arbitration clause or agreement shall be examined under Turkish law. However, if it is determined that the Turkish court should apply the law of another country other than that of Turkey, since the validity of the arbitration clause should be examined according to that law, and it is enacted in Article 33 of TCPC that the judge shall apply it ex officio, and since knowing the law of another country requires special knowledge, the judge, according to Article 266 of TCPC, should have expert examination carried out and the validity of the arbitration clause in question should be determined by such expert examination. As result of expert examination, if it is determined that the arbitration clause is valid under the law of that country, the case should be rejected due to the arbitration clause. On the other hand, as a result of the expert examination if it is determined that the arbitration clause is found to be invalid under the law of that country, with the rejection of the objection, judicial proceedings should be continued.

2.3

Validity of the Arbitration Clause in the Bill of Lading

If, as explained above, the validity of the arbitration clause is to be determined according to Turkish law, the clauses incorporated in the bills of lading and the charterparties referred to, should be examined and the validity of the arbitration clause should be evaluated in the light of the following points. The contract of affreightment may be defined as the contract between the carrier and the charterer for the carriage of goods by sea. Therefore, the contract of affreightment, may be divided into two categories as follows: 1. Charter contracts, issued for the carriage of the goods, referred to as bulk cargo, by vessels carrying out irregular voyages. A single charterer (or multiple charterer providing multiple merchants coming together), holds a vessel for the carriage of goods and issues a charterparty contract with the carrier. 2. A contract, issued by a carrier carrying out regular voyages referred to as liner voyages, or a single voyage with numerous individual shippers, referred to as a contract of affreightment. Contrary to charterparty contracts, in a contract of affreightment, the vessel is not allocated to a single shipper or multiple shippers. Even in container carriage, where there are numerous individual shippers, they are reassured of their cargo being carried from one place to another. The arbitration clause in a contract of affreightment issued between the carrier and the charterer should be evaluated separately according to the two types, mentioned above.

The Effect of the Arbitration Clause Incorporated in a Bill of Lading. . .

2.3.1

7

Liner Bill of Lading

Arbitration clauses contained in these types of bill of lading, must be in written form. In addition, if the validity requirements of the applicable law of the country chosen, or if the law is not chosen, the law of the place of arbitration is satisfied, then a valid contract is deemed to exist. In case the bill of lading is transferred, the arbitration clause will bind both the assignee and the original holder of the bill.

2.3.2

Charterparty Bill of Lading

In these types of bills of lading, the charter parties are incorporated into the bills of lading by an incorporation clause. In order to satisfy the condition that the arbitration agreements should be in writing, a copy of the charter party should be handed over to the bill of lading holder along with the bill of lading. The incorporation of the charter party clauses along with the arbitration can be considered to be sufficient. However, such arbitration agreement or clause is valid between the carrier and the charterer. In the case that the bill of lading is transferred to a new holder, in order for the arbitration clause to be valid for the new holder, a copy of the charterparty must be submitted to the new holder in the course of transfer. (Art.1237/3 of Turkish Commercial Code “hereinafter TCC”) If the charterparty is submitted to the holder of the bill of lading, the arbitration clause shall be binding for the new holder, as well. However, if the bill of lading transferred, also contains an arbitration clause and there is contradiction between this clause and the clause contained in the charterparty referred to, the clause in the bill of lading will prevail. This issue is explained in more detail below.

3 Assessment in Terms of Commercial Law 3.1

Arbitration Clause Along with Other Carriage Agreements/Bills of Lading Not Issued as a Reference to Any Charterparties (in Container Shipping)

Container shipping, by its very legal nature, is a contract for the carriage of goods without a need to issue a separate agreement, as all the conditions being applicable to holders, are depicted on the reverse side of the bill of lading. The conditions in the bill of lading become a part of it and are integrated with negotiable instruments. The conditions being set out in the reverse side of the bill of lading, gives to that instrument the characteristics of a contract of affreightment.8 Moreover, merchants

8

Çağa/ Kender, Deniz Ticareti Hukuku, II, Eight Edition, 2006, pp. 16, 72.

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and companies in the container shipping business, declare the carriage conditions written on the reverse side of the bill of lading in their websites regularly, and in that manner, the content remains unchanged. Briefly, as there is no customary usage regarding issuing contracts of affreightment in written form, the terms of the contract of carriage of goods by sea, are those contained in the bill of lading which becomes evidence of the contract of carriage of goods settled between the carrier and the charterer.9 On the other hand, where the contract of carriage of goods pertains to carriage of particular cargo such as piece goods, the particular distance and the carriage conditions between ports is known in advance. Essentially, printed bill of lading formulations and general tariff specifications also include general provisions regarding carriage conditions. Where there is notification of goods being forwarded to the carrier in advance and acceptance of it by the carrier, the contract is deemed to be concluded. In such a case, the issue of a charterparty contract is of no concern. Upon the dispatching of goods to the vessel, the dispatch or delivery of the bill of lading as a written document, constitutes evidence of the conclusion of the contract.10

3.2

Bill of Lading Issued as a Reference to a Charterparty in Which Charterparty Provisions Are Referred in General or Explicit

In the carriage of bulk cargo, the parties determine the outline of the conditions of carriage before the actual carriage by an initial text known as recap/fixture/stem. The conditions of this initial settlement text are attached to the charterparty by mutual covenant. In carriage by sea, across the world, the bills of lading, both issued through liner and charterparty contracts, contain arbitration clauses and international agreement of jurisdiction authorizing the courts of different countries to exercise jurisdiction in the event of a dispute. In order to make mention of a valid arbitration clause or agreement, it is not compulsory for the agreement to be directly drafted or cited by the parties. Parties may issue an arbitration agreement by reference to generalized transaction terms involving an arbitration clause. It is important to know whether the parties have chosen the generalized transaction terms involving an arbitration clause of their own free will. In this respect, in order for an arbitration clause involving such kinds of general conditions to be valid, a reference must be made to the general conditions

9

Sözer, Deniz Ticareti Hukuku, Third Edition, 2014, p. 397. İzveren, Deniz Ticareti Hukuku, Ankara 1960, p. 118; Tekil, Deniz Hukuku, Sixth Edition, 2001, p.258. In the contracts of carriage of goods, for the reason that a contract of carriage of goods is not also drawn up and the bill of lading constitutes a part of the contract of carriage of goods, bill of lading, also consist many printed terms (Çağa, Deniz Ticareti Hukuku II, 1995, pp. 12–13).

10

The Effect of the Arbitration Clause Incorporated in a Bill of Lading. . .

9

involving this clause; in other words, in the agreement, it must be clarified that the general conditions are part of or a supplement to the agreement.11 There is no problem if there are explicit references to the arbitration clause incorporated in a voyage charterparty. Where parties refer to the application of the charterparty terms and conditions including an arbitration clause, such a clause will be binding. On the other hand, if there is reference to a voyage charterparty or generalized transaction terms without mentioning the arbitration clause, although the binding effect of the arbitration clause may fluctuate, it can be foreseen that an arbitration agreement can be entered into by incorporation in the IAL. In other words, under Art. 4/2 of IAL, a valid arbitration agreement shall be deemed to be made in case of a reference to a document containing an arbitration clause constitutes an arbitration agreement provided that the reference is such as to make that clause part of the contract.12 In this context it will be appropriate to mention Articles 124513and 124314 of TCC. According to Art. 1243 of TCC, all terms and conditions in the contract of affreightment, bill of lading or sea waybill which abolish or restrict obligations and liabilities directly or indirectly, are invalid. According to Art.1245, the provisions of Article 1243 shall not be applied to the voyage charter contracts. In other words, obligations and liabilities can be removed in advance. However, in the continuation of Art.1245 it is provided that if the bill of lading is issued on

Şanlı, Uluslararası Ticari Akitlerin Hazırlanması ve Uyuşmazlıkların Çözüm Yolları, Sixth Edition, 2016, pp. 417–421. 12 Ekşi, “Milletlerarası Deniz Ticareti Alanında “Incorporation” Yoluyla Yapılan Tahkim Anlaşmaları”, First Edition, 2004, pp. 38, 41; Şanlı, “Konişmentonun Devri,Alacağın Temliki, Perdeyi Kaldırma Teorisi Uygulamasında Sözleşmede Yer Alan Tahkim Şartının Konişmentoyu Devralan, Alacağı Temellük Eden ve Perdenin Arkasında Kalan Bakımından Geçerliliği Sorunu, 2002, MHB Ergin Nomer’e Armağan, pp. 774–776. 13 The provisions of Article 1243 shall not be applied to the voyage contracts. However, if the bill of lading is issued on the basis of such a contract, the provisions of Article 1243 shall apply to the relationship between the consignee and the carrier. 14 In a contract of affreightment or in the bill of lading, or seawaybill; 11

(a) Articles 1141, 1150, 1151 and 1178 to 1192 relating to the carrier’s obligations and liabilities, (b) Articles 1145, 1149, 1165 and 1208 concerning the obligations and liabilities of the charterer and the shipper, (c) Articles 1228 to 1242 of the seawaybills, All the terms and conditions that void or restrict the obligations and liabilities arising directly or indirectly from these provisions are invalid. (2) All the terms and conditions resulting from the transfer of the rights and receivables of the insurance to the carrier or to provide such benefits to the carrier and to reverse the burden of proof, which is regulated by the laws, shall be subject to the provisions of the first paragraph. (3) The invalidity of the terms and conditions that abolish or restrict the responsibility shall not be the result of the invalidity of the contract of affreightment or the remaining provisions of the bill of lading or seawaybill. (4) The terms and conditions that extend or aggravate the carrier’s obligations and liabilities are valid.

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the basis of the voyage charter contract, Art. 1243 is not applied with respect to the relationship between the non-charterer consignee and the carrier. In other words, the provisions of the charter contract which abolish the obligations and liabilities of the vessel for the non-charterer consignee, are invalid. Accordingly, under Art.1237, the question arises as to whether the arbitration clause in the charterparty is valid for the holder except for the charterer to whom a charterparty is submitted. In order for this question to be answered, it should be assessed whether the arbitration clause, on its own, has a feature for removing or restraining obligations and liabilities of the carrier. An arbitration clause, on different grounds, is to ensure that there is a real person/ corporation for the settlement of disputes. Such clause does not hinder the party alleging a dispute from resorting to a third party for the settlement of the dispute. It is also not possible to state that the preference of the arbitration procedure breaches the right to legal remedies. If the charterparty is submitted to the non- charterer holder of the bill of lading, it is deemed that he is aware of the method available for the settlement of disputes and there is no restraint on him to apply the agreed arbitration procedure. For these reasons, in my opinion, for the holder, excluding the charterer to whom a charterparty is submitted, it is not possible to interpret the arbitration clause in the charter party as a clause removing or restraining liability. The holder, excluding the charterer to whom a charter party is submitted, shall not allege under TCC Article 1243 that the arbitration clause is invalid.

4 Assessment in Terms of Law of Obligations 4.1

In Regard To a Bill of Lading as a Negotiable Instrument the Unavailability of Examining Generalized Transaction Terms Under Article 20 of TCO

By virtue of the principle of abstraction, which is a leading principle in the Negotiable Instruments Law, a bill of lading, independently of the legal relationship based on it, is in circulation with all its terms and conditions. Another principle that should be mentioned in this regard is the principle of “Trust to Negotiable Instrument Records”. The one who takes over a bill of lading, trusts the records in the belief that the conditions therein are valid for him as well; that is, both for the transferee and the transferor. This principle has a protective effect. It is well known that the negative conclusion of the examination conducted under Article 20 of Turkish Code of Obligations (hereinafter TCO) is the condition examined being “deemed to be unwritten”. The conclusion of the condition being deemed to be unwritten is contrary to the principle of trust to the negotiable instrument records stated above. As a result of the examination of the generalized transaction terms, there is a possibility that the clauses which were agreed upon by the transferee and the transferor of the bill of lading shall become invalid. For this

The Effect of the Arbitration Clause Incorporated in a Bill of Lading. . .

11

reason, for the conditions incorporated in the bill of lading, the examination of generalized transaction terms pursuant to TCO Art.20 is improper with the Negotiable Instruments Law.

4.2

The Infeasibility of Examination of Generalized Transaction Terms in Contracts Between Merchants

In doctrine relating to the Law of Obligations, there is dictum that with regard to the standard-type agreements concluded between merchants and in commercial relations, the examination of generalized transaction terms should not be conducted.15 This is because such an examination constitutes intervention of free market conditions and poses the effect of deteriorating the market balance.

4.3

Freedom of Contract and the Principle of Diligent Businessman in Commercial Law

In accordance with the principle of “freedom of contract”, ascendant in private law, everyone has the right to make a contract with anyone, in any condition, content and any form he wants. According to Art. 18/2 of TCC, a merchant, in commercial affairs and transactions and in all commercial activities, committed by him, shall act as a diligent businessman. The term “diligent businessman” determines the scope of application of the freedom of contract principle in Commercial Law. A merchant, who is aware of the conditions of the contract that he draws up and of the rights and obligations it raises, is diligent. The reflection of this term in maritime law, especially regarding contracts of affreightment, is as follows: The merchant party to the contract of affreightment, being aware of who, how and under which circumstances the burden will be carried and examining the conditions of the contract of affreightment before the contract is drawn up, is a diligent merchant. The consignee will examine the content of the bill of lading, in this context, all that is written on both the front and reverse sides of the bill, and if conditions are appropriate, he will submit the bill of lading to the carrier or the agency by endorsing it. In this way, the weaker party is protected against the more powerful party under the generalized transaction terms examination held under Article 20 of the TCO. This approach is adopted especially in areas such as business, banking or consumer law under which there exists power inequalities between the parties. As to commercial relationships between merchants, the adoption of such an approach is ill suited

15

Antalya, Borçlar Hukuku Genel Hükümler, 2012, p. 294.

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because of the principle of the diligent merchant; and this is valid a fortiori for merchants who intend to have their goods carried by sea. The bill of lading is an instrument concerning commercial business involving carriage of goods by sea. It cannot be contemplated that a merchant holding a bill of lading, who engages in international business, does not act as a diligent merchant and is not aware of the clauses in a bill of lading setting out his obligations in the charterparty to which it refers.

4.4

Article 55/1 of TCC and the Issue of Constituting Unfair Competition

Under the Turkish Commercial Code, there is provision for examination of generalized transaction terms pertaining to commercial relationships between merchants. According to Article 55/1 of TCC, those who use the pre-written generalized transaction terms in a misleading way against the other party, those who directly or through interpretation deviating from the applicable legal regulation or using terms provided for the distribution of rights and debts that significantly violate the nature of the contract, are deemed to act against good faith. The use of generalized transaction terms in a manner that is against good faith constitutes unfair competition. The sanction for unfair competition is compensation and criminal conviction. Since the TCC passed into law after the TCO, it is “new law”. According to general principles, where a “new” and “special” law contradicts with an “old” and “general” law, the provisions of the new and special law are deemed to repeal the corresponding provisions of the old and general law.16 This is consistent with the legal maxim lex specialis derogate legi generali. As seen from the foregoing discussion, the TCC provides for special effect and consequence for the examination of generalized transaction terms. It is obvious that the aim of the legislation is to separate out through examination of the generalized terms in commercial transactions between merchants, the general provisions of TCO. This is subject to Article 55/1 of TCC and the application of the relevant sanctions in case of a finding of unfair competition instead of the imposition of an unwritten sanction. In this regard, rather than the general provisions of TCO, Article 55/1 of TCC should be applied to commercial contracts and transactions such as contracts of affreightment and bills of lading. Besides, in the TCC there are compulsory provisions with regard to maritime law and these provisions constitute a kind of generalized transaction terms examination. This issue is examined in detail below.

16

Baştuğ, Hukukun Temel İlke ve Kavramları, 1975, p. 85.

The Effect of the Arbitration Clause Incorporated in a Bill of Lading. . .

4.5

13

The Privity of Practical Commercial and Customary Applications Compared to TCO (TCC Article 1/2)

According to Article 1/2 of TCC, commercial affairs that do not have a commercial clause, commercial custom applies before general provisions. In this respect, even if Article 55/1-(f) of TCC, as mentioned above, did not exist, customary law would apply before the general provisions of Article 20 of the TCO. Because of the international characteristics within the scope of maritime law, agreements regarding such matters as sea carriage of goods, towage and salvage are drafted as standardform contracts. International authorization and arbitration clauses involved in these contracts and also charterparties to which bills of lading relate, have gained acceptance across the world including Turkey. In this connection, it is submitted that custom, practice and usage have developed. In that regard, before implementing general provisions, this custom must be applied and international authorization and arbitration clauses must be accepted. International bodies involved in global maritime trade expend great efforts into global protection of carriers and parties related to cargo, in order for principles of trade and commerce to be uniform all over the world. The standard type contracts prepared for almost all trade and commerce relations and agreements by the organizations such as the Baltic and International Maritime Council (BIMCO) are resorted to widely in international trade. Changes and updates related to the agreements concerned are announced and presented regularly on their websites for the information of merchants operating internationally. Thus, it is not possible to say that the generalized transaction terms, that become a matter of common knowledge, are accepted by using the ignorance of one of the contracting parties or by imposing means for concealing them. On the contrary, it can be said that the terms in question have reached the status of custom. Examining of generalized transaction terms as general provisions that are contrary to custom will cause the practice that has become uniform to be removed from the international trade system.

4.6

The Effect of the Compulsory Provisions Regarding Maritime Law Under TCC

Article 1243 of TCC, involves compulsory provisions regarding contracts within the scope of maritime law, the conditions that will not be involved in bills of lading and their legal consequences. For example, according to Article 1243 of the TCC, provisions in contracts of carriage, abolishing and restricting the carrier’s liability, must be void. The compulsory provisions of the law mentioned above can be considered as an examination of generalized transaction terms. In such case, while it may be in accordance with the special provisions regarding maritime law in the TCC, internal examination of generalized transaction terms and examining in

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accordance with Art. 20 of TCO, will be contrary to the principle that special provisions shall apply before common ones.

5 Conclusion Whether it is a bill of lading (incorporating either an arbitration clause or referring to charterparties containing an arbitration clause) which has detailed regulation on its validity under the relevant legislation and subject to sensitive examination, both general and specific as in the TCC, or where the terms or references are determined as applicable as a result of such examination, it is necessary to adopt the arbitration clause that is in validity and to establish the decisions in accordance with this determination without applying any other examination. The arbitration clause subject to specific examination, as stated above, will also be subject to the generalized transaction terms examination, which will result in the destruction of the principle of trust and of the universal systems accepted by domestic laws and international conventions. In my view, application of the examination of generalized transaction terms will be improper for maritime transport contracts, charterparties and bills of lading issued accordingly, where the arbitration clause is incorporated.

References Act on Private International and Procedural Law (APIPL), Law No. 5718 Antalya, Borçlar Hukuku Genel Hükümler, 2012 Baştuğ, Hukukun Temel İlke ve Kavramları, 1975 Izveren, Deniz Ticareti Hukuku, Ankara 1960 Çağa, Deniz Ticareti Hukuku II, Fifth Edition, 1995 Çağa/ Kender, Deniz Ticareti Hukuku, II, Eight Edition, 2006 Ekşi, “Milletlerarası Deniz Ticareti Alanında “Incorporation” Yoluyla Yapılan Tahkim Anlaşmaları”, First Edition, 2004 International Arbitration Law (IAL), Law No. 4686 Kalpsuz, Türkiye’de Milletlerarası Tahkim, 2007 New York Convention Şanlı, “Konişmentonun Devri,Alacağın Temliki, Perdeyi Kaldırma Teorisi Uygulamasında Sözleşmede Yer Alan Tahkim Şartının Konişmentoyu Devralan, Alacağı Temellük Eden ve Perdenin Arkasında Kalan Bakımından Geçerliliği Sorunu, 2002, MHB Ergin Nomer’e Armağan Şanlı, Uluslararası Ticari Akitlerin Hazırlanması ve Uyuşmazlıkların Çözüm Yolları, Sixth Edition, 2016 Sözer, Deniz Ticareti Hukuku, Third Edition, 2014 Tekil, Deniz Hukuku, Sixth Edition, 2001

Regime Interaction and GAIRS Gabriela Argüello

Abstract The prevention of pollution has a predominant sectoral approach that could result in the transformation of one source pollution into another. This Chapter addresses the role of General Accepted International Rules and Standards (GAIRS) established in the United Nations Convention on the Law of the Sea (UNCLOS) as a legal mechanism to avoid pollution transformation. Particularly, the author discusses ship waste management while at sea and land. This Chapter illustrates the role of GAIRS on the development cross-sectoral policies regarding the Environmentally Sound Management (ESM) of wastes at port reception facilities and integration of these facilities into national waste management systems. These cross-sectoral policies are the result of the collaboration between the International Maritime Organization (IMO) and the Conference of the Parties (COP) to the Basel Convention on the Control of Transboundary Movement of Hazardous Wastes and Their Disposal.

1 The Need for Normative Integration of Environmental Media: The Ship Waste Case Ship wastes are regulated in the wider context of the prevention and control of shipsource pollution. According to Article 211 of UNCLOS, States have the obligation to prevent, reduce, and control ship-source marine pollution. Particular standards for wastes generated due to day-to-day operations of vessels are governed by the International Convention for the Prevention of Pollution from Ships 1973 as Modified by its 1978 Protocol (hereafter MARPOL). MARPOL regulates, among other things, operational residues generated in: (a) machinery spaces; (b) cargo spaces; and (c) living spaces of a ship. MARPOL is the most comprehensive regime dealing with ship-source pollution, both operational and accidental. This instrument relates to the prevention of “pollution of the marine environment by the discharge of harmful G. Argüello (*) University of Gothenburg, Gothenburg, Sweden e-mail: [email protected] © Springer Nature Switzerland AG 2020 P. K. Mukherjee et al. (eds.), Maritime Law in Motion, WMU Studies in Maritime Affairs 8, https://doi.org/10.1007/978-3-030-31749-2_2

15

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G. Argüello

Table 1 MARPOL—ship wastes Ship Wastes MARPOL Annex I Oil

Annex II Noxious substances carried in bulk

Annex IV Sewage Annex V Garbage Annex VI Air pollution

Oily waste

Oily bilge water Oily residues (sludge) Oily tank washings (slops) Dirty ballast water Scale and sludge from tank cleaning Residues from cargo Residues from Category X Residues from Category Y Residues from Category Z Residues that are mixed with Tank washing water Dirty ballast water Bilge slops Including for example: drainage and other wastes from any form of toilets and urinal, drainage from medical premises, and grey water Including for example: animal carcasses, cargo residues that are not covered by other Annexes, and incinerator ashes Including for example: ozone depleting substances from refrigeration, air conditioning, and fire extinguishing equipment

substances or effluents containing such substances.”1 Harmful substances under MARPOL are polluting materials of any kind, i.e., liquid, gas or solid, whose introduction into the environment is detrimental to both human health and the environment. The substances regulated by MARPOL comprise a wider category than waste, since the concept of “harmful substances” includes, for instance, bunkers and hazardous cargoes, such as oil or chemicals, as well as the residues of such cargo. Article 1 (1) of MARPOL defines harmful substances in relation to their deleterious effects if released into the marine environment, i.e., “any substance . . . liable to create hazards to human health, to harm living resources and marine life, to damage amenities or to interfere with other legitimate uses of the sea.”2 This Convention has six annexes, which deal with, respectively: oil; noxious substances carried in bulk, i.e., chemicals; harmful substances carried in packaged form; sewage; garbage; and air pollution. The day-to-day operations of ships will generate ship wastes in relation to the following MARPOL’s annexes (See Table 1): The prevention of ship source pollution strictly regulates harmful substances (including wastes) while at sea, restricting discharges in the marine environment. Based on several discharge criteria, some residues can, under limited circumstances, be disposed of at sea, after being subject to other waste treatment operations,

1 2

Article 1 (1) of MARPOL. Ibid, Article 2 (2).

Regime Interaction and GAIRS

17

including for example oil-water separation in the case of bilge water,3 and the disinfection and comminution of sewage.4 The vast majority of ship wastes, however, remain on board vessels. These residues are constantly generated due to ships operations, and they can only be kept on board for a limited time before its discharge becomes a necessity. The provision of “adequate port reception facilities”5 becomes essential within the waste management process of ship wastes that otherwise would end up in the sea. The Parties to MARPOL, however, have been reluctant to develop the meaning and extent of the obligation related to the provision of port reception facilities6 and the relationship between these facilities and further downstream management operations. Such reluctance could be understood from the traditional legal approach towards “domestic wastes,” i.e., once wastes are discharged on land, States manage these wastes at their discretion. As further analyzed in this Chapter, the provision of port reception facilities includes the obligation to manage ship wastes on land because States shall not transform one type of pollution into another, i.e., marinesource pollution to land-based pollution in accordance with Article 195 of UNCLOS.

2 Significance of GAIRS in the Development of the Law of the Sea and Beyond According to Article 211(2) of the UNCLOS, the regulations adopted by Flag States to prevent, control, and reduce ship-source pollution “shall at least have the same effect as that of generally accepted international rules and standards established through the competent international organization.” These international rules—also known as GAIRS—refer to external hard and soft law norms that fulfill the following functions. First, the reference to GAIRS operationalize the duty of cooperation between States in the development of rules and standards for the protection and preservation of the marine environment from the deleterious effects of pollution.7 Second, regarding ship source pollution, GAIRS represent the minimum legislative

3 MARPOL, Annex I—Oil, Regulation 30 (4) related to pumping, piping, and discharge arrangement. See also, Regulation 32 “oil/water interface detector.” 4 Ibid, Annex IV—Sewage, Regulation 9 (2) “sewage systems”; Regulation 11 (1.1) “Discharge of sewage.” 5 States have the obligation to ensure the provision of adequate port reception facilities, in relation to the following MARPOL’s annexes. Annex I—Oil: in loading ports, ship repair yards or tank cleaning facilities, bunkering ports. MARPOL, Annex I, Regulation 38. Annex II—Noxious Liquid Substances (NLS) in bulk: in ports and terminals handling cargoes of Annex II and in ship repair ports. MARPOL, Annex II, Regulation 18. Annex IV—Sewage, Regulation 12. Annex V— Garbage, Regulation 8; and Annex VI—Ozone-depleting, Regulation 17. 6 Mitchell (1994), Ch. 6; Tan (2006), pp. 251–281. 7 Redgwell (2016), p. 172.

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requirements8 that Flag States must implement and enforce since article 211 (2) UNCLOS explicitly refers to the adoption of regulations that at “least have the same effect” of GAIRS. This means that States still have discretion to adopt stricter standards. Third, by the incorporation of GAIRS, UNCLOS has become a progressive instrument9 that is able to cope with legal, scientific and technological developments without the need to resort to the burdensome procedure of amendments.10 Consequently, UNCLOS has become the basic framework to develop a comprehensive regime for the protection of the marine environment where global and regional treaties interact and reinforce each other. The umbrella standards provided in UNCLOS, including GAIRS, are envisioned to promote “harmonization” and UNCLOS is the “reference point for the validity of subsequent rules on oceans matters.”11 Finally, GAIRS are legal mechanisms available to enhance regime interaction between the law of the sea and other environmental law regimes. Regarding ship source pollution, GAIRS are those rules and standards established through the ‘competent international organization or general diplomatic conference.’ It has been widely accepted that reference in singular to “the competent international organization” is a reference to IMO.12 The UN General Assembly in its annual review and evaluation regarding the implementation of UNCLOS urged States to develop integrated waste management systems and infrastructure to deal with discharges from ships.13 The UN General Assembly also encouraged cooperation between the COP to the Basel Convention and the IMO.14 Such cooperation has led to enhanced coordination and further development of cross-sectoral standards relating to the management of ship wastes on land drawing upon existing expertise and institutional capacity of both the IMO and the COP to the Basel Convention. In 2016, the IMO revised the Manual on Port Reception Facilities.15 The manual is of fundamental importance because it highlights that the obligation to ensure the provision of adequate port reception facilities as established in MARPOL does not end with the reception of ship wastes. This soft law instrument instead qualifies port reception facilities as “adequate” if they “allow for the ultimate disposal of shipgenerated wastes and residues to take place in an environmentally sound manner.”16 What qualifies as environmentally sound has been extensively developed in the Basel Convention. The IMO urges the parties to MARPOL to take into account the

8

Boyle (1985), p. 353. Redgwell (2016), pp. 169–171. 10 Harrison (2011), p. 171. 11 Barnes et al. (2006), p. 5. 12 Franckx (2001), p. 20; Rothwell and Stephens (2010), pp. 343–344; Harrison (2011), p. 171. 13 UN General Assembly A/RES/71/257 (20 February 2017), p. 38. 14 Ibid, p. 42. 15 IMO Port Reception Facilities – How to Do It (2016). 16 Ibid, pp. 19, 21–22. Resolution MEPC.83(44) Guidelines for Ensuring the Adequacy of Port Waste Reception Facilities, (2000). 9

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ESM principles developed by the Basel Convention “in order to deal with common concerns as efficient as possible by a holistic approach.”17 Thus, the IMO has taken a bold yet cautious step towards an international policy regarding the management of ship wastes. While recognizing that the provision of port reception facilities should consider the integration of ship wastes into national waste management systems, the Manual includes several alternatives for the downstream management of ship wastes, while clarifying that specific treatment operations of ship wastes on land is beyond the scope of MARPOL.18 Whether a soft law instrument as the Manual on Port Reception Facilities could qualify as GAIRS is not without controversy. The difference between rules and standards, if any, is far from settled. The International Law Association (ILA) observes that while rules have been interpreted as treaty-based norms, “standards” have been construed as including soft law instruments or as technical provisions established in Annexes of MARPOL, for instance.19 Nonetheless, these guidelines are legally relevant in the implementation of highly technical treaty law, or they could “provide evidence of opinion juris for the possible emergence of a rule of customary international law.”20 It is equally controversial to assess whether a hard or soft law norm is ‘generally accepted.’ In relation to treaty norms a standard could be high levels of ratification of a treaty. Soft law norms, however, are not subject to the same formalities of treaty law norms, but State practice could provide assistance in this matter and it seems immaterial whether a rule or standard is contained in a soft or hard law instrument.21

3 GAIRS and Ship Waste Management in the Sea/Land Interface Ships have a timeframe within which harmful substances can be kept on board before discharge. For this reason, States are obliged to ensure the provision of “adequate” reception facilities for harmful substances of MARPOL’s Annexes I, II, IV, V, and VI. As the late Professor de La Fayette explains: “[s]hip operators have a right and an obligation to discharge certain wastes into port reception facilities, while Port States have an obligation to provide suitable facilities.”22 While at sea, MARPOL provides detailed standards for managing ship wastes, e.g., prevention of waste generation, equipment on board, and discharge criteria. However, the Convention does not provide substantive content concerning the obligation to provide IMO Port Reception Facilities – How to Do It (2016), p. 17. Ibid, pp. 16, 27 and Chapters 8 to 10. 19 Franckx (2001), p. 21. 20 Boyle (1999), p. 906. 21 Franckx (2001), p. 31; Harrison (2011), pp. 174–176. 22 de La Fayette (2009), p. 211. 17 18

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“adequate” port reception facilities. The history of MARPOL shows that its Parties have been reluctant to establish binding standards to assess whether these facilities are adequate. Instead, they have relied on soft law instruments developed under the auspices of the IMO.

3.1

Ship Waste Management on Land and the Duty Not to Transform Pollution

The IMO Manual on Port Reception Facilities provides guidelines for downstream treatment of wastes after their discharge at port reception facilities. This instrument assists States in complying with the obligation set in Article 195 of UNCLOS, i.e., to avoid the transformation of one type of pollution into another. This provision has an integrative function23 that requires cooperation and coordination between stakeholders and legal regimes in order to prevent unintended consequences in one environmental media, e.g., sea, while taking actions to prevent and control pollution in another environmental media, e.g., land. The international regulation of the environment has a predominant sectoral approach, and Article 195 of UNCLOS is an attempt to address fragmentation.24

3.2

Environmentally Sound Management (ESM) of Wastes

In an effort to integrate port reception facilities to national waste management systems, the Manual on Port Reception Facilities has considered the ESM principle developed under the Basel Convention. ESM was initially embodied in the Basel Convention and has gradually transformed into an autonomous legal principle. Article 2 (8) of the Basel Convention defines ESM as: taking all practicable steps to ensure that hazardous wastes or other wastes are managed in a manner which will protect human health and the environment against the adverse effects which may result from such wastes.

The COP to the Basel Convention from its Fifth Meeting onwards25 has been active in promoting ESM as a pillar of the management of wastes irrespective of whether such management has transboundary implications. As a result of such

23

Rakhyun and van Asselt (2016), pp. 481–482. Cf. The vision that argues that provisions like the one established in Article 195 of UNCLOS weaken “an entire spectrum of regulation aimed at preventing the oceans from becoming the final repository of hazardous, persistent, and bioaccumulative pollutants. There is also considerable danger that the anti-transfer provisions might be used to justify ocean disposal as the least environmentally harmful option.” Teclaff and Teclaff (1991), pp. 197 and 210. 25 COP to the BASEL Convention: Decision V/1 (1999). 24

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efforts, ESM is currently not only a policy objective or a treaty obligation exclusively related to transboundary movements of wastes. In fact, several States have included the ESM of wastes as an obligation in national waste legislation, including for instance: Chile, Mexico, India, South Africa.26 At the EU level, article 13 of the Waste Framework Directive 2008/98/EC provides for a general obligation that requires States to take “measures to ensure that waste management is carried out without endangering human health, without harming the environment.” This obligation corresponds almost verbatim to the definition of the ESM of wastes as defined by, for instance, the Organization for Economic Co-operation and Development (OECD)27 and the Basel Convention. The incorporation of ESM in national legislation is not only included in framework or general waste legislation, but also in varied range of norms, e.g., legislation dealing with particular waste streams or particular constituents. For instance, India has incorporated the ESM of wastes as a general obligation to deal with e-waste.28 Some States—such as Austria, Brazil, Canada, Finland, Germany, Japan, and United States of America—have adopted legislation dealing with the ESM of waste containing or contaminated with persistent organic pollutants (POPs).29 Additionally, the OECD and the COP to the Basel Convention have devoted much effort in developing a framework for the common understanding of ESM of wastes in general.30 The ‘core meaning’ of ESM relates to the life-cycle approach towards wastes, i.e., prevention; reduction; re-use; recycling; recovery; disposal by incineration; and finally landfilling. According to the Framework for the Environmentally Sound Management of Hazardous Wastes and Other Wastes, several elements contribute to a common understanding of ESM. These include: (a) infrastructure; (b) development and implementation of the best available techniques and best environmental practices; (c) legal regulations ranging from licensing to the establishment of sanctions and liability schemes; (d) financial and non-financial incentives; (e) involvement of stakeholders; and (f) research and innovation. From the development of this common understanding of ESM, what should be acknowledged is the continuous effort of the COP to the Basel Convention to adopt

26

A summary of national legislation regarding wastes can be found at www.basel.int/Countries/ NationalLegislation/tabid/1420/Default.aspx, visited on 26 September, 2018. 27 The OECD working definition of ESM is: “a scheme for ensuring that wastes and used and scrap materials are managed in a manner that will save natural resources, and protect human health and the environment against adverse effects that may result from such wastes and materials.” OECD: Guidance Manual on Environmentally Sound Management of Waste (2007), p. 8. 28 See Article 3(o) of the E-Waste Management Rules (2016). Available at www.basel.int/Coun tries/NationalLegislation/tabid/1420/Default.aspx, visited on 26 September, 2018. 29 Secretariat of the Basel Convention: General technical guidelines for the environmentally sound management of wastes consisting of, containing or contaminated with persistent organic pollutants (POPs) (2014). 30 OECD: Guidance Manual on Environmentally Sound Management of Waste (2007); UNEP/ CHW.11/3/Add.1/Rev.1. (2013).

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technical guidelines for the ESM of various categories of wastes. These technical guidelines usually focus on: (a) certain types of wastes, e.g., electronic waste, pneumatic tires, ships; (b) wastes with hazardous characteristics as established in Annex III of the Basel Convention, e.g., delayed toxicity; (c) wastes having certain constituents as established in Annex I of the Basel Convention, e.g., wastes containing or contaminated with mercury; and (d) wastes belonging to certain waste streams as established in Annex I of the Basel Convention, e.g., waste oils.31 These technical guidelines could certainly assist States in managing wastes in an environmentally sound manner whether or not those wastes have been subject to a transboundary movement. They could be particularly relevant for States that have yet to develop national waste management plans, or those that struggle to integrate ship wastes into national waste management. The Manual on Port Reception Facilities developed under the auspices of IMO suggests that guidance regarding the management of ship wastes on land can be found in the technical guidelines adopted by the COP to the Basel Convention.32 In order to assess to what extent these technical guidelines cover MARPOL wastes, the COP to the Basel Convention invited the Parties to undertake such an assessment in close cooperation with the IMO.33 The Public Waste Agency of Flanders, on behalf of Belgium, undertook such an evaluation that shed light on how to utilize the technical guidelines adopted by the COP to the Basel Convention in relation to ship wastes.34 The COP to the Basel Convention in its Twelfth Meeting, held in May 2015, adopted the Decision BC-12/16 (2015) on the “Cooperation between the Basel Convention and the IMO.” Pursuant to this decision, the Secretariat of the Basel Convention developed a draft “Guidance Manual on How to Improve the Sea-Land Interface to Ensure that Wastes Falling Within the Scope of MARPOL, once Offloaded From a Ship, are Managed in an Environmentally Sound Manner” taking into account the Manual on Port Reception Facilities developed under the auspices of the IMO.35 This soft law instrument devotes its attention to the downstream management of ship wastes on land by considering the broader meaning of the ESM of wastes. In 2017, at the Thirteenth Meeting, the COP to the Basel Convention took note of the Guidance Manual and requested that the Secretariat continue its collaboration with the IMO.36 31

The technical guidelines are available at: www.basel.int/Implementation/TechnicalMatters/ DevelopmentofTechnicalGuidelines/AdoptedTechnicalGuidelines/tabid/2376/Default.aspx, visited on 26 September, 2018. 32 IMO Port Reception Facilities – How to Do It (2016). 33 COP to the BASEL Convention: Decision BC-10/16 (2011); COP to the BASEL Convention: Decision BC-11/17 (2013). 34 Public Waste Agency of Flanders (2015). 35 COP to the BASEL Convention: Revised draft guidance manual on how to improve the sea-land interface UNEP/CHW.13/INF/37 (2017). 36 COP to the BASEL Convention: Cooperation between the Basel Convention and the International Maritime Organization UNEP/CHW.13/18 (2016).

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4 Port Reception Facilities The adequacy of these facilities is a crucial first step in ensuring the ESM of ship wastes on land in relation to the collection, storage, and handling of these wastes. States Parties to UNCLOS and MARPOL have designed a regulatory system that aims to prevent marine pollution by reducing discharges of harmful substances into the marine environment. This regulatory system has two implications. On the one hand, since their holding capacity is limited, vessels using a port or terminal have not only the obligation but also the right to discharge residues at port reception facilities.37 States, on the other hand, while exercising their sovereign right over the use of their territory and resources, have agreed to receive ship wastes and treat them on land without transforming one type of pollution into another as required in article 195 of UNCLOS.

4.1

The Obligation to “Ensure” the Provision of Port Reception Facilities

Currently, the regulations in MARPOL requiring port reception facilities state in a similar fashion that each party “undertakes to ensure the provision of adequate reception facilities to receive harmful substances of Annexes I, II, IV, V, and VI.” Unlike strict regulations prescribed in MARPOL and impinged directly on ship operators, e.g., ships’ construction standards, equipment, and discharge criteria, the obligations in relation to the funding and operation of port reception facilities remain vague. States explicitly avoided being bound by strict regulations under MARPOL, and “never meant to state clearly who – the states, the ports . . . should pay for the facilities.”38 In fact, State Parties amend the Convention periodically and strongly support on-board treatment techniques, but little has been done to establish binding obligations in relation to port reception facilities. According to the IMO, a State Party may provide reception facilities, but it is not an obligation imposed on a State per se; instead a Party could choose to require port authorities and terminal operators to provide the facilities.39 However, the obligation “to ensure” the provision of port reception facilities goes beyond the adoption of regulations requiring operators to fund and operate such facilities. Recently, the Arbitral Tribunal examined the obligation “to ensure” in the South China Sea Arbitration case. According to the Court, “ensure” is an obligation of conduct. It requires a State to be due diligent, i.e., it must adopt “appropriate rules “there are a limited number of options for dealing with wastes generated at sea. On land, there are several options. At sea, there are only two, either: 1. discharge into the sea, or 2. discharge/ unloading into port reception facilities.” de La Fayette (2009), p. 211. 38 Tan (2006), p. 265. 39 IMO Port Reception Facilities – How to Do It (2016), p. 97. 37

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and measures, but also a certain level of vigilance in their enforcement and the exercise of administrative control”40 (emphasis added). This case reproduces verbatim the concept of due diligence as analyzed by the ICJ in the Pulp Mills case41; ITLOS in the Request for an Advisory Opinion Submitted by the Sub-Regional Fisheries Commission42; and the Seabed Disputes Chamber in its advisory opinion concerning the Responsibilities and Obligations of States Sponsoring Persons and Entities with Respect to Activities in the Area.43

4.2

The Obligation to Provide “Adequate” Port Reception Facilities

In addition to the obligation “to ensure” the provision of port reception facilities, these facilities must be adequate. MARPOL does not define what constitute “adequate reception facilities,” but the IMO considers that “adequacy”44 serves to describe reception facilities with the following characteristics: satisfy the requirements of their users; prevent undue delays; avoid creating disincentives for using reception facilities; contribute to the improvement of the marine environment; and allow the “final disposal” of wastes generated on board ships on land in an environmentally appropriate way. These characteristics are explained below:

4.2.1

Satisfy the Requirements of Ships That Usually Use the Port

Notwithstanding their size, all ports should be able to provide port reception facilities for the types of ships using a particular port. This does not mean, however, that a port should provide reception facilities for all types of ship wastes. It requires a previous study consistent with the waste management strategy to determine which type of vessels usually call to a port, and an assessment of the type and quantities of ship wastes. Ports should carefully plan where to locate port reception facilities. If

40

Case No. 2013-19 the South China Sea Arbitration (the Republic of Philippines v. The People’s Republic of China) (2016), para 944. 41 Pulp Mills on the River Uruguay (Argentina v. Uruguay) (2010), para 197. 42 Request for an Advisory Opinion Submitted by the Sub-Regional Fisheries Commission, ITLOS (2015), para 131. 43 Responsibilities and Obligations of States with Respect to Activities in the Area, ITLOS Seabed Dispute Chamber (2011). 44 Resolution MEPC.83(44) Guidelines for Ensuring the Adequacy of Port Waste Reception Facilities, (2000); MEPC.1/Circ.834: Consolidated Guidance for Port Reception Facility Providers and Users (2014); IMO Port Reception Facilities – How to Do It (2016).

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those facilities are inconveniently located, their use is subject to complex procedures or time-consuming, the facility cannot be considered adequate.45

4.2.2

Prevent Undue Delays of Ships at Ports

Vessels run on a tight schedule and if the use of reception facilities is timeconsuming, incentives for illegal discharges at sea increase.46 For this reason, “adequate” also means that the use of the facility must not go “beyond the normal turn-around time of the ship in that port.”47 The IMO recommends that the ship operator notify the “appropriate authority” in advance before the expected delivery of ship wastes at a port reception facility48 in order to plan the reception of ship wastes in a timely fashion. The IMO manual on Port Reception Facilities does not identify the authority that should be notified. If the notification system involves several authorities or individual terminals, this system could create practical problems in the assessment of quantities of wastes that are actually received at port reception facilities. It also creates difficulties in tracing the management of such wastes after they are discharged to a port reception facility.

4.2.3

Avoid Creating Disincentives for Using Reception Facilities

Since MARPOL does not establish who must bear the costs of port reception facilities, States are interested in developing cost recovery systems for the reception and further management on land of port ship wastes. Based on the polluter pays principle, i.e., “an economic policy for allocating the costs of pollution or environmental damage,”49 ship operators should pay, at least partially, for the costs involved in the operation of port reception facilities. The IMO’s manual on Port Reception Facilities includes several alternatives for allocating costs of port reception facilities, including the establishment of indirect fee, direct fee, contract fee, or mixed fee systems. In practice, States adopt several recovering mechanisms depending on, e.g., type of ship, the frequency of calls of a particular kind of ship to a port, the type of wastes, the type of cargo handled in a port, and the length of voyage since the last port of 45

Resolution MEPC.83(44) Guidelines for Ensuring the Adequacy of Port Waste Reception Facilities, (2000), p. 7. 46 According to the IMO, “failure to establish adequate facilities is a breach of international obligations and will increase the risk of illegal discharges from ships.” IMO Port Reception Facilities – How to Do It (2016), p. 10. Tan mentions that “tankers will invariably resort to illegal discharges if a visit to reception facilities will cause delay.” Tan (2006), p. 263. 47 IMO Port Reception Facilities – How to Do It (2016), p. 20. 48 This notification should be made at least 24 h in advance. The IMO has developed a Standard Format of the Advance Notification Form for Waste Delivery to Port Reception Facilities. 49 Birnie et al. (2009), p. 322.

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call.50 For instance, in the Baltic Sea area, a direct fee is the most common recovery system in the case of cargo residues from MARPOL, Annexes I and II, i.e., oil and hazardous chemicals respectively.51 However, direct fees may encourage illegal discharges. So, more resources need to be allocated for monitoring and enforcement mechanisms. Additionally, ships could hold wastes to discharge them at cheaper ports, which may affect ports’ competitiveness.52 According to the IMO, States could impose “compulsory discharge for certain types of ship-generated wastes/ residues”53 to avoid ships to discharge their wastes elsewhere. Compulsory discharge criteria are unusual because States face challenges not just in relation to the reception of ship wastes, but also in terms of their management on land.

4.2.4

Contribute to the Improvement of the Marine Environment

The aim of establishing port reception facilities is to prevent and reduce marine pollution. This is closely connected with incentives to avoid illegal discharges at sea. At the same time, it relates to monitoring and enforcement mechanisms to punish illegal discharges.

4.2.5

Allow the “Final Disposal” of Wastes Generated on Board Ships on Land in an Environmentally Appropriate Way

A reception facility is adequate when it is integrated into national or regional waste management systems. Final disposal should not be understood only as operations without the possibility of recovery. According to Chapters 9 and 10 of the IMO’s Manual on Port Reception Facilities, “final disposal” includes operations of recycling, recovery. At first glance, it is outside the IMO’s competences to deal with the management of ship wastes after their discharge. According to Article 1 (a) of the Convention on the International Maritime Organization, the purpose of the IMO is to provide the institutional machinery for cooperation among States and facilitate the adoption of highest standards in relation to the prevention and control of ship-source pollution. In the Advisory Opinion regarding Reparation of Injuries Suffered in the Service of the United Nations, the ICJ discussed the powers vested in the United Nations and stated that:

IMO Port Reception Facilities – How to Do It (2016), pp. 161–169. Ramboll: EMSA/OP/06/2011 (2012), p. 45. 52 Tan (2006), p. 256; Georgakellos (2007), p. 511. 53 IMO Port Reception Facilities – How to Do It (2016), p. 156. 50 51

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[u]nder international law, the Organization must be deemed to have those powers which, though not expressly provided in the Charter, are conferred upon it by necessary implication as being essential to the performance of its duties.54

The IMO’s efforts to provide guidance regarding the discharge of ship wastes and the integration of port reception facilities into national waste management plans are justified because the legal regime adopted under the auspices of the IMO for the prevention, control, and reduction of ship-source pollution restricts discharges of harmful substances at sea and places a crucial role on the provision of “adequate reception facilities.” Adequacy is closely linked with two major aspects: (a) prevention of illegal discharges at sea; and (b) the management of ship wastes on land to prevent the transformation of one type of marine pollution into another. The IMO cannot prescribe standards for waste streams and effluents, but it can guide States on how to integrate their port reception facilities into national waste management systems. Wastes received at port reception facilities should be included within national waste management plans.55 Thus, States are encouraged to develop a “waste management strategy”. This strategy should follow the waste management hierarchy, i.e., a priority order in relation to wastes that moves through the following set of preferences: prevention; reduction; re-use; recycling; recovery; disposal by incineration; and finally landfilling.56 The waste hierarchy focuses primarily on waste prevention, which in terms of ship wastes could be achieved through on-board practices, on-board equipment, and ship design.57 On board practices include, for example, garbage handling and storage, and reductions in packaging. The waste management strategy involves several private operators and public authorities, including port authorities, ship operators, cargo interests such as shippers and receivers of oil and chemicals, terminal operators, waste operators, civil society organizations, and society in general. The IMO calls for public participation58 in order to involve different stakeholders in the decision-making processes regarding waste management, e.g., the legislative process. Public participation gained significance in international environmental law after the United Nations Conference on Environment and Development (UNCED) 1992. It is not surprising that treaties predating UNCED made no reference to public participation, including UNCLOS and MARPOL. Public participation is considered a procedural element of sustainable development, and in broad terms it includes mechanisms to access justice and

54

Reparation for Injuries Suffered in the Service of the United Nations, ICJ, Advisory Opinion (1949), p. 182. 55 Resolution MEPC.83(44) Guidelines for Ensuring the Adequacy of Port Waste Reception Facilities, (2000), para 5.11. 56 IMO Port Reception Facilities – How to Do It (2016), ch. 3. 57 MEPC.1/Circ.834: Consolidated Guidance for Port Reception Facility Providers and Users (2014), pp. 7–8. 58 IMO Port Reception Facilities – How to Do It (2016), ch. 4.

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information, as well as participation in decision-making processes.59 At the international level, the most prominent “regional treaty” dealing with public participation is the Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, 1998 (Aarhus Convention). In general, the implementation of public participation procedures requires the development of legal, institutional, and educational frameworks. In developing countries, public participation has been included in legislation and it also has been subject to judicial assessment to varying degrees.60 However, if the environment does not rank first on States’ agendas, and if environmental awareness is lacking in society, the impact of public participation will remain limited. The incorporation of public participation procedures in relation to ship wastes could potentially have an impact on the legitimacy of waste regulation. Furthermore, if the expertise of several stakeholders is considered, positive effects on the environmental status can also be achieved. Overall, it is desirable to have public participation procedures in place while planning the waste management strategy. The implementation of such a strategy requires the adoption of legal and administrative measures, the development of technological capabilities, and the establishment of adequate infrastructure. Among legal and administrative measures, States should establish legal standards for waste collection, storage, handling and management operations, alongside monitoring procedures, enforcement mechanisms to effectively address non-compliance, and liability and compensation schemes.61 A workable regulatory framework should link ship wastes to existing national legislation on waste, e.g., pollution control, industrial and chemical control, land planning, sewage and drainage systems, pesticides, and occupational and public health.62 A good example of this approach can be found in Directive 2000/59/EC on Port Reception Facilities where “ship-generated waste” and “cargo residues” are considered wastes within the meaning of Article 3(1) of the Waste Framework Directive. The relevance of this provision is in linking ship wastes to land management regulation. In fact, Article 12 of Directive 2000/59/EC provides that management of ship wastes must be carried out in accordance with the relevant EU waste legislation. The management of ship wastes requires a licensing system63 for the providers of port reception facilities and waste operators. This system is essential to enable public authorities to trace the management of wastes once they are discharged from ships, and monitor whether the operators are complying with substantive standards. Licenses should be complemented with notification systems covering the generation, storage, transport, and management of wastes. Procedures should also be in place to

59

Birnie et al. (2009), pp. 116–123; Ebbesson (1998). See an analysis of public participation in several jurisdictions in Razzaque (2010). 61 IMO Port Reception Facilities – How to Do It (2016), ch. 3. 62 Ibid, ch. 4. 63 Ibid, ch. 3. 60

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secure that notifications reach the designated public authority even when transactions take place exclusively between private operators. The Manual on Port Reception Facilities provides assistance on the integration of port reception facilities within national waste management strategies, as well as the available alternatives to collect, store, and treat ship wastes, including recycling and final disposal operations. Downstream waste management has also been a concern for the Parties to the Basel Convention. Over the years, the COP to the Basel Convention has adopted numerous technical guidelines that have not only dealt with management alternatives, but also addressed particular types of wastes, particular hazardous characteristics or constituents, and waste streams. These guidelines could be relevant for managing ship wastes after they are discharged at port reception facilities. In general, the Manual on Port Reception Facilities follows closely the common understanding of ESM developed through the Basel Convention. The foundation of an environmentally sound waste management system is to protect the environment and human health. The ESM of wastes requires the participation of stakeholders and the development of regulatory schemes together with institutional and technical capabilities considering the social and economic conditions of a particular State.

5 Compliance Challenges The success of MARPOL in the prevention of ship-source pollution has been relative because a persistent and well known problem with its implementation concerns the availability of reception facilities as reported on several occasions by the IMO’s Maritime Safety Committee (MSC), the Marine Environment Protection Committee (MEPC), and the Sub-Committee on Flag State Implementation.64 The absence of port reception facilities or their inadequacy relates to: (a) financial, technical, and political restraints involved in the provision of port reception facilities; and (b) lack of enforcement mechanisms against States that breach their obligation to ensure the provision of port reception facilities. Over the last four decades, inadequacy of port reception facilities has been on the agenda of the IMO’s MEPC.65 In developing States, technical capacities are still lacking.66 The World Bank in cooperation with the IMO commissioned a study into the provision of port reception facilities in Sub-Saharan African Ports. It revealed that States are reluctant to provide reception facilities not only because of investment and operational costs, but also due to the challenges related to the management on

64

Report to the MSC and the MEPC Sub-Committee on Implementation of IMO Instruments, 3rd session Agenda item 14 (2016); Stokke and Thommessen (2002), p. 141. 65 Hassler (2016), p. 140. 66 Lethbridge et al. (1991); Karim (2015), pp. 134–135; Tan (2006), p. 267.

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land of such wastes.67 The World Bank noticed that, in many ports, ship wastes were poorly managed and were usually subject to scavenging operations.68 Furthermore, wastes usually end up in drainage systems and eventually end up back in the ocean.69 The study is revealing because challenges related to the provision of port reception facilities cannot be effectively addressed in isolation without considering the integration of reception facilities with national waste management systems. In 2006, the IMO approved the Action Plan to Tackle the Inadequacy of Port Reception Facilities. One of the activities of the Action Plan relates to the development of technical capabilities of developing States, including the downstream management of ship wastes.70 The 2006 Action Plan to Tackle the Inadequacy of Port Reception Facilities is the most recent attempt to address some of the practical problems that users and States face in relation to port reception facilities. The IMO’s Sub-Committee on Flag State Implementation identified six areas of concern: (1) notification procedure between the ship operator and the facility concerning the intention to use a certain facility; (2) information on available port reception facilities; (3) technological challenges in relation to ship-to-shore operation and standardization of standards for garbage segregation; (4) revision of the type of wastes generated on board vessels, the capacity of available port reception facilities, and methodologies to establish the required capacity of port reception facilities; (5) revision of several IMO guidelines and other related regulations; and (6) technical assistance for developing countries.71 As part of the Action Plan to Tackle the Inadequacy of Port Reception Facilities, an updated version of the “advanced notification form” was adopted.72 Ship operators are encouraged to give notification at least 24 h in advance of their intention to use a reception facility. Such notification is useful in identifying the availability of a certain facility and avoiding possible delays. Furthermore, the provider of reception facilities is able to plan the discharge of wastes and, if necessary, arrange special handling requirements.73 The notification intends to provide useful information to governmental authorities regarding the type of wastes received, the quantities that are discharged, and their hazardous characteristics. This information is also used to establish the required capacity and technical capabilities of port reception facilities, and to plan for further management operations on land. In the decades following the entry-into-force of MARPOL, developed States have generally been able to provide port reception facilities for ships calling at their

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Lethbridge et al. (1991), p. 2. Ibid, p. 6. 69 Sadler and King (1990), p. 5. 70 Draft Action Plan to Tackle the Inadequacy of Port Reception Facilities (FSI 14/19) (2006), p. 50. 71 Ibid. 72 MEPC.1/Circ.834: Consolidated Guidance for Port Reception Facility Providers and Users (2014), annex II. 73 Ibid, p. 8. 68

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ports.74 This has not been the case for many developing States.75 The unintended consequence of this development is the transfer of pollution from one place to another. In the absence of compulsory standards that specify the location where ship wastes must be discharged, e.g., the unloading port, ships with enough holding capacity can choose cheaper port reception facilities. In general, the poorest countries continue to be the most affected by pollution because illegal discharges also increase if reception facilities are not available. Judging the availability and adequacy of port reception facilities around the globe is a difficult task, since State Parties to MARPOL are reluctant to provide information. Article 11 (d) of MARPOL prescribes that the Parties must communicate to the IMO “a list of reception facilities including their location, capacity and available facilities and other characteristics.” Reporting is a common feature in conventions adopted under the auspices of the IMO and in multilateral environmental agreements (MEAs) in general.76 In the case of MARPOL, for example, both the IMO and States Parties can collectively exercise supervisory functions and exert pressure (e.g., naming and shaming in effect) on States that fail to implement, comply with, and enforce their international obligations. Extensive research has been undertaken regarding the relationship between reporting and transparency, as well as the influence of reporting on improving enforcement among State Parties.77 Most non-compliance remedies under general public international law, including the possibility to terminate or suspend a treaty in cases of material breach, are essentially inadequate to deal with environmental problems because MEAs require to secure cooperation of States in addressing environmental concerns that are transboundary in nature. In other words, non-confrontational procedures are preferred, since terminating or suspending MEAs would “primarily harm the international community, not the defaulting State.”78 The compliance reporting rate for the year 2015 was 25%, i.e., only 38 Parties have submitted reports.79 Over the years, scholars have emphasized the need to develop alternative incentives to improve compliance with MEAs.80 These incentives usually rely on supervisory mechanisms of international organizations, closer cooperation between several stakeholders, enhancement of transparency, e.g., standardized forms,

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Carpenter and Macgill (2005); Ramboll: EMSA/OP/06/2011 (2012). Karim (2015), pp. 134–138. 76 For instance: Article 11 of MARPOL; Article 13 (3) of the Basel Convention; Article 14 of the Ballast Water Management Convention; Article III of the Protocol of 1988 relating to the International Convention for the Safety of Life at Sea, 1974 (SOLAS); Article 7 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change. 77 Wettestad (2007); Mitchell (1994), pp. 123–124; Birnie et al. (2009), pp. 242–244; Handl (1997); Chayes and Handler Chayes (1991); Ulfstein (2008), p. 129. 78 Boyle (1991), p. 233. 79 MEPC.1/Circ.869 (2017), p. 3. The compliance reporting rate relates to the reporting of incidental spillages, alleged discharge violations, penalties imposed for MARPOL 73/78 violations, among others. 80 Chayes and Handler Chayes (1991), Boyle (1991) and Wettestad (2007). 75

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publicly available information, and shaming “lists”. On a soft law basis, the IMO has indeed created a number of standard forms and utilized technological advances to enhance self-regulation. Nonetheless, the success of this soft approach has been modest. Much can be done to improve transparency and achieve the desired naming and shaming effect. Particularly, the IMO should provide a comprehensive and authoritative analysis of complying and non-complying ports.81 At present, the information is scattered and provided by shipping organizations on an ad-hoc basis. In fact, there is a perception that reporting is irrelevant, since the IMO does not use the information received in any meaningful manner.82 Binding regulation could be a positive step forward in addressing some challenges in respect of port reception facilities, such as allowing developing States to provide regional reception facilities or establishing a fund for financing the design and construction of port reception facilities. This alternative seems, however, unrealistic given that States have consistently failed to establish regulations in relation to port reception facilities. Nonetheless, State Parties must consider strengthening the enforcement capabilities of the IMO, including providing the IMO Secretary with the power to begin rule-making processes,83 and to conduct auditing schemes so as to improve supervision and scrutiny. Since 2003, a voluntary Member State Audit Scheme was developed to enhance the implementation and enforcement of several IMO treaties,84 e.g., MARPOL. Audit standards are found in the IMO Instruments Implementation Code (III CODE). This code guides States in fulfilling their obligations as flag, port, or coastal States in relation to: safety of life at sea; prevention of pollution from ships; standards of training, certification, and watch keeping for seafarers; load lines; tonnage measurement of ships; and regulations for preventing collisions at sea.85 In January 2016, this voluntary audit scheme together with III Code became mandatory in several instruments, including MARPOL.86 This initiative should be welcomed because it reflects a political commitment to strengthen the IMO and to increase its supervisory functions. If possible, the results of the audits should be publicly available for scrutiny.

81 Tan accurately points out that “what has not been attempted to date is a detailed analysis by IMO of the industry information provided so as to compile authoritative lists . . . ports and States are largely immune to criticism by industry actors . . . criticism by IMO, however, cannot be so easily ignored.” Tan (2006), p. 379. 82 Ibid, p. 373. 83 Ibid, pp. 369–373. 84 Assembly of the IMO: Resolution A. 946(23) (2003). 85 Assembly of the IMO: Resolution A.1070(28) (2013). 86 Resolution MEPC.247(66) (2014).

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6 Concluding Remarks: Integration of Port Reception Facilities with National Waste Management Systems The connection between the adequacy of port reception facilities and waste management on land operationalizes the obligation established in Article 195 of UNCLOS, which prohibits the transfer of pollution hazards from one place to another and the transformation of pollution sources. The IMO as the competent international organization has the capacity to develop GAIRS in order to prevent, control, and remedy ship-source pollution. Such prevention inevitable includes standards in relation to the adequacy of port reception facilities to avoid, for instance, illegal discharges at sea. A welcomed step in this direction is the adoption of the IMO’s Manual Port Reception Facilities. This Manual, like any other soft law instrument, is not mandatory. However, it provides guidance to State Parties to MARPOL as to what ensures the provision of adequate port reception facilities including some recommendations for achieving the ESM of wastes on land considering the standards developed under the Basel Convention. ESM as well as the obligation prescribed in Article 195 of UNCLOS have a sectoral integration function. Sectoral integration refers to coordination between regulations governing different environmental media, e.g., land, sea, air. Both attempt to prevent unintended consequences in one environmental medium, e.g., sea, while preventing any environmental harm in another environmental medium, e.g., land. MARPOL imposes several obligations for the prevention of ship-source pollution concerning the construction, equipment, and manning of ships. In addition, operational discharges at sea are severely restricted or prohibited. Although MARPOL is not concerned with waste management on land, the accomplishment of its purpose will be defeated without the development of standards concerning port reception facilities given that such facilities are linked to both the prevention of illegal discharges at sea and the management of ship wastes on land to prevent the transformation of one type of marine pollution into another. In the light of both the prohibition prescribed in Article 195 of UNCLOS and ESM, the “adequacy” of port reception facilities includes not only the reception of wastes, but also their downstream management. The interpretation of adequacy according to the ESM principle also implies that port reception facilities must be integrated into national waste management systems. The development of a common framework of ESM has been fundamental in addressing the management of wastes beyond the peculiarities surrounding the transboundary movement of wastes. An obvious advantage of building a legal framework from existing instruments is that one can draw upon their existing obligations, institutional structures, control mechanisms, and financing systems. It also contributes to the building of bridges between different regimes, enhancing

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cooperation among international institutions and other subjects of international law, and mitigating fragmentation in international law.87 The broad formulation of ESM fostered cooperation between the IMO and the COP to the Basel Convention to improve the management of wastes in the sea/land interface. Such cooperation, however, remains limited. Although the IMO supports the collaboration with the COP to the Basel Convention, the Secretariat of the IMO has been emphatic in clarifying that the IMO is the adequate forum where State Parties to MARPOL should interpret to what extent MARPOL applies to ship wastes discharged to port reception facilities.88 This position could explain why the IMO and the COP to the Basel Convention have been issuing different sets of guidelines instead of promoting a joint forum where different actors could address common concerns and coordinate future activities.

References Andenas M, Bjorge E (eds) (2015) A farewell to fragmentation: Reassertion and Convergence in International Law Studies on International Courts and Tribunals. Cambridge University Press, Cambridge Assembly of the IMO: Resolution A. 946(23) (27 November 2003) Voluntary IMO Member State Audit Scheme Assembly of the IMO: Resolution A.1070(28) (2013) IMO Instruments Implementation Code (III Code). 2013 Barnes R, Freestone D, Ong D (2006) Introduction. In: Freestone D, Barnes R, Ong D (eds) The Law of the Sea: progress and prospects. Oxford University Press, Oxford, pp 1–27 Birnie P, Boyle A, Redgwell C (2009) International law and the environment, 3rd edn. Oxford University Press, Oxford Boyle A (1985) Marine pollution under the Law of the Sea Convention. Am J Int Law 79 (2):347–372 Boyle A (1991) Saving the World? Implementation and enforcement of international environmental law through international institutions. J Env Law 3:229–245 Boyle A (1999) Some reflections on the relationship of treaties and soft law. Int Comp Law Q 48 (4):901–913 Carpenter A, Macgill S (2005) The EU Directive on port reception facilities for ship-generated waste and cargo residues: the results of a second survey on the provision and uptake of facilities in North Sea ports. Mar Pollut Bull 50:1541–1547 Chayes A, Handler Chayes A (1991) Compliance without enforcement: state behavior under regulatory treaties. Negot J 7(3):311–330 Cooperation between the Basel Convention and the International Maritime Organization (UNEP/ CHW.13/18) (2016) Thirteenth Meeting of the Conference of the Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal. Item 4 (e) (ii) of the provisional agenda. Geneva

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de La Fayette L (2009) The sound management of wastes generated at sea: MARPOL, not Basel. Environ Policy Law 39(4–5):207–214 Decision BC-10/16 (2011) Cooperation between the Basel Convention and the International Maritime Organization. In: Report of the Tenth Meeting of the Conference of the Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (UNEP/CHW.10/28) Decision BC-11/17 (2013) Cooperation between the Basel Convention and the International Maritime Organization. In: Report of the Eleventh Meeting of the Conference of the Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (UNEP/CHW.11/24) Decision BC-12/16 (2015) Cooperation between the Basel Convention and the International Maritime Organization. In: Twelfth Meeting of the Conference of the Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (UNEP/CHW.12/27) Decision V/1 (1999) Basel declaration on environmentally sound management. In: Fifth Meeting of the Conference of the Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (UNEP/CHW.5/29) Ebbesson J (1998) The notion of public participation in international environmental law. Yearb Int Environ Law 8(1):51 E-waste Management Rules (2016) Gazette of India, Extraordinary Part-II, Section-3, Sub-Section (i) Fragmentation of International Law (2006) Difficulties arising from the diversification and expansion of international law, Report of the Study Group of the International Law Commission (Fifty-eighth Session A/CN.4/L.682) Framework for the Environmentally Sound Management of Hazardous Wastes and Other Wastes (UNEP/CHW.11/3/Add.1/REV.1) (2013) Eleventh Meeting of the Conference of the Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal Franckx E (ed) (2001) Vessel-source pollution and Coastal State jurisdiction: the work of the ILA Committee on Coastal State Jurisdiction relating to marine pollution (1991–2001). Kluwer Law International, Alphen aan den Rijn Georgakellos D (2007) The use of the deposit–refund framework in port reception facilities charging systems. Mar Pollut Bull 54:508–520 Handl G (1997) Compliance control mechanisms and international environmental obligations. Tulane J Int Comp Law 5:29–49 Harrison J (2011) Making the Law of the Sea: a study in the development of international law. Cambridge University Press, Cambridge Hassler B (2016) Oil spills from shipping: a case study of the Governance of accidental hazards and intentional pollution in the Baltic Sea. In: Gilek M, Karlsson M, Linke S, Smolarz K (eds) Environmental Governance of the Baltic Sea. Springer, Basel, pp 125–148 Karim S (2015) Prevention of pollution of the marine environment from vessels: the potential and limits of the International Maritime Organizations. Springer, Basel Lethbridge J, Wonham J, Oestergaard J, Klein JW, Willekes M (1991) The MARPOL 73/78 Convention: the economic implications and other issues in providing reception facilities for Ship Wastes in Sub-Saharan African Ports. Policy, Planning, and Research Staff. The World Bank, Washington, DC MEPC 69/11 (2016) Port reception facilities – how to do it. Inadequacy of reception facilities updated version of the draft manual on port reception facilities MEPC.1/Circ.834 (2014) Consolidated guidance for port reception facility providers and users MEPC.1/Circ.869 (2017) Summary reports and analysis of mandatory reports under MARPOL for the Period 2010–2015 Mitchell RB (1994) Intentional oil pollution at Sea: environmental policy and treaty compliance. Massachusetts Institute of Technology Press, Cambridge

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OECD (2007) Guidance manual on environmentally sound management of waste Public Waste Agency of Flanders (13 July 2015) Revised assessment prepared by the public waste agency of Flanders, on Behalf of Belgium, on How Far the Current Basel Convention Technical Guidelines Cover Wastes Covered by the International Convention for the Prevention of Pollution from Ships (UNEP/CHW.12/INF/29/REV.1). In: Twelfth Meeting of the Conference of the Parties to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal. Agenda Item 4 (e) (iii) Pulp Mills on the River Uruguay case (Argentina v. Uruguay), ICJ Reports 2010, p. 14 (20 April 2010) Rakhyun K, van Asselt H (2016) Global governance: problem shifting in the anthropocene and the limits of international law. In: Morgera E, Kulovesi K (eds) Research handbook on international law and natural resources. Edward Elgar Publishing, Cheltenham, pp 473–495 Ramboll, Final Report (2012) Study on the delivery of ship-generated waste and Cargo Residues to Port Reception Facilities in EU Ports. EMSA/OP/06/2011. Prepared for European Maritime Safety Agency (EMSA) Razzaque J (2010) Human rights to a clean environment: procedural rights. In: Fitzmaurice G, Ong D, Merkouris P (eds) Research handbook on international environmental law. Edward Elgar, Cheltenham, pp 284–300 Redgwell C (2016) The never ending story: the role of GAIRS in UNCLOS implementation in the offshore energy sector. In: Barret J, Barnes R (eds) Law of the Sea: UNCLOS as a living treaty. British Institute of International and Comparative Law, London, pp 167–183 Reparation for Injuries Suffered in the Service of the United Nations, ICJ Reports 1949 p. 174; ICGJ 232 (Advisory Opinion 11 April 1949) Request for an Advisory Opinion Submitted by the Sub-Regional Fisheries Commission, ITLOS Reports 2015, p. 4 (Advisory Opinion 2 April 2015) Resolution MEPC.247(66) (2014) Amendments to MARPOL Annex VI (to make the use of the III Code mandatory) Resolution MEPC.83(44) (2000) Guidelines for ensuring the adequacy of port waste reception facilities. 2000 Responsibilities and Obligations of States with Respect to Activities in the Area, ITLOS (Seabed Dispute Chamber), ITLOS Reports 2011, p. 10; ICGJ 449 (1 February 2011) Revised Draft Guidance Manual on How to Improve the Sea-Land Interface (UNEP/CHW.13/INF/ 37) (2017) Thirteenth Meeting of the Conference of the Parties to the Basel Convention on the Control of the Transboundary Movements of Hazardous Wastes and Their Disposal. Item 4 (e) (ii) of the provisional agenda Rothwell D, Stephens T (2010) The international law of the Sea. Hart Publishing Ltd, Oxford Sadler P, King J (1990) Study on mechanisms for the financig of facilities in ports for the reception of wastes from ships. MEPC Doc. 30/INF.32 Secretariat of IMO (2015) Answer to the Invitation to IMO to comment on the draft assessment on how far the current Basel Convention technical guidelines cover MARPOL wastes South China Sea arbitration (The Republic of Philippines v. The People’s Republic of China), PCA Case 2013-19, ICGJ 495 (12 July 2016) Stokke O, Thommessen Ø (eds) (2002) Yearbook of international cooperation on environment and development 2002-03. Earthscan, London Sub-Committee on Flag State Implementation (30 June 2006) Report to the Maritime Safety Committee and the Marine Environment Protection Committee (FSI 14/19) Sub-Committee on Implementation of IMO Instruments (2016) Consideration and analysis of reports on alleged inadequacy of port reception facilities (III 3/14). Report to the Maritime Safety Committee and the Marine Environment Protection Committee. Third Session – Agenda Item 14 Tan A (2006) Vessel-source marine pollution: the law and politics of international regulation. Cambridge University Press, Cambridge

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Teclaff L, Teclaff E (1991) Transfers of pollution and the Marine Environment Conventions. Nat Resour J 31:187–211 Ulfstein G (2008) Dispute resolution, compliance control adn enforcement in international environmental law. In: Ulfstein G (ed) Making treaties work: human rights, environment and arms control. Cambridge University Press, Cambridge UN General Assembly (20 February 2017) Oceans and the law of the Sea. A/RES/71/257 Wettestad J (2007) Monitoring and verification. In: Bodansky D, Brunnée J, Hey E (eds) The Oxford handbook of international environmental law. Oxford University Press, Oxford, pp 975–993

Maritime Rules for Rail Carriage: China’s Initiative to Incorporate Rules from the Road to the Belt Abhinayan Basu Bal and Trisha Rajput

Abstract A group of small and medium sized importers in the Chongqing Pilot Free Trade Zone (PFTZ) using the Eurasian railway corridors connecting European countries to China requested the Chongqing local government for creating negotiable transport document for railway carriage, similar to bill of lading in maritime transport, for financing purposes. The importers highlighted that Chinese banks are unwilling to issue letter of credit to support the payment for their imports carried by rail from European countries as railway consignment note is not a document of title. As an interim measure, the Chongqing local government established a logistics and financial intermediary that would assume the credit risk before importers can approach banks to issue letter of credit. To find a permanent solution, the Chinese government plans to initiate international negotiations for revising railway carriage rules in the near future. This chapter critically analyses from a legal standpoint whether the approach adopted by the Chongqing local government can address the evolving trade finance needs of importers in the Chongqing PFTZ. The chapter discusses in contextual detail the legal and policy framework of the BRI under which the Eurasian railway corridors are created and then draws connection between the frameworks of the BRI and the Chongqing PFTZ. The paper examines whether there is real need to apply maritime rules to railway carriage for purpose of obtaining letter of credit and then analytically probes how digital infrastructures such as single windows, platforms and distributed ledgers may be used to reduce information asymmetry between traders and banks to increase access to trade finance. In this context, paperless trade and supply chain finance initiatives that can be supported by the recently adopted Model Law on Electronic Transferable Records is discussed. In conclusion, a prognosis of legal rules that may be promulgated with greater ease to attend to the

A. Basu Bal (*) · T. Rajput Department of Law, School of Business, Economics and Law, University of Gothenburg, Gothenburg, Sweden e-mail: [email protected]; [email protected] © Springer Nature Switzerland AG 2020 P. K. Mukherjee et al. (eds.), Maritime Law in Motion, WMU Studies in Maritime Affairs 8, https://doi.org/10.1007/978-3-030-31749-2_3

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financing needs of Chinese importers is made taking into consideration the flexibility allowed to the Chongqing PFTZ to test new laws that can support new businesses.

1 Introduction Traditionally, a sizeable portion of international trade in goods is transported by sea and many of the related business and regulatory processes depend largely on shipping documents.1 The tender of the correct shipping documents is essential to the fulfilment of several standard form international sale contracts and is fundamental to the operation of documentary letters of credit issued as a payment mechanism for the purchase of goods. Among the shipping documents, a bank issuing a documentary letter of credit generally places a high level of reliance on the bill of lading, as most jurisdictions across the world recognize the bill as a document of title that gives the holder the right to demand delivery of the goods from the carrier at the port of discharge.2 This legal mechanism lends security to the bank as Article 5 of UCP 6003 rightly points out that banks deal in documents, not in the goods or services to which those documents relate. With the expansion of railway corridors along the Eurasian Land Bridge4 under the Chinese Belt and Road Initiative (BRI), attempts are being made in China to incorporate the functions of a maritime bill of lading into a railway consignment note. In 2017, Chinese car traders in the Chongqing Pilot Free Trade Zone (PFTZ) who use the Chongqing-Duisburg train corridor to import cars from Europe requested the creation of a negotiable transport document for rail carriage, similar to bills of lading in maritime transport, for securing the underlying financial transaction.5 The traders highlighted the fact that banks in China are unwilling to issue letters of credit to support the payment for their car imports as railway consignment notes are non-negotiable documents. Railway consignment notes serve two functions, namely, receipt of the goods and evidence of the contract of carriage. They do

1

A typical shipment of goods by sea would constitute an invoice and packing list issued by the seller; a bill of lading or other transport document issued by the carrier; a survey certificate showing quantity and quality; an insurance certificate issued by a cargo insurer and a certificate of origin issued by a local chamber of commerce. See Murray et al. (2012), p. 2. 2 Ibid, at 190. 3 The Uniform Customs and Practice for Documentary Credits (UCP), 2007 Revision, International Chamber of Commerce Publication No. 600 are rules that apply to any documentary credit when parties have incorporated them into their contract. 4 For a general discussion on the China-Europe railway corridors, see Tillman (2018), https://www. csis.org/analysis/rise-china-europe-railways, accessed 17 April 2019. 5 Similar requests as the Chongqing car traders were submitted by railway carriers in Chengdu. This was gleaned from personal discussions with Associate Professor Guo Yu of Peking University Law School, Beijing, China. She also mentioned about this request from railway carriers during a presentation at the conference entitled “A Legal Roadmap for Digital Trade”, organised by the International Chamber of Commerce United Kingdom on 11 September 2018.

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not serve the third function found in negotiable bills of lading, namely, as a document of title, which is preferred by Chinese banks to obtain security when issuing letters of credit. In the absence of a negotiable transport document for rail carriage, a car trader in Chongqing has to approach a financial intermediary who assumes the risks before a bank issues a letter of credit. The intermediary, called the Chongqing Logistics Financing Service Co. Ltd. (CLFS)6 was established by the local government in Chongqing on 25 December 2017 to serve as a one stop shop in the delivery of integrated financial services to traders operating in the Chongqing PFTZ. After surveying the market for three months, CLFS decided to apply rules of maritime law in railway carriage based on Chinese maritime, contract and property laws to create a negotiable railway bill. In June 2018, a tripartite contractual arrangement was reached among Chinese railway carriers, importers and banks to use a negotiable railway bill that secured the letter of credit for a pilot shipment of cars from Germany to China. This solution was welcomed by various organizations in China, including the Ministry of Commerce, the People’s Bank of China, leading commercial banks7 and numerous PFTZs. The High Court in Chongqing also extended support and recognition to this ingenuity through organization of three conferences on the topic and favorable comments from the Director. In the future, CLFS aim to prepare the ground for promulgation of Chinese legislation allowing the issuing of negotiable railway transport document similar to bills of lading and create consensus for adoption of similar rules internationally through amendment of railway liability conventions.8 The solution created by CLFS is indeed innovative and captures the history and soul of using negotiable transport documents in maritime trade in addition to the consequent practices that surround letters of credit. However, one has to be mindful that the traders in Chongqing approached the local government to assist them in meeting their trade finance needs after the opening of new train routes connecting China with Europe. Aside from the complexities that may arise in implementing the proposal of CLFS, such as, multiplicity of regimes governing carriage by rail along the Eurasian railway corridors and the prolonged negotiations that may be necessary to establish consensus internationally for introducing negotiability in railway consignment notes, it must be appreciated that the trade finance requirements of Chinese

6

http://cqlfn.com/index.html, accessed 17 April 2019. Bank of China, China Merchants Bank, China Construction Bank, Agricultural Bank of China, Industrial Bank, Industrial and Commercial Bank of China. 8 The above information is gleaned from an interview conducted by the authors with Mr. Wensheng Zhang, Deputy General Manager and Mr. Jim Liu, Director of Development Planning of Chongqing Logistics Finance Service Co. Ltd. on 29 December 2018 at South West University of Political Science and Law (SWUPL), Chongqing, China. The authors conducted field research in China in 2018 using funding support from the Swedish Foundation for International Cooperation in Research and Higher Education and University of Gothenburg. A special thanks to Prof. Yongmei Chen and Dr. Shunag Liang from SWUPL for engaging with us on various aspects of the BRI, assisting with translations of the Chinese text and organising interviews. 7

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traders may evolve in the next few years. Today, the traders importing goods through the railway corridors face problem in using letters of credit because of non-negotiable consignment notes but in a few years, the traders may feel that other types of trade finance such as trade credit9 or supply chain finance (SCF) through receivable financing supported by transferable instruments10 would be more suitable to support their trade when using the corridors. Therefore, the pertinent question that arises is how can the Chongqing government promulgate and test laws that can cater to all types of trade finance along the corridors? To engage in such a discussion, it is instructive to first appreciate the legal framework of the BRI under which the railway corridors are being created. It is also necessary to draw connections between the BRI and the Chongqing PFTZ that is being used as a testing ground for adopting the laws necessary for information exchange in the railway corridors. Since the context of the discussion is connected to the financing needs of traders, it becomes essential to acknowledge the evolving nature of trade finance, which over the years has been gradually shifting from intermediated trade finance to trade credit. In financial literature, such shift is generally attributed to levels of information asymmetry, which this chapter briefly adopts to create the context for considering modern rules that may be promulgated and tested in the Chongqing PFTZ. In the final discussion, testing of laws using the flexibility of the Chongqing PFTZ is given centerstage with the spotlight shining on modern rules that may facilitate the use of digital infrastructures such as electronic platforms, single windows, blockchains, etc. along the railway corridors allowing for efficient trade finance.

Trade credit as a form of trade finance is discussed below in Sect. 4 of the chapter. Transferable instruments are financial instruments that may contain an unconditional promise to pay a fixed amount of money to the holder of the instrument, or an order to a third party to pay the holder of the instrument. Examples of transferable instruments include promissory notes, bills of exchange, cheques, and certificates of deposit. They may also include chattel paper (e.g. retail instalment sales contracts, promissory notes secured by an interest in personal property, and equipment leases). Documents of title are documents which in the regular course of business or financing are treated as adequately evidencing that the person in possession of such document is entitled to receive, hold, and dispose of the document and the goods indicated therein (subject to any defences to enforcement of the document). Examples of documents of title include certain transport documents, bills of lading, dock warrants, dock receipts, warehouse receipts, or orders for the delivery of goods. See “Legal issues relating to the use of electronic transferable records”, Working Group IV (Electronic Commerce), Forty-fifth session (Vienna, 10–14 October 2011), (A/CN.9/ WG.IV/WP.115), para 3. 9

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2 The Chinese Belt and Road Initiative and Chongqing Pilot Free Trade Zone The BRI emanated from the foreign policy strategy announced by China’s President Xi Jinping in 2013.11 It is inspired by the ancient silk road, the trading routes and networks that emerged during the Han dynasty in 206 BC, for export of silk to India, Mesopotamia, North Africa and Europe. The BRI, in spirit is similar to the ancient silk road, but in form is much bigger and arguably better. Infrastructure development is a crucial element of the BRI but within its scope also lies policy dialogue, infrastructure connectivity, unimpeded trade, financial support and people-to-people exchange.12 Physical infrastructure is currently playing a fundamental role in fostering regional cooperation and development. A large number of projects are underway or under consideration to connect various sub-regions, including high-speed railroads, oil and gas pipelines and telecom and electricity links.13 Chinese institutions, including the Silk Road Fund, the China Development Bank and many Chinese companies are making large investment, alongside funding provided by international organizations such as the AIIB, the BRICS New Development Bank, the World Bank and the Asian Development Bank. In most part, the BRI is sponsored by the Chinese government. Currently, there are close to 70 countries connected with the BRI but 30 countries are main participants which need critical infrastructure. The BRI marks a radical change in China’s foreign policy as it constitutes a new economic development model that aims to strengthen China’s position as an economic superpower.14 However, it has been emphasized time and 11 The BRI is a combination of the Silk Road Economic Belt and the 21st Century Maritime Road. The Silk Road Economic Belt concept was introduced by the President during his visit to Kazakhstan in September 2013 in a speech titled “Promote People-to-People Friendship and Create a Better Future” delivered at Nazarbayev University on 7 September 2013. The Belt refers to economic and overland transport links which stretches from China to Europe passing through central Asia, Russia and the Baltic States. The areas between China and Europe are connected by railroads, highways, air routes and other means of transport. During his speech, the Chinese leader mentioned the strategic vision of China and emphasized the close cooperation between China and Central Asia. Later in October 2013, the President, during a speech to the Indonesian Parliament, proposed the 21st Century Maritime Silk Road to promote maritime cooperation. The twenty-first century Maritime Road is a network of maritime routes which includes ports in China, regions across Asia such as the Indian Ocean, Indonesia, Middle East, North Africa and Europe. He also emphasized the building of a close-knit China-ASEAN community. In his speech at the Indonesian Parliament, the President also proposed establishing the Asian Infrastructure Investment Bank (AIIB) to finance infrastructure construction and promote regional interconnectivity and economic integration. The AIIB was subsequently established on 25 December 2015. 12 “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road”, issued by the National Development and Reform Commission, Ministry of Foreign Affairs, and Ministry of Commerce of the People’s Republic of China, with State Council authorization on 28 March 2015 (hereinafter Vision and Actions document). 13 Interactive map of the BRI, https://www.merics.org/en/bri-tracker/interactive-map, accessed 17 April 2019. 14 Nordin and Weissmann (2018), pp. 231–249.

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again by Chinese officials that the BRI is not an attempt to create a parallel system which stands in competition with already existing economic and legal frameworks.15 In fact, China seeks to participate more actively in the international economic architecture, by incorporating some of its own experiences.

2.1

An Evolving Initiative

The BRI in its current form should be understood as a flexible and dynamic process that continues to evolve. For instance, when the BRI was announced, it only covered two primary components—overland belt and maritime road. This has now expanded to include cyberspace and outer space.16 Presently, the scope and intention of the BRI can be found in political statements, policy documents and guidelines.17 However, in certain cases, the precise legal status of these policy documents and guidelines is not easily discernible. In addition, a myriad of central, regional and local level documents in the forms of laws, regulations, notices, circulars and communications also contribute to the underlying framework of the BRI.18 China has signed memoranda of understanding,19 treaties,20 and updated pre-existing investment and trade agreements to create momentum for the BRI.21 The legal framework of the BRI is in total contrast with the familiar structures of international governance in the area of trade that the world is already familiar with such as the World Trade Organization (WTO) or Free Trade Agreements (FTAs). When the WTO was formed there was a package of documents,22 but in case of the BRI,

15

Shi (2018), p. 13; Xiaoming (2015) New Silk Road is an opportunity not a Threat, Financial Times, 24 May 2015, https://www.ft.com/content/c8f58a7c-ffd6-11e4-bc30-00144feabdc0, accessed on 17 April 2019. 16 Moss (2016) China One Belt and One Road Takes to Space, 28 December 2016, The Wall Street Journal, https://blogs.wsj.com/chinarealtime/2016/12/28/chinas-one-belt-one-road-takes-to-space/, accessed 17 April 2019. 17 There are two important documents that indicate the scope of the BRI, namely the—Vision and Actions, note 12 above and the “Vision for Maritime Cooperation under the Belt and Road Initiative”, released on June 20, 2017. 18 For understanding the legal landscape see Wolff et al. (2017). 19 Around 76 MOU have been signed with different countries. 20 For example, China has signed approximately 53 tax treaties with the BRI participating countries. 21 For example, the China - Association of Southeast Asian Nations (ASEAN) FTA was renegotiated to include provisions that would enable closer integration of China and ASEAN region especially in the context of digital infrastructures. 22 WTO agreements are the result of the 1986–94 Uruguay Round negotiations, signed at the Marrakesh Ministerial Meeting in April 1994. Currently, there are about 60 agreements such as the Marrakesh Agreement, General Agreement on Tariff and Trade, etc.

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currently there exist no such comprehensive legal structure.23 It is also different from FTAs, where rights and obligations of participants are clearly defined and enforced through a dispute settlement mechanism.24 In the case of FTA the legal framework is established first. The BRI has not started from the articulation of a legal framework. The absence of a comprehensive, concrete legal framework means that there is flexibility in terms of legal rules and that the framework is a work in progress which will evolve on the basis of need.

2.2

The BRI Is Based on Flexibility

It has been argued that the BRI is an attempt by China to sustain its economic growth25 by exploring new forms of international economic cooperation with new partners. During the first three decades of economic reform, China achieved rapid economic growth, benefiting from a dramatic expansion of exports to and foreign direct investment from the developed economies. With growth moderating continuously over the past five years, China’s development pattern appears to have reached a bottleneck. The BRI enables China to look westward for new economic opportunities and support for economic growth for the next phase of development and reform.26 In a nutshell, the purpose of the BRI is to solicit new business for China. China is currently in the state of re-designing its economy and is experimenting with new business ideas in a controlled fashion. The absence of a concrete BRI framework allows its policymakers the flexibility to be responsive in terms of strategy and business needs in the short-term. Indeed, such law-making approach is not new in the context of the Chinese legal system. Even historically, there has always been a visibly positive attitude towards short-term flexibility,27 over certainty and predictability. The Chinese view law as a part of the superstructure of society and when economic relations change, law should change as well.28 23

The scope of the BRI may be found from the Vision and Actions document, note 12 above. Central, regional and local level documents in the form of laws, regulations, notices, circulars and communications form a part of the underlying framework of the BRI. 24 For comparison between the BRI and FTA refer to Chaisse and Matushita (2018), pp. 163–186. The BRI is contrasted with TPP on the basis that the former is not based on a formal treaty arrangement and their organizing principles and modes of connectivity are different. The BRI is inspired by the ancient silk routes. 25 Cai, Understanding China’s Belt and Road Initiative, 22 March 2017, https://www.lowyinstitute. org/publications/understanding-belt-and-road-initiative, accessed 18 April 2019. 26 Mustafaga (2015); Summers (2016), pp. 1628–1643; Wen et al. (2017), pp. 36–45. It has also been argued that the BRI is also to manage China’ excess production capacity. 27 It has been highlighted that flexibility yields uncertainty and values like certainty and legal security are much lauded in the context of rule of law. Refer to Dickinson (2007), pp. 53–88; Pound (1922), p. 71. 28 Xingzhong (1989), p. 29. See also Hsia and Johnson (1987), p. 10 who have stated—“Socialist law must develop and change in accordance with the development and change of economic,

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Most of the main BRI documents are broadly worded with principles such as pronouncements which allow for legal flexibility. This statement can be easily supported by perusing the Vision and Actions document of the BRI. An important point that requires emphasis is the importance of market operation and mutual benefit. It states that the BRI will “abide by market rules and international norms, give play to the decisive role of the market in resource allocation and the primary role of enterprises, and let the governments perform their due functions”. The nature of the phrase “give play to the decisive role of the market in resource allocation and the primary role of enterprises” is that of a general catch-all which leaves many questions unanswered regarding the practical aspects of application of the principle. Corne has commented on the principle-like nature of legal pronouncements of the National People’s Congress and the State Council and argues that they exemplify and typify the characteristic of legal drafting in Chinese law. Such drafting is illustrative of legal flexibility that has allowed the legal system to remain viable despite the fast-changing circumstances or local normative structures or conditions.29 This discussion is especially relevant in the context of the BRI, which as highlighted above, continues to evolve on a daily basis. The discussion on flexibility gets more interesting if one directs attention to PFTZs. Flexibility has been utilized as a tool to further business opportunities within the PFTZs. One may view PFTZs as an exciting experiment for China to not just remain a global manufacturer of goods but become a global provider of services. One of the drafters preparing the legislation for the Chongqing PFTZ explained that China wants to further open up its economy, but would like to do so without exposing itself to unpredictability.30 Through the PFTZs, the opening up takes place in controlled small areas allowing time for both businesses and policymakers to consider the impact of opening up and also adapt to global standards. The PFTZs are different from the older models such as supervisory zones and bonded areas and the flexibility offers them the opportunity to be testing ground for new business and the supporting legislation and administrative processes.

political, cultural and other conditions. This kind of change is embodied in the legislative process, where, in order to adapt to the objective needs of development, the process of enactment, revision and abrogation of laws and regulations is continuously undertaken”. 29 Corne (1995), p. 247. 30 This is gleaned from discussions with Professor Yongmei Chen of SWUPL. For more understanding on the matter see Xi Jinping, Accelerating the implementation of a free trade zone strategy, accelerating the construction of a new model based on openness, Xinhua News Agency, 6 December 2014, http://www.xinhuanet.com/english/2018-11/05/c_137583815.htm, accessed 17 April 2019.

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Chongqing PFTZ Can Develop Laws in Accordance with Business Needs

The establishment of PFTZs in large Chinese cities is an important development which shares deep connection with the BRI. The Shanghai PFTZ was launched in 2013, followed by Guangdong, Tianjin and Fujian PFTZs in 2015, and Sichuan, Chongqing, Shanxi, Henan and Hubei PFTZs in 2017. Establishment of twelve more PFTZs were announced in July 2018. The PFTZs exploit the comparative advantages of each region of the country; strengthen the interaction and cooperation among the eastern, western and central regions of the country; and comprehensively improve the openness of the Chinese economy. The PFTZs are located in SEZs and there are overlaps in functions.31 PFTZs are intended to facilitate investment as they relax access restrictions for overseas investors, such as qualification requirements, equity ratio limit and business scope. There are dozens of special measures for opening up business in six fields, namely, manufacturing, financial service, maritime transport service, commercial trade service, professional service and technology, and cultural service. Apart from providing a facilitative investment setting, PFTZs are entrusted to facilitate trade through better information exchange. The Vision and Actions document of the BRI mentions trade facilitation under the section “unimpeded trade”, with particular emphasis on flow of information through establishment of singlewindows, reduction of customs clearance costs and improvement of customs clearance capability. Such emphasis on information connected with the physical movement of goods is in conformity with the notion of trade facilitation advocated by several international institutions.32 The flow of information through digitization of trade processes assists businesses and governmental agencies to manage risks and reduce transaction costs.33 The active role played by PFTZs in information exchange increase supply chain safety and convenience, improve the coordination of crossborder supervision procedures, promote online checking of inspection and

31

Yin (2018). http://www.rksi.org/sites/default/files/document/911/sez-2017-c-yin-chinese-ftzsand-their-contributions-bri.pdf, accessed 17 April 2019. 32 The WTO defines trade facilitation as ‘the simplification and harmonization of international trade procedures, where trade procedures are the activities, practices and formalities involved in collecting, presenting, communicating and processing data and other information required for the movement of goods in international trade’. The United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) defines trade facilitation as ‘the simplification, standardization and harmonization of procedures and associated information flows required to move goods from seller to buyer and to make payments.’ The Organisation for Economic Co-operation and Development (OECD) defines trade facilitation as ‘the simplification and standardization of procedures and associated information flows required to move goods internationally from seller to buyer and to pass payments in the other direction’. Single windows are critical for information sharing connected with trade and may be utilised for building profiles. All the above definitions emphasise the flow of information connected with the physical movement of goods. 33 For a detailed discussion see Basu Bal and Rajput (2017), pp. 305–326.

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quarantine certificates, and facilitate mutual recognition of Authorized Economic Operators. The PFTZs are also allowed flexibility to serve as test beds to experiment with new businesses that may require new legal frameworks. In Chongqing, for example, a notification of the State Council allows flexibility to the local government to promulgate laws that furthers and develops business opportunities in the PFTZ.34 Pursuant to that notification, the local government in Chongqing has permitted certain activities to be carried out inside the PFTZ which would otherwise have contravened Chinese laws. For instance, to develop financing business in the PFTZ, the following activities are permitted: a. Bonded automobile storage and bonded goods and material financing business in the special customs supervision area. b. Financial leasing of aircrafts, ships and large engineering equipment by both domestic and international companies. c. Pilot projects for settlement and facilitation of various trade formats, such as inland processing trade and entrepot trade for optimization of cross-border financial settlement services. d. Foreign exchange revenue and expenditure facilitation measures that are compatible with cross-border transactions. In addition, the banking and financial institutions in Chongqing PFTZ have been allowed to cooperate with the payment institutions that hold necessary permits. The Chongqing PFTZ can also grant more business autonomy to the banking and financial institutions to enhance cross-border financial services and establish specialized institutions for currency exchange and credit reporting. Based on the aforesaid notification, the local government is also permitted to enact laws suitable to local conditions, provided they do not conflict with the Constitution or the central laws of China.35 The notification provides normative guidance in areas where legislation is still lacking. The formulation is made in broad terms and the details are left to be devised and applied by the specific departments and authorities at the local level. The notification emphasises that the relevant departments of the local government should support the PFTZ to deepen reform, strengthen supervision, prevent and control risks and coordinate amongst themselves. More importantly, emphasis is laid on “opening up trials in various fields” and also “solve the problem of institutional guarantees in the pilot process”. What remains unclear though is how conflict may be resolved if and when that arises between central and local laws pursuant to the use of the flexibility? Also, what remains unclear is whether the above notification was subjected to any enactment procedure? If the notification is not subjected to an enactment procedure, then it can

34

See Overall Plan for the China (Chongqing) Pilot Free Trade Zone, notified by the State Council on 15 March 2017. http://www.gov.cn/zhengce/content/2017-03/31/content_5182300.htm, accessed 17 April 2019. 35 Wang and John (1999), p. 8.

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be continually changed and tweaked with passage of time. This especially brings to fore the prospect of making changes to the notification to accommodate policy. Be that as it may, it is clear that there is an intention to provide procedurally systematic and substantively fair protection for businesses operating in the Chongqing PFTZ.

3 Using Maritime Rules in Railway Carriage to Facilitate Trade Finance in Chongqing PFTZ The Chongqing PFTZ covers an area of 119.98 square kilometres and is considered important for the development of the western region of China. This PFTZ is overseeing the construction of an international logistics hub, a port and an inland open-economic highland designed to meet the goals outlined under the terms of both the BRI and the Yangtze River Economic Belt development programme. The ambition of the PFTZ is to establish a multimodal logistics trans-shipment centre that offers a range of services, including international trans-shipment, consolidation and distribution.36 This PFTZ also supports the Chongqing-Duisburg rail corridor which is one of the several Eurasian railway corridors connecting China and Europe. The Eurasian railway corridors are governed under two different international legal regimes for freight transport, one through the CIM-COTIF37 and the other through the SMGS.38 While countries in Western Europe, Central Asia and North Africa are party to CIM-COTIF,39 China, Russia and several countries in Eastern Europe follow the SMGS.40 There are some countries along the corridors that participate both in the COTIF and the SMGS.41 Following the disintegration of the Soviet Union and the expansion of trade between CIM and SMGS countries, a stronger need to promote legal interoperability between the two regimes was felt both nationally and internationally. This led to the effectuation of the CIM/SMGS 36 The authors visited Chongqing PFTZ in July 2018 and it was explained during the tour of the facilities that within a few years of its establishment, the PFTZ has embraced a broad range of activities which include innovative manufacturing and related services, commodity exchange, cloud computing hub, trading in financial services, professional services, etc. 37 Convention concerning International Carriage by Rail 1980 (COTIF); the current version is the Uniform Rules Concerning the Contract for International Carriage of Goods by Rail (CIM), Appendix B to the Convention, amended by the 1999 Protocol. 38 SMGS is the abbreviation for the Russian title of the Agreement on International Railway Freight Transportation. 39 Currently the COTIF has more than 50 members, including Germany, France, United Kingdom, Poland, Slovakia, Romania, Turkey, Iraq, Iran, Azerbaijan, Pakistan etc. European Union acceded to the COTIF in July 2011 by virtue of Council Decision 2013/103/EU. 40 Currently there are 28 members of the SMGS including Afghanistan, Azerbaijan, Belarus, Iran, Kazakhstan, Mongolia, Poland, Russia, Turkmenistan, Ukraine, Uzbekistan etc. 41 The Baltic states, Poland, Slovakia, Hungary, Bulgaria, Iran, Azerbaijan, etc. participates in both COTIF and SMGS. Russia participates in the COTIF since 1 February 2010 only with regard to two short lines in the Baltic harbour areas.

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consignment note in 2006 which is used for block trains, wagon groups, single wagons or containers, in either paper or electronic format.42 The CIM/SMGS consignment note is recognized as a customs transit document and as a bank document. However, exporters and banks exercise caution when dealing with a letter of credit transaction that involves a railway consignment note, because neither exporters nor banks can use the goods as collateral as the rail carrier can deliver goods to the consignee without obtaining the original document.43 The existing railway carriage laws were designed around non-negotiable waybills as transport times were generally short and shippers did not have much reason to develop elaborate trade finance practices involving carriage documents. To the contrary and by contrast, in sea carriage, documents of title such as bills of lading have been in use for centuries to facilitate the financing of goods while they remain afloat on-board vessels for months, being transported across continents. The banks in China developed their practices for letters of credit around sea transport and require a bill of lading as security. The emphasis on negotiability for security purposes is well developed in the sea carriage law of China and can be found in Article 79 of the Chinese Maritime Code (CMC) which provides The negotiability of a bill of lading shall be governed by the following provisions: a. A straight bill of lading is not negotiable b. An order bill of lading may be negotiated with endorsement to order or endorsement in blank; c. A bearer bill of lading is negotiable without endorsement

Also, pursuant to Article 71 of the CMC, a bill of lading is a document of title and the rightful holder of the bill can require the carrier to deliver the goods to them. When the bill is held by a bank, it will have proprietary interest over the goods. The precise nature of the bank’s right, as absolute owner of the goods or as a form of security is unclear under Chinese law, but in practice banks can require carriers to deliver the goods to them. In case of bankruptcy of a seller who has shipped the goods and received the price, the seller no longer has title to the goods. A bank which has subsequently received the bill of lading will be free from any claims from the liquidator or administrator to return the goods or the bill of lading.44 Chinese banks have insisted on negotiable documents to issue letters of credit as they perceive cross-border trade transactions as having moderate levels of information asymmetry, and in the absence of a document of title, banks are required to set aside higher capital as a regulatory requirement. Higher capital requirements have often been cited as one of the prominent reasons for global shortage of trade finance and there exists a huge gap for Asia and the Pacific.45 To avoid tying up more capital, 42

Yan and Filimonov (2018), p. 121. It is to be noted that recognizing established trade practice, Article 24 of the UCP600 provides for the issuance of credit based on non-negotiable railway consignment notes. 44 Tricks et al. (2018) Appendix 10, p. 55 https://www.clydeco.com/uploads/Files/The_Legal_ Status_of_E-bills_of_Lading_-_ICC_and_Clyde_Co.pdf, accessed on 17 April 2019. 45 DiCaprio and Yao (2017), p. 6. 43

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Chinese banks requested for the creation of a financial intermediary that would assume the risk posed from lack of negotiability of railway consignment notes. In response, the local government in Chongqing established CLFS that would support traders operating from the Chongqing PFTZ, using a tripartite contractual arrangement,46 provide guarantee to the banks. Such guarantee would be conditional upon traders surrendering control of the goods to CLFS and exhibiting through proper documentation the following: a. the trade transaction is real and there is a genuine requirement for such transaction to happen; b. the trader has capacity for carrying out such a transaction; c. the trader has prior experience in conducting such a transaction; d. the trader does not have any adverse credit history; e. the trader does not have any court proceedings against her/him; f. the trader does not have any non-planned expansion and investment; g. the trader operates regularly; and h. the trader has deposited 20% of the transaction sum with CLFS.47 The above requirements laid down by CLFS seem reasonable to reduce risk of repayment to the banks but they also increase the cost of accessing trade finance for the importers. It would only be reasonable that laws are created with a vision that eventually importers would be able to easily move to other forms of trade finance that are cheaper than letters of credit.

4 Consideration of Different Forms of Trade Finance in the CLFS Proposal Generally speaking, the request from car traders in the Chongqing PFTZ may be viewed as a request for facilitating international trade finance solutions in railway corridors where goods cross several jurisdictions over several weeks during the journey from Europe to China. Before one deliberates on whether the solution proposed by CLFS would be acceptable to the international transport community, it is imperative to understand the categories of international trade finance and emerging trends. Such understanding may present an opportunity before policymakers to determine which strand of lawmaking should be prioritized, transport law or e-commerce law, to facilitate traders with better access to finance.

46 As mentioned in the introduction of this chapter, in June 2018, a tripartite contractual arrangement was created between Chinese railway carriers, importers and banks to use a negotiable railway bill that secured the letter of credit for pilot shipment of cars from Germany to China. 47 The above list is not exhaustive. These conditions were mentioned during the interview referred to in note 8 above.

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International trade finance is generally categorized under inter-firm trade credit and intermediated trade finance. In inter-firm trade credit, payments are transferred directly from importer to exporter either after or before delivery through “open account”48 or “cash in advance”49 payment terms, respectively. In intermediated trade finance, a financial intermediary such as a bank issues a letter of credit50 to the importer to facilitate the trade with the exporter.51 The typical letter of credit is a sophisticated mechanism designed to mitigate the risks borne by exporters and importers. Intermediated trade finance is commonly used in both low and middle-income countries, as traders rely on the credibility of financial intermediaries rather than the credibility of trading partners. Since intermediated trade finance comes at a cost, its use has been declining in high-income countries. This can be discerned from the result of a survey on country-wise relevance of payment terms conducted by the Association of Executives in Finance, Credit & International Business (FCIB).52 The study indicates that firms’ use of payment terms varies a lot across different destination countries. The correlation seems to be strong between firm managers’ perceived riskiness of the destination country and the adoption of a specific payment term. Although the letter of credit is a popular payment term for imports in China, the overall use of letters of credit appears to be the least common payment term globally. It has to a large extent been replaced by inter-firm trade finance in terms of open account, which is a more competitive payment term. A most likely reason for the popularity of open account in financially developed Northern and Western European countries is simply because better enforcement mechanisms are generally available in such jurisdictions that reduce the opportunity cost of adverse selection.

48 In “open account” the exporter extends a trade credit to the importer, which allows the latter to postpone the payment for the goods typically by 30–90 days after the date of delivery of the goods. Apart from the cost of capital, the credit risk of non-payment is borne by the exporter or his external creditors. 49 In “cash in advance” the importer pays for goods ordered before the shipment of the goods by the exporter. The importer is exposed to the transactional risk of non-delivery or delivery of low-quality goods. 50 Letters of credit are mainly used to settle international trade transactions where a financial intermediary offers trade finance against a fee. The importer’s local bank, which issues a letter of credit assures payment after delivery and/or the exporter’s fulfillment of the obligations agreed upon in the sale contract. The exporter commonly receives the payment via an advising or confirming bank, which is usually the exporter’s local bank. 51 When using a letter of credit, the exposures to counterparty risks, i.e., both non-payment and non-delivery risks for the traders are eliminated at the trading level. Since the importer’s bank absorbs the credit risk, the exporter is exposed only to the comparatively lower risk of a bank defaulting. Seemingly, for the fee paid to the issuing bank, the importer’s transactional risk is reduced to the risk of receiving goods failing to meet quality requirements. Provided that these goods are detected at the time of delivery, and consequently not be paid for, the importer’s additional cost would then be restricted to eventual negative effects on the business in terms of loss of sales, higher production costs, etc. For a detailed discussion on the topic see Ahn (2011). 52 Schmidt-Eisenlohr (2013).

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Considering the evolving nature of trade finance, it is plausible that in the near future, traders in the Chongqing PFTZ may feel that trade credit and SCF would be more suitable to support their trade when using the railway corridors.

5 The Possibility to Monetize Receivables The car traders in Chongqing use the Chongqing-Xinjiang railway line for parallel imports from Europe. The term “parallel imports” refer to completely built cars imported from overseas markets via professional channels and are parallel to cars imported via traditional channels. Cars imported through traditional channels are sold at registered dealers of car manufacturers who provide sales, spare parts, service and survey (referred to as 4S dealers). The parallel imported cars are up to 20% cheaper than those imported through traditional channels. The parallel importers have to show sound financials for securing license in China.53 They buy cars from exporters in Europe who are small dealers. After few years, once trust is established between the traders, it is possible that the Chinese importers may request for open account terms. The well-capitalized Chinese importers may be in a position to use their own balance sheet to support the small car exporters. A number of strategies have emerged in recent years to help traders, for example, leverage the importer’s stronger financial position to help the exporter access low cost liquidity, so that the exporter can then offer the importer extended payment terms. Some of these strategies involve monetization of the importer’s trade accounts receivable. The most common forms of trade receivables monetization include open account based SCF and transferable instrument based SCF. Together, these two strategies are generally referred to as reverse factoring, which is based on financial technology to link importers, exporters, and financial institutions to improve cash flow, reduce supply chain risk, and provide predictable return on investment for funders.54 An open account based SCF relies on the sale of accounts receivable which requires predictable laws and a proper filing system.55 However, in China, selling intangibles can be cumbersome and may expose the investor to additional legal risks, such as fraud and insolvency. Also, the investor may be required to obtain lien release from exporter’s lenders before the receivable can be sold. The existence of a proper recording system for filing information about sale and purchase of receivables is necessary as well. Therefore, a transferable instrument based receivables financing programme using promissory notes or bills of exchange, governed under a chosen 53

HKTDC Research (2018) Chongqing: On Track for Europe via the Yuxinou Rail Route https:// hkmb.hktdc.com/en/1X0ADYAW/hktdc-research/Chongqing-On-Track-for-Europe-via-theYuxinou-Rail-Route, accessed on 17 April 2019. 54 For a holistic discussion on SCF see Basu Bal et al. (2018), pp. 35–54. 55 For example, article 9 of the Uniform Commercial Code (UCC) in the United States provides such predictability. Also, an investor purchasing a receivable need to record that under the UCC filing system.

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law, would allow mitigation of cross border legal risks, such as fraud, insolvency, exporter’s lien, and lack of a systematic credit filing system. In a transferable instrument-based programme, the exporter of cars submits invoices which the buyer in China approves. Also, the exporter creates a draft or bill of exchange or negotiable promissory note or another form of negotiable instrument, governed under Chinese law. Once created, the instrument is then sold by the exporter to a Chinese investor through physical embodiment of the negotiable instrument. Since the instruments are governed under Chinese law and owned by a Chinese investor, they are free of most foreign law constraints. In this arrangement, the Bank of China office in Frankfurt which participated in the pilot from Europe with CLFS or CLFS itself could become the investor. The investor takes physical possession of the instrument upon purchase, then presents the instrument to the car importer for payment on the invoice maturity date. It may so happen that the creation, acceptance, assignment and presentation of the instrument are all handled by the investor. In that case the European exporter and Chinese importer do not need to exchange any physical documents. If all the above are to happen in an electronic platform then modern e-commerce laws that support use of negotiable documents in electronic form through use of electronic transferable records must be adopted in China to facilitate such transaction.

6 Rules for Supporting Better Information Exchange and Facilitating Access to Finance In 2017, the United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on Electronic Transferable Records (MLETR)56 which can be used as a specimen text by national lawmakers when preparing domestic law on electronic transferable records.57 UNCITRAL undertook the task of creating harmonized rules for electronic transferable records in 2011, to benefit the promotion of electronic communications in international trade. Prior to that certain jurisdictions had already promulgated national laws on the subject with different approach and content to remove the obstacle of transferring the physical paper in original.58 However, most of these national laws are technology specific and/or allow use of electronic records that are not functionally equivalent to the paper form. In addition, most of these laws deal with only one type of instrument/document in separate

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http://www.uncitral.org/pdf/english/texts/electcom/MLETR_ebook.pdf. The term “electronic transferable record” is used in this paper as an electronic equivalent of a transferable instrument (negotiable or non-negotiable) or a document of title. 58 For example, the Korea Trade Net (KTNET), which was designated as the registry operator for the purposes of the South Korean Presidential Decree on the Implementation of the Electronic Bill of Lading Provisions of the Commercial Act of 2008, achieves exclusive control through this title registry. 57

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legislation. Such an approach may be effective at national level but does not promote cross-border use of electronic transferable records and discourage new business processes. The MLETR covers transferable instruments such as bills of exchange and promissory notes, and documents of title such as bills of lading and warehouse receipts. The MLETR builds on the principles of non-discrimination against the use of electronic means, “functional equivalence” and “technology neutrality”. Based on the functional equivalence approach the MLETR does not affect substantive law and party autonomy as applicable to the equivalent document or instrument. Based on the principle of technology neutrality, the MLETR is compatible with registry-, token- and blockchain based systems. According to the MLETR, an electronic transferable record59 is functionally equivalent to a transferable document or instrument if that record contains the information required to be contained in a transferable document or instrument, and a reliable method is used to: (a) identify that electronic record as the electronic transferable record; (b) render that electronic record capable of being subject to control from its creation until it ceases to have any effect or validity; and (c) retain the integrity of that electronic record.60 Control is a fundamental notion of the MLETR since it represents the functional equivalent of possession of a transferable document or instrument. In particular, the possession requirement is met with respect to an electronic transferable record if a reliable method61 is used to: (a) establish exclusive control of that electronic transferable record by a person; and (b) identify that person as the person in control.62 Moreover, the MLETR enables inclusion of information in an electronic transferable record that may not be included in a paper-based transferable document or instrument because of its nature. The MLETR also provides guidance on assessing the reliability of the method used to manage an electronic transferable record and on change of medium (electronic to paper and the reverse), among other things.63 In addition, the MLETR aims to facilitate the cross-border use of electronic transferable records by supporting the principle of non-discrimination against the foreign origin or use abroad of an electronic transferable record.64 Finally, the MLETR does not affect in any manner the law applicable to transferable documents or instruments, which is referred to as “substantive law” and includes rules on private international law.65

59 The term “electronic transferable record” is used in this chapter as an electronic equivalent of a transferable instrument (negotiable or non-negotiable) or a document of title. 60 Article 10. 61 Article 12. 62 Article 11. 63 Articles 17 and 18. 64 Article 19. 65 The summary of the MLETR presented in this paragraph is from UNCITRAL’s website. See http://www.uncitral.org/uncitral/en/uncitral_texts/electronic_commerce/2017model.html, accessed on 17 April 2019.

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Although the MLETR is a positive step forward, it is not law. Individual states will have to decide whether to adopt it into their own law. At present Bahrain is the only state that has adopted the MLETR in its domestic legislation.66 As a leading international trading nation, China may wish to be an early adopter of the MLETR. In that case, the local government in Chongqing may explore the possibility of testing the application of MLETR in business areas such as railway transport and trade finance based on the requests made by car importers. In that case, MLETR can support an electronic platform for a transferable instrument based receivable financing programme to create a market-based approach for trade finance. It would also allow China to test the MLETR in a controlled environment before deciding on whether or not to promulgate its national law based on the UNCITRAL template.

7 Concluding Remarks The commercial maritime law framework surrounding physical shipping documents evolved during the sixteenth century to allow traders to dispose the goods while remaining in the custody of the carrier. Incidentally, that legal framework also afforded security to the lenders. Currently, with strict banking regulations on capital adequacy,67 using that legal framework has become increasingly expensive for exporters and importers. In addition, with the surge in pace and complexity of international trade, the physical movement of the shipping documents from trader to trader and/or bank to bank lags behind the movement of the goods. However, a substantial portion of international trade still relies on physical shipping documents and the associated legal framework because of traditional inertia. While several attempts to reform the framework to allow use of electronic records have been made in the past four decades, small and medium sized exporters and importers have not seen enough value to be persuaded to make the transition. In the past decade, international institutions such as the WTO, UNCITRAL, UNESCAP,68 UN/CEFACT and UNECE69 have included paperless trade within the broad meaning of trade facilitation and connected commercial and regulatory aspects of international trade under a modern and coherent legal framework to clear the way for e-commerce. Consequently, governments have been tasked to create the necessary electronic infrastructure to enable business-to-government and vice versa 66 See “Bahrain enacts the UNCITRAL Model Law on Electronic Transferable Records” http:// www.unis.unvienna.org/unis/en/pressrels/2018/unisl269.html, accessed on 17 April 2019. 67 For example, Basel II is an internationally agreed set of measures adopted for the assessment of international banks’ capital adequacy, issued by the Basel Committee on Banking Supervision in 2004. Basel III was subsequently issued in December 2010 in response to the financial crisis of 2007–09 and provides a regulatory scheme targeting governance and risk management and the introduction of global liquidity standards. 68 The United Nations Economic and Social Commission for Asia and the Pacific. 69 The United Nations Economic Commission for Europe.

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information exchange through establishment of national single windows. Also, it is also possible for exporters and importers to take advantage of electronic infrastructures created and operated by private entrepreneurs such as platforms, distributed ledgers, etc., for reliable business-to-business information exchange across borders. The modern legal framework is also being finetuned to facilitate cross-border single window interoperability for government-to-government exchange of information. Overall, the electronic exchange of information across sectors can substitute the need for physical shipping documents, support better risk evaluation, reduce information asymmetry and create enough value to make the transition for small and medium sized exporters and importers worthwhile. The MLETR allows to include all information that are pertinent for cross-border trade in a single electronic record which can then be shared with all businesses and regulators on a need to know basis. The information contained therein would be reliable, i.e., complete, up-to-date and authentic. It is submitted that the CLFS initiative in Chongqing has the potential to create an information driven thirdparty electronic platform which would merge commercial documentation for both logistics and finance to promote SCF along the Eurasian railway corridors. Using the flexibility allowed to Chongqing PFTZ, China can test new laws that are necessary to support modern businesses related to logistics and finance along the new trade route to Europe. If the test is successful in the Chongqing, then China can eventually decide to implement the MLETR into its national law. In case China finds the MLETR to be a suitable solution for expanding its businesses along both land and sea trading routes, then the BRI can assist in spreading an already harmonised set of rules created by UNCITRAL among countries that are its trading partners.

References Ahn J (2011) A theory of domestic and international trade finance. IMF working paper, WP/11/262 Basu Bal A, Rajput T (2017) Trade in digital era: prospects and challenges for an international single window environment. Neth Yearb Int Law:306–325 Basu Bal A et al (2018) Different perspectives on supply chain finance – in search of a holistic approach. In: Cullinane K, Gong S (eds) Funding international logistics and the supply chain: strategies for finance and risk management. Elsevier, pp 35–54 Chaisse J, Matushita M (2018) China’s ‘Belt and Road’ initiative: mapping the world trade normative and strategic implications. J World Trade 52(1):163–186 Corne PH (1995) Lateral movements: legal flexibility in China and foreign investment regulation in China. Case West Reserve Univ J Int Law 27(2):247–299 DiCaprio A, Yao Y (2017) Drivers of trade finance gaps. ADBI Working Paper 678. Asian Development Bank Institute, Tokyo. https://www.adb.org/publications/drivers-trade-financegaps. Accessed 16 Apr 2018 Dickinson A (2007) Third country mandatory rules in law applicable to contractual obligations: So Long, Farewell, Auf Wiedersehen, Adieu? J Priv Int Law 3:53–88 Hsia T-t, Johnson CA (1987) Law-making in the People’s Republic of China: terms, hierarchy, and interpretation. Library of Congress, Washington D.C., p 10 Murray C, Holloway D, Timson-Hunt D, Dixon G (2012) Schmitthoff: the law and practice of international trade, 12th edn. Sweet & Maxwell

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Mustafaga NB (2015) NPC meeting touts new Silk Road as new driver for economic growth. China Brief N 6, 19 Nordin HMA, Weissmann M (2018) Will Trump make China Great Again? The belt and road initiative and international order. Int Aff 94(2):231–249 Pound R (1922) An introduction to the philosophy of law. New Haven/London, p 71 Schmidt-Eisenlohr T (2013) Towards a theory of trade finance. J Int Econ 91(1):96–112 Shi J (2018) The belt and road initiative and international law- an international public goods perspective. In: Zhao Y (ed) International governance and the rule of law in China under the belt and road initiative. Cambridge University Press, pp 9–31 Summers T (2016) China’s ‘New Silk Roads’: sub-national regions and networks of global political economy. Third World Q 37(9):1628–1643 Tillman JE (2018) The Rise of China-Europe Railways. Centre for Strategic and International Studies Research Report. https://www.csis.org/analysis/rise-china-europe-railways. Accessed 17 Apr 2019 Tricks et al (2018) Legal status of the electronic bills of lading: a report for the ICC Banking Commission. Clyde & Co., Appendix 10, p 55 Wang G, John MO (1999) Chinese law. Kluwer Law International Wen T, Chi LK, Wong E, Tsui S (2017) One Belt, One Road - China’s strategy for a new global financial order. Mon Rev 68(8):36–45 Wolff LC, Xi C, Chan J (2017) Legal dimensions of China’s Belt and Road Initiative. Wolters Kluwer Xingzhong Y (1989) Legal pragmatism in the People’s Republic of China. Cornell Law Faculty Publications, Paper 993: 29–51 Yan Z, Filimonov V (2018) Comparative study of international carriage of goods by railway between CIM and SMGS. Front Law China 13:115–136 Yin C (2018) Chinese FTZs and their contributions to BRI

A Critical Analysis of Carriage of Passengers by Sea: Uniformity Through International and Regional Approaches Olena Bokareva

Abstract The purpose of the chapter is to examine and evaluate the legal regime in relation to international sea passengers and whether it provides international uniformity and adequate protection to the passengers carried by sea. The international regime embodied in the Athens Convention relating to Carriage of Passengers and their Luggage by Sea 1974 and the Protocol 2002 establishes carrier’s liability for death and personal injuries arising out of the shipping incidents and in some cases non-shipping incidents. In the context of the European Union (EU), the passengers may also bring their claims based on the EU Regulation 392/2009 which implements the Athens Convention 2002 and harmonises this area among all the EU Members States. In contrast to international regime that mainly focuses on liability of the carrier and compensation for damage, the EU regime has also elements of consumer law.

With the advancement of sea passenger transportation and cruising to virtually all resort destinations around the world, thousands of passengers are traveling by sea to spend their vacation on a passenger ship. According to the data, 24.2 million passengers chose cruises in 2016.1 It is notable that passengers’ claims arising due to accidents on ships have been brought since the sinking of the Titanic in 1912. Unlike carriage of cargo, transportation of passengers presents totally different risks and liabilities for the carrier. The outcome of any claim related to passengers depends on the applicable law and the forum state. The applicable law that will govern a dispute will be indicated in the ticket incorporating standard terms and conditions. It is vital for every passenger to know its rights before planning a voyage, but as practice shows, very few passengers do read the terms and conditions. Only in the case of an accident, it becomes evident whether and to what extent the passenger or his relatives can be 1

Cruise Industry Overview—2017, https://www.f-cca.com/downloads/2017-Cruise-Industry-Over view-Cruise-Line-Statistics.pdf.

O. Bokareva (*) Faculty of Law, Lund University, Lund, Sweden © Springer Nature Switzerland AG 2020 P. K. Mukherjee et al. (eds.), Maritime Law in Motion, WMU Studies in Maritime Affairs 8, https://doi.org/10.1007/978-3-030-31749-2_4

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compensated. Whether the forum state is a party to any international convention related to passengers could be of paramount importance. For example, passengers traveling on the same ship, depending on the forum state and applicable law, can receive compensation for mere delay or disappointment, while others may be left without any compensation for the death of the relative or for a strong psychological trauma. What aggravates the situation is that not all states are parties to a particular convention that establishes international minimum standards of the carrier’s obligations and liabilities. In those states national law will apply to a passenger’s claim and can lead to unpredictable outcomes and sometimes no compensation at all. Passengers transported between the ports in two different countries can bring their claims for accidents at sea under the Athens Convention relating to Carriage of Passengers and their Luggage by Sea either 1974 or 2002, the EU Regime2 or applicable national law which may or may not incorporate any of the international conventions. Notably, both the Athens Convention 1974 and the Protocol 2002 are now consolidated into the Athens Convention 2002 and is in force from 23 April 2014. It will be difficult to access in advance which regime will apply and therefore, claimants or their lawyers must make a good assessment before choosing the forum. The Athens Convention 2002 can also apply contractually in states which have not joined it formally but through contractual incorporation, especially in cruise contracts. The purpose of the chapter is to examine and evaluate the legal regime in relation to international sea passengers and whether it provides international uniformity and adequate protection to the passengers carried by sea. International regime embodied in the Athens Convention relating to Carriage of Passengers and their Luggage by Sea 1974 and the Protocol 2002 establishes carrier’s liability for death and personal injuries arising out of shipping incidents and in some cases non-shipping incidents. As a general principle of contract law, an injured party has to be compensated for its losses. However, international transport conventions entitle the carrier to limit its liability for certain losses or even exclude its liability. The regime embodied in the Athens Convention is not an exception and provides similar provisions regarding the limitation of liability which will be discussed in more details in the following sections. In the context of the European Union (EU), the passengers may also bring their claims based on the EU Regulation 392/2009 which implements the Athens

2 Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents. Other EU instruments include Council Decision of 12 December 2011 concerning the accession of the European Union to the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, as regards Articles 10 and 11 thereof (2012/23/EU);Council Decision of 12 December 2011 concerning the accession of the European Union to the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, with the exception of Articles 10 and 11 thereof (2012/22/EU); and Regulation (EU) No 1177/2010 of the European Parliament and of the Council of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and amending Regulation (EC) No 2006/2004.

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Convention 2002 and harmonises this area among all the EU Members States. In contrast to international regime that mainly focuses on liability of the carrier and compensation for damage, the EU regime has also elements of consumer law. The new Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements3 is applicable from 1 July 2018 and repeals the previous Directive 90/314/EEC. The new Directive extends its protection to those who book other forms of combined travel, including cruises and thus might have a significant impact on EU passenger law, and international regime related to passenger carriage and cruise shipping.

1 International Regime on Carriage of Passengers by Sea 1.1

Historical Evolution

It is conspicuous that international regime pertaining to passengers transported by sea appeared much later than the one related to carriage of goods by sea. When the original Hague Rules governing the liability of the carrier to cargo interests was convened internationally in 1924 after years of consideration and drafting, passenger carriage was still in its beginnings. At that time, it was mainly considered as a transportation service from one place to another. Moreover, it was noted that freedom of contract has dominated the regime related to carriage of passengers by sea until the latter half of the twentieth century.4 Even the regime on carriage of passengers by air embodied in the Warsaw Convention was adopted already in 1929. Nevertheless, various attempts have been made to create an international regime governing passengers’ rights and minimum level of protection since 1960s. However, none of these attempts succeeded.5 The first international initiative was reflected in the International Convention for the Unification of Certain Rules relating to the Carriage of Passengers by Sea, adopted in Brussels in 1961, entered into force in 1965 and ratified by a small number of states. Another related convention was the International Convention for the Unification of Certain Rules relating to the Carriage of Passengers’ Luggage by Sea, adopted in Brussels in 1967, which never came into force.6 At the 28th Conference of the Comité Maritime International in Tokyo one document was drafted to replace both conventions and remove possible

3

Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC. 4 Soyer and Leloudas (2018). 5 Ibid. 6 Berlingieri (2014), Chapter 4.

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discrepancies between the two conventions. This solution was perceived as rational since the creation of a single instrument pertaining to the carrier’s liability for both the passenger and his luggage eventually could increase uniformity and international acceptance.7 However, opinions raised by members of national maritime law associations differed at that point. Some preferred to draft a new convention instead of joining two existing conventions.8 Be that as it may, the first international convention governing carriage of passengers and their luggage that entered into force was adopted on 13 December 1974. Its full name is the Convention relating to the Carriage of Passengers and their Luggage by Sea. Since it was signed in Athens, it is colloquially referred to as the Athens Convention. The Convention entered into force in 1987. A number of Contracting States was 25, but later some of them denounced the Convention and joined the Protocol of 2002.

1.2

Athens Convention 1974

According to the original Athens Convention 1974 the basis of carrier’s liability for death and personal injury to passengers and for loss of or damage to luggage was based on fault. The burden of proof lied with the claimant unless arose from or in connection with the shipwreck, collision, stranding, explosion or fire, or defect in the ship. In those case the fault was presumed. Pursuant to Articles 7–9 the limits of liability were deemed to be units consisting of 65.5 milligrams of gold of millesimal fineness 900 and constituted 700,000 francs for death and personal injury. Later on, Poincaré francs were converted into SDRs (Special Drawing Right as defined by the International Monetary Fund) by a separate Protocol adopted in 1979 which entered into force in 1989. According to the new Protocol, the limits of liability for death and personal injury was changed to 46,666 SDRs. There are different opinions regarding role of the Athens Convention 1974 in achieving uniformity in the area of sea passenger carriage. Some consider that the Convention did not achieve worldwide acceptance, partially because the limits of liability were too low.9 However, it must be recognised at the same time that the Athens Convention was incorporated in the legislation of a number of countries globally. Later on it was realised that the level of compensation is too low and needs to be amended and updated. As a result, a Protocol to the Athens Convention was adopted in 2002 which entered into force in 2014. The text of the Protocol was consolidated with the main convention and will be further referred to as the Athens Convention 2002. It must be observed that in a number of countries the original Athens Convention 1974 still applies which might create conflict of conventions when it is apparent that both regimes can apply to one claim.

7

O’Neill (1969), pp. 107–112. Ibid., pp. 108–109. 9 Soyer and Leloudas (2018). 8

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Despite all the difficulties surrounding the ratifications and accessions to the Convention, it finally entered into force and gained more international acceptance than its predecessor and attracted some 30 Contracting States, including the European Union that joined the Convention along with its Member States. For example, the UK is a Contracting State to the Athens Convention 2002 and denounced the Athens Convention 1974. In contrast, the US10 has joined neither of the sea passenger conventions. In this manner, the majority of passengers’ contracts contain US general maritime law (Federal law) as the applicable law. Even if the US law might be favourable in some categories of claims (death of passengers),11 it will not be that favourable in the area of psychological damage and non-economic losses such as e.g. delays and cancellations.

1.3

Scope of Application and Salient Features of Athens Convention 1974, as Amended by the Protocol of 2002

The general structure and salient features of the Athens Convention 2002 will be discussed, coupled with the issue of limitation of liability pertinent to all transport conventions. It must be noted that the Convention deals with civil liability of carriers, limitation of liability and compensation to passengers for losses incurred during the voyage, such as losses resulting from loss of life or personal injury or loss of, or damage to, their property/luggage.12 In contrast to the Athens Convention 1974 which is a fault-based liability regime, the Protocol 2002 provides for strict and fault-based liability, two tiers of limitation amounts and compulsory insurance. The Convention makes an important distinction between a shipping and non-shipping incident that would entail different levels of liability and compensation. As every international convention, the Athens Convention 2002 has its limitations and does not apply to any passenger carriage by sea. In particular, it does not deal with liability arising out of a ruined holiday which is an area covered by relevant domestic law or EU legislation on package travel. Also, according to Article 22 there is a possibility for a State Party to exclude the application of the Convention in cases where the carrier and the passenger are nationals of that State, and therefore there is no foreign element. The scope of application is found in Article 2 which states that the Convention covers any international carriage if: a) the ship is flying the flag of or is registered in a State Party to this Convention, or b) the contract of carriage has been made in a State Party to this Convention, or

10

US Carnival Cruises is the biggest brand and owner of about 22 ships. The law provides no compensation for the death of pensioners and children and based only on the economic compensation which is completely in conflict with the Athens Convention. 12 Both instruments bear certain similarities but also distinctive features in terms of the liability regime, insurance and compensation available to the passengers. 11

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O. Bokareva c) the place of departure or destination, according to the contract of carriage, is in a State Party to this Convention.

At the same time, the Convention defines categories of passengers who fall under the scope of the Convention. In particular Article 1(4) states: “passenger” means any person carried in a ship, (a) under a contract of carriage, or (b) who, with the consent of the carrier, is accompanying a vehicle or live animals which are covered by a contract for the carriage of goods not governed by this Convention.

It can be implied from this definition that the crew members are excluded from the scope since their contacts pertain to the contacts of employment and not the contracts of carriage. Another important definition provided in the Convention is a contract of carriage. According to Article 1(2) it is “a contract made by or on behalf of a carrier for the carriage by sea of passenger or of passenger and his luggage, as the case may be”. This implies that it is not necessary that the passenger himself enters into a contract of carriage. It is enough that he is covered by a contract of carriage that was concluded on his behalf. Further in Article 1(8) the notion of “carriage” is defined as: a period during which the passenger and/or his cabin luggage are on board the ship or in the course of embarkation or disembarkation, and the period during which the passenger and his cabin luggage are transported by water from land to the ship or vice-versa, if the cost of such transport is included in the fare or if the vessel used for this purpose of auxiliary transport has been put at the disposal of the passenger by the carrier.

It is added further that the period when the passenger is in a marine terminal or station or on a quay or in or on any other port installation is not considered as carriage. Also, it means that the shore excursions from cruise ships will fall beyond the scope of the Convention. Finally, since the Athens Convention is an international regime, the carriage must be international. As stated in Article 1(9) it means: any carriage in which, according to the contract of carriage, the place of departure and the place of destination are situated in two different States, or in a single State if, according to the contract of carriage or the scheduled itinerary, there is an intermediate port of call in another State.

Apparently this provision was inserted to extend its coverage to cruise contracts which usually provide departure from one port and after a week or two of calling at different ports and countries the ship returns to the same port.

2 Carrier’s Liability and Limitation of Liability 2.1

Athens Convention 2002

In the same manner as every other transport convention, the Athens Convention contains a liability regime, its limits and exclusions. These are the most important provisions since they point to the level of compensation for passengers’ losses.

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However, it can be observed that the notion of “personal injury” envisaged in the Athens Convention 2002 is somewhat broader than the “bodily injury” under the Montreal Convention 1999 on air carriage13 which excludes any compensation for non-material damage.14 This can be said as one of the major differences between the two conventions with respect to injuries suffered. However, this can be interpreted in various ways by the national courts in the states that ratify the Convention, and thus might undermine a desired uniformity. Another similarity with the Montreal Convention is the exclusivity of the cause of action. Article 14 of the Athens Convention states explicitly that: No action for damages for the death of or personal injury to a passenger, or for the loss of or damage to luggage, shall be brought against a carrier or performing carrier otherwise than in accordance with this Convention.

Compared to Article 29 of the Montreal Convention the pre-emptive effect is not absolute; the claimant may bring a claim against the same carrier for a quality complaint, or for loss of enjoyment, outside the ambit of the Athens Convention.15 Comparing the nature of both types of carriage, one may observe that carriage by air is essentially transportation from one place to another for a short period of time where the passengers are required to fasten their seatbelts and cannot move in the aircraft during the takeoff and landing unless they do not follow the safety instructions. The sea passengers, on the other hand, are significantly free on board a ship, and as a result, are more exposed to risks and injuries that not related to transportation and sometimes suffer injuries that are more related to hotel land-based risks. It is a point of observation that the Convention is mandatory in its application unlike various soft-law alternatives or contractual provision and will prevail over any contractual terms which are clearly in conflict with the Convention’s provisions in the same manner as the Hague-Visby Rules on carriage of goods. This is specifically provided in Article 18 which addresses invalidity of contractual provisions. It provides, inter alia, that the provisions which aim to relieve any person liable under the Convention of liability or setting the lower limits of liability shall be null and void. It can be submitted that this provision reiterates the goals underlying the Convention to provide the minimum limits of liability of the carrier and to protect a passenger as a weaker party to a contract. The major article enshrining the carrier’s liability in Athens Convention 2002 is Article 3 which provides: 1 For the loss suffered as a result of the death of or personal injury to a passenger caused by a shipping incident, the carrier shall be liable to the extent that such loss in respect of that passenger on each distinct occasion does not exceed 250,000 units of account, unless the carrier proves that the incident:

13

Convention for the Unification of Certain Rules for International. Carriage by Air, 28 May 1999. (ICAO Doc No 4698). 14 It was explicitly explained by the draftsmen and the leading cases from several jurisdictions. 15 Saggerson (2008), p. 562.

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O. Bokareva (a) resulted from an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character; or (b) was wholly caused by an act or omission done with the intent to cause the incident by a third party.

In cases when the loss is higher the above limit, the carrier is further liable unless he proves that the incident which caused the loss occurred without the fault or neglect of the carrier. If the loss is due to non-shipping incident, the carrier is liable if the incident was due to the fault or neglect of the carrier. In that case, the claimant bears the burden of proof. Another provision related to limitation of liability is contained in Article 7 on limits of liability for death and personal injury. According to Article 7(1) the liability of the carrier for the death of or personal injury to a passenger under Article 3 shall in no case exceed 400,000 units of account per passenger on each distinct occasion. However, under Article 13 the carrier might lose its right to limit liability in case the damage resulted from an act or omission of the carrier done with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. To clarify the terminology, “shipping incident” means shipwreck, capsizing, collision or stranding of the ship, explosion or fire in the ship, or defect in the ship.16 Another clarification provided in this article states that the liability of the carrier under Article 3 concerns loss arising from incidents that occurred in the course of the carriage. The burden of proof lies with the claimant. Non-shipping incidents are not specified in Article 3, however, it can be gleaned from various case law, that they may include food poisoning, falling from the stairs, accidents in the swimming pool, falling overboard, and medical maltreatment. As noted before, accidents occurred during the shore excursions are usually explicitly excluded from carrier’s liability in the cruise contracts. An example is death or injuries during shore excursions for which the carriers would like to exclude their liability.17 There is no clear answer whether the courts would grant compensation for such injuries and how far the judges will apply maritime law on land. Another important provision inserted in the Convention is Article 23 regarding amendments of limits. As usually known, in maritime law and other areas of international law, it is extremely difficult to amend the existing conventions. The procedure is lengthy and normally it requires to convene another diplomatic conference and open the discussion as to any amendments. This feature makes the international conventions as inflexible instruments. By the time necessary amendments are introduced, usually in the form of a protocol, there is a big time lapse, and sometimes these amendments become outdated even before they entered into force. To cope with this problem, the drafters of the Athens Convention developed a special procedure in Article 23 of the Protocol 2002 exclusively regarding the limits

16

Article 3(5)(a). See e.g. the clause in Carnival Terms and Conditions, “Carnival is not responsible for any losses, damage, death, injuries, or claims . . . while off Carnival’s ships or tenders in any port of call. . . Guests engage in all such activities off the ship at their own risk”.

17

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set in Article 3(1), 4bis(1), 7(1) and 8. As previously mentioned these articles deal with liability of the carrier for loss suffered as a result of death of or personal injury to a passenger caused by a shipping incident, the limits set for compulsory insurance, additional limit of liability of the carrier on each distinct occasion and limits of liability for loss of or damage to luggage and vehicles. According to Article 17 of the Athens Convention 2002, the claimant is given an option to bring a claim before one of the courts, provided that the court is located in a State Party to this Convention, and subject to the domestic law of each State Party governing proper venue within those States with multiple possible forums: (a) the Court of the State of permanent residence or principal place of business of the defendant, or (b) the Court of the State of departure or that of the destination according to the contract of carriage, or (c) the Court of the State of the domicile or permanent residence of the claimant, if the defendant has a place of business and is subject to jurisdiction in that State, or (d) the Court of the State where the contract of carriage was made, if the defendant has a place of business and is subject to jurisdiction in that State.

The Convention also sets limits as to the time of bringing the suit, also known as time-bar. The general rules contained in Article 16 is that actions for damages due to death or personal injury or for loss or damage to luggage is time-barred after 2 years. However, Article 16(3) provides a maximum 3 or 5 year limit in certain cases but not more than that. Examining the limits of liability the different tiers of liability, it can be submitted that compared to other transport conventions dealing with passenger carriage, the Athens Convention 2002 establishes rather high compensation and these amounts are also secured with the compulsory insurance provisions under Article 4bis. These rules are very detailed and provide additional protection to a passenger or his descendants in case of death or personal injury. It is not intended to discuss these provisions in great details, but it is enough to mention salient features of this article. It is also vital to remind that the provisions on compulsory insurance were a stumbling block for joining the convention and also raised many concerns among the insurance sector, especially P&I clubs offering third-party liability insurance. In order to attract more ratification, the IMO came up with a solution and drafted a provision on reservation and the IMO Guidelines which address, inter alia, the issues related to war and non-war insurance. As in every other sector of shipping and maritime activity, insurance plays a significant role also in passenger carriage. Some of the recent disasters with ferries and cruise ships point to the necessity of additional financial protection available to the passengers. Thus, in line with this need, special provisions were inserted in the Protocol 2002. In brief they provide the limits of the compulsory insurance or other financial security which is not less than 250,000 units of account per passenger on each distinct occasion. Also, the carriers shall obtain insurance or financial security to cover its liability under the Convention regarding death and personal injury to

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passengers. Therefore, a relevant certificate should be issued to each ship according to the procedure set in Article 4 bis.18

2.2

Global Limitation of Liability Under the International Convention on Limitation of Liability for Maritime Claims, 1976, as Amended by the Protocol of 1996

Another convention relevant to passenger claims is the Convention on Limitation of Liability for Maritime Claims, 1976, amended by a 1996 Protocol, generally known as LLMC 1996. It is considered that the notion of limitation of shipowners’ liability as one of the features of maritime law and has its roots in Roman law.19 It is noted that the term “limitation of liability” is not very accurate since its true meaning is the “limitation of damages or compensation” which is a quantitative concept.20 However, the term “limitation of liability” is widely used in statutory and conventional law. It implies that the shipowner is granted a privilege to limit its liability and carries the burden of proof to show that he is entitled to it. It is also noted that limitation is a matter of public policy, rather than law.21 Provisions of limitation of liability are embodied in the major maritime conventions, including those governing carriage of goods and passengers. Article 19 of the Athens Convention refers to other conventions dealing with the limitations of liability of owners of seagoing ships. It is evident that the relevant convention would be the Convention on Limitation of Liability for Maritime Claims, 1976, amended by a 1996 Protocol, generally known as LLMC 1996. Among various other issues, it provides the limits of liability also for passenger claims. As stated in Article 7 of the LLMC Convention: 1. In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner thereof shall be an amount of 175,000 Units of Account multiplied by the number of passengers which the ship is authorized to carry according to the ship’s certificate.

Under the Protocol which was adopted in 1996 and entered into force on 13 May 2004 the amount of compensation payable in the event of an incident was increased. It also introduced a “tacit acceptance” procedure for updating these amounts in the future. Thus, the limit of liability for claims for loss of life or personal injury on ships not exceeding 2000 gross tonnage is 2 million SDR. For larger ships, additional amounts are used for calculation of the limitation amount. It is notable that the 1996

18

Similar legislation was adopted in the European Union reflected in Directive 2009/20/EC of 23 April 2009 on the insurance of shipowners for maritime claims. 19 Huybrechts (2010), p. 120. See Donovan (1978–1979), pp. 1000–1001. 20 Mukherjee (2009), pp. 40–42. 21 Ibid.

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Protocol was also amended after some time and these amendments were adopted in 2012 and are in force since 8 June 2015. The limits were further raised so that the limit of liability for claims for loss of life or personal injury on ships not exceeding 2000 gross tonnage is 3.02 million SDR. For larger ships, the additional amounts were calculated; all of them were increase from the previous amount.

3 Harmonisation of Carriage of Passengers by Sea in the Context of the EU 3.1

Implementation of the Athens Convention Within the EU

Discussion on the international regime pertaining to carriage of passengers should be complemented by examination of the EU regional harmonisation of passenger law and its contribution towards on-going efforts at unification of maritime and transport law.22 It must be duly noted that the EU has actively participated in the development and regional implementation of the Athens Convention 2002. This Convention has the status of a “mixed agreement” in the EU law since the EU joined it along with its Member States.23 In accordance with case-law, mixed agreements concluded by the Community, its Member States and non-member countries have the same status in the Community legal order as purely Community agreements in so far as the provisions fall within the scope of Community competence.24

Thus, it follows that such agreements form part of EU law and fall within the Court’s jurisdiction. However, these agreements also represent an act of international law, which means that for third countries a convention still remains an act of international law and must be interpreted pursuant to the Vienna Convention on the Law of Treaties, 1969. The competence to participate in transport agreements, especially in the area of sea and air transport is granted explicitly in Article 100(2) of the Treaty on the Functioning of the European Union (TFEU). At present, there is no case law 22

See for example, Dickerson (2003–2004), Kröger (2001), Haddon-Cave (2001) and Rosaeg (2007–2008). 23 The Athens Protocol of 2002 allows participation of a Regional Economic Organisation. Some elements of the Convention, i.e. relating to the jurisdiction, recognition and enforcement of judgments, belong to the exclusive competence of the EU; thus the EU needed to become a Party to the Convention. 24 See in particular Case C-239/03—Commission v France, para 25.Other examples of the mixed agreements are UN Convention on the Law of the Sea, 1982 (UNCLOS), UN Framework Convention on Climate Change 1992 and the Kyoto Protocol 1997, Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, Convention for the Unification of Certain Rules for International Carriage by Air, 1999.

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regarding the interplay between the Athens Convention and EU legislation. However, it might be presumed that eventually the Court will have an opportunity to consider those instruments and interpret the Convention. It will be of special interest to follow those developments bearing in mind the EU’s favourable disposition towards passengers. A significant number of recent preliminary rulings handed down in the field of air transportation raised harsh international criticisms and so far provides the only real illustration so far of how an international transport convention is applied and interpreted in the EU legal framework.25 Thus, the cases decided by Court of Justice of the European Union (CJEU) reveal a number of unresolved issues with regard to the co-existence and co-operation of legal frameworks at different levels. It needs to be recalled that the Athens Convention 2002 was ratified by the EU in December 2011. As a result, Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 On the Liability of Carriers of Passengers by Sea in the Event of Accidents was adopted to implement the Athens Convention 2002 within the Union. This Regulation governs the liability regime based on the Athens Convention 2002 and the IMO Reservation and Guidelines for the Implementation of the Athens Convention (IMO Guidelines).26 At a closer look, it is clear that the scope of application of the Regulation is broader than the Athens Convention and includes a number of other issues. For example, in contrast to the Athens Convention, the Regulation provides compensation for mobility equipment of the disabled passengers. It also has a provision that provides immediate compensation in the event of death in the amount of EUR 21,000 and contain obligation to inform the passengers about their rights. The Regulation applies to both international and national transport within the EU. It also includes the IMO Guidelines adopted on 19 October 2006 by IMO, which address some issues under the Convention and compensation for terrorism-related damage. The Regulation incorporates and makes binding parts of the IMO Guidelines. There is also a possibility to amend a Regulation to incorporate any future amendments that will be made to the international conventions and other instruments. According to Article 2, the Regulation applies to any international carriage, to certain carriages within a single Member States, and that the Member States may apply it to all sea-going domestic carriages. Article 3 explicitly lays down the rules for liability and insurance and refers to relevant provisions of the Athens Convention and the IMO Guidelines. Article 5 states that the carrier can enjoy his rights under the

25

See for example, Case C-12/11 Denise McDonagh v. Ryanair Ltd., [2013] ECLI:EU:C:2013:43, Case C-139/11 Joan Cuadrench Moré v. KLM NV., [2012] ECLI:EU:C:2012:741, Case C-63/09 Axel Walz v. Clickair SA., [2010], ECLI:EU:C:2010:251, Cases C-402/07 and C-432/07 Sturgeon and Others v. Condor Flugdienst GmbH and Stefan Böck and Cornelia Lepuschitz v. Air France SA., [2009] ECLI:EU:C:2009:716, Case C-344/04 The Queen on the application of: International Air Transport Association and European Low Fares Airline Association v Department for Transport, [2006] ECLI:EU:C:2006:10. 26 IMO Ref. A1/P/5.01, Circular letter No. 2758, 20 November 2006.

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International Convention on Limitation of Liability for Maritime Claims, 1976, as amended by the Protocol of 1996 (LLMC Convention). The Regulation also introduces the provision on advance payment that is not provided in the Athens Convention 2002. Article 6(1) of the Regulation states that an advance payment should cover immediate economic needs proportionate to the damage suffered within 15 days of the identification of the person entitled to damages. In case of death, such payment shall not be less than EUR 21,000. Notably, such an advanced payment is not a recognition of liability by the carrier and may be offset against any subsequent sums paid based on this Regulation. The positive outcome of EU implementation was the application of the Athens Convention even before it officially entered into force. It became the part of the European legal order and the CJEU will have jurisdiction to interpret it. However, certain difficulties remain that might create problems in the future. As opined by a notable author, one of the difficulties with respect to implementation is that some Member States may not denounce the Athens Convention the 1974. However, under the principle of supremacy of EU Law, they will be bound comply with EU law and thus apply the Athens Convention 2002.27 In such scenario, those Member States will be facing dubious obligations under international law and the EU law. It remains to be seen how these conflicts will be overcome in the future.

3.2

EU Legislation on Passenger’s Rights

In addition to Regulation (EC) No 392/2009 dealing with liability issues, there are other pieces of legislation concerning passengers’ rights within the EU which will be briefly outlined. Apart from carriage by sea, several other regulations in the area of passenger carriage were adopted recently. These regulations deal with carriage of passengers by air, sea and inland waterway, rail and bus and coach transport. Some of them were adopted by means of incorporation of international conventions, which bind the EU and its Member States, and now bind even those EU Member States that are not parties to those conventions. This corresponds with the EU’s objective to create a so-called passenger code in order to provide a high level of protection and assistance to passengers at the Union level. Another relevant regulation related the sea passengers is Regulation (EC) No 1177/2010 Concerning the Rights of Passengers when Travelling by Sea and Inland Waterway. Unlike Regulation (EC) No 392/2009 it mainly deals with delays and cancellations. As stated in the Preamble a high level of protection for passengers should be provided since the passenger is the weaker party to the contract and should be granted a minimum level of protection. It is also mentioned there that the Regulation covers passenger services not only between the ports located in the Member States but also outside the Union. Regulation stresses the importance to

27

Soyer (2016).

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reduce the inconvenience experienced by passengers due to the cancellation or long delay. The scope of application is laid down in Article 2 and covers passenger services where the port of embarkation is located outside of the Member States if it is operated by the Union carrier.28 This Regulation also gives a definition of a cruise, which means “a transport service by sea or inland waterway, operated exclusively for the purpose of pleasure or recreation, supplemented by accommodation and other facilities, exceeding two overnight stays on board”. Another recent EU legislation pertinent to carriage of passengers by sea is Directive (EU) 2015/2302 on package travel and linked travel arrangements. Even though it does not strictly apply to carriage by sea but can nevertheless apply if the cruise is a part of the package. Thus, this new regime might be in conflict with the Athens Convention 2002 and the Athens Regulation. The Directive on EU on Package Travel, Package Holidays and Package Tours 90/314/EEC was the first attempt to regulate the tourist contracts at the EU level. The Directive has been criticised for not regulating some areas.29 However, a number of cases decided by national courts by the Court of Justice demonstrated a number of problems with regard to interpretation of the Directive. These cases concern different aspects of the Directive, such as terminology, the composition of a package,30 the issues of liability and limitation of liability, whether the non-material compensation is provided or not.31 After a number of problems were identified with the application of the existing Directive, an agreement was reached among all stockholders to revise the definition of package and the scope of application of the Directive to make it more up-to-date.32 As a result, Directive (EU) 2015/2302 was adopted to replace the previous Package Travel Directive. The Member States had 2 years to implement it in the national legislation and is applicable from 1 July 2018. It is stressed in the Directive that the Member States should abstain from introducing into their national law provisions diverging from those set in the Directive in order to achieve the necessary level of harmonisation. It extends protection of the 1990 EU Package Travel Directive to those who book other forms of combined travel, e.g. a self-chosen combination on a web- of a flight plus hotel or car rental. The main reason is the fact

28 ‘Union carrier’ means a carrier established within the territory of a Member State or offering transport by passenger services operated to or from the territory of a Member State. 29 EU Commission, Report on the Implementation of Directive 90/314/EEC on Package Travel and Holiday Tours in the Domestic Legislation of EC Member States, SEC(1999) 1800 final 19 November 1999, see also Schulte-Nölke (2008). 30 Case C-400/00, Club Tour, Viagens e Turismo SA v Alberto Carlos Lobo Gonçalves Garrido and Club Med Viagens Lda, 30 April 2002. 31 Milner v Carnival Plc [2010] 3 All ER 701, Case C-168/00, Simone Leitner v. TUI Deutschland Gmbh & Co. KG, 12 March 2002; See also Saggerson (2008) and Grant and Mason (2012). 32 Summary of response to the consultation launched to gather stakeholders’ opinions on the existing problems and preferred solutions in order to identify preferred policy options as part of the Commission’s review of the Package Travel Directive, March 2010.

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that because of the increasing use of the internet, many travel services became “grey zones” and fall outside the scope of the previous Directive. Therefore, there was a strong necessity to adopt a new Directive that would fill in the gaps and provide a better legal regime and high protection of the consumers of this market. One of the novelties of the Directive is the distinction of packages from linked travel arrangements. It applies to three types of packages, such as pre-arranged packages, customized packages and linked travel arrangements. It applies to packages offered for sale or sold by trader to travelers and to linked travel arrangement facilitated by traders for travelers. However, there are certain limitation as stated in Article 1(2). In cases the packages and linked travel arrangements last for less than 24 h unless overnight accommodation if included, the Directive does not apply. It also does not apply when it is offered occasionally and on a not-for-profit basis to a limited group of travelers and those that are purchased based on a general agreement for the arrangement of business travel. According to the Directive, the travel service includes carriage, accommodation, rental cars and any other service. Moreover, the package should include at least two different types of travel services. Due to this, it can be presumed that there is a potential of overlapping with existing international conventions and even EU Regulations on passengers’ rights. In the view of this author, the most contentious provision is stated in Article 14 that deals with compensation for damages. It is provided that the traveler is entitled to compensation from the organizer for any damage sustained by the traveler for any lack of conformity. It can be admitted that the phrase “any damage” can be interpreted in different ways by national courts, and might even include compensation for non-material damage, which can in turn conflict with e.g. Montreal Convention, which does not provided compensation for non-material damage. However, the organizer might be relieved to pay the compensation if the lack of conformity is attributable to the travel or a third party unconnected with the provision of the travel service or due to unavoidable and extraordinary circumstances. In order to cope with a potential conflict between the Directive and existing international conventions or EU Regulations a provision was inserted that the Directive will not affect the rights of traveler provided under these instruments. Since the traveler has a choice to present a claim under any of the suitable instrument, it is stated that any overcompensation should be avoided. It is submitted that even though this provision might facilitate possible conflict of norms, it will not solve it completely. It will be only evident once the Court of Justice interprets its provisions in its judgments. The Directive has already boosted a number of comments and criticisms from various stakeholders and legal scholars.33 The implications of the new Directive provoke further discussion and at the moment it is difficult to say whether there will be any conflicts with the existing international regime on passengers or respective

33

The European Travel Agents’ and Tour Operators’ Associations, The Revision of the package travel Directive: ECTAA’s Position Paper.

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EU legislation. By now, there is hope that the new regime will be complementary and fill in the gaps especially for European travelers and will not distort the existing international uniformity in carriage of passengers by sea.

4 Conclusion This chapter has demonstrated that the existing regime on carriage of passengers by sea is complex and multifaceted. It includes international conventions, EU law and national law of individual States. Thus, it presents difficulties for sea passengers who will be faced with a myriad of regimes and will have to make an important choice to present their claim in the right forum. Answering the questions of whether the harmonisation attempts in IMO were necessary and successful and whether the Athens Convention achieved its goal to unify law related to passengers, it can tentatively be submitted that most likely the question of uniformity is complex and includes many components of whether a particular instrument promotes international uniformity or not. It is always more difficult to achieve uniformity regarding the private law conventions which will be finally applied and interpreted by domestic courts. A well-known fact that implementation and interpretation represent the most important elements of a successful uniform application in all Contracting States and sometimes may be even considered as obstacles to uniformity.34 However, a number of scholars recognised without doubts that maritime law due to the unique character of maritime commerce always demonstrated a striking degree of uniformity. To conclude this chapter, it can be submitted that the Athens Convention represents a serious and well-thought initiative and has already shown worldwide support in various states including the EU. There is hope that this Convention with all its important provisions and features will govern the area of passenger carriage in the years to come.

References Books and Articles Berlingieri F (2014) International maritime conventions volume I: the carriage of goods and passengers by sea, 1st edn. Informa Law, London Dickerson TA (2003–2004) The cruise passenger’s dilemma: twenty-first-century ships, nineteenth-century rights. Tulane Marit Law J 28:447

34

Griggs (2003).

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Donovan JJ (1978–1979) The origins and development of limitation of shipowners’ liability. Tulane Law Rev 53 Grant D, Mason S (2012) Holiday law: the law relating to travel and tourism, 5th edn. Sweet & Maxwell, London Griggs PJS (2003) Obstacles to uniformity of maritime law, the Nickolas J. Healy Lecture. J Marit Law Commer 34(2) Haddon-Cave C (2001) Limitation against passenger claims: Medieval, unbreakable and unconscionable. CMI Yearbook Huybrechts M (2010) Package limitation as an essential feature of the modern maritime transport treaties: a critical analysis. In: Thomas DR (ed) Carriage of goods by sea under the Rotterdam rules. Lloyd’s List, London Kröger B (2001) Passengers carried by sea – should they be granted the same rights as airline passengers? CMI Yearbook Mukherjee PK (2009) Essentials of the regimes of limitation of liability in maritime law. In: The Admiral. Ghana Shipper’s Council, vol IV O’Neill JW (1969) The C.M.I. Draft Convention relating to carriage by sea of passengers and their luggage. J Marit Law Commer 1:107 Rosaeg E (2007–2008) The Athens Convention on passenger liability and the EU. In: Hamburg studies on maritime affairs, vol 16 Saggerson A (2008) Package holiday law: cases and materials. XPL Publishing, UK Schulte-Nölke H (ed) (2008) EC consumer law compendium – comparative analysis Soyer B (2016) Emergence of EU maritime law. In: Patterson D, Södersten A (eds) A companion to European Union law and international law, 1st edn. John Wiley & Sons, Inc Soyer B, Leloudas G (2018) Carriage of passengers by sea: a critical analysis of the international regime. Mich State Int Law Rev 26:483

Legislation Council Decision of 12 December 2011 concerning the accession of the European Union to the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, as regards Articles 10 and 11 thereof (2012/23/EU) Council Decision of 12 December 2011 concerning the accession of the European Union to the Protocol of 2002 to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974, with the exception of Articles 10 and 11 thereof (2012/22/EU) Council Directive 90/314/EEC of 13 June 1990 on EU on Package Travel, Package Holidays and Package Tours Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC. Regulation (EC) No 392/2009 of the European Parliament and of the Council of 23 April 2009 on the liability of carriers of passengers by sea in the event of accidents Regulation (EU) No 1177/2010 of the European Parliament and of the Council of 24 November 2010 concerning the rights of passengers when travelling by sea and inland waterway and amending Regulation (EC) No 2006/2004

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Cases Case C-400/00, Club Tour, Viagens e Turismo SA v Alberto Carlos Lobo Gonçalves Garrido and Club Med Viagens Lda, [2002] ECLI:EU:C:2002:272 Case C-168/00 Simone Leitner v. TUI Deutschland Gmbh & Co. KG, [2002] ECLI:EU:C:2002:163 Case C-12/11 Denise McDonagh v. Ryanair Ltd., [2013] ECLI:EU:C:2013:43 Case C-139/11 Joan Cuadrench Moré v. KLM NV., [2012] ECLI:EU:C:2012:741 Case C-63/09 Axel Walz v. Clickair SA., [2010], ECLI:EU:C:2010:251 Cases C-402/07 and C-432/07 Sturgeon and Others v. Condor Flugdienst GmbH and Stefan Böck and Cornelia Lepuschitz v. Air France SA., [2009] ECLI:EU:C:2009:716 Case C-344/04 The Queen on the application of International Air Transport Association and European Low Fares Airline Association v Department for Transport, [2006] ECLI:EU: C:2006:10 Milner v Carnival Plc [2010] 3 All ER 701

Other Documents EU Commission, Report on the Implementation of Directive 90/314/EEC on Package Travel and Holiday Tours in the Domestic Legislation of EC Member States, SEC(1999) 1800 final 19 November 1999 Summary of response to the consultation launched to gather stakeholders’ opinions on the existing problems and preferred solutions in order to identify preferred policy options as part of the Commission’s review of the Package Travel Directive, March 2010 The European Travel Agents’ and Tour Operators’ Associations, The Revision of the package travel Directive: ECTAA’s Position Paper

Occupational Hazards in the Light of the Maritime Migration Challenge Laura Carballo Piñeiro

Abstract Maritime migration is not only testing the resilience of the international human rights framework, but also that of the law of the sea. Whoever encounters people in distress is under the obligation to rescue and bring them to a place of safety. However, the political environment is moving States to refuse disembarkation and thus putting a huge pressure upon merchant shipping and fishing as they cannot immediately continue their business after rescue. This pressure has been augmented by the fact that the line between rescue operation and maritime interception is becoming blurred and crewmembers criminalise as migration facilitators. The paper discusses the maritime migration challenge from the maritime professionals’ angle and the occupational hazards endured as a result of a rescue operation. While they are collateral victims of a geopolitical matter, the legislation in place already provides a safety net for them, but one that is not much efficient and effective on a closer look.

1 Introduction The significance of the maritime migration challenge can be measured in many ways starting with the most obvious one, i.e. by counting both the number of people arriving at destination countries and the death figure of those who have not made it. The figure of irregular migrants and refugees arriving to Europe reached a peak in 2015 when Frontex reported about 1.55 million (Frontex 2016). That figure has sharply decreased in 2017 pointing to a total number of 204,700 people (Frontex 2018) and 150,000 in 2018 (Frontex 2019). As to deaths, and despite of organizations such as UNITED Against Racism, The Migrant’s Files, and the Deaths at the Borders Database committed to report them, figures are uncertain. The International Organization for Migration (IOM) estimated that 14,469 people have lost their lives

L. Carballo Piñeiro (*) Nippon Foundation Chair of Maritime Labour Law and Policiy, World Maritime University, Malmö, Sweden e-mail: [email protected] © Springer Nature Switzerland AG 2020 P. K. Mukherjee et al. (eds.), Maritime Law in Motion, WMU Studies in Maritime Affairs 8, https://doi.org/10.1007/978-3-030-31749-2_5

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at sea from January 2014 until the end of June 2017 only in the Mediterranean Sea, being unknown the number of those who have died but whose bodies have never been recovered (IOM 2017). These tentative figures are a good indicator that maritime migration is not going to stop, and people will keep embarking on unseaworthy ships either to escape from conflicts or just in search of a better life. Remarkably, the Office of the United Nations High Commissioner for Human Rights issued in 2009 a report on climate change and human rights according to which 150 million people are expected to be displaced from their countries due to extreme weather (UNHCHR 2009). Trade, fishing and other activities carried out at sea are also affected by maritime migration. The burden of rescuing people in distress is simply allocated to any ship that encounters a vessel in distress in accordance with the ancient law of the sea. However, the background against which this rule is applied has changed as a result of the abovementioned figures, making it worth exploring in which manner it is impeding the normal operation of a ship. More specifically, this paper seeks to raise awareness as to the impact of migration on maritime labour by elaborating upon the occupational hazards that these professionals have to endure as a result of a search and rescue operation. The (in)famous MV Tampa case illustrates some of these hazards. In 2001, the Norwegian freighter rescued 421 Afghan refugees on the search and rescue operation zone of Indonesia at the request of Australian authorities. The master headed towards Indonesian waters following the instructions of the latter, but several asylum seekers threatened to commit suicide for which reason the vessel changed route and tried to reach Christmas Island. Australia strongly opposed to migrants’ disembarkation leaving an unprepared ship to deal with very distressed people for several days (Willheim 2003). In addition to occupational safety and health (OSH) issues on board, the whole operation triggered significant delays in the maritime venture that led to amendments in international treaties dealing with rescue at sea, as examined in the second section of this chapter. The MV Tampa case is also remarkable because it unveils a clash between State migratory policies and the international human rights framework. This clash has already been subject to the scrutiny of international courts which have reminded States that they are obliged to honour the latter also at high seas. In 1993, the InterAmerican Commission on Human Rights upheld the complaint filed against the United States following the maritime interception of boat people and their return to Haiti within a bilateral treaty signed by both countries to control illegal migration. According to the Commission, the United States violated Article XXVII of the American Declaration on Human Rights given that maritime interception did not discriminate and thus Haitians had been returned without a proper examination of their condition and an interview to determine whether they were entitled to the status of refugee or not.1 In a similar case involving about 200 Afghan refugees that were

1 Inter-American Commission on Human Rights, Case 10.675, Report 51/96, Decision on merits, 13 March 1997.

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rescued by the Italian Coast Guard and sent back to Libya, the European Court of Human Rights (ECtHR) condemned Italy for infringing the European Convention on Human Rights (ECHR), in particular the prohibition of torture and inhuman and degrading treatment, the prohibition of collective expulsion of aliens, and the right to be afforded an effective remedy under national law.2 Despite the mandate coming from human rights instruments, States have preferred to adjust their migratory policies. While Australia has been outsourcing boat people’s protection to surrounding island States under the Pacific Strategy—Nauru and Papua New Guinea—, the European Union is following a similar pattern with regard to Algeria, Libya, Morocco and Turkey. Accordingly, migrants intercepted in their territorial sea, or even at high seas, are sent back to so-called satellite countries, now considered a place of safety, without taking into account whether they are asylum-seekers or refugees. It can be safely said that national migratory policies have taken over and led to the blurring of the distinction between search and rescue operations and maritime interceptions. The latter casts serious doubt in terms of human rights protection and put maritime professionals in a very difficult situation, as discussed in the third section of this paper. The militarization of the border is also affecting maritime labour. In addition to physical and mental suffering, the MV Tampa’s crew had to face the economic consequences of the delay in the maritime venture for not following Australian instructions. However, they were not criminalised as human smugglers or traffickers as is nowadays happening. A remarkable example is that of the fishermen from the Tunisian city of Zarzis. While many of them have been driven out of business because of their rescue operations, the latest blow has come when some of them, including the president of their fishermen’s association, Mr. Chamseddine Bourassine, has been arrested by Italian authorities to face charges of illegal migration facilitation (Tondo 2018a). The fourth section will explore this issue. The picture so far painted is one that makes maritime professionals face serious conflicts of interests, namely, whether to prioritize business or to rescue people in distress and, if the latter are rescued, whether to confront State authorities in order to deliver them to a place of safety increasing, on the one hand, the work delay while on the other facing the risk of being criminalised. The fifth section of this paper focuses on OSH matters arising out of rescue operations and the shortcomings of the international framework in facing them. The paper closes with some final remarks as to geopolitical and regulatory actions that could help to ameliorate the situation, including the prevention and reduction of risks at work that seriously threaten the maritime professionals’ well-being.

2

2002 ECtHR judgment Hirsi Jamaa and Others v. Italy, No. 27765/09.

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2 Rescue Versus Interception Assistance to anyone in distress at sea is a rule of the sea that goes back further in time. Humanitarian at its core, all ships are obliged by it and all people in distress benefit from it, as enshrined in the United Nations Convention on the Law of the Sea (UNCLOS), the International Convention for the Safety of Life at Sea (SOLAS), the International Convention of Maritime Search and Rescue (SAR) and the International Convention on Salvage (the Salvage Convention). More specifically, the ship’s master is obliged to render assistance to anyone in danger of being lost with all possible and reasonably expected speed as long as the rescue operation does not involve serious danger to the ship, the crew or the passengers.3 For its part, coastal States are obliged to promote the establishment, operation and maintenance of search and rescue services,4 helping those at sea regardless of nationality.5 The search-and-rescue operation may involve a non-rescue vessel, public or private, to respond to the distress call if a rescue unit is not available in the area, and authorities might go as far as requisition of a private vessel in the vicinity.6 Coastal States are also under the obligation of providing for the disembarkation of rescued people at a place of safety, whenever a commercial ship has provided assistance.7 Generally speaking, this rule seeks to benefit rescued people as much as the commercial ship engaged in the rescue operation to the extent that it may then proceed with minimum further deviation and thus economic losses. Tradition has established that disembarkation is meant to happen at the next port of call and this State will be in charge of returning the rescued person to his or her country of origin taking advantage of diplomatic or consular channels. However, the increase in migratory flows has seriously affected this traditional approach and more and more coastal States refuse disembarkation to avoid irregular migration and the costs of resettling boat people. The MV Tampa case is an excellent example of this policy, that has been followed in other cases, also in the fishing sector. In 2006, the crew of the Spanish-flagged fishing vessel Francisco y Catalina spotted on international waters a small fishing boat in distress whose 51 passengers had run out of gas and food two days ago.8 The vessel had communication problems and was unable to reach the closest State authorities, those of Malta, thereby the crew rescued the migrants, including one woman and her child. While heading towards La Valetta, the ship was halted by the Maltese Coast Guard and made to wait at high seas as diplomatic negotiations unravelled to decide migrants’ final destination. A similar 3

See Article 98(1) of UNCLOS; Chapter V, Regulations 10a and 33(1) of SOLAS; Article 10(1) of the Salvage Convention. 4 UNCLOS and Chapter V, Regulation 7(1) of SOLAS; Articles 10(1) of the Salvage Convention. 5 See Chapter 2.4.1 of SAR. 6 Chapter V, Regulation 33 of SOLAS. 7 Chapter 1.3.2 and 2.1.2 of SAR. 8 This case was brought to the cinema by the documentary film ‘Malta Radio’ directed by Manuel Menchón and released in 2009.

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story has just occurred in late November 2018 involving 11 migrants rescued by another fishing vessel from Santa Pola in Spain (Martín 2018). The humanitarian and economic consequences behind all these cases have prompted the intervention of IMO in an attempt to narrow down coastal States’ obligations and clarify the ambiguous issue of disembarkation. After lengthy discussion, SOLAS9 and SAR10 were amended in May 2004 in an almost identical manner that reads as follows: [Parties] shall co-ordinate and co-operate to ensure that masters of ships providing assistance by embarking persons in distress at sea are released from their obligations with minimum further deviation from the ships’ intended voyage, provided that releasing the master of the ship from [these obligations] does not further endanger the safety of life at sea. [The party] responsible for the search and rescue region in which such assistance is rendered shall exercise primary responsibility for ensuring such coordination and co-operation occurs, so that survivors assisted are disembarked from the assisting ship and delivered to a place of safety, taking into account the particular circumstances of the case and guidelines developed by the Organization. In these cases, the relevant [parties] shall arrange for such disembarkation to be effected as soon as reasonably practicable.11

And yet, a clear statement on where rescued people should be disembarked is missing. As can be read, the determination of this place is now entrusted to the country responsible for the relevant search and rescue region. To this end, the Rescue Co-ordination Centre (RCC) shall identify “the most appropriate place(s) for disembarking persons found in distress at sea”.12 Disembarkation would have to occur at a “place of safety” to the extent that asylum-seekers and refugees might be within the rescued party. The IMO Guidelines on the Treatment of Persons Rescued at Sea (IMO 2004) have provided some guidance to this end, indicating that a place of safety is ‘a location where rescue operations are considered to terminate’ because rescued persons’ safety and basic human needs are covered. That may be a “place from which transportation arrangements can be made for the survivors’ next or final destination”. The latter is not necessarily ashore, but it “may be aboard a rescue unit or other suitable vessel or facility at sea that can serve as a place of safety until the survivors are disembarked to their next destination”. Hence, place of safety and place of disembarkation do not have to coincide. And more importantly, the fact that a place of safety can be another ship robs this concept of its essential meaning (Miltner 2006). RCCs have thus an essential role in determining where to discharge ships rendering assistance to people in distress from their obligations towards them without further delay. RCCs are, nevertheless, State bodies, thereby the amendments to SOLAS and SAR open the door to State-driven migratory policies and contribute

9

IMO, Adoption of amendments to the International Convention for the Safety of Life at Sea, 1974, as amended, Rs. MSC 155(78), MSC Doc. 78/26.Add.I, Annex 3 (May 20, 2004). 10 IMO, Adoption of amendments to the International Convention on Maritime Search and Rescue 1979, as amended, Resolution MSC Doc. 78/26.add.1, Annex 5 (May 20, 2004). 11 See SOLAS, Regulation 33-1-1, and SAR, Chapter 3.1.9. 12 See SAR, chapter 4.8.5.

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to the blurring of the line between rescue at sea and maritime interception as discussed by Miltner (2006). While the latter had been defined as “measures applied by a State, outside its national territory, in order to prevent, interrupt, or stop the movement of persons without the required documentation crossing international borders by land, air or sea, and making their way to the country of prospective destination”,13 the extraterritoriality component has been removed from the definition14—and thus interception might take place in a State’s territory, for example by denying access irregular migrants to its ports—while a humanitarian element has been awkwardly added—as interceptions might prevent people from risking their lives at sea—. Nevertheless, the principles behind both institutions remain intrinsically divergent as rescue at sea is basically about human rights protection while maritime interception prioritizes national security. For our purposes, the distinction between rescue at sea and maritime interception is relevant because the latter can only be undertaken by State authorities. Commercial ships do not engage in maritime control tactics. The rescue operation might end up serving this purpose, though, if the relevant RCC indicates the saviours to deliver the rescued people to a place which has been determined in accordance with such strategy. The question is, then, whether the rescue mission is accomplished if migrants are not delivered to a place of safety in the terms of the applicable human rights instruments as discussed in the next section.

3 Human Rights Protection at Sea In the light of the events unfolding in many countries, it is not redundant to remind that migrants are human beings. As such, they are entitled to human rights protection. To this end, and as already mentioned, international courts have already confirmed that human rights conventions apply at high seas provided that the ship flies the flag of a signatory country. Hence, ongoing private—as well as publicowned vessels are within the international human rights framework, even when at high seas. Human rights protection does not oppose migratory control tactics provided that such a protection is embedded in the strategy. Maritime interception is not an exception in this regard. The abovementioned rulings of the Inter-American Commission on Human Rights and the ECtHR condemn both the United States and Italy because intercepted migrants were pushed back without an individual screening that could determine whether they were entitled to human rights protection or not. While

13 UNHCR Executive Committee of the High Commissioner’s Program, Interception of Asylum Seekers and Refugees: the International Framework and Recommendations for a Comprehensive Approach, EC/50/SC/CRP.17 (June 9, 2000), at 10. 14 UNHCR Executive Committee of the High Commissioner’s Program, Conclusion on Protection Safeguards in Interception Measures. No 97 (LIV) (October 10, 2003).

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irregular migrants can be intercepted and sent back to their country of origin, maritime migration is increasingly mixed as asylum-seekers and refugees are obliged to take the maritime route as well. Hence, boat people might be eligible for protection and access to the refugee status in accordance with the 1951 Geneva Convention and 1967 Protocol relating to the Status of Refugees. The former was born out of the events occurred in the European Continent after the Second World War,15 but the New York Protocol of 1967 put an end to restrictions on its scope and made the Refugee Convention a general and universal human rights instrument that has inspired regional ones like the Addis Ababa Convention and the Cartagena Declaration on Refugees. The core of the protection afforded by these instruments lies in the nonrefoulement principle, i.e. the prohibition of expulsion or return to the frontiers of territories where life or freedom would be threatened. For example, and read in positive terms, the EU area of justice, freedom and security16 is the safe side of the frontier. However, how safe depends on the controversial Dublin system, nowadays contained in Regulation (EU) 604/2013 of the European Parliament and of the Council of 26 June 2013, establishing the criteria and mechanisms for determining the member State responsible for examining an application for international protection lodged in one of the member States by a third-country national or a stateless person.17 The system relies on the one-stop-shop at the country of first entrance principle that poses an extra burden on those member States whose geographical position situates them as Europe’s gates. Italy is a case in point. After the sinking of a large number of unseaworthy ships trying to reach the island of Lampedusa in 2013, the country unilaterally launched the Mare Nostrum operation with a straightforward humanitarian purpose. Moreover, the country made a very reasonable proposal of elaborating a Migration Compact. And yet, a few years later, Italy has moved to a defensive position with the main objective of operations at sea being to push back refugees. In fact, the move has reached the EU, which has been reinforcing the European Agency for the Management of Operation Cooperation at the External Borders (Frontex),18 now replaced by the European Border and Coast Guard,19 with a budget

15

See Refugee Convention, art. 1.B. See Treaty of Functioning of the European Union and EU Charter on Fundamental Rights, arts. 77–80. 17 OJ [2013] L 180/31. The Dublin system was first established by the Convention determining the State responsible for examining applications for asylum lodged in one of the Member States of the European Communities—Dublin Convention, OJ [1997] C 254/1, replaced by Council Regulation (EC) No 343/2003 of 18 February 2003 establishing the criteria and mechanisms for determining the Member State responsible for examining an asylum application lodged in one of the Member States by a third-country national, OJ [2003] L 50/1. 18 Frontex was first established by Council Regulation (EC) No 2007/2004 of 26 October 2004, OJ [2004] L 349/1. 19 Regulation (EU) 2016/1624 of the European Parliament and of the Council of 14 September 2016 on the European Border and Coast Guard and amending Regulation (EU) 2016/399 of the European 16

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twelve times higher than its predecessor and more power (Andersson 2016, p. 1059). Frontex was heavily criticized for not putting sufficient emphasis on human rights; the new regulation, thereby, apparently tackles this important shortcoming. In practice, the EU has developed an extremely controversial and worrisome concept of ‘safe country’ in the terms of the Refugee Convention by granting such status to Turkey and Libya. Neither of these countries is a signatory to the said convention nor have they given reliable proof of being capable of dealing with asylum-seekers (Gogou 2017; Matziaraki 2016). And yet, the Council of the European Union has endorsed in its Malta Declaration a specific agreement between Italy and Libya despite the political instability of the latter. Actually, Italy had already signed a Treaty of Friendship, Partnership and Cooperation with Libya in 2008, suspended in 2011, but now revamped with a significant increase in technical and financial support to establish immigration detention facilities, and, in particular, to facilitate interception of migrant boats by the Libyan Navy and Coast Guards. Moreover, similar agreements with African countries have been reached with the EU’s approval in a move that integrates search and rescue operations within the machinery to prevent people arriving at the EU border. Flag States are also obliged by the law of the sea and thus, if coastal States do not allow disembarkation, it is within the responsibility of the flag State to secure it (Rah 2009). However, flag States seem to align with the view that mixes up maritime interception and rescue operations. In this vein, it is remarkable that Gibraltar first and Panama later on decided to de-register the M/V Aquarius Dignitus, a vessel operated by Medecins san Frontiers (MSF) and used in search and rescue operations in the Mediterranean Sea, after the crew refused to deliver the rescued migrants to the Libyan Coast Guard as requested by the Italian RCC. The Panamanian maritime authority claimed that the registered purpose of the Aquarius was not in line with search and rescue operations (HRAS 2019). Along the same lines, the Spanish and Italian port authorities are refusing ships operated by NGOs to leave port because they end up undertaking rescue operations and transporting passengers until a port willing to disembark them (Rodríguez Martínez and Valero 2019). According to these authorities, this is not in compliance with salvage rules, thereby these ships are not allowed to sail until coastal States open again their ports for disembarkation. In other words, national migration policies and maritime interception are prioritised over human rights protection and rescue operations. However, international human rights conventions do apply at high seas. In fact, while the refugee status is only granted in accordance with specific grounds that are not applicable to all migrants, other human rights’ instruments might be applicable. The ECtHR condemned Italy for infringing the prohibition of torture and inhuman and degrading treatment, the prohibition of collective expulsion of aliens, and the right to be afforded an effective remedy under national law as rights enshrined in the

Parliament and of the Council and repealing Regulation (EC) No 863/2007 of the European Parliament and of the Council, Council Regulation (EC) No 2007/2004 and Council Decision 2005/267/EC, OJ [2016] L 251/1.

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ECHR. Articles 6 and 7 of the 1966 International Covenant on Civil and Political Rights, the 1984 Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment or the 1969 Organization of African Unity (OAU) Convention Governing the Specific Aspects of Refugee Problems in Africa are all instrumental in supporting the obligation of not to return a person where there are substantial grounds for believing that there is a real risk of irreparable harm. It is needless to highlight that the risks of infringing these rights have increased with the policy of outsourcing migration management, by making the authorities of third countries to intercept migrants or accept them back before reaching the European coast (Andersson 2016). In general, only ratifying States are obliged by the abovementioned instruments. However, some human rights such as the prohibition of torture and inhuman and degrading treatment are enshrined in customary international law and thus all States are responsible for their respect. The question is, nevertheless, whether maritime professionals are to be held accountable for infringement of these rights as well, i.e. whether they can be held responsible for not assisting migrants in distress, including disembarking them at a place of safety. From a public international perspective and the abovementioned human rights framework, an answer in the negative is right to the extent that international instruments are primarily directed towards States and not private persons, setting aside some exceptional cases. However, States are obliged to incorporate the said human rights protection in their legislation and this obligation reaches private persons, of course. The correct answer is, thus, that maritime professionals might be held accountable in accordance with a national criminal law if they do not comply with basic human rights. In this vein, many jurisdictions construe a duty to rescue that it is more or less restrictive depending on the tradition to which the applicable law on board ascribes. More specifically, failures to provide assistance might be tried as crimes within the jurisdiction of the flag State, including if rescue implies returning a person to a place where his/her life is in danger. Nevertheless, it does not seem as States are willing to enforce criminal law in view of the difficulties in proving lack of legal compliance with the duty to rescue.

4 Criminalisation of Maritime Professionals Compliance with the duty to rescue might become an issue for maritime professionals, but for the very reason of trying to comply with it as they may face charges for migration facilitation. The risk of being taken for smugglers has dramatically increased for seafarers and fishermen in last times. Indeed, and along with other instances in which they are criminalised, this is becoming an occupational hazard. As a matter of fact, the significant increase in (in)voluntary migrants has been accompanied by a flourishing industry willing to take advantage of people’s desperation and the hardening of the borders. The harder the border, the more pressing the need to resort to facilitation services. In particular, maritime migration has become

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the usual means of transportation for those without resources. Against this backdrop, the boosting of criminal activities as a result of migratory movements is a cruel fact. In view of the significance of the problem, the United Nations has issued the Protocol against the Smuggling of Migrants by Land, Sea and Air, and the Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children, both supplementing the United Nations Convention against Transnational Organized Crime. For our purposes, it is to note the definition of smuggling of migrants according to which it “shall mean the procurement, in order to obtain, directly or indirectly, a financial or other material benefit, of the illegal entry of a person into a State Party of which the person is not a national or a permanent resident”.20 The latter highlights that this crime only takes place if it provides a financial or other material benefit to facilitators that operate within a transnational organized structure. Rescue at sea followed by disembarkation at a place of safety does not fall within the abovementioned definition. And nevertheless, there is a worrisome trend towards criminalising all assistance to migrants regardless of whether it is made for profit or not.21 In particular, the trend targets crews on board ships operated by NGOs. In 2004, a ship operated by the Cap Anamur relief group rescued 37 migrants in distress and the then Cap Anamur president, the ship’s captain and first officer were put on trial in Agrigento, Italy, in 2006 to be finally acquitted in 2009. In another case, three Spanish firefighters and two members of the Danish NGO Team Humanity were caught in Greece returning from a rescue mission which ended without finding anyone. Finally, the Greek Criminal Court No 9 of Mitilene in Lesbos found them not guilty on 7 May 2018 [Agence France de Press 2018]. Similar is the case of the Spanish NGO Proactiva Open Arms whose ship was arrested and the master indicted in Sicily, on grounds of having disembarked 218 boat people in Italy against the orders issued by the Italian authorities requiring the master to transfer them to Libyan coast-guard ships (Tondo 2018b). Fishermen have been also criminalised. In 2011, two Tunisian fishermen faced charges in Italy after rescuing 44 migrants and disembarking them at an Italian port (Mangano 2011). In early September 2018, six Tunisian fishermen were detained in Sicily, also for helping people to reach Italy (Tondo 2018b). The UN Refugee Agency has repeatedly complained that all these trials have a very negative impact to the extent that seafarers and fishermen restrain from rescuing people stranded at sea. As to NGOs, all their rescued ships have been withdrawn from where they are much needed because of the arrests and the costs therein involved. The (thin) legal basis for cases like the above-mentioned ones can be found in the national implementation of the Migrant Smuggling Protocol. On a regional level, the European Union has reinforced prosecution of these crimes by issuing specific

20

Art. 3(a) of the Migrant Smuggling Protocol. See The Institute of Race Relations (2017) Humanitarism: the unacceptable face of solidarity, available at: