New Responsibilities for Vessel Owners in Connection with Wrecked Vessels in Force July 30, 2019

July 19, 2019 | Jaclyne Reive

The Wrecked, Abandoned or Hazardous Vessels Act, SC 2019, c.1 (the “Act”) will come into force on July 30, 2019 and incorporates the Nairobi International Convention on the Removal of Wrecks, 2007 (the “Convention”) into Canadian Law. The implications of the new statute are that vessel owners are made liable for wrecks that may pose a hazard, and certain vessel owners must also hold insurance related to wreck recovery.

The Act intends to “promote the protection of the public, of the environment, including coastlines and shorelines, and of infrastructure by […] regulating wrecks and vessels posing hazards, prohibiting vessel abandonment, and recognizing the responsibility and liability of owners for their vessels.”[i]

Application of the Act

The Act applies to all vessels in Canadian waters or in the exclusive economic zone of Canada, Canadian vessels wherever they are, as well as wrecks located within Canada, its territorial sea, and its exclusive economic zone that are the result of a maritime casualty.[ii] The Act defines a “wreck” as a vessel, or part of a vessel, that is sunk, partially sunk, adrift, stranded or grounded, including on the shore. The definition also includes equipment, stores, cargo or any other thing that is or was on board that vessel.[iii]

Liability for Wreck Removal

If the Minister of Fisheries and Oceans believes that a wreck poses a hazard, he or she may direct the owner of the vessel involved in the maritime casualty that resulted in the wreck to take measures (that he or she considers proportionate to the hazard) to remove the wreck. If the vessel owner does not take such measures within the specified time, then the Minister may take those steps.[iv] The Act also makes the vessel owner liable for any costs incurred by the Minister or a third party in connection with the wreck’s removal.[v]

Other Prohibited Activities

Other prohibitions against the vessel owner include leaving a dilapidated vessel stranded, grounded, anchored or moored in the same location for 60 consecutive days, abandoning a dilapidated vessel, and knowingly causing such vessel to sink or partiality sink or to be stranded or grounded.[vi]

Insurance Requirements

The Act also requires owners of Canadian registered vessels weighing over 300 gross tons to carry insurance or other financial security for wreck removal. These owners must apply to Transport Canada for a Wreck Removal Convention Certificate, indicating that they have such insurance in place. Vessels of the same tonnage that are foreign-registered and wish to call at Canadian ports will also need to show a certificate issued by another state that is party to the Convention, or if the foreign vessel is registered in a state that is not a party, then the vessel owner can apply to Transport Canada to obtain a certificate.[vii]

Penalties

Penalties for non-compliance with the Act can be up to $50,000 for individuals and $250,000 for organizations, while fines payable upon prosecution can be up to $1,000,000 for individuals and $6,000,000 for organizations.[viii]

Next Steps

In a press release regarding this legislation, Transport Canada indicated that other measures it plans to take as part of its “National Strategy to Address Canada’s Wrecked and Abandoned Vessels” include: “improving vessel owner identification, creating an inventory of problem vessels and assessing their risks, and establishing a polluter pays approach for vessel clean-up.”[ix]

Owners of vessels weighing over 300 gross tons that wish to call at a port in Canada should review their current insurance policies to determine if their coverage meets the requirements of the Act and: (i) in the case of Canadian-flagged vessels, apply to Transport Canada for a Wreck Removal Convention Certificate; or (ii) in the case of foreign-flagged vessels, either obtain an equivalent certificate from the vessel’s home jurisdiction, or request one from Transport Canada, as applicable.  Given that the general liabilities for wreck removal are not limited to vessels weighing over 300 gross tons, owners of vessels with a smaller tonnage should also consider reviewing their existing insurance coverage to ensure that they are properly protected.

For more information about the Convention and these new statutory requirements, contact any of our Transportation and Logistics lawyers.


[i] Wrecked, Abandoned or Hazardous Vessels Act, SC 2019, c-1., s. 4.

[ii] Ibid., s. 18.

[iii] Ibid., s. 27.

[iv] Ibid., s. 21.

[v] Ibid., s.s. 23, 45.

[vi] Ibid., s.s. 30, 32, 34.

vii] Ibid., s.s. 24, 25

[viii] Ibid., s.s. 90(4),110(5) and (6.)

[ix] Government of Canada – Transport Canada news release, “Government of Canada marks the passage of Bill C-64: the Wrecked, Abandoned or Hazardous Vessels Act to address vessel abandonment and ensure owner accountability”, online.