The Nairobi Convention: Reforming Wreck Removal in New Zealand

• Author: William Irving
• Position: Final year BA/LLB(Hons) student at the University of Auckland. This paper was originally written in 2009 for a course in Maritime Law taught by Paul Myburgh
• Pages: 76-92

THE NAIROBI CONVENTION:

REFORMING WRECK REMOVAL IN NEW ZEALAND

William Irving ∗

1 Introduction

All parties to the maritime venture share an interest in avoiding maritime casualties. Shipwreck is the worst

possible result of a maritime casualty and the ‘nightmare scenario for the seafarer’. 1 When a ship is wrecked, the

shipowner will not only have lost a high value asset, but may also incur considerable ad ditional costs thro ugh

removing the result ing wreck. It is uns urprising that, whe n faced with a val ueless shipwreck, t he key question

which is likely to occur to the shipowner is ‘[c]an I merely abandon this wreck to the Government and walk

away without further liability?’2

When a ship is wrecked within New Zealand’s territo rial waters this is by no

means an easy question to answer. The first part of this p aper outlines the cir cumstances in wh ich the New

Zealand Government can at present require the owners of wrecked vessels to have them removed.

The shipping industry is designed to operate across state boundaries. For this reason, maritime law is an area of

law which lends itself to the establishment o f international legal instruments. There is a pro liferation of

international maritime treaties and conventions, a nd New Zealand is a party to many of them.3 In 2007, a major

attempt at international standardisation of wreck removal law was finalised in the for m of the Nairobi

International Convention on the Removal of Wrecks (hereinafter the ‘Convention’).4

The second part of this

paper constitutes an e xamination of the aims o f the Convention’s framers, and how successful the Convention is

in fulfilling these go als.

The third major part of this paper comprises an argument that the current state of New Zealand’s wreck removal

law means that reform is essential. The Convention represents the perfect opportunity both to reform New

Zealand’s domestic wreck removal law, and to strive for international harmonisation of wreck removal regimes.

In addition, the key te st in the Convention for when a wreck must be removed is a far superior alternative to the

de facto test in New Zealand. As a result, having signed the Convention, the New Zealand Government should

take the measures necessary under article 3(2) to extend the Convention’s application beyond New Zealand’s

exclusive economic zone and into its territorial waters.

2 De finitions

Before turning to the circumstances in which the New Zealand Government is able to require the removal of

wrecks, it is first necessary to consider what a wreck is. Ne w Zealand’s Admiralty Act does not define a ‘wreck’,

but it does define a ‘ship’ as including ‘any description of vessel used in navigation’. 5 Likewise, the Maritime

Transport Act defines a ship as ‘every description of boat or craft used in navigation, whether or not it has a ny

means of propulsion’.6 There are various pieces of New Zealand legislation which define ‘wreck’, and so me of

these are discussed below. In particular, words such as ‘sunk’,7 ‘submerged’, 8 ‘stranded ’,9 ‘in distress’, 10

∗ Final year BA/LLB(Hons) student at the University of Auckland. This paper was originally written in 2009 for a course in Maritime Law

taught by Paul Myburgh.

1 Gotthard Gauci, ‘The International Convention on the Removal of Wrecks 2007 – A Flawed Instrument’ (2009) Journal of Business Law

203, 204.

2 Carter Quinby and David R Owen, ‘Recent Amendments to the U.S. Wreck Removal Act’ (1989 ) Lloyd’s Maritime and Commercial

Quarterly 15, 15 .

3 See, eg, United Nations Convention on the Law of the Sea (UNCLOS), opened for signature 10 December 1982, 1833 UNTS 3 ( entered

into force 16 November 1994); Convention on the Int ernational Regulations for Preventing Collisions at Sea (COLREGs), opened for

signature 20 October 1972 (entered into force 15 July 1977); International Convention on Maritime Search and Rescue, 1979, opened for

signature 27 April 1979, (entered into force 22 June 1985).

4 Nairobi International Convention on the Removal of Wrecks (Nairobi Convention), opened for signature 19 November 2007.

5 Admiralty Act 1973 (NZ), s 2 .

6 Maritime Transport Act 1994 (N Z), s 2.

7 Harbours Act 1950 (NZ), s 208(1).

8 Maritime Transport Act 1994 (NZ), s 110(1).

9 Harbours Act 1950 (NZ), s 208(1); Maritime Transport Act 1994 (NZ), s 110(1); Local Government 1974 (N Z), s 650K(1)(a).

10 Local Government 1974 (NZ), s 650K(1)(a).

(2010) 24 A&NZ Mar LJ

76

‘derelict’,11 and ‘abandoned’,12

2.1 Insure d Ships

are used to distinguish a wreck from a ship. At a basic level, a wreck is an object

which is not capable of being used in navigation, but if it were, would other wi se f ulfil the definition of a ship.

The types of wrecks which the Government will want to have removed are o nly those which are not voluntarily

removed by their owners. There is an established pattern to how insured ships, at least, arrive at this point. There

are two levels of marit ime insurance for shi ps: hull insuranc e and protection and indemnity (‘P&I’) in surance.13

Following a maritime casualty in which a ship has suffered damage, the owner of the damaged ship will

approach his first in surer, the hull insurer . The hull insurer ho lds an insurance polic y for the insured value o f the

ship as it was previ ously declared b y the shipowner. 14

It is in the hull insurer’s interests to restore the ship back

into service for a figure less than the ship’s insured value. This may be possible: the cost of recovery, towage,

repair and refitting may be less than the i nsured value of the shi p. The result is a sal vage operation. Whe n this is

the case for a wreck, the wreck will thus be removed voluntarily by the salvage operators on behalf of the

shipowner.

On the other hand it ma y be physically impossible for the ship to be repaired, or it may be technologically

impossible for a salvage operation to be completed. Alternatively, the cost of restoring the ship back into service

may be higher than the value of the hull insur ance policy. In any of t hese cases, the hull i nsurer will pay out t he

insurance policy to the shipowner. The ship owner, however, will re tain ownership of the wreck, and the

liabilities attaching to it. One of these liabilities is wreck re moval liability. Should the Government then wi sh to

remove the wreck, the shipowner will approach his second, P&I, insurer. The P&I insurer provides liability

insurance, includin g wreck removal liab ility.15

The shipowner do es not wish to remove t he wreck, and neither

does the P&I insurer, since the cost of doing so will be significant. It is at this point that it is necessary to

consider whether the Government has the authority to compel removal of the wreck.

2.2 Uninsured Ships

However, there is another sort of vessel which the Government may wish to have removed. Not all ships are

insured. When an in surer is not involve d, the likelihood of a ship becoming a wreck due to the i naction or

impecuniosity of the shipowner increases. In such cases, the ship may in fact still be capable of navigation, or

may be in the process of having its navigational capability restored. This was the case in Dorn v Maritime Safety

Authority, Carter v Ports of Auckland and Southland Regional Council v Huggins, which are discussed below.

The statutory definitions of ‘wreck’ are sufficiently wide as to cover both the case when the ship is incapable of

navigation (a wreck in the fullest sense) and the case when the wreck is capable of navigation, but the owners

refuse for other reasons to remove the ship from its current location. The same criteria for determining if the

Government can compel wreck removal apply in both situations. This authority is necessary, since the fact that

the shipowner, the insurance company, or the salvor is unprepared to move the vessel gives no indication as to

whether the vessel should be moved for reasons which do not concern these parties.

3 New Ze aland Law

3.1 Harbo urs Act 1950

The first piece of legislation relevant to wreck removal is the Harbours Act 1950. The Harbours Act was

repealed in 1999.16 However, the Act is of more than merel y historical interest and, for completeness, it is still

necessary to examine its operation. ‘Harbour’ was defined in s 2 of the Act as including:17

any harbour properly so called, whether natural or artificial, and any haven, est uary, navigable lake or river, dock,

pier, jetty, and work in or at which ships do or can obtain shelter, or ship or unship goods or passengers, and any

harbour defined under this Act.

11 Maritime Transport Act 1994 (NZ), s 110(1); Local Government 1974 (NZ), s 650K(1)(b).

12 Harbours Act 1950 (NZ), s 208(1); Local Government 1974 (NZ), s 650K(1)(a).

13 See generally Howard B ennett, Law of Marine Insurance (2nd ed, Oxford Uni versity Press, Oxford, 2006) 3.40-3.56.

14 Ibid, 331-361.

15 Ibid, 484-487.

16 Local Government Amendment Act (No 2) 1999 (NZ), s 10.

17 Harbours Act 1950 (NZ), s 2.

(2010) 24 A&NZ Mar LJ

77