- 1 APRIL 24, 2008 CIRCULAR NO. 09/08 TO MEMBERS OF THE ASSOCIATION Dear Member: ENTRY INTO FORCE OF THE BUNKERS CONVENTION: CERTIFICATION REQUIREMENTS AND ISSUANCE OF BLUE CARDS AND STATE CERTIFICATES The International Convention on Civil Liability for Bunker Oil Pollution 2001 (“the Bunkers Convention”) has now been ratified by the required number of States, with the requisite combined gross tonnage. It will enter into force in State Parties on November 21, 2008. Certification requirements The Convention provides a liability, compensation and compulsory insurance system for the victims of oil pollution damage caused by spills of bunker oil. The Convention will make the shipowner 1 liable to pay compensation for pollution damage (including the costs of preventive measures) caused in the territory, including the territorial sea, of a State Party, as well as its exclusive economic zone or equivalent area. Registered owners of any sea-going vessel and seaborne craft over 1000 gross tons, of any type whatsoever, and registered in a State Party or entering or leaving a port in the territory of a State Party, will be required to maintain insurance which meets the requirements of the Convention and to obtain a certificate issued by a State Party attesting that such insurance is in force. The State-issued certificate must be carried on board at all times. The regime closely follows the well established liability and insurance provisions which apply to oil tankers under the Civil Liability Convention (CLC). Certification and pooling of liability under certificates Following consideration by all club boards, it has been agreed that clubs in the International Group will issue the required Bunkers Convention “Blue Cards” to enable signatory states to issue certificates from August 2008. Notwithstanding that clubs do not currently provide shipowners with primary P&I war risks cover, it has been further agreed that clubs will pool all liabilities incurred under certificates issued, including otherwise excluded liabilities, up to, but not exceeding, the amount of the liability so certified. Exclusions will continue to apply in the usual way in respect of liabilities arising otherwise than under certificates. The Convention provides that liability under certificates shall not exceed limits calculated in accordance with LLMC 1976 as amended. It also contains an exclusion of liability for acts of war (although the definition of war does not include terrorism) and for damage wholly caused by the intentional act of a third-party. The Club will issue Blue Cards on condition that the Member agrees that where any payment by the Club under the certificate is in respect of war risks, the Member will indemnify the Club to the extent 1 Defined as including the registered owners, bareboat charterers, managers and operators. - 2 that such payment is recoverable under the Member’s P&I war risks policy, or would have been recoverable if the Member had maintained and complied with the terms and conditions of a standard P&I war risks insurance policy, and that there shall be assigned to the Club all the rights of the Member under such insurance and against any third party. By requesting a “Blue Card”, a Member will be deemed to have agreed this condition. It is therefore necessary that all Members requesting Blue Cards ensure that they have in place P&I war risks cover on standard terms with a separate limit for P&I liabilities. Issuance of State Certificates The Inte