International Maritime Conventions in Brazil

2018 INTERNATIONAL MARITIME CONVENTIONS IN BRAZIL

Contents I. Introduction ..................................................................

04

II. International Maritime Law Conventions – work methodology

08

III. Organs that elaborate the international maritime law conventions object of this study ...............................................................................

10

III.1– IMO III.2 – CMI III.3 – UNCTAD III.4 – UNCITRAL III.5 – HCCH III.6 – ILO IV. Technical Conventions not ratified or adhered to ..............

14

V. International Conventions signed, ratified and pending promulgation

15

VI. Conventions that should be ratified by Brazil related to Jurisdiction, Arbitration and Enforcement in the International Maritime Law ...............

16

VI.1 – International Convention on Arrest of Ships, 1999 VI.2 – International Convention for the unification of certain rules concerning civil jurisdiction in matters of collision, 1952 VI.3 – International Convention for the unification of certain rules relating to penal jurisdiction in matters of collision or other incidents of Navigation, 1952 VI.4 – Hague Choice of Court Convention, 2005 VII. Conventions that should be ratified by Brazil related to Property and Rights in the International Maritime Law ...........................................

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VI.1 – International Convention on Maritime Liens and Mortgages, 1993 VI.2 – Nairobi Convention on the Removal of Wrecks, 2007 VIII. Conventions that should be ratified by Brazil related to the Transport of Things in the International Maritime Law ........................................

16

VIII.1 – Convention on Limitation of Liability for Maritime Claims, LLMC 1976 IX. Conventions that should be ratified by Brazil related to Maritime Labor

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VII.1 – Maritime Labor Convention, 2006 X. Conventions that should be ratified by Brazil related to the Transport of Persons in the International Maritime Law ........................................

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X.1 – Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 and Protocol, 2002 XI. Conventions to be ratified by Brazil related to Pollution in the International Maritime Law ....................................................................

20

XI.1 – International Convention on Civil Liability for Oil Pollution Damage, 1992 (CLC 1992) XI.2 – International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (Fund Convention 1992) XI.3 – International Convention on Civil Liability for Bunker Oil Damage, 2001 (Bunker Convention) XI.4 – International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (HNS, 1996)

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XI.5 – Protocol to the Convention on the Prevention of Marine Pollution by the Dumping of Wastes and Other Matter, completed in London, 1972 (1996 LC Protocol) XI.6 – Protocol on Preparedness, Response and Co-operation to Pollution Incidents by Hazardous and Noxious Substances (OPRC–HNS PROTOCOL, 2000) XII. Conventions that should be ratified by Brazil related to navigation safety

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XII.I – Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation, 2005 (SUA, 2005) XIII. Other Conventions .....................................................

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XIII.I – United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea XIV. Conclusions .................................................................

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I. Introduction In 2016 Brazil lost 6 additional positions in the ranking of the most competitive economies in the world, falling to the 81st place – the worst position ever reached in the competitiveness ranking prepared since 1997 by the World Economic Forum.

The worst position by then had been 75th place, recorded in 2015. In 4 years, Brazil lost 33 positions.

This performance is attributed, among other factors, to the inefficiency of the legal framework for conflict resolution and the regulatory framework, in addition to the lack of transparence in the elaboration of government policies and the burden of regulatory compliance.

This mapping of our deficiencies, however, should not be cause for discouragement, but an opportunity for the development of our country.

With this purpose, this paper aims to demonstrate that the International Maritime Conventions, once they are ratified or adhered to by Brazil, could, without much Page 4 of 62

legislative effort, simplify and modernize the regulation of the sector, improving the business environment and, as a result, attracting more business to the country.

Noteworthy is the legislative effort to update the second part of the current Brazilian Commercial Code, which, although dating from 1850, is still a valuable instrument for the collation of maritime customs. However, updating this part of the Code may give rise to a new law of old methodology, without necessarily aligning the country internationally for some reasons:

First of all, it is important to understand that the scope of the practical application of Maritime Law has become much broader than commercial law alone. As a matter of fact, in this regard, our Constitution consecrates the autonomy of maritime law.

However, the proposed reform of the Commercial Code excludes, for political reasons, matters pertaining to tax, consumer and environmental law, subjects that, among others, currently make up the necessary role of the subjects that any maritime regulation has to cover. Therefore, a Commercial Code reform that is totally commendable so as to correct the error, which was the confusion brought by the Civil Code by mixing what is civil with what is mercantile, should not touch the maritime with these restrictions, under penalty of causing an incomplete service for the Brazilian society.

As if it were not enough, it must be understood that the lex maritima is characterized by the fulfillment of pre-existing customs, different from other activities that admit legal fiction as a formula to adapt the codes of conduct. Such customs which, at the time of the Commercial Code, were recognized through the effort of the Napoleonic Code followed by the countries of Latin tradition, over the years, were finding shelter Page 5 of 62

in international intergovernmental and private institutions which seek this international unity extremely necessary as regards the feasibility of the flow of foreign trade, which needs clear and uniform rules for the good understanding of all. Thus, countries that effectively aspire to be a model of legal security to attract international investment and generate income and employment need to understand that this international alignment is more than essential.

Therefore, taking care of the maritime by updating an internal law, even though more modern, still makes the country unsafe and unattractive in the eyes of the international maritime community, since the path followed and recommended is the adoption of the International Maritime Conventions discussed for years, sometimes for decades, by the entire community in appropriate and technical forums. No matter how good it may be, no national law will be of better quality than these international instruments, and even if it were, it would never inspire the trust necessary to attract the investments that are so important for our country.

Several countries traditionally aligned with the French Commercial Code, such as the case of Brazil, adopted another modernization methodology, through the adoption of these international instruments, so as to then, through a navigation law, adapt the domestic legislation to those Conventions. See, for example, Argentina, Venezuela and Spain, to name but a few.

By looking at the International Maritime Conventions we find out that we have adopted 65 Conventions from among 165, i.e., we are out of more than 60% of everything that was treated in the matter, as shown below:

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Aware of what international experience shows as to how Brazil has been seen in the sector, worldwide, we have selected at least 16 International Conventions that, once adopted, will raise the country to another level of alignment in the activity.

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II. International Maritime Law Conventions – work methodology We identified through this study 165 Conventions related to the International Maritime Law and Law of the Sea (International Public Maritime Law).

After the identification, we noticed that of the 165 Conventions, 84 were not signed, whereas 9 were signed (but not ratified or adhered to), 7 were signed, ratified or adhered to (but not promulgated) and 65 were duly signed and promulgated.

However, if we subdivide and group such Conventions by theme, we will find out that the themes of Law of the Sea (International Public Maritime Law) have a much larger number of promulgation than the themes of International Maritime Law (Private Law), which confirms the perception of the Global Competitiveness Ranking in relation to the difficulty of doing international business in Brazil, as shown below:

Analyzed

LAW OF THE SEA (INTERNATIONAL PUBLIC LAW) JURISDICTION, ARBITRATION AND EXECUTION NAVIGATION SAFETY PROPERTY AND RIGHTS TRANSPORT OF THINGS AND PASSENGERS WORK AND EMPLOYMENT POLLUTION

11

Only signed by Brazil (not ratified or adhered to) 0

Promulgated

11

21

3

7

29 5 20

5 1 2

16 1 3

43 34

2 1

19 13

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CONVENÇÕES DO COMÉRCIO INTERNACIONAL MARÍTIMO POLUIÇÃO TRABALHO E EMPREGO TRANSPORTE DE MERCADORIAS E PESSOAS PROPRIEDADE E DIREITOS SEGURANÇA DA NAVEGAÇÃO

JURISDIÇÃO, ARBITRAGEM E EXECUÇÃO DIREITO INTERNACIONAL PÚBLICO 0

10 20 Ratificadas pelo Brasil

30 40 Assinadas pelo Brasil

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Our proposal, therefore, is to adapt the matters of International Maritime Law (Private Law) to the international practices, as already being done by Brazil in relation to the Law of the Sea (Public Law), filling this important gap in our legislation, aiming at improving the business environment in our country and consequently increasing international competitiveness, especially considering that maritime transport is the main type of international transport for the trade of products, being used by more than 80% of the merchandise sold in the world.

In order to do so, we selected, among the International Maritime Law Conventions that have not been ratified, those that we consider to be the most important, whether by the matter dealt with or by the international representation of the States that are parties to them.

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III. Organs that elaborate the international maritime law conventions

The International Maritime Law Conventions are generally produced through International Agencies or Institutions which have among their members the States of the International Community or Associations related to the Maritime Law.

Among the above-mentioned institutions, the following stand out:

III.1 – INTERNATIONAL MARITIME ORGANIZATION – IMO

In the capacity of a United Nations specialized agency, IMO is the global authority for the standard of safety and environmental performance of the international maritime transport. Its main role is to create a fair and effective regulatory framework

for

the

maritime

sector,

universally

adopted

and

universally

implemented.

Maritime transport is a truly international industry and can only operate effectively if regulations and standards are agreed upon, adopted and implemented on an international basis, and IMO is the forum in which this process occurs.

Brazil regularly participates in IMO meetings and committees and is currently represented by the Brazilian Navy.

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III.2 – INTERNATIONAL MARITIME COMMITTEE – CMI

It

is

an

International

non-governmental,

non-profit

oriented

organization

established in Antwerp in 1897, whose aim is to contribute by all appropriate means and activities for the unification of maritime law in all its aspects.

To this end, it brings together the National Maritime Law Associations and cooperates with other International Organizations, including IMO.

III.3 – UNITED NATIONS CONFERENCE ON TRADE & DEVELOPMENT – UNCTAD

UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly in 1964. Its headquarters is located in Geneva, Switzerland, and it has offices in New York and Addis Ababa.

UNCTAD is part of the UN Secretariat of the United Nations Development Group.

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III.4 – UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW – UNCITRAL

The United Nations Commission on International Trade Law (UNCITRAL) is a subsidiary body of the General Assembly. It plays a major role in developing the legal framework for the international trade through the preparation of legislative texts on the modernization of international commercial law, to be used by the States and through the preparation of non-legislative texts on commercial transactions, to be used by the parties.

The legislative texts of UNCITRAL aim at the international sale of goods, the resolution

of

international

commercial

disputes,

including

arbitration

and

conciliation, electronic commerce; insolvency, including cross-border insolvency, international

transport

of

goods;

international

payments,

acquisition

and

development of infrastructures; and the commercial papers.

The non-legislative texts include rules of conduct in arbitration and conciliation procedures; notes on the organization and conduct of arbitration proceedings; and legal guidelines on industrial construction and trade contracts.

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III.5 – HAGUE CONFERENCE ON PRIVATE INTERNATIONAL LAW – HCCH

With 83 members (82 states and the European Union) the Hague Conference on Private International Law is a worldwide intergovernmental organization with representatives from all continents. The statutory mission of the organization is to work towards the progressive unification of the rules of “Private International Law”.

Over the years the organization has carried out its mission, especially in the fields of protection of the family, children, civil procedure and commercial law. The ultimate goal of the Organization is to work for a world in which, despite the differences between the legal systems, individuals and companies can enjoy a high degree of legal security.

III.6 – INTERNATIONAL LABOR ORGANIZATION – ILO

The only UN tripartite agency since 1919, the International Labor Organization, brings together governments, employers and workers from its 187 member states to establish labor standards, develop policies, and elaborate programs that promote the dignity of work.

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IV. Technical Conventions not ratified or adhered to The main scope of this paper is to present the Conventions that can improve the business scope of the country.

Nevertheless, it should be noted that there is a range of Conventions and technical documents that we leave to the thorough analysis of the Ministry of Defense – Navy Command, among which we highlight:

• SOLAS AGREEMENT 96 (1996 Agreement concerning the International Convention for the Safety of Life at Sea);

• LOAD LINES PROTOCOL 1988 (1988 Protocol to the International Convention on Load Lines);

• CSC AMENDMENT 93 (1993 Amendments to the International Convention for Safe Containers);

• SFV PROTOCOL 93 (1993 Protocol to the International Convention for the Safety of Fishing Vessels);

• CAPE TOWN AGREEMENT 2012 (2012 Cape Town Agreement concerning the International Convention for the Safety of Fishing Vessels);

• STCW F CONVENTION 95 (International Convention on Standards of Training, Certification and Watch-keeping for Fishing Vessel Personnel); Page 14 of 62

• STP AGREEMENT 71 (Special Trade Passenger Ships Agreement);

• SPACE STP PROTOCOL 73 (1973 Protocol);

• IMSO AMENDMENT 2008 (2008 Amendment to the Convention on the International Mobile Satellite Organization);

• HONG KONG CONVENTION (International Convention for the Safe and Environmentally Sound Recycling of Ships).

V. International Conventions signed, ratified and pending promulgation We also emphasize that there are Conventions and instruments already approved by the Legislative Branch, and only the promulgation by means of Executive Decree is pending.

Specifically, we highlight:

• AMENDMENTS 91 AND 93 TO THE CONVENTION ON THE ESTABLISHMENT OF THE INTERNATIONAL MARITIME ORGANIZATION;

• AMENDMENTS TO THE ANNEX TO THE INTERNATIONAL CONVENTION ON THE SAFEGUARD OF HUMAN LIFE AT SEA – SOLAS AND TO THE 1988 PROTOCOL TO THE SAME CONVENTION;

• MARPOL 73/78 – ANNEX VI RULES FOR PREVENTION OF AIR POLLUTION BY SHIPS; Page 15 of 62

• CSC CONVENTION 72 – STANDARDS FOR SAFETY OF CONSTRUCTION AND OPERATIONS WITH CONTAINERS;

• INTERNATIONAL CONVENTION FOR THE CONTROL AND MANAGEMENT OF SHIPS’ BALLAST WATER AND SEDIMENTS.

VI. Conventions that should be ratified by Brazil related to Jurisdiction, Arbitration and Enforcement in the International Maritime Law

VI.1 – International Convention on Arrest of Ships, 1999

Member Countries of the 1952 Arrest Convention: 71

Member Countries of the 1999 Arrest Convention: 15

Position of Brazil: Not a party to any Arrest Convention

The Convention on Arrest of Ships, 1999 was drafted by the CMI and arose from the need to revise the Arrest Convention of 1952 and the Mortgage Conventions of 1926 and 1967, as evidenced by a decision of the CMI, preceded by a resolution of IMO and UNCTAD in the same regard.

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BERLINGIERI, Francesco. Berlingieri on Arrest of ships. v. II: a commentary on the 1999 Arrest Convention. 6. ed. Oxford: Informa, 2017. p. 1.

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The text of the Convention was adopted by the Diplomatic Conference of Geneva on 12 March 1999, with the participation of the CMI, UNCTAD and UN-IMO.

Brazil was represented at the Conference, and it not only signed the final minutes of the Convention, but also had an active participation, since Brazilian lawyer Walter de Sá Leitão was its rapporteur general.

Until June 30, 2016, parties to the 1999 Convention were: Albania, Algeria, Benin, Bulgaria, Congo, Ecuador, Estonia, Latvia, Liberia, Spain and Syria.

However, some countries have adopted the main provisions of the text of the Convention in their domestic law: in the Andean Community (Bolivia, Colombia, Ecuador and Peru), in CEMAC (Cameroon, Congo, Equatorial Guinea, Gabon and Chad), China, Russia and Venezuela.

2

The arrest of ships has always been treated differently in the Brazilian Legal System.

Proof thereof lies in the fact that Decree 737 of 1850 (article 338) subordinated the arrest (or embargo) of vessels exclusively to the provisions of the Commercial Code (Article 47 et seq.) and not to the common provisions of the arrest (therein also referred to as “embargo”) then provided for in Decree 737 (articles 21 and 322 which very much resemble the provisions contained in the CPC/73 in articles 813 and 814).

BERLINGIERI, Francesco. Berlingieri on Arrest of ships. v. II: a commentary on the 1999 Arrest Convention. 6. ed. Oxford: Informa, 2017. p. 10.

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Although the rule of article 338 of Decree 737/185 was not reproduced in CPC/1939, CPC/1973 and CPC/15, the differential treatment of ship arrest remained guaranteed in the Legal System due to the validity of the Commercial Code.

The Commercial Code still in force has specific rules (articles 479 to 483), of a heterotopic nature (procedural rules within a system of substantive law) that authorize the arrest of ships only in well-defined situations.

Basically, the articles of the Commercial Code recognize that the arrest of a vessel is something that affects not only the interests of its owner, but also of the crew, charterers, shippers, exporters, importers, public authorities, i.e., of commerce as a whole, in such a way that the arrest of a vessel represents an issue that transcends the simple private interest of a creditor of the ship-owner, and this is the reason for the restrictive treatment of the hypotheses that authorize the granting of the precautionary measure of ship arrest.

Although such restrictive rules are in force, it is true that those who militate in the Maritime Law coexist with the most complete legal insecurity regarding the arrest of ships, which insecurity tends to increase due to the advent of CPC/15.

In this scenario, the main reason for Brazil to ratify the 1999 Convention is to gain clarity as to the hypotheses authorizing the arrest, potentially eliminating the legal uncertainty as to the theme of ship arrest.

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The Convention still has to be ratified due to its handling of turbulent matters relating, for example, to cases in which the arrest of a vessel is possible for debts that are not under the responsibility of the owner, cf. article 3(3).

It should also be noted that the ratification of the Convention will not affect any right of the Brazilian Public Authorities to detain a ship based on International Conventions or on the basis of the Brazilian domestic law, since such right is expressly protected by the Convention, cf. article 8(3).

Economic impacts

It is possible that the ratification of the Convention will make Brazil a friendly place for foreign creditors who may choose to bring lawsuits to Brazil, promoting services to be provided in the country and the consequent generation of revenue.

In addition, it provides more legal certainty and an effective tool for potential domestic and international creditors.

In this context, we visualize positive economic impacts, through the ratification of the Convention without costs.

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VI.2 – International Convention for the unification of certain rules concerning civil jurisdiction in matters of collision, 1952 Member Countries of the International Convention for the unification of certain rules concerning civil jurisdiction in matters of Collision of 1952: 71

Member Countries of the Convention for the unification of certain legal rules concerning collision of ships of 1910: 92

Position of Brazil: It is party to the 1910 Convention, promulgated by Decree 10.773/1913 but it is not a party to the 1952 Convention.

It is important to notice that only the text of the Decree and the original text of the Convention in French are available in official sources (Planalto Palace, Senate and House of Representatives) and the official translation of the Convention is not available on the web.

3

The main characteristic of the 1910 Convention is the establishment of liability proportional to guilt.

The 1910 Convention does not define guilt, but it is understood by the Courts around the world as the violation of the principles established in COLREG (Convention on the International Regulations for Preventing Collisions at Sea, 1972).

As evidenced at: <http://www.planalto.gov.br/ccivil_03/decreto/1910-1929/anexo/ andec10773/andec10773.htm>. Access on June 15, 2017.

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Three other principles established in the 1910 Convention are: (a) where two or more ships involved in a collision are to blame, the liability for deaths and personal injury shall be joint and several between those responsible for the ships involved, and there is right of indemnity between them; (b) the indemnity for damage caused to the property must be sought before each one of the responsible parties in the proportion of its fault and (c) the statutory period of limitations for the filing of lawsuits is two years.

The 1910 and 1952 Conventions have different objects. While the former is intended to regulate issues related to the liability for the collision, the latter is intended to regulate issues related to the jurisdiction. In the common language of the Brazilian legal system, we could say that the former deals with substantive (or material) rules regarding ship collision and the latter with adjective (or procedural) rules.

The preparation of a draft of a convention on civil jurisdiction was decided by the Permanent Bureau of the CMI in 1932, along with the elaboration of a draft of a convention on criminal jurisdiction and a convention on arrest of ships.

4

The drafts of the Conventions on criminal and civil jurisdiction could only be appraised after World War II, along with the draft of the Convention on Arrest, which were adopted at the ninth session of the International Conference on Maritime Law held in Brussels on May 10, 1952; the Belgian Government being the depositary.

Brazil was represented at the Conference and signed the Convention, but did not ratify it though.

BERLINGIERI, Francesco. International Maritime Conventions - v. II: navigation, securities, limitation of liability and jurisdiction.

Oxford: Informa, 2015. p. 30 4

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The importance of the 1952 Convention is the establishment of clear rules for the identification of the Jurisdiction in which an action must be presented that has as remote cause of action a collision between ships, with the purpose of preventing two jurisdictions from taking cognizance of actions resulting from the same collision.

Article 1(1) of the Convention determines that an action may be filed as a result of a collision: (a) before the court of the place where the defendant has his habitual residence or the place of its business; (b) before the court of the place where the arrest of a defendant’s vessel was effected or before the court of the place where the arrest could have been effected and (c) before the court of the place where the collision occurred, when it occurs within the boundaries of a port or in inland waters.

Article 1(2) establishes that the option among the hypotheses of items “a”, “b” and “c” of article 1(1) will be the responsibility of the Plaintiff of the action.

Article 1(3) establishes that the Plaintiff can only initiate a new action against the same Defendant based on the same facts before another Jurisdiction when the first lawsuit has been extinguished.

Article 2, in turn, safeguards the right of the parties, upon agreement, to submit the dispute to a jurisdiction other than that established under the provisions of article 1, or to arbitration.

Article 3 (1)(2), establishes that the Jurisdiction in which an action based on article 1 was filed may also take cognizance of other actions related to the same collision.

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The rules of article 1(3) and of article 3(1)(2) seem to have the purpose of preventing a single collision from being judged by different jurisdictions, which would be clearly inconvenient in addition to representing legal uncertainty.

The rule in article 1(1)(b), which confers jurisdiction over a judgment that has as remote cause of action a collision to the court before which an arrest was made or to the court before which the arrest could have been made, is in accordance with the rule of article 7(1) of the Arrest Convention of 1999, since both articles guarantee the Jurisdiction of the place where the arrest was made for judgment of the merits of the main claim.

In this context, simply for the fact that Brazil is already a party to the 1910 Convention that establishes uniform rules of substantive law on collision law, which would justify the adoption of uniform rules of procedural law on the same subject, or for the purpose of the 1952 Convention of avoiding duplication of actions in different jurisdictions, or for the complementary nature of the Conventions on Collision of 1952 and on Arrest of 1999; as regards the Jurisdiction of the court in which the arrest could or was made for the appraisal of the merit of the main claim, we recommend Brazilâ&#x20AC;&#x2122;s ratification of the Collision Convention of 1952.

It is further noted that the ratification of the Convention will not change any rule of domestic law relating to collisions involving warships or ships at service of a State, cf. article 5.

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Economic impacts

As commented in relation to the 1999 Arrest Convention, it is possible that the ratification of the Convention will make Brazil a friendly place for judging disputes relating to Collision, especially due to the rule of article 1(1)(b), in the event that the 1999 Arrest Convention is also ratified.

Moreover, the ratification of the Convention provides legal security by making it difficult to have actions in different jurisdictions relating to the same collision.

In this context, we visualize positive economic impacts, through the ratification of the Convention without costs.

VI.3 â&#x20AC;&#x201C; International Convention for the unification of certain rules relating to penal jurisdiction in matters of collision or other incidents of Navigation, 1952

Member Countries of the Convention for unification and certain rules relating to the penal jurisdiction in respect of collision of Ships or other incidents of navigation of 1952: 72

Position of Brazil: Signed the convention on May 10, 1952, during the Diplomatic Conference, but there is no news of approval by the Legislative Branch (through Legislative Decree).

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The basic text of the Convention was prepared by the CMI and was adopted by the ninth session of the International Conference on Maritime Law, on May 10, 1952 along with the Collision Convention on Civil Jurisdiction and with the Convention on Arrest of Ships, 1952.

5

The scope of application of the Convention is given in its article 1, which states that, in the case of ships that navigation at sea, if there is a collision or some other incident that causes criminal or disciplinary liability on the part of the Captain or any other person at service of the ship, the criminal or disciplinary actions may only be brought before the court or administrative authority of the flag state, at the time of the collision or navigation accident.

As mentioned above, Brazil was represented at the Conference and signed the Convention, but did not ratify it though.

We are of the view that the same grounds justifying the accession to the 1952 Convention on Civil jurisdiction are grounds for acceding to the 1952 Convention on criminal jurisdiction, which is why we refer to those arguments.

Not enough, it should be noted that the sovereignty of States for criminal and administrative prosecution for events occurring within the limits of a port or in inland waters is respected under the terms of Article 4 of the Convention. Not enough, the States Parties may also, pursuant to the same above-mentioned Article 4, reserve the application of the Convention to events occurring in their territorial waters.

BERLINGIERI, Francesco. International Maritime Conventions - v. II: navigation, securities, limitation of liability and jurisdiction.

Oxford: Informa, 2015. p. 39.

5

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Economic impacts

We do not see any positive or negative economic impacts directly resulting from the accession to the Convention.

VI.4 â&#x20AC;&#x201C; Hague Choice of Court Convention, 2005

Member Countries of the Hague Choice of Court Convention, 2005: 29 countries and the European Union

Position of Brazil: It did not sign it.

The Hague Choice of Court Convention of 2005 wishes to ensure the effectiveness of the choice of court clauses between parties of international transactions. This is because, while the arbitration convention is universally recognized and respected in international cases, due to the rules established by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the same is not true in relation to the choice of court clauses, as regards internal legal rules, especially where the dispute is brought before a court other than that chosen by the parties.

The three basic rules of the Convention are:

6

1. In principle, the judge of the elected court shall be heard (article 5);

2. Any court other than the elected one shall decline jurisdiction (article 6); and

6

As evidenced at: <https://assets.hcch.net/docs/89be0bce-36c7-4701-af9a-1f27be046125.pdf>. Access on June 19, 2017.

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3. The judgment rendered by the judge of the elected court shall be recognized and enforceable in any of the contracting states, except when there is an excuse provided for in the Convention (articles 8 and 9).

The convention only applies to the election of court in contracts in civil or commercial matters (article 1). The convention expressly excludes its application on consumer and employment relations (article 2).

Economic impacts

We do not see any negative economic impacts as a result of the ratification of the Convention.

VII. Conventions that should be ratified by Brazil related to Property and Rights in the International Maritime Law VII.1 â&#x20AC;&#x201C; International Convention on Maritime liens and mortgages, 1993 Member Countries of the International Convention on maritime liens and mortgages, 1926: 35

Member Countries of the International Convention on maritime liens and mortgages, 1967: 6 (it is not in force).

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Member Countries of the International Convention on maritime liens and mortgages, 1993: 18

Position of Brazil: It is a party to the 1926 Convention. It signed, but did not accede to the convention of 1993.

The financing of the activities of proprietors and ship-owners by financial institutions has become increasingly relevant for the maintenance and expansion of the navigation industry. This fact led to the perception of the need for an international instrument to standardize the recognition of the maritime mortgage and to limit and standardize the maritime privileges (maritime liens); credits that have preference over the mortgage.

The above scenario led to the first convention on the theme, the Convention on maritime liens and mortgages of 1926; however, the success of such convention was limited, as can be seen from the number of countries that ratified it or acceded to it.

The Convention on the same theme of 1967 had the clear goal of replacing the Convention of 1926, as can be read in its article 25. However, this goal has never been achieved, since the Convention did not come into force.

These facts led to a new international effort culminating in the 1993 Convention, adopted at the Geneva Conference in 1993. It was signed by 57 countries (including Brazil) and came into force on September 5, 2004.

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Until April 28, 2016 the parties to the 1993 Convention were: Albania, Benin, Republic of Congo, Ecuador, Estonia, Lithuania, Monaco, Nigeria, Peru, Russia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Serbia, Spain, Syria, Tunisia, Ukraine and Vanuatu.

The main point of the Convention is to bring legal security to the matter, as it clearly determines that the Convention applies to ships registered in a State that is a Party to the Convention and to ships registered in a State that is not a Party to the Convention, provided that the recognition of the mortgage is sought before the Jurisdiction of a State Party.

This is a sensitive issue since recently a decision by a Brazilian Court of Justice failed to recognize a mortgage registered in a State that was not a party to the 1926 Convention, This is a sensitive issue, since recently a decision handed down by a Brazilian Court of Justice failed to recognize a mortgage registered in a State that was not a party to the 1926 Convention, which was criticized even in international doctrine.

7

Brazil's accession to the convention would also give greater clarity to the theme, especially after the promulgation of the Vienna Convention on the Law of Treaties, since it would establish uniformity in the theme of maritime privileges, currently regulated both in the Commercial Code and in the 1926 Convention.

In the event that Brazil accedes to the 1993 Convention, it shall denounce the 1926 Convention.

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OSBORNE, David; BOWTLE, Graeme; BUSS, Charles - The law of ship mortgages. 2. ed. Oxon: Informa, 2017. p. 115

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Economic impacts

We do not see negative economic impacts as a result of the ratification of the Convention, taking into account that Brazil already has a registry of mortgages on ships, which is made before the Maritime Court, but positive, in recognition of Brazil as a country that respects the International Vested Right.

VII.2 â&#x20AC;&#x201C; Nairobi Convention on the Removal of Wrecks, 2007

Member Countries of the Nairobi Convention on the Removal of Wrecks, 2007: 36

Position of Brazil: It is not a party.

The IMO Legal Committee began to consider the need for a convention to address the issue of removal of wrecks at its twelfth session, which dates back to 1965.

The main reason for the beginning of the works for the elaboration of the Convention was the absence of international normative parameters concerning the removal of wrecks beyond the territorial waters.

A study sponsored by the CMI and presented during the 74 th meeting of the IMO Legal Committee demonstrates that although the United Nations Convention on the Law of the Sea (UNCLOS) (promulgated in Brazil through Decree 99.165/1990) does not explicitly confer to the coastal States the right to remove wrecks located in their territorial sea, such states had such right, due to their sovereignty over the internal Page 30 of 62

waters and the territorial sea, and because they had the power to regulate the safety of navigation and the prevention of pollution in those areas. The same study of the CMI showed that the exercise of this right varied from State to State though.

In Brazil an example of the exercise of the right to regulate the removal of wrecks is given by the revoked Law of the Ports (Act no 8.630/1993) which established in its Article 33, §1, X, that the Port Administration shall, within the limits of the port area: “promote the removal of vessels or hulls of vessels that may impair the navigation of vessels that access the port”. A similar provision is the one found in the new Law of Ports (12.815/2013) in article 17, §1, VII. It establishes that the administration of the organized port, referred to as port authority, shall: “promote the removal of vessels or hulls of vessels that may impair the access to the port.”

The issue of major concern, however, was the removal of wrecks located beyond the territorial sea, since the rules contained in the UNCLOS do not prohibit or clearly authorize the removal of wrecks located therein in order to safeguard the safety of navigation.

At the 83rd meeting of the IMO Legal Committee, held in October 2001, the delegations from Germany, the Netherlands and Vanuatu presented a study on the efforts made since 1965 up to that date (2001) to establish a Convention on the Removal of Wrecks, and at the end of the meeting they requested the Legal Committee to express its opinion on the continuity of the works for such purpose. 8

8

LEG 83-5-1

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The Committee agreed that the continuity of the works was one of its priorities and established that a first version of the Convention should be presented for consideration in the biennium 2004-2005. At the suggestion of the Norwegian delegation, the latter took the lead in drafting the first version of the Convention.

The text of the Convention was adopted by the International Conference held in Kenya, in May 2007.

Brazil was represented at the Conference, and a Brazilian was one of the vicepresidents of the conference, Adm. Miguel Angelo Davena (leader of the Brazilian delegation at that time).

Until April 3, 2017, the parties to the Convention were: Albania, Antigua and Barbuda, Bahamas, Belgium, Bulgaria, China, Congo, Cook Islands, Cyprus, Denmark, Estonia, Finland, France, Germany, India, Iran, Italy, Jordan, Kenya, Liberia, Malaysia, Malta, Marshal Islands, Morocco, Netherlands, Nigeria, Niue, Palau, Panama, Romania, Saint Kitts and Nevis, South Africa, Switzerland, Tonga, Tuvalu and the United Kingdom.

The four main issues identified in the Convention are:

a) The definition of the right of the coastal State to promote the removal of the wrecks located in its Exclusive Economic Zone, in the event of any risk to the safety of navigation or to the marine environment;

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b) The right of the State Party to declare that the rules of the Convention shall also apply to its territorial sea;

c) The objective responsibility of the ship-owner for the costs of reporting, flagging and removing wrecks, if so required by the coastal State;

d) Compulsory coverage and right to direct action against the insurer up to the limit of liability calculated in accordance with the 1996 Protocol to the 1976 International Convention on Limitation of Liability for Maritime Claims (LLMC).

The mere fact that there is no rule in Brazil regulating the issue of wreck removal beyond the territorial sea is enough to justify the ratification of the Convention.

Not enough, the instruments of compulsory coverage and direct action concerning the insurer up to the limit of liability will give the Public Authorities instruments of action to deal with wrecks cases that endanger the safety of navigation and the marine environment.

Finally, two issues stand out:

i) The Convention does not apply to Warships or to ships operated by the State (cf. article 4(2)), unless the State Party chooses to apply the Convention to such ships (cf. article 4(3));

ii) The State may choose to apply the Convention to wrecks located in its territory, including the territorial sea (in accordance with Article 3(2)). In Page 33 of 62

this case, the limitation of liability applies only to the measures set forth in Articles 7, 8 and 9, but not to those measures established by the national law, as determined in article 3(2).

Economic impacts

We do not see negative economic impacts as a result of the ratification of the Convention, taking into account that that the Brazilian Navy already has a structure to deal with material and formal issues related to the removal of wrecks.

In any case, it is important to point out that obligations are established for States Parties, such as those provided in articles 6, 7, 8, 9(1)(6)(7)(8)(9), and 12(2)(7)(11)(12).

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VIII. Conventions that should be ratified by Brazil related to the Transport of Things in the International Maritime Law

VIII.1 – Convention on Limitation of Liability for Maritime Claims, LLMC 1976

Member Countries: 65

Position of Brazil: It is not a party.

Historically, the institute of limitation of responsibility in some activities of society is considered as a matter of public necessity, in order to encourage certain activities that are essential for the development.

The exact notion of the origin of the institute in maritime law is uncertain, although it is possible to identify in the provision of delivery/abandonment of the ship to the creditors (in Brazil article 494 of the Commercial Code) some similarity with the noxae deditio of the Roman Law, in the sense that an owner can exempt himself from an obligation for damages in relation to the other person by giving up the offending thing.

In Exodus XXI 28 there is a similar provision: “If an ox gores a man or a woman to death, the ox shall surely be stoned and its flesh shall not be eaten; but the owner of the ox shall go unpunished”.

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Both involve the delivery of an item that has been the cause of the loss of another person.

The origin of the idea of limiting the responsibility of the owner, in certain circumstances, to the value of the thing has been attributed to Grotius in 1625 9, which has been effected by both the Internal Law and the International Conventions.

The limitation was initially necessary to encourage sea shipping, as it was a highrisk activity, and potential investors were easily dissuaded from entering the industry.

Christopher Hill in the 5th edition of his book Maritime Law 10 records that:

â&#x20AC;&#x153;The basic idea behind the right to limit liability was that all encouragement should be given to ship-owners to take care of their business. Going to sea by ship was an adventurous activity that should be encouraged rather than discouraged by the interests to promote and stimulate international trade and if those that were prepared to invest their capital knew that they would be exposed to unlimited liability and often in situations where they would not have personal control, their ardent adventurous spirit could be stifled even before it had time to blossom.â&#x20AC;?

At present, the possibility of securing the activity is based on this principle, since it would be practically impossible to obtain unlimited insurance coverage.

9

J. G. Gissberg. Civil Liability for Oil Pollution Damage from Tankers and other Ocean-Going Vessels, PhD dissertation, University of Michigan, 1971, p 93.

10 HILL, Christopher. Maritime Law - 5th edition - LLP, 1998 - p. 375

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For this reason, the market has evolved and the LLMC has established specific tonnage-based values, providing the maximum financial liability of â&#x20AC;&#x153;ship-ownersâ&#x20AC;? in relation to all claims arising from maritime incidents involving mainly personal claims (injuries and loss of life), as well as claims for material damage (such as damage to other ships, properties or port works).

The unit of measure for the monetary liability used is the special drawing right (SDR), which is an international reserve asset with interest created by the IMF in 1969.

It should be noted that the SDR is not a currency but it is based on a basket of International currencies that comprise the US dollar, the Japanese yen, the euro and the pound sterling.

The aim of the Institute today is no longer to promote the activity but to guarantee its security regardless of the financial health of the ship-owner and even the physical conditions of the ship that suffered the accident.

Moreover, the Convention provides, in addition to the limitation, that it will be followed by the formation of a fund and establishment of a concourse of creditors, enabling quick payment, with straightforward criteria and concentrated on a single procedure, which also helps the Judiciary Branch that will no longer face hundreds and sometimes thousands of lawsuits.

Finally, it is worth mentioning that on April 19, 2012, IMO announced new limits to enter into force, in accordance with the tacit acceptance procedure, on June 8, 2015.

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The new liability limit for claims of loss of life or personal injury on ships not exceeding 2,000 gross tons has been increased to SDR 3.02 million, whereas for larger ships the following additional values will be used in the calculation of the limit value:

- For each ton from 2,001 to 30,000 tons, SDR 1.208 (in relation to SDR 800).

- For each ton from 30,001 to 70,000 tons, SDR 906 (above SDR 600).

- For each ton above 70,000 tons, SDR 604 (above SDR 400).

The liability limit for claims of ownership of vessels not exceeding 2,000 gross tons has been changed to SDR 1.51 million, whereas for larger ships the additional amounts to be used in the calculation of the limit are as follows:

- For each ton from 2,001 to 30,000 tons, SDR 604 (above SDR 400).

- For each ton from 30,001 to 70,000 tons, SDR 453 (above SDR 300).

- For each ton above 70,000 tons, SDR 302 (above SDR 200).

The above figures represent an increase of 51% of the previous limits.

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To better illustrate the significance of this increase, if we use the hypothetical example of a vessel with 50,000 GT and examine the amount of the property damage limitation in accordance with the 1957 and 1976 Conventions, as well as with the 1996 protocol and the new limits, we will have:

1957

Convention:

SDR

3,333,500

(USD

4,625,832.78)

(approximately

R$

15,100,568.53).

1976 Convention: SDR 7,593,500 (USD 10,537,351.50) (approximately R$ 34,398,130.24)

1996

Protocol:

SDR

18,200,000

(USD

25,255,784.20)

(approximately

R$

82,444,981.94)

2015 New Limits: SDR 27,482,000 (USD 38,136,234.14) (approximately R$ 124,491,922.73)

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As a matter of fact, at the time of the discussion about the increase of the limits at the IMO, the International Group of P&Is (International Group) presented a survey of approximately 10 years 11 in relation to the cases that exceeded the liability limits of the LLMC regimes, especially those involving bunker oil pollution, in which claims related to the aforementioned Convention are more substantial.

This survey revealed that of the 595 incidents that were subject of the study, only 8 incidents would exceed the limits of the 1996 protocol, if applied, i.e., only 1.34% of the cases, and in relation to the new limits of 2015 this percentage is close to zero.

Hence, the increase in 2015 coupled with the decrease in incidents due to the increase in technology and control procedures of the sector has been very beneficial for the dozens of countries that have adhered to the system of this Convention, both for the efficiency to form a fund for the creditors and for the insurance coverage for the possible parties affected by the damages listed therein.

Economic impacts

With the increase of the liability limits at higher levels than the existing claims, it is expected that there will be no negative economic impact with the ratification of this Convention, but on the contrary, positive aspects, resulting from the improvement of the business environment with legal certainty, efficiency and reduction of legal proceedings.

11

LEG 96-6-2

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IX. Conventions that should be ratified by Brazil related to Maritime Labor IX.1 – Maritime Labor Convention, 2006

Member Countries: 85

Position of Brazil: It is not a party.

The Maritime Labor Convention is known as “seafarer’s bill of rights”

12

was adopted

by representatives of the governments, employers and workers represented at the International Labor Conference held in February 2006.

Its peculiarity lies in the fact that it aims at the same time to achieve dignified work conditions for seafarers and ensure economic interests through fair competition for the ship-owners.

The convention covers virtually every aspect of the life on board, including:

- Minimum age;

- Contracts;

- Work and rest hours;

- Payment of salaries;

As evidenced at: <http://www.ilo.org/global/standards/maritime-labour-convention/what-it-does/WCMS_219665/lang-en/index.htm>. Access on June 19, 2017.

12

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- Paid annual vacation;

- Repatriation at the end of the contract;

- Medical assistance on board;

- Use of private recruitment services;

- Accommodation and food;

- Health protection and safety on board.

The ratification of the Convention is important because it puts in a single normative system minimum international standards to guarantee decent work for seafarers around the world, in addition to ensuring an equitable field of loyal competition for the ship-owners.

Economic impacts

We do not see negative economic impacts as a result of the ratification of the Convention.

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X. Conventions that should be ratified by Brazil related to the Transport of Persons in the International Maritime Law

X.1 â&#x20AC;&#x201C; Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 and Protocol, 2002

Member Countries of the Athens Convention of 1974: 37

Member Countries of the Protocol of 2002 to the Athens Convention: 31

Position of Brazil: It did not even sign the Convention or the Protocol.

The Convention was adopted at the Athens Conference in 1974 and was intended to consolidate and harmonize the two conventions that dealt with the carriage of passengers and luggage adopted in 1961 and 1967.13

The Convention establishes a regime of liability for damage caused to passengers of seagoing ships. The carrier is liable for loss and damage caused to a passenger if the accident occurs in the course of the trip due to a fault of the carrier.

The 2002 Protocol, however, alters this issue by establishing strict liability.

As evidenced at: <http://www.imo.org/en/About/conventions/listofconventions/pages/athens-convention-relating-to-thecarriage-of-passengers-and-their-luggage-by-sea-(pal).aspx>. Access on July 19, 2017.

13

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The 2002 Protocol also introduces a compulsory guarantee to cover passengers on ships and increases the limit of the 1974 Convention to 250,000 SDR (special drawing rights â&#x20AC;&#x201C; which on July 19, 2017 are equivalent to R$ 4.4285).14

If the loss exceeds the liability limit, the carrier is liable up to the limit of 400,000 SDR per passenger in each different situation, unless the carrier proves that the accident occurred without any fault on its part.

If Brazil accedes to the 2002 Protocol, it is not necessary to accede to the 1974 Convention.

Economic impacts

We do not see negative economic impacts as a result of the ratification of the Convention.

14

As evidenced at: <http://www2.correios.com.br/sistemas/efi/consulta/cotacaomoeda/>. Access on July 19, 2017.

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XI. Conventions that should be ratified by Brazil related to Pollution in the International Maritime Law XI.1 – International Convention on Civil Liability for Oil Pollution Damage, 1992 (CLC 1992)

Member Countries of the CLC of 1969: 34

Member Countries of the CLC of 1992: 137

Position of Brazil: Member of the CLC of 1969

Compensation for damage caused by pollution such as spill of oil transported as cargo by oil tankers is governed by an international regime elaborated by the International Maritime Organization (IMO).

The regime, originally created by the International Convention of 1969 on Civil Liability for Oil Pollution Damage (CLC 1969) and the International Convention of 1971 on the Establishment of an International Fund, known as “old regime” was changed in 1992 by means of two protocols, and the changed conventions are known as Civil Liability Convention of 1992 and Fund Convention of 1992.

The Convention establishes the principle of strict liability of ship-owners and establishes a system of compulsory civil liability insurance which guarantees the compensation of the victims even in the event of the ship-owner's insolvency.

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The Fund Convention of 1992, which is complementary to the Civil Liability Convention of 1992, establishes a regime of compensation for the victims when the compensation under the applicable Civil Liability Convention is insufficient, as will be seen.

The Civil Liability Convention of 1992 covers damage caused by pollution in the territory, territorial sea or Exclusive Economic Zone (EEZ) or equivalent area of a State Party to the Convention. The flag State of the oil tanker and the nationality of the ship-owner are irrelevant in determining the scope of application.

The â&#x20AC;&#x153;damage resulting from pollutionâ&#x20AC;? is defined as loss or damage caused by contamination.

The notion of damage caused by pollution includes measures taken to prevent or minimize damage caused by pollution.

The expenses incurred regarding preventive measures are recoverable even when there is no oil spill.

The damage caused by non-persistent oil, such as gasoline, light diesel, kerosene, etc., is not covered by the Civil Liability Convention of 1992.

The value of the mandatory insurance to which the ship-owner responds, regardless of fault, is not linked to its assets or to the value of the ship but to an amount established by the member countries according to their experience in past accidents.

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Currently (last value increase was in 2003), the value is:

(A) for a vessel not exceeding 5,000 units of gross tonnage, 4,510,000 Special Drawing Rights (SDR) (US$ 6.25 million);

(B) for a ship with a tonnage between 5,000 and 140,000 tonnage units, 4,510,000 SDR (US$ 6.25 million) plus 631 SDR (US$ 874) for each additional tonnage unit; and

(C) for a vessel of 140,000 or more tonnage units, 89,770,000 SDR (US$ 124.3 million)

Economic impacts

Today Brazil as part of CLC 69 only requires compulsory civil liability insurance for oil tankers in the maximum amount of 14,000,000 SDR or US$ 8,155,280.00, which is far below the risk of environmental damage faced on a daily basis by these ships.

The participation in the 1992 Convention would ensure greater mandatory insurance coverage, more than US$ 124 million in the maximum amount, more consistent with the risk under discussion, even more, if together with the complementary fund that we will demonstrate next.

On the other hand, since this Convention is compulsory in most countries of the world, the acquisition of such insurance will not mean an additional cost to ship-

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owners, which usually contract it in order to sail in the signatory countries, only giving Brazil the possibility of also being a beneficiary of compulsory insurance.

The limitation of the liability of the ship-owner to the insured amount should not cause economic impact either, since such values are quite significant, especially if accompanied by the Additional Compensation Fund (which we advise), as we will see below.

XI.2 â&#x20AC;&#x201C; International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 (Fund Convention 1992)

Member Countries of the Fund of 1992: 114

Position of Brazil: It does not have any Fund for Compensation for damage by pollution by crude oil as cargo.

The International Fund for Compensation for Oil Pollution Damage of 1992, known as IOPC Fund or Fund of 1992 is an intergovernmental organization created to administer the compensation regime created by the Fund Convention of 1992.

Upon becoming a Party to the Fund Convention of 1992, a State becomes a Member of the Fund of 1992. The Organization is based in London.

The Fund of 1992 pays compensation to those that suffer damage caused by hydrocarbon pollution in a State Party to the Fund of 1992 and that for any of the Page 48 of 62

following reasons did not receive a full indemnity by Civil Liability Convention of 1992:

(A) the ship-owner was considered exempt from liability; or

(B) the ship-owner is financially unable to fulfill its obligations under the civil liability of the Convention of 1992 or its insurance is not enough to meet the claims for indemnity for pollution; or

(C) the damage exceeds the liability of the ship-owner under the Civil Liability Convention of 1992.

The maximum amount to be paid by the fund after the increase of about 50.37% in 2003 was changed to 203 million SDR (US$ 281.1 million) including the sum actually paid by the ship-owner (or its insurer)

These figures are much higher than the individual financial capacity of a ship and even of most ship-owners meaning an important tool to protect the environment, which justifies the popularity of the Convention and the Fund among diverse countries around the Globe.

Economic impacts

The Fund of 1992 is financed by contributions levied on any entity that receives in a calendar year more than 150,000 tons of crude and heavy oil in a State Party.

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The oil is counted for contribution purposes each time it is received at a port or terminal in a Member State after the maritime transport. The term received refers to the receipt in the tank or storage immediately after the transport by sea. The place of loading is irrelevant in this context.

The oil may be imported from abroad, transported from another Port in the same State or transported by ship from an offshore production platform or also received by transshipment by another vessel.

The condition of Brazil as an oil exporter indicates that the country would be more a beneficiary than contributor of the fund in cases of accident. The fund is usually supported by the great oil importers, as shown below (source: www.iopcfund.org):

XI.3 â&#x20AC;&#x201C; International Convention on Civil Liability for Bunker Oil Damage, 2001 (Bunker Convention)

Member Countries: 84

Position of Brazil: It is not a party to the Convention and has no mandatory insurance provision for ship pollution by bunker oil.

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This Convention was adopted to ensure, according to the IMO, â&#x20AC;&#x153;that adequate, prompt and effective compensation is available for persons that suffer damage caused by oil spills when transported as fuel in ship bunkers.â&#x20AC;?

The Convention applies to the damage caused in the territory, including the territorial sea and the exclusive economic zones of the States Parties.

The convention is based on the International Convention on Civil Liability for Oil Pollution Damage of 1969 and just like this convention a fundamental requirement is the need for the registered owner of a vessel to maintain compulsory insurance coverage.

Another key provision is the requirement of direct action â&#x20AC;&#x201C; this allows an indemnity claim for damages caused by pollution to be directly filed against the insurer.

The Convention requires vessels with more than 1,000 gross tons to maintain insurance or other financial security, such as the guarantee of a bank or similar financial institution, to cover the liability of the registered owner for damage caused by pollution in an amount equal to the limits of liability under the applicable national or international limitation regime, but in all cases not exceeding an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976, as amended*

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Economic impacts

Since this Convention is compulsory in most of the countries around the world, the acquisition of such insurance will not mean an additional cost to the ship-owners, which usually contract it to sail in the signatory countries, only giving Brazil the possibility of also being a beneficiary of the compulsory insurance.

The limitation of the liability of the ship-owner to the insured amount should not cause economic impact either, since such amounts were substantially increased in the last review of 2012, to cover the current risk, according to the accident history, reaching approximately US$ 100 million for a capesize ship, which is much larger than the value of the ships and also the financial health of their owners, which, in case of no insurance, may have to respond directly.

XI.4 â&#x20AC;&#x201C; International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 (HNS, 1996)

Member Countries: 14 (not yet in force)

Position of Brazil: It is not a party to the Convention and has no mandatory insurance provision for pollution resulting from the transport of hazardous products by sea

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The HNS Convention was adopted by an international conference in 1996 and is based on the successful model of the Conventions on Civil Liability and Fund for pollution caused by spill of oil cargo.

Just like the original oil pollution compensation regime, the HNS Convention will establish a two-level system for compensation to be paid in the event of accidents at sea, in this case, involving hazardous and harmful substances such as chemical products. Nevertheless, it goes further to the extent that it covers not only pollution damage, but also the risks of fire and explosion, including loss of life or personal injury, as well as loss or damage to property.

Level 1 will be covered by the compulsory insurance contracted by the ship-owners, which would be able to limit their liability. In cases where the insurance does not cover an incident or is insufficient to meet the claim, a second level of remuneration will be paid from a fund composed of contributions from the recipients of the HNS. The contributions will be calculated according to the amount of HNS received in each Party in the previous calendar year.

Economic impacts

Although the Convention is not yet in force for lack of a minimum number of ratifications, Brazil should consider the possibility of ratification to have the benefit of compulsory insurance in the international transport of hazardous cargoes.

According to the Brazilian Chemical Industry Association (ABIQUIM), Brazil imported US$ 38.2 billion in chemical products in 2015, which may represent becoming a Page 53 of 62

contributor to a complementary fund to face the risks of transporting this type of cargo.

However, such impact must be analyzed in relation to the covered risks to which the citizens and the environment are subject, considering the same great quantity of products of this nature received in our country.

XI.5 â&#x20AC;&#x201C; Protocol to the Convention on the Prevention of Marine Pollution by the Dumping of Wastes and Other Matter, completed in London, 1972 (1996 LC Protocol)

Member Countries of the Convention of 1972: 79

Member Countries of the Protocol of 1996: 41

Position of Brazil: It is a member of the Convention of 1972, having promulgated it through Decree 87.566/1982. It signed the Protocol on February 05, 1998, but did not approve or promulgate it.

The protocol of 1996 represents the greatest change in addressing the issue of how to regulate the use of the sea as a waste disposal site. In essence, the disposal of wastes is prohibited, except for those contained in an approved list. In this regard, the Protocol of 1996 contrasts with the Convention of 1972, which authorized the disposal of waste, except for those contained in a list of banned materials.

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The Protocol of 1996 replaces the Convention of 1972 among the States Parties (case of Brazil).

The Protocol of 1996 reflects a more modern and comprehensive agreement on the protection of the marine environment due to dumping activities as compared to the original Convention of 1972 and reflects broader goals to protect the environment in general, emanating from Agenda 21, the global plan of action for sustainable development adopted by the 1992 United Nations Conference on Environment and Development, in Rio de Janeiro, also known as the 1992 Earth Summit.15

Economic impacts

We do not see negative economic impacts as a result of the ratification of the Convention.

XI.6 â&#x20AC;&#x201C; Protocol on Preparedness, Response and Cooperation to Pollution Incidents by Hazardous and Noxious Substances (OPCR-HNS PROTOCOL, 2000)

Member Countries of the Protocol of 2000: 37

Position of Brazil: It signed the Protocol on March 15, 2000, but did not approve or promulgate it.

As evidenced at: <http://www.imo.org/en/ourwork/environment/pollutionprevention/pages/1996-protocol-to-theconvention-on-the-prevention-of-marine-pollution-by-dumping-of-wastes-and-other-matter,-1972.aspx>. Access on July 19, 2017.

15

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According to information available on the IMO website 16:

The Protocol on Preparedness, Response and Cooperation to Pollution Incidents

by Hazardous and Noxious Substances (Protocol OPRC-HNS) follows the principles of the OPRC Convention and was formally approved by the States already Parties to the OPRC Convention at a Diplomatic Conference held at IMO Headquarters in London in March 2000.

Similarly to the OPRC Convention, the OPRC-HNS protocol aims to establish national preparedness and response systems and provide a comprehensive framework for international cooperation in addressing major marine pollution incidents or threats. The parties to the OPRC-HNS protocol are required to establish measures to deal with pollution incidents either at national level or in cooperation with other countries. The vessels are required to carry a pollution contingency plan on board to deal specifically with incidents involving hazardous and noxious substances.

The OPRC-HNS protocol ensures that ships carrying hazardous and noxious substances are covered by readiness and response regimes similar to those already in place for oil incidents.

For the purposes of the HNS Protocol, a Hazardous and Noxious Substance is defined as any substance other than oil, which, if introduced in the marine environment, is likely to create risks to human health, harm living resources and marine life or interfere with other legitimate uses of the sea.

As evidenced at: <http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/Protocol-on-Preparedness,Response-and-Co-operation-to-pollution-Incidents-by-Hazardous-and-Noxious-Substances-(OPRC-HNS-Pr.aspx>. Access on July 20, 2017.

16

Page 56 of 62

Economic impacts

Considering the need for the State Party to establish a national plan for a prompt and efficient response to pollution incidents, we envisage economic impacts arising from the implementation of such plan.

XII. Conventions that should be ratified by Brazil related to navigation safety

XII.1 â&#x20AC;&#x201C; Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation, 2005 (SUA, 2005)

Member Countries of the Convention of 1988: 156

Member Countries of the Convention of 2005: 40

Position of Brazil: It is a party to the convention of 1988, promulgated through Decree 6.136/2007. It is not a party to the Convention of 2005.

Among the unlawful acts covered by the SUA Convention are the seizure of ships by force; acts of violence against persons on board ships and the placing of devices on board a ship which is capable to destroy or damage it.17

The Protocol of 2005 increases, by means of article 3bis, the acts considered offensive, under the terms of the convention.

17

As evidenced at: < http://www.imo.org/en/about/conventions/listofconventions/pages/sua-treaties.aspx>. Access on July 20, 2017.

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A new article 8bis in the Protocol of 2005 covers cooperation and the procedures to be followed if a State Party wishes to embark on a ship flying the flag of a State Party where the requesting Party has reasonable grounds to suspect that the ship or a person aboard the ship is, or is about to be, involved in an offense under the terms of the Convention.

Economic impacts

We do not see negative economic impacts as a result of the ratification of the Convention.

XIII. Other Conventions

XIII.1 – United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, known as Rotterdam Rules

Adopted by the UNCITRAL General Assembly on December 11, 2008, the Convention establishes a uniform and modern legal regime which regulates the rights and obligations of shippers, carriers and consignees under a door-to-door transport contract which includes at least one part by the sea. The Convention is based and provides a modern alternative to the previous conventions concerning the international carriage of goods by sea, particularly, the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (Brussels, August 25, 1924) (“Hague Rules”) and its Protocols (“Hague-Visby Rules”) and the United Nations Convention on the Carriage of Goods by Sea (Hamburg, March 31, 1978) (“Hamburg Rules”).

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The Rotterdam Rules provide a legal framework that takes into account the many technological and commercial developments occurred in maritime transport since the adoption of these previous conventions, including the growth of containerization, the desire for door-to-door transport under a single contract and the development of electronic transport documents. The Convention provides shippers and carriers with a binding and balanced universal regime to support the operation of maritime transport contracts that may involve other modes of transport.

Although the countries that are in the regimes of the Hague and Hamburg Rules have not yet migrated to the Rotterdam Rules, for Brazil, which is not a party to either of the two above-mentioned Conventions, ratifying this Convention may represent a good opportunity to signal to the international community a positive change movement to update the maritime transport contract legislation in an effective modern way. One option may also be to await the entry into force thereof.

Economic impacts

This Convention, just like those similar to it in relation to the same matter, presents a limit of tariff liability for goods carried by ship, which must be analyzed.

As it is widely known, the limits according to the Hague-Visby Rules are 666.67 SDR per package or unit and 2 SDR per kilogram, and were increased in the Hamburg Rules to 835 SDR and 2.5 SDR, respectively.

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Here in the Rotterdam Rules such limits were once again increased up to 875 SDR and 3 SDR: an increase in relation to the Hague-Visby, of 31.25% for the package limit and of 50% for the limit per kilogram.

Such limits are always subject to extensive negotiations between cargo carriers and insurers and although they have been approved by a substantial majority

18

, they

were not supported by some important delegations, including China, which considered them very high, and Germany and Sweden, which considered them very low.

The criteria on the basis of which the limit is to be evaluated include the average value of the products transported by sea as well as the cost of the liability insurance of the carrier and its impact on the freight.

The reference to the average value of the goods was made in the Debate that took place during the sessions of the UNCITRAL Working Group to oppose an increase above 2.5 SDR per kilogram, which limits, therefore, are higher than those currently practiced in the other Conventions in force and even higher than the Multimodal Transport Operator in Brazil which is 666.67 SDR (six hundred and sixty-six Special Drawing Rights and sixty-seven hundredths) per volume or unit, or 2.00 SDR (two Special Drawing Rights) per kilogram of gross weight of the goods damaged or lost, whichever is greater, in accordance with article 16 of Decree 3.411/2000.

See â&#x20AC;&#x153;A comparative analysis of the Hague-Visby rules, the Hamburg rules and the Rotterdam rulesâ&#x20AC;? by Francesco Berlingieri in www.uncitral.org 18

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XIV. Conclusions

Hopefully this study has been useful to draw the attention of our legislative and executive authorities that a look of maritime dimension can represent an immense contribution to the progress and evolution of our country.

The seas require a normative uniformity that makes it impossible to escape the adhesion to the International Maritime Conventions as the only safe source to generate conditions for legitimate legal security.

Our conventional maritime deficit represents a delay not only in relation to most European and Asian countries, but also even in relation to our South American neighbors.

The movement to make the country the power that it can be can no longer wait. We have what we need to stop being a promise and materialize the maritime and foreign trade potential that we have.

YES, WE CAN to enhance the natural maritime vocation of Brazil so that it can be a land seen without distrust, with clear rules practiced by the entire international community, which will generate stability capable of attracting investment and income for our people.

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Prepared by: Luiz Roberto Leven Siano Partner at Siano & Martins Advogados Associados Master in International Law by Rio de Janeiro State University Bachelor of Science in Nautical Science Member of CMI E-mail: levensiano@sianoemartins.com.br

Fabiana Simões Martins Partner at Siano & Martins Advogados Associados Master in International Law by Rio de Janeiro State University President of WISTA Brasil E-mail: fmartins@sianoemartins.com.br

Marcos Simões Martins Filho Associated at Siano & Martins Advogados Associados Master in Civil Procedure Law by Espírito Santo Federal University E-mail: marcos@sianoemartins.com.br

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