A Study Of The Legal Regime Of Mandatory Liability Insurance Covering Pollution Damage From Ship Recycling

Recycling of ships is an effective way to save natural resources.However,end-of-life ships usually carry some residual oil,materials and structures containing asbestos,heavy metals and other hazardous materials.If it is not managed properly,pollutants discharged from ship braking may cause damage to people's health and property.Even though there are international and national legislations and regulations concerning safe and environmentally sound recycling of ships,there is no financial mechanism for responsible recycling of ships,particularly a legal regime of pollution liability insurance.Since that China is a major shipping country as well as a major shipbreaking country in the world which suffering serious environmental pollution problems,it is critical for China to establish such a mandatory liability insurance mechanism.The author analyzed and made a comparison of legal systems concerning responsible shipbreaking and recycling,environmental pollution liability insurance and compulsory oil pollution liability insurance at home and abroad.The author also made a research on current condition in shipbreaking industry,especially environment protection and hazardous control measures taken by shipbreaking yards.Main conclusions have been reached as follows:1.It is both necessary and practicable to establish a mechanism of ship recycling pollution liability insurance and make it mandatory.2.It is needed to introduce requirements of mandatory ship recycling pollution liability insurance when revising existing laws regulating recycling of ships,or alternatively to set special rules of ship recycling insurance at time of establishment of legal regime of mandatory environmental pollution liability insurance in the future.3.It is not only the duty of shipbreaking yards but also the duty of shipowners,including registered shipowners,ship operators,ship managers and demise charters to control and prevent pollutants discharged from end-of-life ships.These two subjects of duty have to bear legal liability for pollution damage to third parties' heath and property respectively if there is a breach of relevant duty.Registered shipowners and shipbreaking yards are coinsured under insurance contract.4.The compulsory liability of ship recycling pollution can be either covered by commercial insurance companies or covered by P&I clubs.5.The victim of pollution damage due to ship recycling should be entitled to claim against underwriters of a ship recycling pollution liability insurance policy.6.It has to be clarified of insurance coverage and exclusions when establish the mandatory liability insurance mechanism.