Economic impacts, legal harmonization, and policy logic of China’s accession to the 2010 hazardous and noxious substances convention

As China emerges as a prominent hub for the maritime transport of hazardous and noxious substances (HNS), its existing compensation regime reveals significant structural weaknesses in addressing large-scale transboundary incidents. Relevant legislation, including the Ecological Environment Code and the Maritime Code, suffers from ambiguous liability provisions, inadequate compensation limits, a limited scope of coverage, and the lack of a dedicated compensation fund. These deficiencies have severely impeded effective redress in cases such as the Sanchi oil spill. This paper posits that accession to the 2010 HNS Convention represents the most viable solution to these challenges. It traces the legislative evolution of the Convention and underscores its balanced framework for risk-sharing among shipowners, cargo interests, and victims. Moreover, a quantitative risk calibration analysis is conducted to assess the financial implications for China, revealing that the country would incur modest annual costs while accessing significantly higher compensation coverage than the current regime permits. The paper advocates for a coordinated strategy that includes ratification of the Convention, reform of domestic legal frameworks, establishment of a supplementary compensation fund, and reinforced regional cooperation to effectively rectify the identified shortcomings.