Mr KING (10:50 AM) —When a seagoing vessel suffers a casualty there are many interests that are adversely affected by that unhappy consequence, depending on whether it occurs at sea or in port. The persons most immediately affected are the owners of the vessels, other shipping interests such as charterers and the owners of the cargo. But others can also be adversely affected in very significant ways: the crew, who may be either injured or lose their jobs, or both; the victims, such as owners of fishing grounds, or others who have commercial interests in relation to that portion of the sea adversely affected by any discharge of oil or other pollutants into the ocean; and the environment and those who have an interest in the environment in the immediate area, such as owners of the adjacent shores, whether riverine or strands. It is very important that the adjustment of the interests of those adversely affected by such a casualty, which can have enormous consequences, be properly determined in a way which gives rise to certainty of outcomes, quickness of results and fairness.

The horrific consequences of such a casualty was first brought to the attention of the world by the disastrous oil spill resulting from the Torrey Canyon in the English Channel when she grounded in 1967. She was entering the Channel when the ship's tanks ruptured and her entire cargo of 120,000 tonnes of crude oil was lost into the adjacent channel. This resulted in the biggest oil pollution incident recorded up to that time. It was as a result of that casualty that the world maritime community, through IMCO as it then was, or IMO as it now is, met to determine what ought to be the appropriate adjustments that occur in relation to such a casualty.

Some nations joined the International Convention on Civil Liability for Oil Pollution Damage, also known as the civil liability convention, done in 1969. Not all nations joined and, as a result of being outside the convention, some have continued, to a very large degree, to have the problems of adjustment between the various interests I have mentioned. Perhaps the most obvious was the loss of the Exxon Valdez, a United States vessel, off the coast of Alaska in 1989. The loss of that vessel, which was a very large tanker, led to claims of several billion Australian dollars. As the United States was not a member of the civil liability convention, there was very extensive litigation over many years and very significant payouts by the owners and, in some cases, nil adjustment in relation to other interests of the type that I have mentioned.

It is perhaps a matter of some regret that the United States had not seen fit—certainly not until that stage—to join the convention, because of its importance in relation to the international shipping community. It is not directly an owner in each case—many of the vessels are flagged, as we know, in other countries—but, because it has owning interests and is a charterer, the significance of the United States in international trade cannot be denied. Australia joined the 1969 civil convention through the Protection of the Sea (Civil Liability) Act 1981. This is the first opportunity I have had to discuss this legislation and the impact of it upon the ship owning and maritime communities in this country. It is therefore appropriate to make some general comments about that legislation and the way it operates. It was suggested by the member for Batman—

Mr Danby —A very good member.

Mr KING —He is a very good member, as commented by the member for Melbourne Ports. I listened to his speech with some interest in this House, but I could not agree with every word of it. I am sure he was merely seeking to summarise the effect of the statute when he said that it had a strict liability operation. It is not quite accurate. It is important, in determining the continuing appropriateness of the adjustments provided for by the convention in that act, that the precise nature of its operation be examined.

Sections 7 and 8 of the statute basically make provision for the operation of the civil liability convention, which is appended as schedule 1 to the statute. As I have mentioned, the state parties who were signatories to the convention probably included the original signatories. They were representatives of most of the maritime countries of the world—although obviously not all of them have subscribed to the actual operation of the convention and made it law in their own countries. So it is likely, certainly with regard to my own experience, that representatives of the United States were involved in the drafting of the convention. It notes the dangers of pollution posed by the worldwide maritime carriage of oil in bulk. It refers to the need for adequate compensation to be made available to those who suffer damage caused by pollution resulting from the escape or discharge of oil from ships.

Article II makes provision that the convention `shall apply exclusively to pollution damage caused on the territory including the territorial sea of a Contracting State and to preventive measures'. Article III makes provision for an undertaking of liability in respect of the owner of a vessel at the time of any incident, including a series of incidents. That person `shall be liable for any pollution damage caused by oil which has escaped or been discharged from the ship as a result of the incident'. The first thing I note is that this convention does not seek to adjust all of the various potential liabilities that may occur in a casualty of the type I mentioned at the commencement of my address. For example, in the case of collisions at sea, which are not infrequent and which have momentous consequences on occasions, there may be very significant claims between the owners of respective vessels for damage or hull loss et cetera, and there may be claims between owners of cargoes and the carriers themselves. But those sorts of claims are not covered or adjusted by this convention. This convention deals with an entirely different topic—namely, the question of pollution damage.

It is that which, in a prosaic way, I point out by commenting on the amendment proposed by the opposition. That amendment, which I will deal with shortly, is really not to the point of the legislation that has been proposed in this House. It is not a topic that is entirely relevant to the real issues that are addressed by this important legislation. That becomes apparent upon a mere cursory reading of the provisions of the convention, which are adjusted by the amendments put now before the House and which I am pleased to see that the opposition do support.

Returning to the topic of the reach of the convention, it will be noted that there is no liability for owners in respect of `an act of war, hostilities, civil war, insurrection or a natural phenomenon of an exceptional, inevitable and irresistible character'. Perhaps more importantly in an immediate sense, there is also no liability for `an act or omission done by a third party with intent to cause damage'. In the case of the Laura D'Amato in Sydney Harbour in 1999, it was suggested that the seacocks of the vessel had been opened in Singapore Harbour by one of the crew, who maliciously and resentfully sought to damage the vessel. That was never proven; that was the suggestion. But it might have been argued—and perhaps this was the reason that it was suggested—that, had it been proven, it would have amounted to an excuse within the meaning of article III of the convention. Interestingly enough, subclause 4 of article III provides:

If, for example, a trespass is proven for which the owner might otherwise be liable but nonetheless the excepting provisions of the convention apply, then there is no liability under this convention.

It might be said by some—and I have heard it argued before—that this is unfair and wrong, that there may be substantial damage to the environment but nonetheless the owner can escape liability. That is the price of the automatic liability and extensive coverage in respect of the various other claims provided for by this international convention. When one looks at it in the broad, the adjustment is reasonable, but article V sets out the limits of liability in respect of any one incident or any series of incidents that fall within the compass of the convention as it might apply in respect of a casualty. It is those limits that are the subject of the present amending legislation.

I will not go through the rest of the convention, but it does provide for the usual framework of conventions of this type, permitting owners to establish a fund that amounts to the full extent of their potential liability, calculated by reference to the tonnage of the vessel itself. That is a matter of some complexity but it is an adjustment that is known to appropriate experts in the industry. It also provides for a capacity for those who are claimants on that fund to bring proceedings forth in the courts of the state where the incident occurred. Bearing in mind that we have a common law system which is state based, not federal, claims would be brought in the state courts in the jurisdiction where the incident occurred. Of course, that would be to the extent of the economic zones, as provided for by the convention, although in relation to the fund convention there is provision that the Federal Court may be approached as well.

I have mentioned the case of the Laura D'Amato and the incident which occurred in Sydney Harbour. That vessel spilt some 300,000 litres of oil into the harbour, and fines of about $5.5 million were incurred. Although the master of the vessel was cleared of wrongdoing, the chief officer, Mr Rosato, who was described as having a `lax attitude', was fined $110,000. There was no significant pollution damage, mainly as a result of favourable weather conditions at Gore Bay at the time, but one could imagine the extensive interests that could be harmed by a major pollution discharge into a significant waterway like Sydney Harbour—so one can be thankful. There was a more significant discharge in the case of the Kirki in 1991 off the coast of Western Australia. Again, the losses were not significant because most of the oil broke up before it hit the coast. Some 17,000 tonnes of crude oil were lost in that incident, when the bow of the vessel broke off and significant damage to the ship occurred. Those are the principal incidents in Australian waters. Pray God that we do not have any major incidents such as those Japan suffered with the Nakhodka in 1997, or the Erica in 1999 when some 6,000 claims, amounting to a total of $350 million, were paid out in respect of a loss of oil off the coast of Brittany.

The limits that are being amended by this legislation may be briefly summarised. Vessels of up to 5,000 gross tonnes currently have a limit imposed by the fund convention, which tops up the civil liability convention, of $7.125 million—which is actually measured in special drawing rights under the International Monetary Fund arrangements, but I am giving the Australian dollar equivalent. That is increased to $14.3 million. Under current liability limits, maximum compensation is $321 million, and that is extended to $482 million. Those are very significant sums of money, but it has to be remembered that they are shared amongst the various victims of pollution damage and do not include the owner's interests or others who have legitimate claims against the owner not relating to pollution damage. So it does not actually set the real limits of the owner's loss, although there may be hull insurers who would have different exposures from those of the insurers who protect the pollution funds that are provided for by the two pieces of legislation currently before the House for amendment. I therefore support the proposed amendments to this legislation. I do so because it is important that parliament continually review the operation of conventions of this type to ensure their fair operation and the just distribution of compensation for claims related to loss and damage from major pollution damage at sea, whether in port or on the high seas.

However, the opposition have proposed amendments to the legislation that deal with the shipping industry generally. I oppose those amendments, mainly because now is not the time and place to deal with such matters put forward by the opposition as the Australian shipping industry as a whole, maritime jobs and coastal communities. Nor is this important legislation appropriate for dealing with the question of banning single-hulled vessels like the Prestige, which recently sank off the coast of Spain and is causing continuing losses as we speak to fishermen and others in Biscay. It is a misconception for the opposition to try to address these important issues—some of which were briefly mentioned by the member for Hotham, as he conceded—in such a casual fashion. They should not be so addressed. In any event, having looked at the precise wording of the proposed amendment, I say that it is a misconception to suggest that the security interests of Australia are in some way different from our national interests. I support the legislation. (Time expired)