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Thursday, 26 June 2008
Page: 3509

Senator SCULLION (Leader of the Nationals in the Senate) (1:23 PM) —The Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Bill 2008 and the Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) (Consequential Amendments) Bill 2008 will give effect in Australia to the International Convention on Civil Liability for Bunker Oil Pollution Damage, which is now known as the bunkers convention. The principal impact of this legislation is that shipowners will be strictly liable, regardless of fault, for any bunker oil spillage. A shipowner can be the owner, registered owner, bareboat charterer, manager or operator of the ship. The consequential amendments bill will ensure that there is no duplication of requirements due to existing acts for vessels entering Australian ports and no additional burden on shipowners. The shipping industry has accepted that it must pay its way in the event of an oil spillage. The industry is only too happy to guarantee the safety of marine environments for those that depend on the bounty of the sea.

Protection of Australian waters is very important to those who make a living from the sea and live in coastal towns. Australia has a mostly pristine environment that needs to be maintained at any cost. An oil spill in Australian waters could have catastrophic consequences to Australia’s environment and our economy. Australia’s signing of the convention further encourages other nations to sign. Australia has been progressive and led the way internationally in the creation of a convention on bunker oil pollution damage. Australia took a leading role in the negotiations within the International Maritime Organisation, which led to the development of the bunkers convention in 2002. Both Australia’s role at IMO and Australia’s domestic legislation in 2001, requiring ships with a gross tonnage of 400 or more to be insured to cover liability in cases of pollution damage, complement Australia’s oceans policy.

Australia’s role in the development of the bunkers convention, which this legislation ratifies, had its origins in the 1992 House of Representatives Standing Committee on Transport, Communications and Infrastructure Ships of shame report. The report recommended that the Australian government require proof of possession of adequate protection and indemnity insurance cover as a prior condition for entry of vessels into Australian ports. The bunkers convention complements Australia’s high standards for ships trading along our coastlines and entering our ports. Australia is now world renowned for the enforcement of strict inspection regimes. This legislation excludes tankers.

The liability of oil tankers is covered by the International Convention on Oil Pollution Preparedness, Response and Co-operation 1990. It will be surprising to many who are listening that international data on oil spills indicates that, even in the case of larger spills, the number of non-tanker ship spills is far greater than the number of tanker spills. Approximately 93 per cent of incidents requiring response action actually originate from ships other than oil tankers. Under the bunkers convention prompt and effective insurance compensation claims can be sought directly against the insurance company. No longer will the fault of the shipowner have to be proved or the trouble taken to trace the registered shipowner. The carriage of insurance certificates will facilitate claims for compensation by making it easier to determine who the insurer is. The carriage of necessary liability cover for a business is nothing more than sound business practice. The legislation will mean victims of bunker oil pollution will no longer have to prove that the shipowner was at fault in order to receive compensation. Until now, shipowners have only been liable for payment of compensation if proof could be given that the owner was at fault. The bunkers convention, as ratified by these bills, ensures compensation is available even if the oil spill was accidental.

Implementation of the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001 will ensure that clean-up and response costs are recoverable from all shipowners without difficulty. In establishing a liability and compensation regime for bunker oil spills from ships that are not oil tankers, the bunkers convention ensures adequate, prompt and effective compensation for damage caused by pollution resulting from the escape or discharge of bunker oil from ships. It also adopts uniform international rules and procedures for determining questions of liability and providing adequate compensation in such cases. The shipping industry was widely consulted in 2001, providing valuable input into the findings of the Joint Standing Committee on Treaties 2001 report and the committee’s recommendation to ratify. Australia depends almost exclusively on shipping to transport its exports and imports and has, in terms of tonnes of cargo shipped and kilometres travelled, the fifth-largest shipping task in the world. Australia also has some of the most iconic and sensitive marine areas in the world.

The basis of liability is the size of the ship—that is, over 1,000 gross tonnes is considered a fair level by the industry. The bunkers convention enters into force on 21 November 2008, which is one year after the date on which 18 states, including five states each with ships whose combined gross tonnage is not less than one million, have ratified the convention. Inaction by the Australian government has not delayed the ratification of the convention. Legislation was not prioritised due to the legislation already in place since 2001, requiring certificates of insurance to be held by vessels of over 4,000 gross tonne. In 2001 an amendment was made to the Protection of the Sea (Civil Liability) Act 1981 requiring all vessels, except oil tankers of 400 gross tonne and over entering Australian waters to carry certification of insurance to cover the cost of oil spillage, pollution damage and clean-up, in the case of proof of fault of the owner. Australia benefits from a world where interaction between countries takes place within a transparent framework based on fair rules as agreed in treaties.

The building of a global alliance through which Australia seeks to influence standards under which international relations are conducted is advantageous to industry. If Australia did not ratify the bunkers convention, it would result in Australian shipping legislation not keeping pace with international developments and would leave open the possibility of government being ultimately responsible for bunker oil spill response costs. Australia played an active role in developing the bunkers convention at the International Maritime Organisation and internationally has been a strong supporter of its early entry into force. Amendment of the protection of the sea bill, with the addition of part 111A, provided some level of insurance cover but did not include the broader range of issues included in the bunkers convention, which will now be ratified by these bills.

As of February 2008, the following countries belong to the bunkers convention: the Bahamas, Bulgaria, Croatia, Cyprus, Estonia, Germany, Greece, Iceland, Jamaica, Latvia, Lithuania, Luxembourg, Poland, Somalia, Sierra Leone, Singapore, Spain, Tonga and the United Kingdom. Discussions with Australian peak industry bodies, including the Shipowners Association, Shipping Australia, the Association of Australian Ports and the Marine Authority reveal full support of this legislation.