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Wednesday, 11 December 2002
Page: 10083


Mr TUCKEY (Minister for Regional Services, Territories and Local Government) (10:20 AM) —I move:

That this bill be now read a second time.

The Maritime Legislation Amendment Bill 2002 will amend four acts and repeal another act which is no longer of any effect. The bill does not attempt any major reforms. Rather, it is primarily intended to ensure that some recent decisions taken by the International Maritime Organisation are reflected in Australian legislation.

The most significant amendments in this bill are the amendments contained in schedule 1 to the Protection of the Sea (Civil Liability) Act 1981 and to the Protection of the Sea (Oil Pollution Compensation Fund) Act 1993. Those amendments relate to compensation for pollution damage resulting from spills of `persistent' oils from oil tankers. Persistent oils are heavy oils which do not evaporate readily, such as crude oil, fuel oil, heavy diesel oil and lubricating oil.

Australia is a party to the two-tier international scheme for providing compensation for pollution damage resulting from oil spills from oil tankers. Under this scheme, risk is shared between tanker owners and cargo interests.

Following an oil spill, a tanker owner is required to pay compensation up to a specified limit, that limit depending on the size of the tanker. If damage exceeds the amount obtainable from the owner, or the tanker owner cannot be identified, is uninsured or is insolvent, then the International Oil Pollution Compensation Fund will make payments on top of any payments made by the tanker owner so that the total maximum compensation payable for a single pollution incident is approximately $A320 million.

The International Oil Pollution Compensation Fund is funded by levies imposed on companies which receive by sea more than 150,000 tons of persistent oil in a calendar year. The combined annual contributions for each of the last three years from the five Australian companies which contribute to the fund has averaged about $4 million.

In October 2000, the Legal Committee of the International Maritime Organisation passed resolutions to amend the applicable conventions so that, following an oil pollution incident involving a tanker, the limits on the amount of compensation available from the tanker owner and the International Oil Pollution Compensation Fund will be increased by approximately 50 per cent, with effect from 1 November 2003. The amendments made by items 1 to 6 of schedule 1 of the bill will implement these increased limits.

There have been only two cases worldwide where the applicable conventions applied and where the eligible compensation claims have exceeded the current limit. These were the breaking up of the Nakhodka in the Sea of Japan on 2 January 1997 and the breaking up of the Erika off the coast of Brittany, France on 12 December 1999. In putting forward these amendments, the government is demonstrating its commitment to ensure the payment of full compensation in even the most catastrophic of pollution incidents, however unlikely such an incident may be. The vigorous and thorough port state control inspections by the Australian Maritime Safety Authority of ships entering Australian ports help ensure that those tankers that are most likely to cause such an incident do not trade with Australia.

While the increased limits for tanker owners have the potential to increase insurance costs, advice provided by the International Group of Protection and Indemnity Associations indicates that, as premiums are based on historical claims data, the increased limits would not result in an automatic increase in premiums. If there are any premium increases, they are likely to be insignificant.

These amendments are supported by the shipping and oil industries. While acknowledging the possibility of a major oil spill, industry recognises its responsibility to prevent pollution as far as possible and to provide for adequate compensation in the case of an incident. It should be noted that there has not been an oil pollution incident in Australian waters where the compensation costs have required a contribution from the International Oil Pollution Compensation Fund.

The amendments made by this bill to the Protection of the Sea (Prevention of Pollution From Ships) Act 1983 serve three minor purposes. There are currently restrictions on the disposal of garbage from ships into the sea. In accordance with a resolution of the Marine Environment Protection Committee of the International Maritime Organisation, item 7 of schedule 1 of the bill will further restrict the disposal of garbage from a ship by placing an absolute prohibition on the disposal of incinerator ashes from plastic products where there is a risk that those plastic products may contain toxic or heavy metal residues. Such incinerator ashes will be required to be stored on a ship for disposal in a proper facility when the ship is at a port.

Ships of 12 metres or more in length are required to display placards setting out the kinds of garbage that may be disposed of from the ship and the conditions to which such disposal is subject. The placards must be written in the language of the flag state of the ship. If that language is not English or French, the information must also be written in either English or French. In accordance with a resolution of the Marine Environment Protection Committee, items 8 and 9 of schedule 1 allow the placards to be written in Spanish as an alternative third language.

The final amendments to the Protection of the Sea (Prevention of Pollution From Ships) Act are made by items 2 to 28 of schedule 3 of the bill. Those items convert penalties in the act from monetary amounts to penalty units. These are direct conversions without any change at all in the level of penalty.

Schedule 2 of the bill will make a minor clarificatory amendment to the Trade Practices Act 1974. Under part X of the Trade Practices Act, liner shipping is given limited conditional exemptions from the general prohibition on anticompetitive conduct in order to allow shipping lines to collaborate as liner `conferences' in setting shipping charges. Section 10.24A of part X could possibly be interpreted as allowing stevedoring operators to collude in determining the terms and conditions of a stevedoring contract to be negotiated with a shipping conference. The amendments made by schedule 2 will explicitly state that the exemptions that apply to liner shipping in relation to negotiating stevedoring contracts under section 10.24A do not apply to stevedoring operators.

The final amendment in this bill is the repeal of the Bass Strait Sea Passenger Service Agreement Act 1984. The purpose of this act was to approve an agreement made in 1984 between the Commonwealth and Tasmania. Under the agreement, the Commonwealth provided financial assistance to Tasmania to allow for the replacement of the Bass Strait ferry Empress of Tasmania with a newer vessel, the Spirit of Tasmania, and also for the upgrading of terminal facilities. The grants have been made and all conditions of the agreement have been complied with. As the act no longer performs any useful function, it is being repealed by item 1 of schedule 3 of the bill. I present the explanatory memorandum for this bill.

Debate (on motion by Mr Edwards) adjourned.