Sussan Ley (Farrer, Liberal Party, Minister for Health) Share this | Hansard source

I am pleased to provide the following summing-up comments on behalf of the Minister for Infrastructure. Australia is a party to the 1996 protocol to the Convention on Limitation of Liability for Maritime Claims, which allows a shipowner—including the charterer, manager and operator of the ship—or salvor to limit the total amount they can be required to pay for damage caused by the ship, the shipowner or the salvor.    Allowing shipowners to limit their liability in respect of ship sourced damage balances the tension between compensating those who suffer loss or damage caused by shipowners or their representatives and ensuring shipowners are able to access insurance to cover their liability for that damage.

Australia implements the 1996 LLMC protocol through the Limitation of Liability for Maritime Claims Act 1989. The purpose of this bill is to implement amendments to the 1996 LLMC protocol which will enter into force internationally on 8 June 2015.    Australia was the leading advocate of increasing the liability limits under the 1996 LLMC protocol at the IMO following the Pacific Adventurer incident off the Queensland coast on 11 March 2009 which involved a bunker oil spill. The costs for cleaning up the spill were estimated at $34 million. However, under the 1996 LLMC protocol the shipowner was legally entitled to limit its liability to approximately $17.5 million.

The 1996 LLMC protocol uses special drawing rights to quantify the liability limits based on conversion rates as at 5 February 2015 under the new arrangements. The financial liability for a medium sized vessel of 50,000 gross tonnes in respect of claims for loss of life or personal injury amounts to an increase of approximately $33,600,000. A claim for the same sized vessel made in regard to any other claims amounts to an increase of approximately $16,800,000. The maximum liability of a shipowner is usually calculated based on the size of the ship.

The amendments are expected to have a minor impact, if any, on insurance costs for ships. Insurance for the global shipping industry is organised through insurance pools, whereby premiums respond to calls on those insurance pools, rather than fluctuating as a direct result of increases in liability limits. There was wide support amongst signatory states to the 1996 protocol on the need to review the limits of liability in order to ensure the availability of adequate compensation to victims. The Australian Shipowners Association and the International Chamber of Shipping support the increase in liability limits. Ensuring the LLMC liability limits are raised in Australia as soon as they enter into force will reduce the risk of having to seek an increase to the Protection of the Sea Levy in the event that the shipowner's liability and/or insurance for an incident is insufficient or absent.

I commend the bill to the House and I appreciate the support of the opposition.

Question agreed to.

Bill read a second time.

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