Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

Australians love the beach. More than 80 per cent of us live within 100 kilometres of the beach. In Queensland, from where I come, we love the Sunshine Coast, Hervey Bay, the Great Barrier Reef and even the Gold Coast, which the people of my home town of Ipswich often call ‘our beach’. We love the beach. We fish there, we swim there, we take our families there and we holiday there. The thought of an oil spill on any of those beaches in Queensland is an environmental nightmare to all of us who come from the sunshine state. The costs associated with fixing up or cleaning up an oil spill are influenced by many factors: circumstance, location, the types of products which are spilled, the timing of the spill, whether any environmentally sensitive areas have been affected and the total amount of the oil spill. The most important determining factor is often location. Getting response and manpower to the extremely remote locations where some oil spills take place can be very costly.

As I said, we Australians love our environment, and oil spills have significant impact, with wildlife rehabilitation, beach clean-up and shoreline restoration, and we just do not want this to happen on our shores. The best and most cost-effective management of any clean-up operation is to invest expeditiously in personnel, machinery and energy to ensure that the oil is kept away from the beach, the rocks, the shoreline or any other sensitive area. Where oil hits the shoreline the cost of clean-up can be as high as 90 to 99 per cent of the total cost. The cost of offshore oil removal can average approximately US$7,350 a tonne. If oil hits the shoreline the cost can go as high as US$147,000 or even, some experts say, as high as US$294,000 a tonne. The cost of dispersants can be horrendous and the impact of the cost complex and hard to quantify. Estimating the actual cost is a very imprecise science and it is a very labour-intensive and time-consuming operation to clear shorelines.

As we debate this bill I am reminded of probably one of the most horrendous environmental disasters when it comes to oil spills, the Exxon Valdez oil spill in 1989. On 24 March 1989 the oil tanker ran aground, spilling 250,000 barrels—about 10 million gallons—of oil into Alaska’s Prince William Sound. That particular clean-up operation, if I could call it that, gives a textbook analysis of what not to do in terms of time response, ineffective use of communication channels and a refusal to accept responsibility. The end result was that the clean-up cost the company US$2.5 billion and Exxon was compelled to pay out US$1.1 billion in various settlements. In fact it is interesting to note that a US federal jury fined the company $5 billion for recklessness.

So it is very propitious that we have this bill before us today. I acknowledge that, whilst we are raising a third tier of compensation, it does not go quite so far it could address an Exxon Valdez oil spill, but it is certainly a vast improvement on our current compensation regime. The regime is governed by and under the auspices of the International Maritime Organisation. Compensation for oil pollution damage caused by spills from oil tankers is governed by an international regime developed under the IMO.

The framework for the regime was originally started in 1969 with the International Convention on Civil Liability for Oil Pollution, commonly known as the 1969 civil liability convention. Then of course there was the 1971 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage. The old regime, if I can put it like that, was amended in 1992 by two protocols, and the amended conventions are commonly known as the 1992 civil liability convention and the 1992 fund convention. The conventions came into force on 30 May 1996, and the 1971 fund convention ceased to be in force as of 24 May 2002.

In May 2003 a protocol to the 1992 fund convention, known as the supplementary fund protocol, was adopted, which provided the third tier of compensation by establishing an International Oil Pollution Compensation Supplementary Fund, commonly known as the supplementary fund. The supplementary fund is financed in a similar way to the 1992 fund, and the supplementary fund protocol entered into force on 3 March 2005 and applies to incidents which occurred on or after that date. It has been left to the Rudd government to implement legislation which provides for that, and the most charitable thing I can say is that the Howard government certainly did fail in that regard—in treating this issue as a very serious one. You would have thought that in that time legislation could have been introduced into the House.

Under article 1 of the International Convention on Civil Liability for Oil Pollution 1992—or the civil liability convention—a ship is defined as:

... any sea-going vessel and seaborne craft of any type whatsoever constructed or adapted for the carriage of oil in bulk as cargo provided that a ship capable of carrying oil or other cargo shall be regarded as ship only when it is actually carrying oil in bulk as cargo and during any voyage following such carriage unless it is proved to have no residues of such carriage of oil in bulk aboard.

So it is a very comprehensive definition of a ship. Oil also has a very comprehensive definition, and so it should. It talks about oil meaning:

... any persistent hydrocarbon mineral oil such as crude oil, fuel oil, heavy diesel oil, lubricating oil ... whether carried on board a ship as cargo or in the bunkers of such a ship.

So it covers everything you could possibly conceive as well. Pollution damage is also described in a very comprehensive way, and I commend the drafter of the convention. It means:

... loss or damage caused outside the ship carrying oil by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge may occur providing that the compensation for impairment of the environment other than loss of profit from such impairment shall be limited to costs of reasonable measures of reinstatement actually undertaken or to be undertaken.

So the convention applies to oil damage caused.

There are some exceptions, of course. It does not apply in the case of war, hostilities, civil war, insurrection, natural phenomena or acts of omission caused intentionally by a third party. So no claim can be made under the civil liability convention except in accordance with the convention. It is trite to say that but it is actually the case: you have got to make an application here. The owner of a ship registered in a contracting state such as Australia and carrying more than 2,000 tonnes of oil in bulk as cargo shall be required to maintain insurance or other financial security such as a guarantee from a bank or a certificate delivered by an international compensation fund in sums fixed by applying the limits of liability prescribed in the convention. A certificate attesting to the insurance or financial security in force has got to be provided—the name of the ship, the port of registration, the names and principal place of business of the owner, the type of security, the names and principal place of the insurer and the period of validity. The official language has to be specified and, if it is not in English or French, it has to have a translation, of course. A certificate has to be carried on board a ship in such circumstances as well.

A claim can be made against the insurer as well under this particular legislation. And, to protect people in the circumstances, there is a limitation period of three years from the date the damage occurred, and no case can actually be brought after six years from the date of the incident which caused the damage. So it is as it were a very comprehensive code and it makes a big difference when it comes to claims for oil damage.

The second convention, the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992, is in fact a second tier. One wonders why there were two conventions in the same year, but it is really a top-up—if I can put it like that—and we are used to top-up insurance in Australia. There are a lot of different professions where that applies—whether law, medicine or whatever it is—and it is similar to that. It effectively tops up the compensation. The convention says:

... the Fund shall pay compensation to any person suffering pollution damage ... if ... such person has been unable to obtain full and adequate compensation for the damage under the terms of the 1969 Liability Convention ...

The protocol of 2003 provides for the supplementary fund. It was done because a number of the contracting states considered it necessary, as a matter of urgency, to do so and they believed at the time—and I think they were right to believe this—that victims of oil pollution damage needed to be compensated in full for their loss or damage. There are also a number of other difficulties faced by victims where there is a risk of compensation not being adequately provided for. There are a lot of people involved. It is not an exact science; it is very difficult to quantify. It is not a simple process to quantify the amount that should be provided for in terms of damages suffered by a contracting state.

This bill is an important reform the Rudd government and demonstrates the government’s understanding that an effective liability and compensation scheme is critical to a comprehensive marine pollution response regime. It will increase the amount of compensation available from about $350 million to $1.3 billion, and I look forward to the day when that is actually increased. It is necessary to consider that in the future. I urge the IMO to think about that in the future.

We join other parties—most Western countries, including France, Germany, Greece, Italy, the Netherlands, Spain and the United Kingdom, and Japan—in this regard. I note the comments from the Minister for Infrastructure, Transport, Regional Development and Local Government, who proclaimed in his second reading speech that this bill was important from a global perspective.

When the 2003 protocol fund was established, the IMO proclaimed that the supplementary fund would:

... ensure, for the foreseeable future, that victims of oil pollution damage will be fully compensated for their losses.

It is an important reform, and the supplementary fund adds enormous sums of money to the two-tiered system. The bill before us today recognises that the ceiling figure that is currently in existence is manifestly inadequate, especially considering the several major oil spills which other speakers have referred to—and I will not go through those. That has proved to be inadequate in the circumstances; $1.3 billion seems a lot of money but, when you consider what impact an oil spill would have on places such as the Gold Coast, the Sunshine Coast or the Great Barrier Reef, it is not a lot.

The supplementary fund is financed through levies on public and private entities in receipt of more than 150,000 tonnes of contributing oil per year in contracting states. It is pertinent to note that those levies will only be collected following an oil spill incident and after the first two tiers of compensation have been exhausted.

I commend the government for proposing this amendment. The idea of an oil spill on our coastline is too horrible to contemplate. It is good environmental policy to prepare ourselves for such a disaster. A significant oil spill would devastate our sea’s fragile marine ecosystem, and oil spills could result in damage to wildlife, economic loss and impacts on the health of people on the coastline. You can also imagine the cost to our economy of such a spill. Some in this chamber would be aware, as other speakers have noted, of spillages we have seen around Australia. Reference has been made to the Princess Anne-Marie in July 1975 where 15,000 tonnes of crude oil spilled; and 18,000 tonnes of crude oil were spilt by the Kirki after the bow fell off the vessel. These were very frightening incidents. I remember them vividly. They both occurred off the coast of Western Australia. I was at school when the Princess Anne-Marie was off the coast of Western Australia, and I remember the discussions we had in our classroom in relation to it. An econightmare was on our shores. The clean-up costs associated with these instances did not exceed the limit, but they were paid by the oil tankers’ insurance funds.

In considering any oil spill which may occur and what may happen, one only has to think of the fishing industry. Commercial fishing is an important venture off the coast of Queensland and other states. Imagine the damage that would cause to commercial fishing off the coast of Queensland. The costs would be horrendous.

Impacts from oil pollution vary based on the type of oil and the amount discharged. The lighter and more refined oil typically disappears quickly from the water column, while the heavier oil may sink and persist in the marine environment in sediments and beach sand. However, all oil spills have a dramatic impact on the natural environment. Oil smothers marine life. Typically, when an oil spill occurs it does not just affect the animals and the organisms at the bottom of the food chain. Oil can bio-accumulate and affect organisms much higher in the food chain and impose costs on the coastline communities and increase the cost of food and costs in our economy generally. Sea animals and birds can be harmed—their feathers and food can be coated with oil—and chemical contaminants can get into our river systems as well.

There are other schedules to this particular bill. Australia is a party to MARPOL, as the member for Corio said. We are implementing six technical annexes, which deal with the prevention of pollution by the discharge of oil, noxious liquid substances in bulk, harmful packaged substances, sewage, garbage and air pollution from ships. In Australia, the legislation giving effect to MARPOL is the Protection of the Sea (Prevention of Pollution from Ships) Act 1993 and the Navigation Act 1912. There are amendments to those acts under this legislation before us today.

The bill amends the Protection of the Sea (Prevention of Pollution from Ships) Act 1993 and the ship levy legislation relating to the definition of Australian ports and how the levy is to be collected. The new definition will prescribe that an Australian port is a place appointed, proclaimed or prescribed as a port under the Customs Act 1901, under a law of a state or territory, in the Marine Navigation Levy Collection Act 1989, in the Marine Navigation (Regulatory Functions) Levy Collection Act 1991 and in the Protection of the Sea (Shipping Levy Collection) Act 1981. This is important because it ensures that ships that may unload and load offshore will not be able to dispute liability concerning the relevant levies. Currently, not all ships enter ports to load or unload. Many stop at offshore installations and unload offshore. In doing so, these ships still gain the benefit of our ship safety and environment protection services and the national aids to navigation network. This amendment bill will ensure that these ships enjoy those benefits and are liable to pay the levies, despite not entering a port. The bill makes it unambiguous. Any place adjacent to an installation or indeed a place to which a ship comes for the purposes of unloading cargo—even if that place is not immediately adjacent to land—can be considered a port under the Customs Act 1901.

I concede that the bill before the House will not stop shipping accidents occurring. But it is important to ensure that, in the event of oil pollution, victims are able to obtain prompt, adequate and effective compensation. The Rudd government is committed to the protection of life and property at sea and to the preservation of our marine environment. Many will remember last year’s Pasha Bulker incident off Newcastle and the frightening nightmare that was before us on that particular occasion. We managed to avoid a major ecological disaster. Every day, Australians watched and listened. It was on the news all the time. Fortunately, we managed to avoid that particular nightmare. But it was a cautionary tale, and we cannot afford to be complacent when it comes to protecting our seas.

The Minister for Infrastructure, Transport, Regional Development and Local Government said on 18 June 2008 that this bill can be summarised as a plan for ‘the unthinkable’. While an oil spill off our coast may be unlikely, the Pasha Bulker experience proves that it is imperative that we are vigilant and prepare for all scenarios and circumstances. This bill is an important piece of legislation that will ensure that in the event of a spill there will be adequate compensation. It will strengthen the framework of our nation’s maritime environment protection. That is good practice. It is good for the Australian community, it is good for our beaches and it is good for our coastlines.

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