Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Hansard source

This may be the first time that I have spoken before you, Deputy Speaker Sidebottom, in your new role. Congratulations. I listened very intently to the member for Blair and the member for Charlton and very much enjoyed their contributions to this debate. The Protection of the Sea Legislation Amendment Bill 2008 is about a fair and realistic compensation framework for oil spill accidents at sea. It is about protecting the environment and protecting parties affected by oil spillages from tankers at sea. It brings Australia into line with an international regime that includes countries such as France, Germany, Greece, Italy, Japan, the Netherlands, Spain and the United Kingdom. It establishes improved arrangements and a more realistic payment regime for an international compensation fund to pay for the damage and losses sustained by people and interests affected by oil spills. This is important legislation.

Oil tankers carry a very large percentage of the world’s oil around the globe. Over half of the oil consumed in the world is transported by sea; thousands of millions of tonnes are transported every year. Every day of the year—right now, at this moment—hundreds of millions of tonnes of oil are floating on top of our oceans contained within giant steel tankers. I would ask people to think about this. The world has a shipping industry that we all know has rogue elements—shipowners who cut corners. While many shipping owners do the right thing, following best practice safety and maintenance regimes, many ships are still ‘ships of shame’.

We have a growing demand for oil, and more oil floating on our seas every day as a consequence. We have an inherently dangerous environment—the ocean environment. We have an increasingly unstable environment, with all the world’s experts saying that we are going to experience more severe weather events. We have an industry in which it is relatively easy to not report accidents. We have an industry in which it is in the business’s financial interest not to report incidents; incidents often go unreported and shipowners often get away with it. On top of this, when an accident occurs it is in an environment in which the results are largely uncontrollable. It is not like a land spillage, where an accident occurs within a relatively stable environment. The oil spills into the ocean, and where it lands is in the lap of the gods. There are all these factors.

What does this say to us? It says that we must be extremely vigilant, we must have the best regulatory regimes possible and we must keep improving them. That is what this amendment bill is about. It is trying to bring us into a more realistic compensation environment. It will increase the penalties for oil spills by increasing the total amount of compensation that can be paid. We currently have a two-tier compensation environment. The first tier is the International Convention on Civil Liability for Oil Pollution Damage. The second tier is the International Convention on the International Fund for Compensation for Oil Pollution Damage.

Under the first tier, compensation is payable by oil tanker owners and/or their insurers. Under these arrangements, tanker owners are able to limit their liability, with the liability limit depending on the size of the tanker. If the compensation costs resulting from an oil spill exceed a tanker owner’s liability limit, then compensation above that limit is payable by the International Oil Pollution Compensation Funds. However, the amount of compensation payable by the IOPC Funds is itself limited so that the maximum amount payable by the tanker owner and the IOPC Funds is approximately $350 million. This amendment bill introduces a third tier to the compensation payment regimes, called the supplementary fund protocol, so that the maximum amount payable increases up to $750 million per incident, which is approximately A$1.3 billion. This amendment bill toughens the regime on compensation damages and says to shipping owners, ‘If your ships are dodgy and if you take risks, then you are going to have to pay for it if an accident occurs.’ I think this amendment bill sends a very important signal to the industry.

Many people think that these sorts of events, when ships spill large quantities of oil, are relatively rare but they are not. They are common events and are in fact everyday events. The international tanker owners publish figures. According to their own figures, well over half a billion tonnes of oil have been spilt into the sea. That statistic of half a billion tonnes of oil spilt into the sea, of course, includes only those spills that have been reported. In these statistics, the international tanker owners do not take into account anything under seven-tonne spillages. All of those little six-tonne spillages are not counted. Call me a pedant, but I cannot understand why that is the case. I guess it is a measure of where the industry is at. I guess it says something to all of us about the industry. To me it says we have a fair way to go with shipowner attitudes when no spillage under seven tonnes gets reported in the industry’s statistics. Imagine if I were to dump 6.9 tonnes of oil on the top of this parliament. Imagine if I were to dump 6.9 tonnes of oil onto the floor of this House. Would that be reportable? Mr Deputy Speaker, I think you might pull me into line and report me to Mr Speaker! I expect that I would get ejected from this chamber, probably for life.

Another source of statistics on oils spills is the United States National Research Council, which has estimated the amount of oil entering the sea from different sources as totalling 3.2 million tonnes worldwide annually. The NRC estimates the total spillages from tankers at around 960,000 tonnes. Tanker operations account for 22 per cent of this, followed by tanker accidents with 13 per cent of that amount. Significantly, tanker accidents, along with offshore installations, account for most of the world’s largest oil spills. It really is important to put in place regulatory regimes that ensure there are fewer oil spills and ensure shipowners and their insurers know that there are serious penalties payable in compensation when incidents occur. The oil production and transportation industry is one of the world’s largest, most profitable and most important industries. It is a big dollar industry. We have to make it in the financial interests of the oil industry that it does the right thing. We have to make the penalties for spillages such that it is far cheaper for the oil not to spill. The penalties and compensation regime has to say, ‘You spill it—you lose big time.’

It is critical that Australia becomes a party to the supplementary fund protocol, because our ratification will add support to the protocol and encourage other countries to follow our lead. This bill goes together with the Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Bill 2008, which this government also introduced into this House during the autumn sitting. That bill makes sure compensation is available for everyone who suffers damage or loss as a result of leakage of bunker oil from a ship other than an oil tanker. Australia is a party to the International Convention for the Prevention of Pollution from Ships 1973, known as MARPOL, and has implemented all six technical annexes to MARPOL. These annexes 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.

People often think that these big oil spills will not happen here. They think they happen in far-off places that do not affect us. But in fact we have already experienced a number of spills. Some of these spills have had very severe impacts on our local environment, and some could have been catastrophic. In 1975 the hull of the tanker Princess Anne-Marie cracked wide open 300 miles off the Australian coast and the ship lost 14,800 tonnes of oil. More recently, the Kirki got into trouble off the West Australian coast and lost 18,000 tonnes of crude oil. There have been numerous spills around Australia on a lesser scale. During one reporting year, the Australian Maritime Safety Authority received 349 reports of oil discharge sightings, including 28 accidental spills resulting from incidents such as grounding, collisions and tanker overflow during bunkering.

We have been dead lucky with a number of the major spills. Save for different weather, the beautiful coastline of Ningaloo Reef or Cape Naturaliste and all their amazing marine wildlife could have been smeared with oil, resulting in untold losses and damage to those environments. The people of Tasmania—and I note the member for Franklin is here—and the creatures that live in the marine and near-shore environment of the Tamar River were not so lucky in 1985 when the Iron Baron came to grief on Hebe Reef. Three hundred tonnes of bunker fuel oil escaped, impacting shorelines around Low Head. Very serious impacts on wildlife, particularly little penguins, resulted.

I would point out that the odds of a local oil spill are of such an order that the federal department of the environment has put in place specific national response plans for pollution of the sea by oil and, in fact, has undertaken major national oil spill response exercises. Major oil spill catastrophes have occurred very close to our shores. South Korea last year suffered its worst ever spill. Thousands of tonnes of oil spread along a pristine coastal region south of the capital, Seoul. Almost 9,000 troops, police and volunteers using shovels and buckets desperately tried to clean up the enormous slick. Tourism and aquaculture, a major Korean industry, took a massive blow. One hundred and sixty marine farms out of a total of 445 were severely damaged. Environmentally, it was a disaster.

Imagine if this sort of accident occurred along the Great Barrier Reef, one of Australia’s most environmentally fragile areas and one of our economy’s biggest money earners. The Great Barrier Reef is worth billions to our economy. Shipping traffic in the Great Barrier Reef includes over 7,000 voyages made by over 2,000 ships every year.

I have some real concerns about what could happen in my own patch. Imagine the impact on our regional economy if we had a major oil spill off the Great Ocean Road. The impact on the region’s reputation and on the environment would be very significant. Because of the importance and uniqueness of the biodiversity along Bass Strait and adjacent to the Great Ocean Road we have a number of declared marine national parks. The impact of a major oil spill on the wildlife and biodiversity in this marine environment and particularly on the intertidal zones, which are most affected by oil spills, would be catastrophic. We have already had spills of some significance in my area. Back in December 1995, an oil slick measuring approximately seven nautical miles long by 200 metres wide was reported about seven nautical miles off Cape Otway lighthouse. The Australian Maritime Safety Authority initiated and coordinated the response, which included the spraying of an estimated 800 litres of oil dispersant over the slick. An oil tanker registered in the Bahamas was sighted in the vicinity.

This legislation will provide much more appropriate protection for the business operators and for the costs of environmental remediation work should an oil spill accident take place. It is a thoroughly worthwhile and necessary piece of legislation. I would like to put my concern on record in this parliament that we need to keep a very close watching brief on this industry because of its potential to do so much damage. I acknowledge that the industry is trying to improve its record. Total volumes of spillages seem to have been reduced over some time, even if you factor in the large number of unreported and under-reported spillage incidents. This bill, which goes to compensation, is very important, but we need to continue to address the most crucial issue—that is, reducing oil spills. It is exactly the same as the old health adage: prevention is better than cure. We need to keep addressing this fundamental point. We need to improve tanker standards and compliance checks to ensure that this industry is at an international best practice standard. That said, I thoroughly recommend this bill to the House and welcome Australia joining with the international community to better address compensation in this important area of commerce. My region’s economy, that of the Great Barrier Reef, that of the surf coast and that of the Bellarine Peninsula, all of which would be substantially threatened by oil spills, depend on strong government legislation to ensure that there are appropriate mechanisms in place to clean up oil spills when they occur, to ensure that appropriate compensation is paid when incidents do occur and, of course, to ensure that incidents do not occur. I commend the bill to the House.

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