Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

The Protection of the Sea Legislation Amendment Bill 2008 will increase the amount of compensation available to those who have established a claim for damages from approximately A$350 million to about A$1.3 billion. In the event of a major oil spill, this compensation can be used to fund the clean-up costs and help with the recovery of affected marine environments and coastal communities. In the event that an incident involving an oil tanker were to occur, the measures provided for in this bill will ensure that victims of oil pollution damage are able to obtain prompt, adequate and effective compensation.

Every year some 3½ thousand cargo vessels as well as more than 200 oil tankers and chemical carriers navigate through Australian waters, including near environmental icons such as Queensland’s Great Barrier Reef and Western Australia’s Ningaloo Reef. A significant oil spill would clearly be devastating to these fragile marine ecosystems. That is why the Labor government is acting swiftly and decisively to strengthen the legislative approach to protecting Australia’s pristine marine environment from pollution.

This bill complements the Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Bill 2008, which passed the House of Representatives in May. These two pieces of legislation will together strengthen Australia’s maritime environment protection framework and align it with international best practice. The Protection of the Sea Legislation Amendment Bill 2008 will place into Australian law the protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, generally known as the supplementary fund protocol. The bill will implement that protocol of 2003 in schedule 1, it will introduce amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 with schedule 2, and it also includes amendments relating to shipping and marine navigation levies in schedule 3.

Australia is party to two conventions which establish the international liability and compensation regime for pollution damage resulting from spills of oil from an oil tanker: the International Convention on Civil Liability for Oil Pollution Damage 1992 and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992. These conventions establish a two-tier scheme to provide compensation for loss or damage resulting from a spill of oil from an oil tanker. The burden of compensating victims for oil spills is shared in the first instance between shipowners and their insurers. If the moneys available are insufficient, the outstanding compensation is provided by the International Oil Pollution Compensation Fund, which is financed by levies on cargo owners—that is to say, the oil-receiving entities.

Under the first tier, the tanker owner is strictly liable to pay compensation to a maximum amount, which is determined based on the size of the tanker. The second tier is provided by the International Oil Pollution Compensation Fund, which provides compensation for substantiated claims in excess of the shipowner’s liability for the incident.

Under this two-tier scheme, the maximum amount of compensation available for a single incident involving spills of oil from an oil tanker is 203 million special drawing rights, and I understand that that is worth approximately A$350 million. Following a number of high-profile, high-impact tanker incidents, the maximum compensation afforded by these two conventions has proven to be insufficient to provide full compensation for all claimants. In Australia, given our extensive coastline and our strong environmental perspective, the compensation available under these funds may not cover a major incident. As a result, the supplementary fund protocol was adopted back in 2003 by the International Maritime Organisation to create a further source of funds for compensation in the event of pollution damage caused by an oil spill from an oil tanker.

The supplementary fund will be financed through levies on public or private entities in receipt of more than 150,000 tonnes of contributing oil per year in contracting states. Levies for the supplementary fund will be collected after an oil spill occurred and after the first two tiers of compensation are exhausted. Australia’s accession to the supplementary fund will ensure that compensation to Australian victims following an oil spill from an oil tanker incident is maximised and that adequate financial resources are provided for clean-up and restoration of Australia’s marine environment.

Debate interrupted.

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