Greg Combet (Charlton, Australian Labor Party, Parliamentary Secretary for Defence Procurement) Share this | Hansard source

We will help him out at the next election and pension him off! The work that was carried out by the parliamentary committees at that time in the Ships of shame reports was extremely important in exposing, not just within Australia but at an international level, the shortcomings of the flag of convenience arrangements. The Ships of shame reports were damning in their views of flag of convenience shipping and the resultant problems. I am not sure whether I paused a moment ago to recognise the work of the former member for Shortland, the Hon. Peter Morris, who played an important role and continues to this day—I saw him only recently—to take a very close interest in the international maritime industry and this particular issue.

The issues canvassed by the committee work in the Ships of shame reports included the fact that flags of convenience had led, amongst other things, to the operation of unseaworthy ships; the use of poorly trained crews, crews with false qualification papers or crews unable to communicate with each other or with Australian pilots; inadequate, deficient and poorly maintained safety and rescue equipment; beatings and abuse of sailors, including crew members being starved of food—and I have personally seen circumstances where this has occurred and where seamen have not even had fresh drinking water on their vessel—and being forced to sign dummy pay-books indicating that they had been paid much more than they actually received while also often being required to work long periods of overtime; poor ship safety; and, as a consequence, environmental damage.

Since those reports were published quite some time ago now—the better part of 15 years—it is unfortunate to report that nothing much has really changed in the international shipping industry. These findings were, and still are, not only disturbing but also a disgrace. It is a disgrace that these practices occur, and in my own working life, along with many others, I have worked very hard to try and eradicate them. I worked as an official of the Waterside Workers Federation of Australia, now the Maritime Union of Australia, and dealing with problems generated by flag of convenience shipping was a large part of the work that we undertook.

To help deal with these problems of flag of convenience ships, there are some well-known and very worthwhile international campaigns, such as that conducted by the International Transport Workers Federation, that call for there to be a real connection between a flag state and the ship in question and, of course, for the improvement of the international regulatory environment. I would like to briefly take the opportunity that I have in speaking to this bill to recognise the work of the ITF—the International Transport Workers Federation—and its member unions internationally, including my own union, the Maritime Union of Australia, of which I am a life member. In very difficult circumstances, many people work hard to try and improve the conditions for international seafarers and to avert the environmental damage caused by flag of convenience shipping. Within Australia, the environment where this work is to be done is very difficult. Under the former Howard government, as I recall, one of the very early acts of the then workplace relations minister, Peter Reith, was to strengthen some provisions of the Trade Practices Act in a way that made it even more difficult for people trying to help flag of convenience ship crew members achieve some justice once their ship visited a port within Australia. So it is a hard environment.

The problems I just outlined are still in existence today. I would like to make it very clear that I strongly support the eradication of those practices and condemn those practices by shipowners and some of the flag of convenience states. It does not take much of a stretch of the imagination to see how these problems can lead to very serious accidents within our waters—and, of course, in international waters—and to serious environmental damage. Indeed, it has happened before. In one of the more recent experiences, on 21 July 2001 the bow section of an oil tanker known as the Kirki actually fell off the ship—it broke off—just off the coast of Western Australia. The Kirki, at the time, was loaded with approximately 82,600 tonnes of light crude oil. The damage to the structure of that ship was caused by corrosion that, believe it or not, had not been picked up in any of the inspections by the flag state or the classification society acting on their behalf. Of course, it was a flag of convenience ship. This type of neglect and failure of the regulatory system puts the lives of crew at risk and, in this particular instance, threatened the health of the Western Australian marine environment.

Another way to help reduce the fallout from these problems associated with flag of convenience ships is to have a strengthened compensation and liability scheme, which is one of the features of the bill before us today. I will now turn to some consideration of the current liability and compensation scheme arrangements that are in place. In Australia, we have a two-tier scheme to provide compensation for loss or damage resulting from a spill of oil. This scheme is based on our obligations, firstly, under the 1992 protocol to the International Convention on Civil Liability for Oil Pollution Damage, known as the civil liability convention, and, secondly, under the 1992 protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, known as the fund convention. Basically, the operation of this system allows for the burden of compensating victims for oil spills to be shared, ensuring that adequate compensation is paid. In the first instance, the liability falls on the shipowners and their insurers. Under this tier, the tanker owner is strictly liable to pay compensation to a maximum amount, which is determined based on the size of the tanker. If the compensation available through this method is inadequate, the outstanding compensation is provided by the International Oil Pollution Compensation Funds, which are financed by levies on cargo owners receiving more than 150,000 tonnes of contributing oil. Under this two-tiered scheme, the maximum amount of compensation available is approximately A$350 million.

The bill before us today establishes a third tier in our compensation system. A number of recent and high-profile tanker incidents demonstrated that the maximum compensation afforded by these two conventions and reflected in our system was wholly inadequate. To deal with this issue, the supplementary fund protocol was adopted in 2003 by the IMO with the purpose of creating a further source of funds for compensation in the event of pollution damage caused by an oil spill from an oil tanker. This protocol entered into force internationally on 3 March 2005. Unfortunately, notwithstanding our obligations under the various conventions I have outlined, the previous government was—I think I could, at most, generously say—rather tardy in ensuring that we entered into our obligations under this new protocol.

In recognition of our strong maritime interests, the importance of a healthy and sustainable marine environment and our international obligations, the government is now giving effect to this protocol through the bill which is before us today, and it is overdue. The protocol, as I said, creates a third tier of compensation for pollution damage resulting from spills of oil from oil tankers so that the maximum amount payable increases from $350 million to up to approximately $1.3 billion per incident. This 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 fund will be collected after an oil spill has occurred and after the first two tiers of compensation are exhausted. It should be noted here that the fund will not impose additional costs on the shipping industry as the cost is in fact borne by the oil-importing entities. This new amount will help ensure that Australia is able to adequately compensate any victims of an oil spill in our marine environment, an extremely important commitment when the international regulatory environment for flag of convenience shipping in particular remains so inadequate and there is a continuing risk of such environmental damage.

The bill also allows Australia to meet its obligations as a responsible international citizen with regard to marine pollution. As the Minister for Infrastructure, Transport, Regional Development and Local Government said in introducing the bill, Australia is a party to the IMO International Convention for the Prevention of Pollution from Ships 1973, the convention known as MARPOL. We have implemented all six technical annexes to MARPOL which, respectively, 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. Recent changes to annexes I, III and IV of MARPOL will now be reflected in the Australian legislation which gives effect to our commitments under that convention—that is, the Protection of the Sea (Prevention of Pollution from Ships) Act 1983. Amongst other things, these amendments include extending an existing provision regarding the discharge of sewage to include sewage originating from spaces containing living animals, adopting a recommendation on standards for the rate of discharge of untreated sewage and the updating of criteria for defining marine pollutants which will be based on the UN globally harmonised system of classification and labelling of chemicals. Those are extremely important amendments to the relevant legislation because, when these ships are in port, significant environmental damage can occur by the ejection of those substances.

Under schedule 3 of the bill, a new definition of ‘Australian port’ and ‘collector’ is also provided for. These new definitions have been necessary to ensure that existing loopholes for the collection of levies are also closed. They also reflect changes in the way some shipping is operating. As the minister stated in introducing the bill, it is becoming more frequent for our ships to load and unload offshore without entering a port. Ships calling at offshore installations and ships unloading cargo offshore gain the benefit of Australia’s ship safety and environment protection services and the national aids to navigation network. We therefore need to ensure that these installations now fall under the definition of an Australian port so that there are no disputes over the liability to pay levies. This amendment will allow for a place to which a ship comes for the purposes of unloading cargo, even if that place is not immediately adjacent to land, to be defined as a ‘port’ if so prescribed under the Customs Act 1901, and that is an important loophole to close.

In conclusion, as an island continent Australia has a significant economic, social and environmental interest in the protection of our maritime environment. The measures in this bill provide a greater strengthening of the compensation and liability schemes for oil pollution in that environment. I am very pleased to support these measures today. They are extremely important in the context of an international shipping industry where there is still very weak regulation and where there is a great risk of environmental damage. I commend the measures in the bill to the House.

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