Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Link to this | Hansard source

The Protection of the Sea Legislation Amendment Bill 2008.The bill contains three separate schedules. deals with three issues that are not, basically, of great substance but which are, potentially, of some importance. It has been brought on because the government has run out of legislation of substance and it needs to fill in time while it awaits the end of the week. Of the three schedules, the first gives effect to the implementation of a supplementary fund for compensation for oil pollution damage from oil tankers. This will form a third tier of compensation available in the event of an oil tanker accident. Schedule 2 introduces amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, known as the MARPOL amendments. The amendments to this act make miscellaneous amendments to the requirements for maintenance of garbage record books, and allow regulations to prescribe penalties of up to 50 penalty units. Schedule 3 introduces amendments to the definition of an Australian port consistent in three separate acts, and to amend the definition of ‘collector’ in the Protection of the Sea Act 1981.

Australia has every reason to be a signatory to international maritime conventions which ensure adequate compensation is available in the event of an oil spill in our waters. Because Australia is an island state, almost all of our international trade is carried by sea. Oil tankers are an essential element both in the movement of oil from our offshore oil rigs and for the importation of oil into our ports and refineries. We all know how vital oil is to our way of life and to our economy. It is a commodity we do not want to be without. As a result of this legislation and Australia being a party to the supplementary fund protocol, in the event of an oil tanker incident, levies on the receivers of oil will be imposed to finance clean-up activities and compensation.

The supplementary fund protocol has been introduced by the International Maritime Organisation as a result of oil spill incidents that have cost more than was available through the first and second tiers of compensation. The first tier is the International Convention on Civil Liability for Oil Pollution Damage of 1992, known as the civil liability convention. Compensation under this regime is the tanker owner’s responsibility to a maximum amount. The second tier, the International Oil Pollution Compensation Fund, provides compensation for substantiated claims in excess of the shipowner’s liability for the incident. This fund is financed by levies imposed on receivers of oil in countries like Australia that are contracting parties. The supplementary fund protocol was adopted in 2003 by the International Maritime Organisation to create a further source of funds in the event of damage caused by an oil spill. Levies for this fund will only be collected in the event of an oil spill occurring and after the first two tiers of compensation are exhausted. Unfortunately, in the past, under the two-tier regime the availability of compensation funds has proven to be insufficient to provide full compensation for all claimants in a small number of instances. By way of example, for the Nakhodka oil spill off the Japanese coast in 1997, compensation was insufficient and claimants only received a pro rata amount.

Australia has always taken its place on the world stage seriously. We are a progressive and economically sound nation. We also take our responsibilities to the environment seriously. Australia is in a position to lead by example, and by Australia becoming a signatory to this protocol we are showing the world the importance Australia places on ensuring the financial capacity to compensate those involved in a clean-up exercise and, worse still, those who may have lost income as a result of an oil spill.

A conscientious government is concerned about the aspirations of its people. Australians take responsibility for coastal and marine environments seriously. Australia has some of the most sensitive marine areas in the world and some of the most important. Protection of Australian waters is very important to those who make a living from the sea or who live in coastal towns. Australia has a mostly pristine environment that needs to be maintained at any cost. An oil spill in Australian waters could have catastrophic consequences for Australia’s environment and economy—our fishermen, crayfish and prawn industries, pearling industry and marine wildlife. Then there is the impact on land based marine vegetation and wildlife, our pristine coastal beaches and the general ambience that the Australian tourism industry so much depends upon and promotes to the world. In the event of an oil spill from a tanker in, say, the Great Barrier Reef, the consequences could potentially be disastrous. The clean up would take many years and costs could run into millions of dollars.

Australia chooses to be a part of well-organised international conventions where industry members can come together to develop and debate the objectives of their international entities. Amendments negotiated at International Marine Organisation level to conventions and protocols are developed through input from stakeholders and industry. It is responsible for a government to legislate to accommodate protocols developed at an international level. International standards are considered to be useful for the shipping industry. Any variance in legislation between different countries or Australian states is restrictive and makes it difficult for the international shipping industry to operate effectively. They prefer one set of rules and guidelines to operate under, not a different set of rules depending on what part of the sea they are entering.

Australia is fortunate to have well-developed umbrella groups like Shipping Australia Ltd, the Australian Shipowners Association and Ports Australia who represent Australia’s interests at international forums, including at the International Maritime Organisation. I appreciate the assistance and advice that they have provided to the opposition in developing a response to this legislation to help us assess the implications of this proposal for industry.

During the years of the previous government, there were many initiatives taken aimed at reforming and enhancing competition in the marine sector for the benefit of users of both international and domestic shipping and to ensure that shipping met community standards in safety, marine environment protection and security. Australia has a reputation internationally for being vigilant in the conduct of port control inspections and also in the other areas where we have international responsibility for the protection of our waterways. It is important that all nations concerned with marine protection and safety work together. Australia has led by example in many aspects. Australia is in a position therefore to influence other nations, including flag of convenience states.

Tanker oil spills are becoming less frequent. Australian importers of oil have recognised for some time the importance of using double-hull tankers as they take their responsibilities seriously and have taken the necessary steps to ensure the shipping of oil is as safe as possible. Australia has agreed to the phasing out of single-hull tankers by 2010. The Australian Maritime Safety Authority has advised that it will be adhering strongly to the International Maritime Organisation’s MARPOL convention and will be denying single-hull tankers access to Australian ports or offshore terminals from 2010.

The shipping industry and the oil industry have been consulted on this legislation and support its ratification. The consultation with Australian industry peak shipping bodies and port bodies, including the Shipowners Association, Shipping Australia and Ports Australia and of course the very important oil industry, reveals strong support for this legislation.

The financial responsibility resting with the oil receiver is a concept that works satisfactorily and is a proven and effective system. Levies on the receivers of oil will only be made in the event of an incident and when the first two tiers of available compensation have been exhausted. The Supplementary Fund Protocol will ensure compensation is paid quickly and effectively.

An argument can be mounted that it would be better to collect some of these levies in advance so that there are funds in place that could be used in the event of an incident. This would ensure that the pressures associated with collecting levies from countries around the world for an incident which may not have occurred in their waters would dissipate. That is an issue that I am sure would have been debated extensively in the international fora and may well prove in the future to be problematic. However, the oil industry are committed to supporting the passage of the bill and they are aware of their responsibilities. The level of financial call on industry is accepted and they understand compensation and insurance are necessary to run an efficient business in the global market.

Schedule 2 and 3 are routine and technical amendments. Schedule 2 will ensure adequate maintenance of garbage record books. Schedule 3 will improve the robustness, clarity and consistency across existing legislation of the definition of Australian ports. The legislation will make certain that a port is not only an area adjacent to land. In this day and age, it can also be a place where a ship comes to unload cargo in an offshore facility. The opposition is happy to support these amendments, and it is for this reason that we support the passage of this legislation.

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to 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.