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

Last night I indicated to the House that significant oil spills overseas have demonstrated that the maximum amount of compensation afforded under the current protection of the sea legislation scheme is insufficient. For example, in the Nakhodka oil spill off the coast of Japan in 1997, the Erika spill off France in 1999 and the Prestige spill off Spain in 2002, the funds available under the existing scheme proved insufficient, with claimants unable to get the full amount of their approved compensation.

Australia has itself suffered a number of marine incidents involving oil tankers. The most notable incidents involved the Princess Anne-Marie off the Western Australian coast in July 1975, when approximately 15,000 tonnes of oil was spilt, and the Kirki off the Western Australian coast in July 1991, when approximately 18,000 tonnes of crude oil was released after the bow fell off the vessel. In the latter incident, serious pollution of the Western Australian coast was avoided due to the combination of severe weather conditions and the effects of the Leeuwin current in dispersing the 7,900 tonnes of oil lost during the initial stages of the spill off Cervantes and Jurien Bay. While the clean-up costs in the above incidents fell within the limit provided for under the International Convention on Civil Liability for Oil Pollution Damage and were consequently paid by the oil tankers’ insurers, a large spill of heavy crude oil from an oil tanker in an environmentally sensitive area could necessitate extensive clean-up and restoration costs which might require drawing on the IOPC Funds. This figure, of course, could increase substantially in areas involving, for example, extensive commercial fishing or tourism interests, where potential claimants may seek to recover compensation for loss of income. Such a figure could exceed the IOPC Funds limit. In order to tackle this problem, the supplementary fund protocol creates a third tier of compensation for damage resulting from spills of oil from an oil tanker so that the maximum amount payable increases to 750 million special drawing rights, which is approximately A$1.3 billion, per incident.

Let me now make some remarks about schedule 2 of the Protection of the Sea Legislation Amendment Bill 2008. Australia is a party to the International Convention for the Prevention of Pollution from Ships 1973, which is known as MARPOL. It has implemented all six technical annexes to MARPOL. They deal respectively with prevention of pollution by the discharge of oil, noxious liquid substances in bulk, harmful package substances, sewage, garbage and air pollution from ships. The legislation giving effect to MARPOL in Australia is the Protection of the Sea (Prevention of Pollution from Ships) Act 1983. The amendments here make miscellaneous amendments to the requirements for maintenance of garbage record books.

In October 2006 the International Maritime Organisation adopted a revised annex III of MARPOL which was about prevention of pollution by harmful substances carried by sea in packaged form. The revised annex III will enter into force on 1 January 2010. The annex was revised to harmonise it with the criteria for defining marine pollutants which had been adopted by the United Nations transport of dangerous goods subcommittee, based on the United Nations’ globally harmonised system of classification and labelling of chemicals. This bill makes the necessary amendments to implement this change as from 1 January 2010.

In July 2007 the International Maritime Organisation adopted an amendment to annex IV of MARPOL which extended an existing provision regarding the discharge of sewage to include sewage originating from spaces containing living animals and adopted a recommendation on standards for the rate of discharge of untreated sewage. This amendment will enter into force internationally on 1 December 2008. An amendment is necessary for Australia to continue to meet its international obligations.

The bill also substitutes a new definition of the term ‘Australian port’, to mean a place appointed, proclaimed or prescribed as a port under the Customs Act 1901 or under a law of a state or territory, in the Marine Navigation Levy Collection Act 1989, the Marine Navigation (Regulatory Functions) Levy Collection Act 1991 and the Protection of the Sea (Shipping Levy Collection) Act 1981. It is becoming more frequent for 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. However, as they do not call at Australian ports, they may seek to dispute their liability to pay the relevant levies for these services. This amendment will put beyond doubt that a 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 a port if it is so prescribed under the Customs Act 1901.

Australia is fortunate to have jurisdiction over 14 million square kilometres of marine area. This is almost twice the size of our continental land mass, so Australia’s oceans are massive and important things indeed. They extend from Antarctica to near-equatorial waters, and we have one of the largest exclusive economic zones in the world. The states and territories have jurisdiction over marine areas out to three nautical miles from the coastline, and the Commonwealth has jurisdiction beyond those waters to the 200-nautical-mile boundary of the exclusive economic zone. Our oceans are vitally important to us for recreation, for commercial and recreational fishing and for their multitude of plants, animals and fish, many of which are unique to Australian waters. Our oceans play a major role in our economic life as a base for shipping and transport and by supporting fisheries, aquaculture and tourism.

Our oceans are subject to a number of threats, not just those from oil tanker spills. The 2006 State of the environment report set out the continued degradation of marine habitats and our presently unsustainable fisheries management. There are a number of things that I believe need to be done to set our oceans on a path to sustainability. I believe we need a national oceans act that declares biodiversity protection, ecological sustainability and ecosystem based management as key objectives and works towards those objectives through enforceable regional marine plans. Progress has been too slow on regional marine plans and we should get on with the development of these plans. They should help achieve a national representative system of marine protected areas which ensure that no-take marine protected areas in which fishing is not permitted are established in each marine ecosystem.

No-take areas serve as a refuge where fish stocks can be built up, and they are an important safeguard against the chronic overfishing which is imperilling many of the world’s fish species. Bureau of Rural Sciences fisheries status reports have painted a bleak picture, describing two-thirds of Australia’s fisheries as either overfished or uncertain. We need a specific audit of the state of Australia’s fisheries under the National Land and Water Resources Audit. We should ensure that Commonwealth and export trawl fisheries develop and implement turtle excluder devices and other bycatch reduction initiatives in longline fisheries. Longline fishing in areas and seasons that are of high risk to albatrosses and other seabirds should be limited to night setting.

Australia should develop regional partnerships to extend the present efforts to protect fisheries and marine life in Antarctic waters, including the pursuit and apprehension of illegal fishers in the Southern Ocean. We should pursue cooperatively with other nations the creation of marine protected areas in the Southern Ocean to protect the global marine heritage on Australia’s doorstep. A comprehensive approach to marine protection includes safeguarding our oceans from pollution, from shipping and from land based activities. Water quality needs to be protected from impacts from nutrients, sedimentation, sewage and stormwater disposal and coastal shipping practices. We could have a marine pests initiative. Such an initiative would improve controls on ballast water discharges and build on existing activities by the Australian Quarantine and Inspection Service through the national system for the protection and management of marine pest incursions.

Then there is the impact on the sea of its interface with the land—the beaches and the shore. The Marine Coastal Community Network has done much to raise community awareness of these issues, and I notice that in its latest publication there is a report concerning the state of beaches and the impact of four-wheel drive vehicles on those beaches. This report indicates that beaches are not marine deserts, as is falsely assumed by the majority of beach users. They are highly dynamic ecosystems that host a great diversity of life, are a habitat for species not found elsewhere and provide irreplaceable ecosystem services—for example, water filtration, nutrient recycling and nursery habitat for fishes. They are not resilient to vehicles, which substantially modify the habitat of the intertidal fauna, displacing large volumes of sand. As a result, if the invertebrates get crushed under tyres, beaches subjected to heavy vehicle traffic support significantly fewer species at much reduced densities. This has an impact on the ecosystem because those creatures recycle nutrients, break down organic matter such as stranded algae and seagrass and are food for birds and fishes. So, due to their role in transferring energy from plants up to fishes and birds, it means there is a reduction in the diversity of invertebrates which reverberates up the food chain. Fewer shorebirds and fewer fish may therefore be the consequence of driving cars on our beaches. Effective management of coastal ecosystems needs to include sandy beaches as living ecosystems and reduce the impacts from widespread human interference such as that involving four-wheel drive vehicles.

Then of course there is the impact of climate change on the oceans. Just in the past week there has been a report which has found:

Oceans have heated up much more rapidly in the past four decades than scientists had thought.

As reported in the Age:

An Australian and American research team found that between 1961 and 2003, the rate of warming of the upper ocean layers was about 50% higher than it was estimated in last year’s report by the United Nations Intergovernmental Panel on Climate Change.

Scientist Catia Domingues, of the Centre for Australian Weather and Climate Research, said her team’s finding helped solve a problem for climate researchers, who had not been able to fully explain why sea levels had risen so rapidly in this period.

They said, essentially, it was the result of ‘expansion of the warming oceans’. The article continued:

The CSIRO team reviewed millions of measurements of ocean temperatures, taken from instruments probing the upper 700 metres of the ocean, to assess the contribution of the thermal expansion of the upper layers to overall sea-level rises.

Contributions from melting glaciers, melting ice sheets in Antarctica and Greenland, and thermal expansion of the deep ocean were also analysed.

It is also reported that they are now looking to work out whether the global sea rise is accelerating. Findings from ocean-mapping satellites suggest that between 1993 and 2003 sea levels rose by an average of ‘slightly more than three millimetres a year’ compared with the sea level rise of 1.8 millimetres a year during the previous part of the 20th century.

This suggests that our oceans may be very different in 50 years time. Ocean temperatures are warming. The pH—the acidity—is decreasing and sea levels are rising. The impact of climate change on Australian marine systems needs to be a concern for the general public, for scientists, for managers and policy makers. Clearly, there is a need for better research in this area, cross-disciplinary and cross-organisational research networks and integrated data archiving, in order that we understand this phenomenon better. It is important that the parliament understand the impact of climate change on our oceans and on the Australian environment more broadly and that we take the measures that are needed to mitigate climate change, reduce our greenhouse gas emissions and also adapt to the inevitable impact on oceans, on beaches and on Australian life more broadly.

Chris Trevor (Flynn, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Protection of the Sea Legislation Amendment Bill 2008 and, might I say, what a great piece of legislation it is, not only for my electorate of Flynn but also for Australia generally. By way of a brief outline, the bill is intended to: implement the protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, described as the supplementary fund protocol, schedule 1; introduce amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, the MARPOL amendments, schedule 2; and amendments relating to shipping and marine navigation levies, schedule 3. The Protection of the Sea Legislation Amendment Bill 2008 will implement the supplementary fund protocol, introduce amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 and amendments relating to shipping and marine navigation levies.

By way of background, Australia is currently part of a two-tier liability and compensation scheme applying to pollution damage resulting from oil spills from oil tankers. Under the International Convention on Civil Liability for Oil Pollution Damage 1992, the tanker owner is strictly liable to pay compensation to a maximum amount, which is determined by the size of the tanker. Owners of tankers registered in a contracting state carrying more than 2,000 tonnes of oil as cargo are required to maintain insurance to cover liability under the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992. This tier is provided by the International Oil Pollution Compensation Funds, which provide compensation for substantiated claims in excess of the shipowner’s liability for the incident. The IOPC Funds are financed by levies imposed on receivers of oil in countries which are contracting parties to the given convention which established the funds.

Under this two-tier system the maximum amount of compensation available for a single incident is currently only about $350 million—not nearly enough. There have been several major international oil spills where the IOPC Funds proved to be insufficient to provide full compensation to all claimants. A supplementary fund protocol was adopted in 2003 by the International Maritime Organisation, the IMO, to create a further source of funds for compensation in the event of damage caused by an oil spill. The protocol entered into force internationally on 3 March 2005.

This bill under the consideration of the House implements the protocol of 2003 whereby the supplementary fund protocol creates a third tier of compensation for damage resulting from spills of oil from an oil tanker so that the maximum amount payable increases to approximately $1.3 billion per incident. 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 will only be collected after an oil spill occurs and after the first two tiers of compensation are exhausted.

Australia is also a party to the International Convention for the Prevention of Pollution from Ships. The legislation giving effect to this is the Protection of the Sea (Prevention of Pollution from Ships) Act 1983—the POTS act—and the Navigation Act of 1912. The amendments to the POTS act make miscellaneous amendments to the requirements for maintenance of garbage record books and allow regulations under the POTS act to prescribe penalties of up to 50 penalty units. The purpose of the amendments to the Marine Navigation Levy Collection Act 1989, the Marine Navigation (Regulatory Functions) Levy Collection Act 1991 and the Protection of the Sea (Shipping Levy Collection) Act 1981 is to make the definition of ‘Australian port’ consistent in these acts and to amend the definition of ‘collector’ in the Protection of the Sea (Shipping Levy Collection) Act 1981.

As I said at the commencement of my speech today, this is ‘great news’ legislation not only for the electorate of Flynn but also for Australia generally. The legislation is to ensure that if there is pollution damage resulting from an oil spill from an oil tanker then adequate, proper, just and reasonable compensation will be available. There have already been a number of high-profile, high-impact oil tanker incidents: the Nakhodka off the coast of Japan in 1997, the Erika off the coast of France in 1999 and the Prestige off the coast of Spain in 2002. The maximum compensation afforded by the two conventions to which Australia is currently a party has proven to be insufficient to provide full compensation for all claimants. The legislation before the House will increase the maximum amount of compensation available for a single incident from about $350 million to $1.3 billion. The passing of this bill 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.

In addition to providing for the payment of compensation costs, this bill will also play an important role in the protection of the marine environment. This is an absolutely critical piece of legislation for the electorate of Flynn and for Australia generally. Already, warning bells have been ringing very loudly in our ears and warning shots have been fired across our bows. To date, Australia has suffered a number of marine incidents involving oil tankers, including the Princess Anne-Marie off the Western Australian coast in July 1975 when approximately 15,000 tonnes of oil were spilt, and the Kirki off the Western Australian coast in July 1991 when approximately 18,000 tonnes of crude oil were released after the bow fell off the vessel. Serious pollution of the Western Australian coast was avoided due to the dual combination of severe weather conditions and the effects of the Leeuwin current in disbursing the 7,900 tonnes of oil lost during the initial stages of the spill off Cervantes and Jurien Bay.

I am well qualified to speak on this bill, I believe. I have witnessed firsthand the damage and destruction an oil spill can inflict on a community, including its environment. In January 2006 in my electorate of Flynn a major oil spill occurred at the port of Gladstone. It was Queensland’s worst oil spill in more than 30 years. Authorities worked for days to contain the spill in Gladstone Harbour, on the central Queensland coast where I live, after 25,000 litres of heavy fuel poured from a coal carrier. The clean-up cost millions of dollars. It had the potential to be a tragedy for the area’s marine life. The area is frequented by dugongs, crocodiles, seabirds and turtles. That incident showed to Australia how easily these things can happen. According to reports, a tug accidentally rammed into a Korean bulk carrier in Gladstone Harbour and ruptured its fuel tank. Through the outstanding efforts of all concerned in the clean-up of that major oil spill, a major economic and environmental catastrophe was thankfully averted. But it just showed the community of Gladstone, in my electorate of Flynn, and Australia generally that, as we go about our business, things can quickly go horribly wrong.

I will leave that incident aside and return to the proposed bill. This bill will never prevent human error, failure to comply with safety standards, wanton disregard for the law or acts of terrorism. What it will do is provide a just, adequate and equitable compensation regime for those aggrieved and affected by an oil spill disaster.

My electorate of Flynn includes within its boundaries the magnificent Great Barrier Reef. The Great Barrier Reef is the only living organic collective visible from earth’s orbit. The Great Barrier Reef, which is off the east coast of Australia, is included in the electorates of Flynn, Capricornia, Dawson and Leichhardt—all represented, may I say, by fantastic Labor members: Trevor, Livermore, Bidgood and Turnour. It is one of the wonders of the natural world. It is the world’s largest coral reef ecosystem, and it was declared a World Heritage area in 1981.

The reef is scattered with beautiful islands and idyllic coral cays and covers more than 300,000 square kilometres. The Great Barrier Reef system consists of more than 3,000 reefs, which range in size from one hectare to over 10,000 hectares in area. I have spent much time on this reef. I have fished on it, I have snorkelled on it, I have scuba dived on it and I have holidayed on it. It is a beautiful place and every Australian should visit it. In recent years, I have gone out in September on a charter boat, the Gray Scout, owned by Kev Benn of Gladstone. He is a wonderful skipper. The trip is organised by Croc Thomas, and Hanso, Crossy, Rowy and a number of other great blokes. I have a great time on this reef fishing and swimming, and on occasions we see whales. The Swains Reef is a beautiful place on the Great Barrier Reef. I will not get there in September this year, because of parliament. But I wish them a safe and happy trip.

From being out there, I realise what a great disaster it would be if there was an oil tanker spill there. Corals make up the various reefs and cays. The coral has over the years brought many ships to grief, including Captain James Cook’s Endeavour. One of the most famous wrecks is that of HMS Pandora, which foundered in 1791. There are 30 shipwreck sites known in the marine park. Just imagine if we had 31 and it was an oil tanker.

The World Heritage area of the Great Barrier Reef hosts many habitats or native environments where animals and plants live. The Great Barrier Reef abounds with wildlife, including dugong, green turtles, varieties of dolphins and whales, more than 1,500 species of fish, 4,000 types of mollusc and more than 200 species of birdlife. More than two million people visit the reef each year, generating billions in tourism dollars and making tourism a major earner for the Australian economy. Just imagine if we were to wake up one morning to learn of a major spill of oil on the Great Barrier Reef. As a regular visitor to the reef and a fierce advocate of it, I say ‘perish the thought’. The cost of restoring the environment would be enormous. With the wind and the tides out there, it would be a catastrophe. I honestly shudder to think of the cost of an environmental clean-up, let alone the significant loss to tourist resorts, dive boat operators, commercial fishers, recreational fishers, tourism operators and charter fishing vessel operators.

I am proud to speak on this proposed legislation. It provides an economic and environmental safeguard—a safety net, so to speak, in economic terms—to those potentially affected. I pray deep down in my heart and from the very bottom of it that I never witness the need to use this legislation. I commend this bill to the House on behalf of the people of Flynn and the Australian public generally.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Protection of the Sea Legislation Amendment Bill 2008. The purpose of this bill is to implement the protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage—the supplementary fund protocol—and to introduce amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, the MARPOL amendments, and amendments relating to shipping and maritime navigation levies.

Australia is party to two conventions which establish the international liability and compensation regime for pollution damage resulting from spills of oil from oil tankers: the International Convention on Civil Liability for Oil Pollution Damage 1992, or the civil liability convention, and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992, or the 1992 fund convention. 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 the shipowners and their insurers. If the moneys available are insufficient, the outstanding compensation is provided by the International Oil Pollution Compensation Funds, the IOPC Funds, which are financed by levies on cargo owners—that is, the oil-receiving identities. 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, which is approximately $350 million. The SDR is a unit of account defined by the International Monetary Fund. The value of the SDR varies from day to day in accordance with changes in currency.

Following a number of high-profile, high-impact tanker incidents, including one off the coast of Japan in 1997, the Erika off the coast of France in 1999 and the Prestige off the coast of Spain in 2002, the maximum compensation afforded by these two conventions has proved to be insufficient to provide full compensation for all claimants. In Australia, given our extensive coastline and strong environmental perspective, the compensation available under the IOPC Funds may not cover a major incident such as those experienced by Japan, France or Spain.

As a result, the supplementary fund protocol was adopted in 2003 by the International Maritime Organisation, the IMO, 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 protocol entered into force internationally on 3 March 2005. The supplementary fund protocol creates a third tier of compensation for pollution damage resulting from spills of oil from an oil tanker, so that the maximum amount payable increases to up to 750 million SDRs, which is approximately A$1.3 billion per incident. 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 has occurred and after the first two tiers of compensation are exhausted. The supplementary fund protocol does not impose additional costs on the shipping industry, as the cost is borne by the oil-importing entities.

Australia’s accession to the supplementary fund protocol will ensure that compensation to Australian victims following an oil spill from an oil tanker is maximised and that adequate financial resources are provided for clean-up and restoration of Australia’s marine environment. This is absolutely vital for a country like Australia with such a vast and expansive coastline. We are all familiar with the story of the Pasha Bulker, the huge coal carrier which ran aground in Newcastle during severe weather in May last year and caused a major spectacle in that city for several weeks. While the Pasha Bulker was not an oil tanker, that ship had on board 760 tonnes of fuel oil and smaller quantities of diesel and other lubricating oils to operate its machinery. Luckily, in the case of the Pasha Bulker, time was on the side of salvage crews, who, despite some damage to the ship’s hull, were able to empty most of the fuel oil and other potential pollutants from the vessel before spillages occurred at Nobbys Beach.

Members of this House may take issue with my saying that the seat of Dobell has the most beautiful beaches in the whole of Australia. For that reason this bill is absolutely vital—to make sure that these pristine beaches, which stand out amongst many great beaches in Australia, are protected. In the future we may not be able to avert a major environmental disaster so easily. From Newcastle, which is just to the north of the seat of Dobell, stretching south along the coastline right through my electorate, there is a constant and long queue of ships waiting to off-load their cargo. We often see up to 48 vessels waiting along the coastline in front of my electorate. These vessels carry similar quantities of bunker oils to that of the Pasha Bulker. The likelihood of other weather events, accidents or equipment failures aboard the many coal vessels, oil tankers or general cargo ships that ply the Central Coast waters each year along the coastline of Dobell and its neighbouring electorates mean that we are potentially at risk of major maritime oil spills.

Increasing importance is being placed on the future of Dobell as a tourist destination. From beautiful Wamberal in the south, through to Forresters Beach, Shelley Beach, Toowoon Bay and Soldiers Beach in the north, our pristine beaches are the area’s jewels and Australia’s jewels in terms of beaches. An incident involving an oil spillage or something similar anywhere along the beautiful coastline would be disastrous for the lifestyle and economy of my electorate in terms of the effect it would have on tourism. The seat of Dobell has almost twice the national level of unemployment, and tourism is one industry that provides vital employment for people living within the electorate. The impact economically of an oil spill on the tourism industry in Dobell cannot be overstated.

I must stress that my constituents take their lifestyles very seriously. Not only do we take pride in some of Australia’s best beaches, with a healthy level of participation in ocean swimming and surf-lifesaving; we also have one of the country’s highest per capita rates of recreational fishing. Our waters need protection. Our surf clubs on the Central Coast are part of the Dobell culture. Almost all kids who grow up on the Central Coast join a surf-lifesaving club at some stage and participate in the nippers and other activities there. Surf-lifesaving for people who live in my electorate is far more than a sporting activity. It is an activity that brings together and binds our community and provides support for each other in hard times and in good times. If we were to have oil spills that were in some way to threaten the functionality of these surf clubs, that would have a disastrous social impact on people who live in my electorate. The Central Coast has had a proud record in surf-lifesaving. The advent of RVs, which you now see at most surf beaches around Australia, were primarily pioneered at Soldiers Beach at Norah Head in my electorate. Surf-lifesaving has played a very important role in the development of the sense of community that we have on the Central Coast.

I can let the House know that, as a member of Surf Life Saving Australia who actively and regularly patrols beaches, I can attest firsthand to the important role that surf-lifesaving plays in the lives of people who live on the Central Coast and for the many hundreds of thousands of tourists who come to the Central Coast to enjoy the best beaches in Australia.

The Rudd government has already embarked on several initiatives to improve and protect the environment. In my electorate, this includes $20 million for the Tuggerah Lakes Estuary Management Plan, which aims to clean up the lakes system and restore it to the environmental showpiece status that it deserves. Thousands of Central Coast residents live around the lakes and use them for recreational purposes on a daily basis. Visitors from both within Australia and overseas regularly benefit from holidays by the lakes at such popular destinations as The Entrance—and, of course, it is named The Entrance because that is where the Tuggerah Lakes meet the ocean. That shows the vulnerability of the lakes system to an oil spillage, should one occur.

Commercial fishermen draw some of their livelihood from the lakes, and the area is known for its sweet-tasting school prawns in particular, which even in these times of record inflation can be bought for about $14 a kilo by the lakes’ edge. Areas of the Tuggerah Lakes system are natural habitats for hundreds of species of migratory birds, some of them threatened. Substantial areas of bush reserve, which contain a vast variety of flora and fauna, interface with Tuggerah Lakes and its smaller surrounding waterways. Much of the Tuggerah Lakes Estuary Management Plan—which, as I said, the Rudd government has contributed $20 million to over the next five years to ensure that the lakes are returned to a pristine condition—focuses on ensuring that the run-off and the flow from other waterways into the lakes are clean. Restoring the lakes system is a vital program for the region’s natural environment and tourism industry. The federal government is working closely with Wyong Shire Council to ensure that this aim is met.

The estuary management plan is also an important project for the constituents of Dobell, many of whom at both the council and the community level have a strong involvement in the process and take great pride in the natural features of our lakes system. We have many volunteer organisations that regularly participate and assist in ensuring that our lakes system is kept in good condition, and the $20 million from the Rudd government will help to ensure that the lakes system is restored to the pristine condition that we know it should be in.

The environment is a priority on the Central Coast and the federal government has recognised this. The Rudd government chose to highlight its commitment to the environment with the launching of the $100 million Caring for our Coasts plan by the Minister for the Environment, Heritage and the Arts, Peter Garrett, at North Entrance, an area that is itself facing tough coastal erosion issues. In fact, both at Wamberal in the south of the electorate and at Norah Head in the north we have houses that have been threatened by coastal erosion. Again the federal government will work closely with the local council and with community bushcare and dune-care groups to ensure such areas receive the best care.

On a wider scale, our comprehensive plan to tackle climate change also includes ratifying the Kyoto protocol, substantially increasing the mandatory renewable energy target, making every Australian school a ‘solar school’ and committing $500 million to the development of clean coal and low emissions technologies through the National Clean Coal Initiative. The Central Coast will also benefit from other Rudd government initiatives, including practical measures to improve household energy efficiency. Among these are generous rebates for solar power systems, solar hot water and rainwater tanks, as well as low-interest loans for families to undertake practical water and energy efficiency measures in their homes.

If we look at the effect that climate change could have on my electorate, we see that we are bordered on the east by the coast and have a large lakes system in the middle. Houses, residences and the community are built around the lakes and between the ocean and the lakes. If climate change is not addressed properly, if we do not properly address environmental concerns, it has been shown by some modelling that, rather than the east coast and the eastern area of Tuggerah Lakes being where the vast majority of people will live, the coastline will move to the western side of Tuggerah Lakes. Already we have had major flooding of many houses. The June long weekend last year saw my electorate become the subject of tidal surges and storm flooding that affected many residents. In fact I can report to the House that the member for the state seat of Wyong, Mr David Harris, and I are holding a picnic this Sunday to offer our congratulations and to bring a greater sense of community to all the people who rallied together at this time last year against the impact of the flooding in my electorate.

It cannot be overstated just how sensitive and vulnerable the environment is along our unique Australian coastline and in the electorate of Dobell in particular. Offering adequate compensation for any major oil spill and enforcing responsibility and accountability in the maritime industries, both in Australia and abroad, are essential. Australia is a party to the International Convention for the Prevention of Pollution from Ships 1973—MARPOL—and has implemented all six technical annexes to MARPOL which, respectively, deal with the prevention of pollution by the discharge of oil, by noxious liquid substances in bulk, by harmful packaged substances, by sewage, by garbage and by air pollution from ships. The following legislation gives effect to MARPOL in Australia: the Protection of the Sea (Prevention of Pollution from Ships) Act 1983—the POTS act—and the Navigation Act 1912. The amendments to the POTS act will implement changes to annexes I, III and IV of MARPOL, make miscellaneous amendments to the requirements for maintenance of garbage record books and allow regulations under the POTS act to prescribe penalties of up to 50 penalty units.

This bill will improve the robustness of Australia’s maritime environment regulatory regime and provide clarity and consistency across existing legislation. Without this amendment, the pristine beaches of Dobell, the beaches surrounding this country and the waterways, such as Tuggerah Lakes, will continue to be at risk from oil spillages. This is a risk that we cannot allow to continue. As part of a suite of measures that the Rudd government has introduced to protect our environment and the economy in these areas which would be so adversely affected by such spills, this bill must be supported. In conclusion, when the risks are considered, Australia must have proper regulation, legislative protection and adequate compensation in the event of any major maritime accidents or disasters that might affect our precious coastline. For these reasons I commend the bill to the House.

Mark Dreyfus (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

The Protection of the Sea Legislation Amendment Bill 2008 establishes a supplementary fund to provide additional compensation to victims of oil spills. These amendments give effect to the 2003 protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage. The amendments reflect article 2(2) of the protocol, giving the supplementary fund legal personality in Australia, and article 7, which gives Australian courts jurisdiction to entertain an action against the supplementary fund for compensation. The importance of these amendments lies in their embrace of a multilateral framework for the protection of our seas. They provide certainty to the shipping and oil industries and ensure that our fragile marine environments are provided for in the event of a spill. They continue the strong Labor tradition, from Evatt through to Gareth Evans, of engaging with the United Nations on issues of international significance, such as in this case a consistent approach to compensation in the aftermath of an environmental disaster.

Australia has long recognised the need to provide adequate compensation for damages resulting from oil spills. Under the 1992 International Convention on Civil Liability for Oil Pollution Damage, to which Australia is a party, liability for damage resulting from a tanker spill lies with tanker owners and their insurers, known as protection and indemnity, or P&I, clubs. Subject to a number of specific exceptions, this liability has been strict, and the onus is on tanker owners to prove in each case that any of the exceptions should operate. Owners of tankers carrying more than 2,000 tons of oil and registered in a contracting state are required to maintain insurance to cover any liability under the convention. If the amount covered by the owners’ insurance is insufficient to meet the damage caused by the spill, the excess will be covered by the International Oil Pollution Compensation Fund 1992. This, too, is limited so that the combined amount payable by the tanker owners and the IOPC does not exceed $350 million.

The supplementary protocol provided for in the Protection of the Sea Legislation Amendment Bill 2008 will introduce a third tier of funding. The maximum amount payable will increase to 750 million special drawing rights, or SDRs, per incident. SDRs fluctuate with exchange rates, but the 750 million equates at present to approximately $1.3 billion.

Given that Australia has in excess of 32,000 kilometres of coastline and a sensitive marine environment with many species of aquatic life unique to Australia, such as the giant cuttlefish and the Australian fur seal, these reforms are vital to protect our marine environment and economy. The increase reflects the reality of the modern oil spill. Over 6,000 claims for compensation were lodged in the aftermath of the Erika disaster off the coast of Brittany in December 1999, and the total compensation and clean-up cost of the 1989 Exxon Valdez disaster in Alaska totalled billions of dollars.

The supplementary protocol will be financed through levies imposed on oil importers in the aftermath of a spill. This spreads the responsibility for the damage of a major spill between the shipping industry, which carries most of the burden under the current structure, and entities in receipt of more than 150,000 tonnes of contributing oil per year in contracting states.

The national interest analysisreports that the cost to the Australian taxpayer will be negligible as a result of this levy mechanism. The Minister for Infrastructure, Transport, Regional Development and Local Government has already informed the House of the massive Nakhodka, Erika and Prestige oil spills on the coastlines of Japan, France and Spain respectively. I would like to add to that the Hong Kong tanker Hebei Spirit, which was wrecked in December last year when 10,000 tonnes of crude oil affected 375 kilometres of the western coast of the Republic of Korea. Should a similar incident occur along the Great Barrier Reef, an area as large as the coastline between Cairns and Townsville could suffer extensive and irreparable environmental damage. A spill of the magnitude of the Hebei Spirit would be an economic as well as environmental disaster. As we have heard in this debate already from members representing seats in Queensland who have sections of the Great Barrier Reef as part of their coastlines, the reef has very real economic importance. The Great Barrier Reef Marine Park Authority estimates that visitors to the far northern section of the park alone numbered 8,545 in 2006 and similar numbers in 2007. The local economy is dependent on these visitors, and an oil spill would have a disastrous effect on families that run businesses that cater for tourists visiting the marine park. The increases to the maximum amount payable under the supplementary fund are made with these potential massive losses in income in mind.

My electorate of Isaacs includes a stretch of beautiful beaches in Port Phillip Bay between Carrum and Mentone. Despite the best efforts of the Port of Melbourne Corporation to protect Port Phillip Bay from shipping related environmental damage, the possibility of an incident involving oil spillage cannot be excluded. On 4 January 2006, just to give one example, the oil tanker Desh Rakshak, owned by the Shipping Corporation of India, sustained holes in a water ballast tank on the port side while entering the heads of Port Phillip Bay, inbound for Geelong. I understand that the tanker was under experienced pilotage and in compliance with depth restrictions, and a disastrous spill was averted. However, the effect of such a spill on the beaches, lifesaving clubs and sensitive coastal ecosystems in my electorate would have been considerable.

The amendments will also update Australia’s commitment to the International Convention for the Prevention of Pollution from Ships 1973, which is given effect by the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, also known at the POTS act. The POTS act protects our coasts and waterways from noxious pollutants associated with ships. The amendments that are before the House today seek to harmonise our national criteria for defining marine pollutants with the criteria adopted by the United Nations Subcommittee of Experts on the Transport of Dangerous Goods. Given the extensive global trade in chemicals, the need to develop national programs compatible with the international community is recognised in these amendments. Harmonisation is essential to enhance the protection of human and environmental health and guarantee the safe transport of hazardous chemicals. It also provides an internationally comprehensible system for hazard communication. Harmonisation will help to facilitate Australia’s international trade by making our system more compatible with the outside world.

Schedule 3 of the amendment bill changes the definition of ‘Australian port’ so that ships unloading cargo offshore may be compelled to pay for their use of services, such as the national aids to navigation network. Services such as our navigation system are second to none. The aids to navigation network has an extensive network of global positioning stations which allows for greater integrity of positioning in areas of high marine traffic or environmental sensitivity. As amended, the act will define a port as a ‘place appointed, proclaimed or prescribed as a port under the Customs Act 1901’ so ships will no longer be able to avoid liability for the use of such services.

The purpose of these amendments is to provide compensation in the aftermath of an oil spill and, in doing so, enhance our social and economic resilience to coastal disasters. With an estimated 1.2 billion people worldwide living within 100 kilometres of a coastline and 50 per cent of the world’s population likely to do so by 2030, it is essential to safeguard Australian coasts with the amendments introduced by this bill, which I commend to the House.

Richard Marles (Corio, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Protection of the Sea Legislation Amendment Bill 2008, which is a very important bill for our country in meeting its international obligations, in securing and protecting its vast waters and the vast seaborn ecosystem which exists within them, and, importantly, ensuring that there are adequate funds available for the restoration of the environment and for the compensation of those affected in the event of a major oil spill.

This bill has three schedules. The first enacts the supplementary fund protocol. This adds a third tier of compensation to the existing international system of compensation which in its totality will increase the amount that can be paid in the event of a major oil spill from about A$350 million to A$1.3 billion. Schedule 2 puts in place the MARPOL amendments—MARPOL is an acronym used for the International Convention for the Prevention of Pollution from Ships—which amend requirements for waste management and increase the penalties for breaches of those requirements. Schedule 3 of the bill provides for amendments to the existing shipping and marine navigation acts, providing for definitional amendments so that there is consistency in a number of terms, particularly the term ‘Australian port’, throughout our maritime legislation. The intent of all of these measures is to provide much greater clarity and certainty in Australian maritime law. Importantly, what they will also do is ensure that there is adequate financial compensation available in the event of an oil tanker spill.

Before I go into the substance of the bill, I wish to welcome students from the Epping West Public School who are in both galleries above us. I very much welcome them to parliament today and to Canberra and hope that they enjoy their visit and learn a lot. This is a very important debate for them to be listening to.

The Rudd government views this legislation as very important for the protection of our marine environment. As an island state, obviously the entirety of our border is coastline, and those waters form very much a part of the heart of our national identity. Our country is ‘girt by sea’. This legislation is also very important for our economy. The Australian commercial fishing industry, for example, enjoys the third largest fishing zone in the world—a fishing zone which is a consequence of the large coastal area that we have and the 200 nautical mile area extending from our coastline, which gives us a fishing zone of 11 million square kilometres. Commercial fishing is the fifth largest food-producing industry in Australia. It is worth approximately $2.2 billion to our economy—$1.5 billion in exports.

Tourism is also a very important industry for our economy. In 2005-06 the tourism industry in Australia was worth $81 billion. It amounted to 4.6 per cent of the total Australian workforce and it contributed to over 11 per cent of Australia’s exports. From the point of view of regional Australia, where my electorate is, tourism is a very important sector because 47c of every tourism dollar is spent outside Australia’s capital cities. In the year to 30 April 2008 there were 5.6 million international visitors in Australia and, of those, 60 per cent went to a beach at some point during their visit, which highlights how important the sea is to our tourism industry.

Geelong is a town which is very much based upon water, both in terms of our bay and our proximity to the surf coast. Aquaculture is an industry which has long been associated with Geelong, but it is an industry which is growing at a rapid rate right now. Aquaculture in Geelong employs 470 people and contributes almost $70 million to the regional economy. In addition to aquaculture, tourism is very much becoming a major theme for Geelong’s future. It is an incredibly large industry in Geelong right now and it is one of the fastest growing industries in our region. In the year ending March 2008 there were 2.1 million overnight stays by visitors to the Greater Geelong region. In the year ending March 2008 domestic visits were up by 3.3 per cent and international visits were up by 10.3 per cent. Tourism contributes almost 7,000 jobs to the local Geelong economy and amounts to 5.8 per cent of the total employment in the Geelong-Otway region. Again, the relevance of water to tourism in Geelong is very clear: 55 per cent of domestic visitors to Geelong and 41 per cent of international visitors to Geelong enjoyed a visit to a local beach during their time in Greater Geelong.

The Great Ocean Road is one of the major tourist attractions not only for our local region but for Australia. It is one of the great motoring drives in the world, and Geelong is very much the gateway to the Great Ocean Road. Torquay, about 20 minutes from Geelong, is described as the home of surfing—arguably the international home of surfing. Billabong, Rip Curl and Quicksilver all have a very strong presence in Torquay, and Torquay is home to the famous Bells Beach.

In a sense highlighting the significance of the coastline to Geelong is a recent initiative of the Department of Defence, and I note the Parliamentary Secretary for Defence Procurement, the honourable member for Charlton, has just entered the chamber. The HMAS Canberra is currently in Geelong being demobilised. The HMAS Canberra is going to be taken to the coastal side of the Bellarine Peninsula, where it will be sunk, and it will become a major scuba-diving attraction for our region.

Geelong is very much based on Corio Bay. Indeed, Corio Bay is why we are where we are, with the establishment of the port of Geelong on Corio Bay in the mid-19th century. Whereas for much of the last few decades in a sense Geelong has turned its back on the bay, in recent years we have started to realise how important and how beautiful the bay is and the role that the bay is going to play in our future. The development of the waterfront along the city edge of the bay has become one of the most impressive things about Geelong. The common which exists on the city waterfront has become the heart of public life in Geelong, being the base for a number of public events and for a number of markets. It has become very much the centre of community life.

Indeed, the city of Geelong has a north-fronting aspect to the bay, which is something unique in Victoria. It is bordered on one end by Cunningham Pier. Cunningham Pier is a very historic pier. When Australia was said to ride on the back of the sheep, in fact the great majority of wool that was exported from Australia left from Cunningham Pier. At the other end of the common is a proposed development of the old Yarra Street Pier. Both of these will contribute greatly to the aspect of Corio Bay.

If you go further around Corio Bay to the north you will find Osborne House, a very historic building which sits on a hill and has perhaps the best view over Corio Bay. There are plans in this precinct for a public performance area, a marine maintenance facility, restaurants and accommodation. From all of this it is clear how important Corio Bay is to Geelong. Without a doubt it is the key asset of our city. From the Osborne House development through to Eastern Park, we are going to see Geelong face the bay once more, incorporating it very much into our lives.

A major theme for the future of Geelong is becoming a lifestyle-tourism city. With its raised peninsula, the hills around the bay and its proximity to the surf coast, it is a place that people come to visit. It is also a place where people who intend to work in Greater Melbourne can live. Being a lifestyle-tourism based city is very much a key to Geelong’s future.

This bill is important for the people of Geelong not only because that is part of our future but also because of another facility which is housed on Corio Bay—that is, the Shell refinery, one of the largest refineries in the country. We in Geelong are very lucky to have Shell as part of our city. For more than half a century Shell has been a very important contributor to the local economy and a very important contributor to local jobs. It is a good corporate citizen and it is now very environmentally sensitive, particularly about its refinery. Growing up near the refinery, I am perhaps a bit biased, but I think there is a certain industrial aesthetic to that refinery, being particularly beautiful at night—but perhaps that is just me. Importantly, what it means is that there are a number of oil tankers which are sailing our waters on a regular basis. The Helcion, the Helix and the Zemira are ships owned by Shell, all of which represent cutting-edge technology; we are lucky to have those ships plying our waters. There are also other ships which go through our waters, which have, for example, Panamanian or Liberian registration.

The shipping channel actually hugs the coastline on Corio Bay, coming within a few hundred metres of the attractions which I have just described. So, whilst of course the events that we are talking about are incredibly unlikely, were the worst to occur it would be critical for Geelong that we have in place the appropriate legislative infrastructure to provide for adequate funds to restore our immediate environment and to compensate those who are affected. It does not take much imagination to see that, were there to be a significant oil spill in Corio Bay, or indeed along the Surf Coast, it would be absolutely devastating to the community of Greater Geelong, which is why this is such an important bill for our community.

This bill is a reflection of the Rudd government’s commitment to addressing environmental issues. In that sense it does stand in stark contrast to the behaviour of government in the Howard years—a government which did not sign the Kyoto protocol; a government which continually questioned the existence of human caused climate change; a government which was reactionary in its approach to water management; a government which had a myopic focus on nuclear power as being the only solution to our woes. Currently we see the Liberal opposition flip-flopping all over the place in terms of its position on a national emissions-trading policy. Indeed, the member for Wentworth, when he was the minister for the environment introducing into this House the National Greenhouse and Energy Reporting Bill in August last year, cited it as a first step in the phased introduction of a carbon-trading scheme, and he said that it would be:

... the most comprehensive emissions trading scheme in the world, broader in coverage than any scheme currently operating anywhere.

And yet we saw in the House over the last couple of days the now spokesperson for the environment during question time starting to raise a fear campaign about an emissions-trading scheme being implemented by the Rudd government. It indicates that the Liberal opposition have no credibility at all when it comes to the issue of the environment or the issue of climate change. That does stand in stark contrast to the Rudd government, which wants to build upon its environmental credentials. This bill is very much a part of that.

This bill, as I said at the outset, provides for three schedules. I particularly want to go into schedule 1, which really is the heart of the bill. It deals with the increased compensation available in the event of a major oil spill. Schedule 1 adds to the existing two-tier liability and compensation scheme which applies in Australia a third tier which is currently operating in the international system for compensation. There is important history which I want to take you through which explains the development of these tiers.

The International Maritime Organisation is a specialised UN agency and the body responsible for developing measures to ensure secure shipping and clean oceans, free from ship-borne pollutants. Since 1969 it has developed and redesigned conventions to meet these purposes. The 1969 civil liability convention, including the 1971, 1976 and 1984 protocol amendments, first gave rise to the establishment of an International Fund for Compensation for Oil Pollution Damage. That fund capped liability payments at an amount roughly equivalent to A$50 million. The 1969 convention was superseded by the protocol of 1992 and that, including the 2000 amendments, provided for the current two-tier system which operates in Australia today.

The first tier is the International Convention on Civil Liability for Oil Pollution Damage. In essence, this provides the conditions by which oil tanker owners themselves are liable to pay compensation in the event of an oil spill. It also provides the level of insurance that they need to take out. But obviously that insurance has a limit—it is capped. For that reason, a second tier was put in place—the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage. That provides for compensation above the liability limits of the oil tanker owners’ insurance policies. That fund is financed by contributions by contracting states, and ultimately that fund is capped at about A$350 million.

As other speakers in this debate have indicated, there have been a number of instances of oil spills around the world where the environmental damage and the compensation bill as a result of that have been well in excess of that $350 million limit. The Nakhodka spill in the Sea of Japan in 1997, for example, resulted in a compensation bill of around $500 million. The Erika spill off the coast of Brittany in France in 1999 resulted in a $1.2 billion bill. The Prestige spill off the coast of Spain in 2002 also involved a compensation bill in excess of the limits at that time.

Australia has had its own share of incidents over the years. The member for Isaacs referred to a potential spill which could have occurred from a ship entering into Geelong waters. The Princess Anne-Marie off the coast of Western Australia in 1975 had a spill of almost 15,000 tonnes of oil. The Kirki, again off the Western Australian coast in 1991, spilled approximately 18,000 tonnes of oil. On that occasion environmental damage was only avoided due to very favourable weather conditions. One is left to only imagine what the impact would be were there to be a serious oil spill along the Great Barrier Reef, off the coast of Sydney or, of course, from the point of view of my electorate, in Corio Bay itself. For these reasons it is very important that we put in place this legislation.

This legislation implements the supplementary fund protocol, which increases the liability in the case of a very significant oil spill from about A$350 million to A$1.3 billion. This is done by levying public and private entities in contributing states—public and private entities who themselves receive over 150,000 tonnes of oil per year. Importantly, that levy would only be struck in the event of a major oil spill which extended beyond the current liability limits. The new protocol came into force in March 2005, and, were this bill to pass this parliament and ultimately become enacted, Australia would be, relatively speaking, a world leader in relation to this. There are a number of countries which are already parties to the supplementary fund protocol but we would be among a leading group, and that is also obviously important in terms of encouraging other countries to do the same.

In the time left to me I will briefly mention the remaining parts of this bill. Schedule 2 of the bill involves an improvement to the MARPOL convention. MARPOL, as I said, is an acronym for the International Convention for the Prevention of Pollution from Ships. Australia has implemented all six annexes to MARPOL by way of the Protection of the Sea (Prevention of Pollution from Ships) Act 1983, by the Hawke government, and the Navigation Act 1912, by the Fisher government. This will involve implementing changes to annexes I, III and IV of MARPOL which will provide for provisions regarding the upkeep of garbage record books and increasing the penalties prescribed under that legislation.

Finally, schedule 3 gives consistency to the term ‘Australian port’ through a range of pieces of legislation in our maritime law which will be important in terms of reducing the scope for disputes over what constitutes an Australian port in an era where there is increased ship loading and unloading that occurs offshore. In summary, this is an important bill in terms of increasing the amount that can be paid in the event of a major oil spill. It builds upon the Rudd government’s environmental credentials. It is very important for our country, which is so reliant on our coastline and our water. (Time expired)

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

The Protection of the Sea Legislation Amendment Bill 2008 before us today implements very important objectives. Firstly, it is intended to implement in Australia the protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage. Secondly, the bill seeks to introduce amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983. Thirdly, the bill has some amendments relating to shipping and marine navigation levies. I will shortly outline some of the detail of each of those objectives and their importance. However, before I do so I want to touch on some of the background regarding the regulatory and commercial aspects of the international shipping industry because it is important to understand in context the need for the changes that are the subject of the legislation before the House.

The shipping industry is responsible for more than 90 per cent of global trade—that is, the carriage of it—and it is subject to intense global competitive and commercial pressures. It is also the subject of an international regulatory regime that is unfortunately largely ineffective. The bulk of the regulatory environment for international shipping is set by international bodies which have nation states as their members. The regulatory framework is therefore subject to some of the same shortcomings as other areas of international legal regulation—namely, problems relating to enforcement by nation states. The most important international agency that oversees the regulation of shipping activities is the IMO, the International Maritime Organisation, which is an agency of the United Nations. The IMO currently has 167 member states and three associate members, with Australia of course being a member state of the IMO. The fundamental role of that organisation is defined as the protection of the marine environment and the safety of life and property at sea. Its aim is to achieve safe, secure and efficient shipping on a clean ocean.

Another agency of the United Nations that relates to the international shipping industry is the International Labour Organisation, which helps determine the employment conditions of seafarers and deals with occupational health and safety issues. These matters are largely spelt out in what is known as convention 147 of the ILO. While these two international bodies help establish the basis for and definition of the regulatory environment, enforcement, as I noted before, is left to member states. In shipping, the flag state is the country in which a ship is registered and which undertakes the responsibility for the implementation of international conventions and agreements relating to that ship. I will say a little bit more about the responsibilities of a flag state in a moment, because therein lies some of the fundamental weaknesses of the regulatory environment. There are also bodies called classification societies, which sometimes, at the behest of a flag state, perform the work of a flag state in ensuring compliance with certain regulations.

The state where the port is based—that is, where the ship is visiting—is called the port state. It is permitted under the international system to inspect visiting foreign ships to ensure that they are in compliance with international regulations. While port state control is important, it remains a secondary measure to the responsibilities of a flag state in ensuring regulatory compliance. In Australia the functions of the flag and the port state are met through the Australian Maritime Safety Authority, AMSA. AMSA works to ensure that Australian flagged ships comply with international standards and that foreign vessels trading in Australian ports meet their requirements. Apart from these bodies, the shipowner, or the charterer in a lot of cases, maintains the overall responsibility for the safe operation of their ships.

That, in brief, is the regulatory environment in which the matters before the House should properly be seen. But it is not just the regulatory environment at an international level which is relevant; it is also the commercial environment in international shipping. Like many other international industries, shipping is subject to intense commercial and competitive pressures, but these pressures in the international shipping industry have been added to, if you like, and driven by the weakness of the regulatory environment that I have described. Shipping companies and owners experience immense pressure to cut costs as they increasingly face lower financial returns for their activities in a weak regulatory environment. These lower financial returns have led shipping companies to look at ways in which they can increase their margins in the face of increasing international competition. Perhaps the most common method for doing so is through the use of flag of convenience arrangements.

Flag of convenience arrangements have led to a degrading of ship standards, poor treatment of ships’ crews, environmental damage and an inability to meet the original intent and purpose of the current international regulatory standards. Flags of convenience are offered by some states at a lower cost and with some significant incentives added for shipowners to flag their ship in a particular state. The concern with this practice is that it has also inevitably involved, at best, an inability to enforce international regulations and, at worst, a blatant attempt to avoid such scrutiny. Classification societies attached to flag of convenience states often contribute to the problems of poor compliance monitoring.

The issue of flags of convenience was, of course, brought to the attention of many Australians in the early 1990s following a trilogy of parliamentary reports made at that time, under the Keating government, on ship safety. These reports were titled Ships of shame.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister Assisting the Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Mr Pyne interjecting

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

Peter Morris had a close involvement with the member opposite—

Christopher Pyne (Sturt, Liberal Party, Shadow Minister Assisting the Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

I think I’ve been here too long!

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

who now notes that he has been here too long. We would have to concur with that comment on the part of the member for Sturt.

Christopher Pyne (Sturt, Liberal Party, Shadow Minister Assisting the Shadow Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

Tongue in cheek!

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

We tried to do something about that!

Greg Combet (Charlton, Australian Labor Party, Parliamentary Secretary for Defence Procurement) Share this | Link to 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.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to 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.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to 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.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker Sidebottom, I know that this is an area that you have great interest in and I know that you have spoken on shipping legislation on many occasions in this parliament. I know that you are committed to ensuring that our marine environment is protected and that our shipping industry continues to grow and prosper in a safe way. My electorate of Shortland is a coastal electorate and as such is very vulnerable to pollution of the sea by ships traversing the coastline. I have expressed my concerns about this on many occasions in the House and I have taken great interest in shipping and shipping activities around the coast of our great island nation. As a member who is concerned about the protection of our coastline and pristine beaches, I know that one of the greatest threats to our beaches and marine life is pollution caused by oil spills emanating from ships traversing our coastline.

We often forget that the seas around our nation are actually highways for ships that are carrying goods around our coastline, delivering from one port to another and also delivering overseas. Particularly with our export of coal at such a high level at the moment, we really need to make sure that we make the commitments that are included in this legislation before us today.

The Protection of the Sea Legislation Amendment Bill 2008 is intended to implement the supplementary fund protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage in schedule 1, introduce MARPOL amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 in schedule 2 and implement amendments relating to shipping and marine levies in schedule 3.

In this House we have discussed many of the MARPOL amendments over a long period of time. There have been a number of them and the Australian parliament has signed up to a number of them. Schedule 1 amendments of this particular legislation commence on a date set by proclamation, because an instrument of accession of a protocol needs to be lodged with the Secretary-General of the International Maritime Organisation following the passage of the bill through parliament. Schedule 2 amendments commence on various dates. Items 1, 2, 5 and 6 commence on the day when the act receives royal assent, and items 3 and 4 commence on 1 January 2010 and December 2008 respectively. This legislation follows another piece of legislation, the Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Bill 2008, which we discussed earlier this year. A number of members made contributions to the debate on that bill in the House.

I became interested in shipping and the impact that it has on our coastline and nation when I spoke to my predecessor in this parliament, Peter Morris. Peter Morris was a previous transport minister. He chaired the Standing Committee on Transport, Communications and Infrastructure in the House of Representatives when they brought down the Ships of shame report, as well as ICONS, when they prepared a report on shipping from an international perspective, Ships, slaves and competition.

The Standing Committee on Infrastructure, Transport, Regional Development and Local Government of this parliament have been looking at shipping and they are currently conducting an inquiry into coastal shipping policy and regulation. I understand that they are moving towards the end of that inquiry at the moment. In the report, the committee is going to look at the nature and characteristics of the Australian shipping industry and international and coastal trade. It will review the policy and regulation arrangements in place for the coastal shipping sector and it will also assess strategies for developing an adequately skilled maritime workforce in order to facilitate the growth of the Australian shipping sector.

I might add at this point that unfortunately, over the years of the Howard government, our maritime shipping industry and the industries that are associated with it have been on the decline. The previous government did not have a commitment to a sustainable Australian shipping industry. With us being an island nation, as I have already mentioned, I believe that it is incredibly important that we embrace the opportunities that a strong shipping industry can provide to us as a nation and not limit our thoughts to the actual ships but include all the onshore industries that are associated with them and maybe follow the lead of the United Kingdom, which has reinvested in a UK shipping industry.

The committee will also consider the effect of coastal shipping policy on the development of an effective and productive freight transport system, taking into account issues such as environmental and safety impacts and competitive neutrality between coastal shipping and other modes of transport. When we are looking at it from an environmental perspective, which brings us back to the legislation we are discussing here in the parliament today, it is very important for us to sign up to the MARPOL protocols. This legislation will allow us to do that. The final point of that House of Representatives inquiry that is underway is to look at coastal shipping from defence, maritime safety and security, environmental sustainability and tourism perspectives.

That is a very important inquiry that has been taking place within this parliament. For a long time—and I know, Mr Deputy Speaker Sidebottom, that this has been of some concern to you—there has been the issue of continuing voyage permits and single-voyage permits, which really flourished under the previous government. These permits have allowed foreign-flagged ships to traverse the shores of our country with crew from various countries. One example of this is a ship I visited a few years ago at the port of Newcastle, the Angel III. That was flagged as a Greek ship and had a Burmese crew. A number of issues were raised when I visited that ship and I think those issues continue today. I know the committee conducting the current inquiry has looked at those issues.

That is why these protocols are so vital—because they do afford protection to our environment. It is really important from a global perspective that Australia becomes a contracting party to the supplementary fund protocol, because our ratification will add support and will encourage more countries to be part of it. The simple fact that not all countries have signed up to this protocol, and with us having these foreign ships traversing our coastlines, really shows how important it is for more countries to be involved.

Australia is one of many countries to have signed up to the protocol. Other countries have already made that commitment, including France, Germany, Greece, Italy, Japan, the Netherlands, Spain and the United Kingdom. When we have a Greek ship such as the Angel III travelling, as it was at the time, around our coastline, it puts responsibility on the shipowner to ensure that if there is an oil spillage they will be responsible for cleaning it up—and that the financial means will be there to allow that to happen.

Compensation costs resulting from oil spills will often exceed a tanker’s own liability limit. Compensation above that limit is then payable by the International Oil Pollution Compensation Funds, known as the IOPC Funds. The amount of compensation payable by these funds has limits on it. The maximum amount payable by a tanker owner in the IOPC Funds is, as at 22 May this year, approximately $350 million.

It is important that I refer to the fact that there have been significant spills from oil tankers overseas in the past, and I know other members have mentioned them in their contributions to this debate. There was the Nakhodka oil spill off the coast of Japan in 1997, the Erika spill off the coast of France in 1999 and the Prestige spill off the coast of Spain in 2002. The amount available under the two-tiered system was insufficient and the claimants could not be fully compensated.

In my own region last year, the Pasha Bulker was grounded off the coast of Newcastle. I would like to acknowledge the fine work of the rescue workers, as has been mentioned in the House this week, in their efforts at that time. It was a situation where, if things had deteriorated further, we could have had an oil spillage of enormous significance in my own region. It is when you are faced with a situation like that that you realise the implications and the vulnerability of our seas, our marine environment and our coastline. It is at times like that that you understand why we as a parliament and we as a nation are prepared to make the commitment to sign up to the protocol that we have before us today.

For many years in the Shortland electorate, on a daily basis, coal was taken on the MV Wallarah from Catherine Hill Bay, where there was a mine that is no longer operating, to the coal loader. We had confidence in that ship because it was an Australian owned and operated ship with Australian crew, a rarity at the time. At any time, though, even with its high safety standards and such wonderful crew and it being Australian owned, it could have been subject to an incident that might have led to pollution of one sort or another. It would have had an enormous impact on the environment between Catherine Hill Bay and Newcastle. It would not only have affected the marine life; it would have affected the beaches and had an enormous impact on the fishing industry and on the tourism industry.

Without funds being available to deal with such an incident, to make sure that the oil spillage was properly cleared up and that there was proper compensation, it could have been quite a nasty situation in my own area. That could be replicated in every coastal electorate around Australia. I see the member for Leichhardt in the chamber. His electorate includes—

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

The Great Barrier Reef.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

the Great Barrier Reef, as he rightly interjects. The Great Barrier Reef is one of our major natural treasures. It is also one of our most fragile environments and, as such, is exceptionally vulnerable to impact from oil spillage. Just imagine what a major oil spillage would mean for that wonderful marine environment, the Great Barrier Reef.

This legislation can increase the maximum compensation available for a single incident from $350 million—as I referred to when debating the previous legislation that went through parliament in May this year—to $1.3 billion. Australia’s accession to the supplementary fund will ensure that compensation to Australians following an oil spillage from an oil tanker is maximised and that adequate financial resources are provided for the clean-up and restoration of Australia’s marine environment. This bill will also play an important role in the protection of the marine environment.

I believe this is good-news legislation which ensures that, if there is pollution damage resulting from spillage from an oil tanker, adequate compensation will be available. Over and above that, I would like to emphasise the importance of making sure that we have a safe, viable Australian shipping industry, one which has controls in place to ensure that our fragile marine environments are protected, one which makes a commitment to the skills of a viable marine industry and one which makes a commitment to using the highways traversing our coastline in a safe and secure way.

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to support this important legislation, the Protection of the Sea Legislation Amendment Bill 2008, which, as the member for Shortland has rightly pointed out, will ensure that there is sufficient compensation available if, by chance, there is an oil spill from an oil tanker in Australian waters. This legislation will increase the maximum amount of compensation available for a single spill from $350 million to approximately $1.3 billion. Australia is currently party to a two-tiered liability and compensation scheme applying to pollution damage resulting from oil tankers under which the maximum amount of compensation available is only $350 million. It is not surprising then that there have been several major oil spills where the current two-tiered system of compensation proved insufficient to provide full compensation to all claimants. Some examples of that are the Nakhodka off the coast of Japan in 1997, the Erika off the coast of France in 1999 and the Prestige off the coast of Spain in 2002, where the maximum amount of compensation afforded by the two conventions currently in place, to which Australia is a party, proved to be insufficient. So this legislation, which will increase the maximum amount of compensation available, is very important.

If you look at our coastline in tropical North Queensland and Cairns in the seat of Leichhardt, where I am from, and the Great Barrier Reef, or you travel up through my electorate to the Torres Strait or further around to the Northern Territory and the Joseph Bonaparte Gulf, you will see beautiful waters where the impact of an oil spill would be devastating. Down the Western Australian coast there are significant oil and gas fields and significant movements of shipping, which again place our coastline at risk. That $350 million would not go very far if these coastlines were impacted. There is beautiful coastline in South Australia. Everybody knows of the beautiful experiences people have on the Great Ocean Road. Imagine the impact of an oil spill from a tanker down in that area or even on the beautiful beaches on the northern and southern coasts of New South Wales. These are pristine areas of Australia. We need to ensure that we have in place legislation that enables proper compensation if there is an oil spill from an oil tanker.

As the member for Leichhardt, from the great city of Cairns, and as a representative of tropical North Queensland I am going to spend most of my time talking about the benefits of this legislation to the Great Barrier Reef because of the potential threats to the Great Barrier Reef from oil spillages. Currently, as I understand it, we are party to two protocols that put in place compensation of $350 million but we entered into another protocol which was brought into force internationally on 3 March 2005. It is the third protocol that this legislation specifically deals with. It raises the amount of compensation available to approximately $1.3 billion per incident. The supplementary fund, the amount between $350 million and the $1.3 billion approximately, will be provided through a levy on both public and private entities receiving more than 150,000 tonnes of contributing oil per year in contracting states. In plain English, we are talking about not having this fund come into force unless there is a need for compensation beyond the $350 million and, if it were, it would be in place on only larger oil-producing companies—BP, Caltex, Mobil—or some of our large miners like BHP, Alcan or possibly Rio Tinto. This levy would not be put in place to raise these additional funds until after the first two tiers were utilised up to $350 million. If it were necessary, it would not impact on small business but on large businesses directly involved in utilising large amounts of oil or directly involved in the sale of large amounts of oil.

Although $350 million, which is the amount available for compensation at present, sounds like a large amount of money, it is not a large amount of money if you look at the impacts of an oil tanker spill on a place like Cairns and tropical North Queensland. This is an economy that is very much built on tourism. The Minister for the Environment, Heritage and the Arts, when introducing the Great Barrier Reef Marine Park and Other Legislation Amendment Bill 2008 recently, estimated the value to Queensland of tourism to the Great Barrier Reef to be $6 million. In my seat of Leichhardt, of which Cairns is the centre, Tourism Tropical North Queensland estimates the value of tourism to be over $2 billion. We have welcomed 2.3 million visitors per year to tropical North Queensland, and they alone spend $821 million. When you add the flow-on effects from that, there is a contribution to the local economy of more than $2 billion. Tourism provides approximately 30,000 jobs directly and indirectly; it is a very significant industry in Cairns and tropical North Queensland. It is based on more than two million people coming from all around the world to my region to see icons like the Great Barrier Reef—icons that would be significantly impacted if we were to have a major oil tanker spillage in the region. It would have flow-on effects on not only the environment—which would be tragic—but also the local region and the local region’s economy. When we talk about the value of tourism alone in my region, $350 million would not go very far. It is extremely important that we put in place this legislation to ensure that there is sufficient money available to properly compensate people.

Business tourism in my electorate is valued at $100 million as a direct result of business visitors. We have 920 business events, bringing more than 70,000 delegates to the region, every year. They come up there because they want to not only do business but also enjoy our beautiful environment, and the Great Barrier Reef is a very important part of that. The Great Barrier Reef Marine Park Authority describes the Great Barrier Reef as one of the richest, most complex and diverse ecosystems in the world. The Great Barrier Reef Marine Park begins at the tip of Cape York in Queensland and extends south almost to Bundaberg. The area is larger than Victoria and Tasmania combined and stretches more than 2,300 kilometres along the north-east coast of Australia. It is a significant environmental icon. It is an extremely valuable environmental icon, and we need to ensure that we have resources available to protect it from the risk of oil spills.

I have had some wonderful experiences on the Great Barrier Reef. Members may not know that prior to entering politics I spent some time considering my future. As part of that, I took 12 months off from work and spent several months sailing from Townsville across the top of Australia around to Broome. I spent a significant amount of time cruising through the northern part of the Great Barrier Reef.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

Ms Plibersek interjecting

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

It sounds like the Minister for Housing would love to come up and experience and enjoy some of that.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

When I retire!

Jim Turnour (Leichhardt, Australian Labor Party) Share this | Link to this | Hansard source

When the minister retires, she would be most welcome to come to Cairns and tropical North Queensland. I am sure I could put her in touch with some bareboat charter people so that she could enjoy some of the experiences that I am about to describe. I had the opportunity to travel in a 32-foot Miller and Whitworth yacht—which is a wonderful yacht, designed and built in Western Australia—up through the Great Barrier Reef with my good friend Gary Rogers. Swimming with manta rays off High Island, just off Innisfail and Cairns, is a wonderful memory. We spent time up at Lizard Island, snorkelling on the reefs, doing a little bit of line fishing and eating mackerel every night. It was very, very nice. We had no freezer, so we ate freshly caught fish.

These are the sorts of experiences that we are talking about protecting as part of this bill. By putting in place this compensation framework, we make sure we send the right messages to large oil companies and freighter companies who are transporting fuel in the area. My mention of eating mackerel and snorkelling is very pertinent to this bill. These are wonderful experiences to have. Going north of Lizard Island we have Princess Charlotte Bay and then Margaret Bay. This is the northern route of the Great Barrier Reef: the northern inner route of the shipping lanes. There are significant numbers of large vessels more the 50 metres long that transit this route every year. I will speak about that in more detail later. My experience of travelling through that area in a 32-foot yacht is that you come across large freighters and oil tankers. At the same time, you come across trawlers, recreational fishers and a range of leisure craft. They are not in large numbers, but they are negotiating a channel inside the Great Barrier Reef in difficult circumstances, with winds above 30 knots and sometimes up to 40 knots and where sections of the channel are only a few hundred metres wide. These create significant risks of oil spillages. The Great Barrier Reef is a fantastic icon from not only an environmental point of view but also an economic and a way-of-life point of view. I know plenty of people in my part of the world—whether they are out sailing on the weekend or out doing some recreational fishing—will appreciate that the parliament is putting this legislation in place not only to ensure that there is sufficient money in place for compensation but also to send a message to those companies that we take the risk to the reef very seriously.

There was a review of ship safety and pollution prevention measures in the Great Barrier Reef undertaken back in 2000, and a report was brought down in July 2001 which provides very useful information in relation to ship movements along the east coast of Australia, particularly in relation to the Great Barrier Reef. There are two routes down the coast. The inner route extends north-south from the Torres Strait to Gladstone between the Great Barrier Reef and the Queensland coast. The northern section of that route obviously borders my electorate and runs up to another great part of my electorate—the Torres Strait. The Great Barrier Reef runs up to border it, and there are tremendous reef systems through there that are also at risk because those ships enter through the Torres Strait into that inner zone. There are pilotage issues and there is great risk to the Torres Strait from oil spills when ships enter through the Torres Strait and traverse down through the inner route.

There is also an outer route that commences at the eastern limit of the Torres Strait, the Great North-East Channel, continues southwards through the Coral Sea and rejoins the Queensland coast near Sandy Cape, south of Gladstone. The outer route was surveyed and charted to international standards in 1997, encouraging a greater number of vessels, particularly oil tankers, to use the outer route. Some of the larger vessels use the outer route, but there is still a lot of use of the inner route by larger vessels. There are a couple of reasons for that. It is a shorter distance, so economically it makes sense for companies in the shipping business to travel that way, but also the weather conditions are much tamer within the inner route. They can be quite severe and you can get some short chop in those areas, which I have experienced, but larger vessels manage to cope with that. Regulations allow them to carry more cargo through that inner route because of those calmer conditions. So there is an inner and an outer route and, between them, the report found that there was not any difference in terms of risks and safety.

To come back to the amount of shipping that actually traverses the Great Barrier Reef region, there are approximately 6,000 movements of vessels in excess of 50 metres in length that run down the east coast. That is understandable when you look at the number of ports that we have along the east coast of Queensland. Queensland is obviously one of the major economic drivers of the great nation of Australia, and tremendous amounts of resources come out of the great state of Queensland. Resources come out of places like Cape Flattery, Cairns, Mourilyan, Lucinda, Townsville, Abbot Point, Mackay, Hay Point, Port Alma, Gladstone and Bundaberg. These are all major ports down the east coast of Queensland, and it is not surprising that there are 6,000 ship movements across this area.

Looking specifically at the numbers of oil tankers that traverse the east coast of Queensland, between five and 10 per cent of shipping movements are oil tankers, so we see significant numbers of oil tankers moving up and down the east coast of Queensland. They are carrying either refined product to service Queensland ports north of Brisbane or ballast. If we take five to 10 per cent of 6,000, we are looking at between 300 and 600 oil tankers heading north through this region each year. There are considerable risks associated with that.

If we look at some of the statistics available through the review of ship safety and pollution prevention measures report we find that, during the period 1985 to 2000, there were 11 collisions and 20 groundings within the inner route of the Great Barrier Reef, which represents over two incidents each year. We are talking about incidents happening not irregularly within that route and we are talking about large vessels. Two incidents a year might sound like a relatively small rate, but it is not. There are more than 2,500 ship movements in the northern region, which borders my electorate, every year. There is considerable risk of ship groundings within the region that I am talking about.

The largest contributing cause of all incidents was human error. We can do all we like in terms of technology, and it certainly helps to improve safety, but the reality is that there is always a human factor when it comes to ships travelling down the east coast of Queensland. Human error accounts for 57 per cent of the incidents. It is the reason for most of the incidents that happen. This is above international standards, which place human error as accounting for around 48 per cent of incidents. I suggest that it is not because Australian pilots or seafarers traversing Australian waters have less ability but because the risks are higher because of the difficulty of the inner channel, particularly the narrowness of the inner channel, and also the sea conditions in existence.

As I mentioned earlier, as part of the review there was a study commissioned by Det Norske Veritas, DNV for simplicity, to ascertain whether there was a reduction in risk by pushing ships into the outer route, outside the Great Barrier Reef, coming down through the Coral Sea. That report effectively found there was no difference in risk. With an incident outside the reef, we have the strong high-pressure systems that regularly traverse the southern part of Australia pushing south-easterly winds, and any spill would be most likely driven back onto the reef. It is also a long way to go, if there is an incident, to undertake a clean-up. It makes the clean-up more difficult and there is essentially a greater risk to the environment. It has been found that there is no real difference in risk between ships travelling down the inner and ships travelling down the outer route of the Great Barrier Reef, according to the DNV report that was done as part of that study. I found that most interesting because you would think by pushing ships to the outside it would reduce the risk, but that is not what the independent report found.

There are real risks to the Great Barrier Reef, which not only is an environmental icon in Australia but also creates the wonderful lifestyle that we enjoy in tropical North Queensland. It is a wonderful icon environmentally and it creates tremendous lifestyle advantages for those people living in Cairns, the north and all along the Queensland coast. I am sure the member for Longman will talk about some of those experiences as well.

This bill will lift the amount of compensation available from $350 million to $1.3 billion. The tourism industry, on which my electorate is so dependent, is such that the $350 million compensation that exists in the current two protocols would not go very far. We do need to introduce this legislation and ensure that we have the legislative framework to support the international protocol that we signed up to back in 2005. This legislation will ensure that those tourism operators in tropical North Queensland, who may be impacted by an oil spill from a tanker at some stage in the future, have the wherewithal to be properly compensated. The legislation sends appropriate messages to oil companies that they need to ensure that their vessels are well maintained and that every risk assessment is done to reduce the likelihood of an oil spill in tropical North Queensland and all around Australia.

Jon Sullivan (Longman, Australian Labor Party) Share this | Link to this | Hansard source

Listening to the member for Leichhardt just before me, I think that he has probably done more for North Queensland tourism than the infamous ‘Yo! Way to go’ advertising campaign of the 1990s. I am very pleased to speak on the Protection of the Sea Legislation Amendment Bill 2008, which, importantly, implements the supplementary fund protocol. I do not necessarily intend to talk much today about the IMO protocols, the civil liability convention or the like. Many speakers before me have done that. I want to talk about a number of things; one of those is this nation’s maritime tradition. The infamous assertion by the minister for transport of some years ago, Mr Anderson, that Australia is a shipper nation, not a shipping nation, has done great disservice to our country. Our country is a maritime nation. I repeat, it is a maritime nation, although you would not know it given the parlous state of our Australian shipping industry. I think there are only about 43 ships registered under the Australian flag at this time.

As other speakers have indicated—including Mr Truss, the Leader of the Nationals, when he spoke earlier in this debate—virtually all of our imports and exports are transported to and from this country by sea. What we are not saying is that they are transported to and from this country by sea in ships that are generally owned by people overseas, who make no economic contribution to the coffers of this country. Apart from the bulk carriage of material in supply chain operations and the carriage of oil and petroleum products, for instance, around the coast, very little of our domestic freight is carried by sea. I note that today the Minister for Infrastructure, Transport, Regional Development and Local Government is announcing record rail freight results for Australia in the past 12 months, so maybe we should be doing something about that. Our railways and our roads are always congested and our sea lanes are quite clear. You could pretty much say they are ‘traffic free’. As a nation, as I said a moment ago, we do not derive anything like the benefits that we could or, indeed, that we should from having a strong, vibrant Australian maritime sector. I note the member for Shortland, I think it was, spoke about that a little earlier.

However, the attitude of the former minister for transport is an accurate indication of the attitude of the former government, who did, at best, very little to prevent the dismantling of what was once an efficient Australian ship owning and operating sector. The government has, of course, asked the all-party House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government to undertake inquiries in relation to coastal shipping. I am a member of that committee and have had a lot of opportunity as a consequence to talk with people involved in the shipping industry. We will obviously have a lot more to say about that when the committee reports.

I want to, if I may, just briefly pick up on a couple of comments from the member for Wide Bay, the Leader of the Nationals, who is the only opposition speaker to have taken part in this debate. The member for Wide Bay indicated at the beginning of his contribution that this legislation has been brought on because the government has run out of legislation of substance. I would point out to him that this is legislation of substance. It may be a small bill but, as you will have gathered from the number of speakers from the government side who have wanted to talk on this bill—about the effects that it could have on their electorates and the effect of not joining in this third tier, as we call it, of protection for Australia in the event that there is an oil spill—this is something that is important. The member went on to say that we have 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. A little further on he said, ‘We take our responsibilities to the environment seriously and we are in a position to lead by example.’ They were in a position to lead by example on this in 2003 when the members opposite were in government and they chose not to take the opportunity to lead by example. In fact, they have left it to those who followed to lead by example on this issue.

The eastern coastline of Bribie Island, which is the eastern boundary of my electorate of Longman, is actually the north-western boundary of the port of Brisbane, one of the major ports in this country. Brisbane is a busy port—and increasingly so. I think they have invested about $1.1 billion in Brisbane, and I thank the members of the Port of Brisbane Corporation for a tour that they provided us with recently and some discussions about their plans. It is the closest container port to the Asia-Pacific rim. In some cases, the sailing time can be up to five days quicker. There are 50 shipping lines serving Brisbane and, in 2006-07, 2,632 shipping calls were made at the port. Importantly, amongst the major exports from Brisbane is refined oil. Amongst the major imports to Brisbane are crude oil and refined oil, just the kinds of products that we are talking about here today. Importantly, in relation to the port of Brisbane and its location in respect of my electorate, all ships that enter Brisbane port sail past Bribie Island, travelling firstly down the North West Channel and then on to the Spitfire channel. They all pass Bribie Island and, for us, there is serious concern that there could be a marine accident for a vessel approaching or departing the port of Brisbane.

In fact there has been such an accident. If we go back to 29 October 1981, the Anro Asia ran aground at the northern end of Bribie Island. This is not a tanker; it is a roll-on, roll-off container vessel. But if a roll-on, roll-off container vessel can run aground on the northern end of Bribie Island so can a tanker. Despite the fact that bad weather hampered the clean-up and retrieval operation, we were fairly lucky. Some oil did reach the shore and had to be cleaned up, but fortunately the efforts of the authorities at the time prevented oil from crossing the Caloundra Bar and going into Pumicestone Channel.

We, of course, have some local understanding of what is possible because there have been a number of oil spills around the coast of Australia. I want to refer particularly to the first recorded oil spill in Australia—a vessel called the Petriana, which ran aground in Port Phillip Bay in November 1903. There were a couple of things about this spill that were interesting. The first is that the oil that escaped from the Petriana was described at the time—and I am sure that environmentalists of today will be appalled to hear this—as:

... a film of great beauty, radiating all the colours of the rainbow, spread from Sorrento Back Beach to Point Nepean ...

This description went on to say that the foul-smelling oil contaminated the beaches for months afterwards.

The other interesting piece of Australian history in relation to this particular oil spill is a matter relating to the crew of the vessel. When the captain, his family, the officers, the cabin boy and the crew were evacuated from the vessel after they discovered that they were unable to refloat it, there was a national controversy. I say this noting that there are some students in the gallery today who may or may not have been given information in their education about the Immigration Restriction Act 1901 and what was called the White Australia Policy, which prohibited immigrants of non-European descent from entering the Commonwealth. The crew of the Petriana, who were Malay and Chinese, were placed aboard a Japanese steamer and sent to Hong Kong. There was quite a bit of controversy at the time, but I think I will give the final word on that one to the captain of the Petriana, Captain Kerr, who wrote at the time:

If this treatment of my crew is a fair specimen of your humanity, it is about equal to the worst barbarity of other nations, and if it is forced on you by your laws, I regret to say they are a disgrace to the British Empire.

It took a long time, but we finally got rid of that particular blight on Australia.

There are a couple of other spills that I would like to mention, particularly as they have a certain pertinence to matters that were talked about by the member for Leichhardt—that is, the major oil spills on the coast near some of the tourist islands of the Great Barrier Reef and in the Torres Strait. In 2001 the Pax Phoenix ran aground near Holbourne Island in the Whitsunday group and discharged oil. The Pacific Quest spilled oil near Border Island near Hayman Island—I am sure a number of people have enjoyed holidays on Hayman Island—and again we were relatively fortunate there. In March 1970 the Oceanic Grandeur sank in the Torres Strait.

Obviously there are any number of examples of oil spills in the world. In fact, using the modern research technology called Google, I called up a list of major oil spills. I have 14 pages of references here, starting with the Torrey Canyon in 1967 and going through to an oil slick in the Suez Canal in December of 2004. So there is quite a history of oil spills.

There has been a tendency, I believe, in the contributions today to demonise the oil tanker industry, and I am not sure that that is entirely warranted. It is easy enough to pull out information that says that the majority of man-made oil pollution in the ocean has come from land based activity, such as the rupturing of pipes, while public attention has focused sharply on tankers. I think most of us would be relatively familiar with the situation during the first Gulf War where retreating Iraqis opened the pipes and allowed probably 1½ million tonnes of crude oil to spill into the ocean there. Closer to home, in Brisbane we were much concerned back in 2003 by an oil spill at the Santos terminal, where about 1½ million litres of crude oil leaked from a ruptured pipeline. Fortunately, we were able to respond appropriately to that incident and look after it.

The point I am making is that, whilst the bill that we are talking about deals with tankers, we need to be aware that transporting oil and petroleum products by tanker is statistically fairly safe. The losses from tankers in the 1980s and 1990s amounted to 0.01 per cent of the product that they carried. I cannot think of any endeavour that would not think that that was a pretty good safety record. I am sure there are plenty who would like it as a safety record. But the problem with that 0.01 per cent is that it can make a hell of a mess and it is very visible. We all recall the kinds of things we saw when the Exxon Valdez ran aground in Alaska.

The member for Leichhardt spoke a great deal about the Great Barrier Reef. As a Queenslander—indeed, as an Australian—I know that we are all very fond of that iconic environmental area. As the member said, annually there are approximately 6,000 ship voyages through the Great Barrier Reef Marine Park. At any one time there are about 40 to 50 ships within the park. As he indicated, there have been about 33 incidents in the period since 1987. None of those incidents resulted in an oil spill; however, they easily could have done so. They would have had devastating, catastrophic, economic and environmental effects on the marine park and would have taken several years of work to overcome.

The oil tanker industry hold many annual conventions, one of which is Spillcon—I think it was biennial in Australia once upon a time but may now be triennial—where they discuss technology, techniques and the means of avoiding the incidence of spills.

As the Minister for Infrastructure, Transport, Regional Development and Local Government is here and paying very close attention, I want to raise one particular issue in relation to the legislation that he may want to cover in his concluding remarks. The information that we have received, and indeed it has been commented on a couple of times during the debate, is that levies from the supplementary fund will only be collected after an oil spill has occurred and after the first two tiers of compensation have been exhausted. That sounds very reasonable, as if that would be the situation. However, after doing some research, I found that the IMO, on their website, say:

Annual contributions to the Fund will be made in respect of each Contracting State by any person who, in any calendar year, has received total quantities of oil exceeding 150,000 tons.

So the IMO are talking about an annual contribution, but the information that we have talks about a contribution that occurs only after there has been an oil spill.

While oil tanker spills are not a major issue for us, I was taken by one of the slides from a presentation on aerial surveillance given to Spillcon 2007 by Anneliese Caston from AMSA. It was a nice, coloured slide of Australia observed from the air, with white dots indicating where oil spills had been observed. In this place, I will be understood if I say that the picture makes Australia looks like a strange shaped lamington, because there are lots and lots of white flecks on the outside. There have been a large number of oil spill incidents around the country, and we need to be aware that tankers, whilst a part of that problem, are improving their industry and are less of a problem than they used to be. In fact, over the seventies, tankers averaged 24 spills a year; in the eighties, just under nine; and, in the nineties, just over seven.

Hundreds of millions of gallons of oil have spilled onto coastlines around the world since the dawn of the supertanker. Techniques have improved, but even in calm weather a complete clean-up is impossible. Any spill is a potential environmental disaster for wildlife and for human life, particularly for those who depend on tourism and the ocean for their living. Anything we can do to make sure that the effects can be mitigated is worth while. I commend this bill to the House.

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Share this | Link to this | Hansard source

in reply—I would like to thank members for participating in this important debate on the Protection of the Sea Legislation Amendment Bill 2008 and thank all members of the House for supporting the bill. Fortunately, there have not been any oil spills in Australia on the scale of some that have occurred overseas. To date, the two most significant incidents involved the Princess Anne-Marie, off the Western Australian coast in 1975, when approximately 15,000 tonnes of oil were spilt, and the Kirki, off the Western Australian coast in 1991, when approximately 18,000 tonnes of crude oil were spilt. Australia has comprehensive arrangements in place to respond to an oil spill, yet, in spite of the dedication and professionalism of the men and women involved in response activities, there is still the potential for significant pollution damage and for this to affect a range of industries and our environment.

The bill creates a third tier of compensation for damage resulting from spills of oil from an oil tanker so that the maximum amount payable increases to 750 million special drawing rights, which is approximately $1.3 billion, per incident. The bill ensures that compensation to Australian victims following an oil spill from a tanker incident is maximised and that adequate financial resources are provided for clean-up costs, economic loss and property damage, and to help with the natural recovery of Australia’s affected marine environment. It also amends the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 and the Navigation Act 1912, giving effect to the MARPOL amendments, and amends ship levy legislation relating to the definitions of ‘Australian port’ and ‘collector’.

This is good legislation for our environment. It is unfortunate that it sat on the books of the previous government for three long years and was not enacted. For too long, many of the issues in the transport portfolio just sat on the desks of ministers, with no action taking place. This government is committed to a comprehensive transport strategy. That includes making sure that the impact of transport, including maritime, is given proper consideration. This legislation, when joined with the Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Bill 2008, which was previously carried by this House, does just that. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.