Michaelia Cash (WA, Liberal Party, Assistant Minister for Immigration and Border Protection) Share this | Hansard source

I thank senators for their contributions to the Limitation of Liability for Maritime Claims Amendment Bill 2015. Australia is party to the 1996 protocol to the Convention on Limitation of Liability for Maritime Claims, which allows a shipowner—including the charterer, manager or operator of the ship—or salvor to limit the total amount they can be required to pay for damage caused by the ship, the shipowner or the ship salvor. Allowing shipowners to limit their liability in respect of ship sourced damages balances the tension between compensating those who suffer loss or damage caused by the shipowners or their representatives and ensuring ship operators are able to access insurance to cover liability for that damage.

Australia implemented the 1996 limitation of liability for maritime claims protocol through the Limitation of Liability for Maritime Claims Act 1989. The purpose of the bill is to implement amendments to the 1996 limitation of liability for maritime claims protocol which will enter into force internationally on 8 June 2015. Australia was the leading advocate of increasing the liability limits under the 1996 protocol at the IMO. Following the Pacific Adventurer incident off the Queensland coast on 11 March 2009 which involved a bunk oil spill, the costs for cleaning up the spill were estimated at $34 million. However, under the 1996 LLMC protocol the shipowner was legally entitled to limit its liability to approximately $17.5 million.

The 1996 LLMC protocol uses special drawing rights to quantify the liability limits. Based on conversion rates as of 5 February 2015, the financial liability for a medium sized vessel of 50,000 gross tonne in respect of claims for loss of life or personal injury amounts to an increase of approximately A$33,600,000. A claim for the same sized vessel made in regard to any other claims amounts to an increase of approximately A$16,800,000. The maximum liability of a shipowner is usually calculated based on the size of the ship. The amendments were expected to have a minor impact, if any, on insurance costs for ships. Insurance for the global shipping industry is organised through insurance pools whereby premiums respond to calls on those insurance pools rather than fluctuating as a direct result of increases in liability limits.

There was wide support amongst signatory states to the 1996 protocol on the need to review the limits of liability in order to ensure the availability of adequate compensation to victims. The Australian Shipowners Association and the International Chamber of Shipping support the increase in liability limits. Ensuring the LLMC liability limits are raised in Australia as soon as they enter into force will reduce the risk of having to seek an increase to the protection of the sea levy in the event that the shipowner's liability and/or insurance for an incident is insufficient or absent. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.