Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Mental Health) Share this | Link to this | Hansard source

The opposition is happy to support the Limitation of Liability for Maritime Claims Amendment Bill 2015. On 11 March 2009, as Cyclone Hamish bore down on south-eastern Queensland, a freight vessel called the Pacific Adventurer began losing the first of 30 shipping containers containing ammonium nitrate. At least one of those containers damaged the ship as it tumbled into the water. The result was a 60-kilometre oil slick that hit the beaches of the Sunshine Coast and the northern part of Moreton Bay. The cost of cleaning up that spill reached about $34 million. The bill before us today is partly as a result of that dreadful incident. In 2009 the maximum liability applying to the Pacific Adventurer's owners was $17.5 million, leaving the public to fund the difference. That is not good enough. In an island nation like Australia, a nation endowed with fantastic coastal assets, including the Great Barrier Reef, we must do everything we can to prevent accidents but when accidents happen, either through misfortune or negligence, we must ensure that those responsible pay to clean up the damage.

After the Pacific Adventurer accident the former Labor government brought forward a proposal to increase the liability limit under the 1996 Convention on Limitation of Liability for Maritime Claims. The federal minister at the time, my colleague Anthony Albanese, pressed for that change at an International Maritime Organization meeting in London on 2 December 2009. In a speech to the organisation he explained the damage that had been done to the Australian coast in recent accidents and praised the work of Australian authorities who cleaned up the mess. He also pointed out that liability levels were inadequate. The international community agreed and the change before us today is a result of that advocacy. Labor acknowledges that the current Minister for Infrastructure and Regional Development recognised that background in his second reading speech.

The bill amends Australian law to reflect the increased international limits. It increases the liability for a medium-sized vessel, defined as one of 55,000 gross tonnes, by about $33.6 million in respect of claims relating to loss of life or personal injury. The limit with respect to what is defined as 'any other claims' will increase by $16.8 million. That is a 50 per cent increase. It will allow for fair compensation for accidents without lifting the limits so high that shipowners will be unable to obtain insurance cover. That is only proper.

Australian moves 99 per cent of the volume of its exports, worth 75 per cent of its export income, by sea. An effective maritime sector is central to the health of our economy. Moving goods by sea in an efficient manner supports jobs not only in the maritime sector but also in our vast resources and food production industries. But, at the same time, the health of our coastal areas is also critical to our economy. For example, the Great Barrier Reef is the No. 1 drawcard for tourists, especially in the booming Chinese market. Tourism related to the reef earns this nation $5.7 billion a year. It supports 65,000 jobs. The reef itself is the size of Italy.

On 3 April 2010, just a year after the Pacific Adventurer incident, a Chinese bulk coal carrier, the Shen Neng 1, ran aground on the Great Barrier Reef east of Rockhampton. The vessel was 10 kilometres away from normal shipping lanes. It gouged a hole in the reef that was three kilometres long and 250 metres wide—the equivalent of 58 football fields—and it created an oil slick more than three kilometres long. There was no Australian pilot on board. The seaman in charge at the time was later sentenced to 18 months in jail for his negligence. That is the kind of incident that underlines the importance of ensuring the proper protection of our coastal waterways.

The stakes for my state are so high. Imagine the sinking feeling if you had been a tourism business operator on the Sunshine Coast back in March 2009 as you watched that oil slick from the Pacific Adventurer encroaching on the beaches of that beautiful and economically important coastal strip. Imagine wondering about the viability of your business as the media reported the growing cost of the spill. But this bill is not just about preserving the tourism industry. It is also about making sure that, a century from now, our descendants will have the same access to the same natural wonder we enjoy right now—the Great Barrier Reef, the Sunshine Coast and coastal wonders right around our country. That is why Labor is so pleased to be supporting this bill, which, as I have said, is the result of the advocacy and common sense of the former Labor government.

I acknowledge the current government's good sense in carrying this legislation forward. It does make sense. The health of our environment and the safety of our shipping lanes are not a political issue, or at least they should not be a political issue. So, while the opposition will be pleased to support this bill, I question this government's sincerity in its broader approach to maritime issues. On several occasions since the 2013 change of government, the minister for infrastructure has foreshadowed his intentions to wind back Labor reforms to coastal shipping arrangements. These arrangements are designed to protect the viability of the Australian shipping industry by requiring foreign-flagged ships working our coastal trade routes to pay Australian-level wages. The former Labor government also amended the permit system applying to foreign-flagged vessels to require foreign ships to take on Australian officers and trainee mariners while working in Australian waters. We also provided tax breaks for Australian shippers. The intent of these laws is very simple: we want Australian companies to operate on a level playing field. We want a viable Australian shipping industry. We want to see the Australian flag flown off the back of our maritime fleet, crewed by Australians.

In a series of speeches clearly designed to undermine the current system, the minister for infrastructure has attacked these arrangements as 'red tape'. The truth is that the minister does not care about the viability of the Australian shipping industry. He wants a free-for-all on our coastal waters: 'Work Choices on water'. We know this from comments he made to the PacShip conference not long after his election. In that speech the minister said that, while he wanted a domestic shipping industry in Australia, his greatest concern was lower costs for exporters. The minister said:

To put it bluntly, there is no point in artificially propping up our coastal shipping industry if it is unable to compete—it will have an impact on our broader economy.

On this side, we do not see the shipping industry as some sort of ledger entry in the cost structure of other industries. We want a healthy domestic shipping industry and booming exports—not one or the other.

That brings me back to the bill before us and its bipartisan approach to ensuring that, when shipping accidents happen, our nation is properly empowered to send the bill to those who are responsible. Not one of the major shipping accidents that have occurred around our coast in recent times involved Australian-flagged vessels that were crewed by Australian mariners. That is because local mariners and ships' captains have years of experience working our coastal waterways. Unlike the crew of the Shen Neng 1, for example, they are familiar with the use of the proper sea lanes when it comes to ship movements around the Great Barrier Reef. They understand the environmental sensitivity of the Great Barrier Reef. They understand the importance of tourism to this nation—to communities like the Sunshine Coast and right across the country. So it makes sense to ensure that, when foreign-flagged ships are used to ship freight, there is someone on board who knows something about our waterways. On this side we know that the minister for transport is preparing to unleash an ideologically motivated attack on our maritime industry. We know he wants to use reform of the maritime sector as a stalking horse for broader industrial relations reforms across the economy down the track. Today, as we think about the practicalities of caring for our environment, I urge those opposite to rein in this dangerous ideology.

Despite the claims of those opposite, Labor's position on domestic shipping is not an exercise in protectionism. If you want that go to that bastion of the free market, the United States, where the Jones Act prohibits all foreign vessels and foreign crews from working domestic trade routes. Nor is our position an exercise in the creation of red tape. Labor's position is based on fairness and caution—fairness in terms of maintaining a level playing field for Australian shipping companies and caution in maintaining an Australian presence on our waterways in the circumstances where producers engage foreign flagged vessels for domestic trade. I commend the bill to the Senate.

Michaelia Cash (WA, Liberal Party, Assistant Minister for Immigration and Border Protection) Share this | Link to 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.