PROTECTION OF THE SEA LEGISLATION AMENDMENT BILL 2008

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.

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.