The Rudd Labor Government will temporarily increase the Protection of the Sea Levy by 3 cents per net registered tonne in order to recover the clean-up costs of the Pacific Adventurer bunker oil spill incident off the Queensland coast last March.

This increase of 3 cents brings the levy to 14.25 cents per net registered tonne.

The fact that the levy may need to be increased was first flagged by the Rudd and Bligh Governments in a media statement, dated 8 August 2009.

In August last year, Swire Shipping, the owner of the Pacific Adventurer agreed to pay $25 million for compensation for valid claims arising from the oil spill.

Although the payment agreed was in excess of the company’s legal obligations, it was below the actual cost of the clean-up, estimated to be $31 million.

Taxpayers should not have to bear the additional costs of the clean up.

In accordance with the ‘polluter pays’ principle, we are increasing the Protection of the Sea Levy by a small amount until the clean-up costs have been met.

The Australian Maritime Safety Authority, which coordinates oil spill responses, will reimburse the Queensland Government for the shortfall.

A court administered limitation fund has already been established and this will provide compensation for the valid private claims for compensation, as well as some of the clean-up costs.

We have taken this step because the current liability limit set out in the International Maritime Organisation’s 1996 Convention on the Limitation of Liability for Maritime Claims is too low to cover the actual costs of the clean- up.

The Government believes the international liability limit on merchant vessels should be lifted. That’s why we have put this issue on the IMO’s agenda for this year.

The Protection of the Sea Levy is charged against ships based on the ‘potential polluter pays’ principle and applies to vessels 24 metres or more long, with 10 tonnes or more oil as fuel or cargo.

The levy increase is expected to be in place from 1 April 2010. A Cost Recovery Impact Statement is available on the AMSA website, www.amsa.gov.au.