Mar 20, 2008

Big Rise in Compensation for the victims of oil spills

Big Rise in Compensation for the victims of oil spills

MEDIA RELEASE – The Hon Anthony Albanese MP

Minister for Infrastructure, Transport,

Regional Development and Local Government

20 March 2008

The Rudd Labor Government will make sure oil and shipping companies responsible for oil spills within Australian waters are held financially accountable for the damage caused to our coastal ecosystems and communities.

After years of inaction by the previous government, we are moving quickly to ratify two major international maritime treaties by introducing into the Parliament today the Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Bill 2008 and foreshadowing further legislative action in the upcoming winter session.

Every year some 3,500 cargo vessels as well as more than 200 oil tankers and chemical carriers navigate through Australian waters, including near environmental icons such as Queensland’s Great Barrier Reef and Western Australia’s Ningaloo Reef.

The Government must and will do more to protect our nation’s fragile environmental assets for current and future generations.

Protection of the Sea (Civil Liability for Bunker Oil Pollution Damage) Bill 2008

This legislation will place into Australian law the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 – a multilateral agreement requiring ship owners to take out insurance to cover their liabilities in the event their vessels spill fuel (bunker) oil.

Bunker oil is used to drive ships’ engines and has been historically the most persistent form of oil pollution. It is very difficult to clean up and can have a potentially devastating impact on coastal communities and livelihoods as well as marine and coastal wildlife.

While Australia legislated in 2001 to require ships entering Australian ports to have documentation on board demonstrating they have insurance coverage, they can only be held accountable for spills IF the shipowner is found to be at fault.

If our new legislation isn’t passed by the Parliament then clean up and compensation costs will continue, in most cases, to be borne by the Australian taxpayer.

Ratification of the Convention will help strengthen the Government’s approach to marine pollution within a consistent framework of strict liability and compulsory insurance.

This legislation will mean that ships entering Australian waters will be strictly liable for bunker oil spills and will have to carry compulsory insurance to cover any pollution damage, including the cost of clean-up and the economic losses incurred by innocent third parties.

In addition, the ship’s insurer will be liable if there is any difficulty in recovering damages from the ship owner.

The maximum amount of compensation available depends on the size of the ship involved. For example, for a typical container ship with a gross tonnage of 35,000, the maximum compensation payable for one particular incident is about $24 million.

This Convention will allow governments to go further in cost recovery and compensation payments than is normally allowed in domestic legislation.

Protection of the Sea Legislation Amendment Bill 2008

In addition to the legislation being introduced today, the Rudd Labor Government also intends to introduce further legislation in the forthcoming winter sittings of Parliament to strengthen the existing compensation regime that applies to oil spills from oil tankers.

The legislation will increase the existing maximum compensation level from approximately $360 million to about $1.33 billion.

This will ensure that should a major oil spill occur on the Australian coastline, the organisations responsible will provide appropriate levels of compensation.

These two pieces of legislation will strengthen Australia’s maritime environment protection framework and align it with international best practice.