The Australian Parliament has today approved legislation strengthening the compensation regime that applies when oil spills occur within Australian waters – quadrupling the maximum amount of compensation from $350 million to $1.3 billion.

The successful passage of the Protection of the Sea Legislation Amendment Bill 2008 makes good on the Rudd Labor Government’s promise to do more to protect our nation’s fragile environmental assets for current and future generations.

The legislation brings into effect the Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage – a multilateral agreement which levies oil importers to fund an insurance scheme for the victims of oil spills.

These levies are paid by the oil importers of the 21 countries currently party to the Protocol including Denmark, France, Germany, Italy, Japan and the United Kingdom.

In Australia, companies liable to make contributions to the Fund will include refiners of petroleum products and some of the major resource companies.

In the event of a major oil spill, monies from the Fund may be used to cover the clean-up costs as well as help with the recovery of affected marine environments and coastal communities.

In recent years, major oil spills overseas have proven that the maximum amount of compensation afforded under the old scheme was insufficient.

For examples, in the Nakhodka oil spill off the coast of Japan in 1997, the Erika spill off France in 1999 and the Prestige spill off Spain in 2002 the funds available under the old scheme proved insufficient, with claimants unable to get the full amount of their approved compensation.

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 WA’s Ningaloo Reef.

Australia’s accession to the Protocol will help strengthen the Government’s approach to marine pollution and create a consistent approach to managing the impact and risks associated with oil spills.