Bills Digest no. 100 2007–08
Protection of the Sea (Civil Liability for Bunker Oil
Pollution Damage) Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Protection of the Sea (Civil
Liability for Bunker Oil Pollution Damage) Bill
2008
Date
introduced: 20
March 2008
House: House of Representatives
Portfolio: Infrastructure, Transport, Regional
Development and Local Government
Commencement:
Royal Assent or the day
when the International Convention on Civil Liability for Bunker Oil
Pollution Damage comes (or enters) into force in Australia,
whichever is the later. If the Convention does not enter into
force, the provisions will not commence.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
To establish the legislative regime necessary to
implement the International Convention on Civil Liability for
Bunker Oil Pollution Damage in Australia.
The 2001
International Convention on Civil Liability for Bunker Oil
Pollution Damage (the Bunker Oil Convention) establishes a
liability and compensation regime for pollution damage caused by
spills of bunker oil. Bunker oils are those used in the operation
of the relevant ship, including fuel oil for its engines. This
contrasts with oil carried as cargo.
The Bunker Oil Convention is one of a series of maritime
pollution conventions created by the International Maritime Organisation (IMO)
over recent decades. Spills from oil tankers, including of bunker
oil, are covered by the 1992 International Convention on Civil
Liability for Oil Pollution Damage.[1]
The Bunker Oil Convention applies to pollution damage caused by
spills of bunker oil from ships (other than oil tankers) that are
in the waters[2] of
countries that are Parties to the Convention. The key features
include:
- the shipowner is strictly liable for pollution damage caused by
bunker oil on board or originating from the ship (Article 3);
- the shipowner is able to limit liability under any applicable
State or international regime (Article 6);
- the registered owners of ships having a gross tonnage greater
than 1,000 are required to maintain insurance to cover any
potential liability (Article 7(1)); and
- claims for compensation for pollution damage may be brought
directly against the insurer (Article 7(10)).
The Bunker Oil Convention was signed by Australia in 2002, but
Australia has not ratified it as yet. As the Convention has
achieved the requisite number of ratifications, it will come into
force internationally on 21 November 2008. If Australia ratifies
the Bunker Oil Convention on or before 21 August 2008, it will
enter into force on 21 November. Otherwise the Bunker Oil
Convention will enter into force 3 months after it is ratified by
Australia.
The Bunker Oil Convention was tabled in Parliament in March
2006. It was subject to a relatively brief review process by the
Joint Standing Committee on Treaties (JSCOT). The key part of the
JSCOT
report stated:[3]
There will be minor costs associated with
ensuring compliance with the Bunkers Convention, in particular,
Australian Customs Service will be responsible for verifying that
ships are carrying the relevant certificates. However, similar
inspection and certification procedures are already in place so the
existing checks will be extended to cover the insurance
certificate. Furthermore, ships entering Australian ports are
already required by the Civil Liability Act to be insured to cover
pollution damage.
Consultation was undertaken with stakeholders
in three stages: first, during the development of proposals for a
new convention and the preparation of technical briefs for the
Australian delegation attending the Legal Committee sessions where
the text of the Convention was being drafted; second, during the
preparation of the brief on the final text for the Australian
delegation attending the Diplomatic Conference; and third, after
the Bunkers Convention was adopted, when determining whether
Australia should adopt the Bunkers Convention.
Key groups within the shipping industry,
including the Australian Shipowners Association, Shipping Australia
Limited (which represents overseas shipowners operating in
Australia) and the Association of Australian Ports and Marine
Authorities all support adoption of the Bunkers Convention.
The Bunkers Convention will be implemented by a
proposed Protection of the Sea (Civil Liability for Bunker Oil
Pollution Damage) Bill which is expected to be introduced into
Parliament in 2006.
The Committee supports the establishment of a
liability and compensation regime for oil pollution damage caused
by oil spills other than from oil tankers.
Recommendation 4 - The
Committee supports the International Convention on Civil
Liability for Bunker Oil Pollution Damage and recommends that
binding treaty action be taken [emphasis
added].
The implementation of IMO maritime pollution
conventions through Commonwealth legislation is a fairly routine
matter. The provisions of the Protection of the Sea (Civil
Liability for Bunker Oil Pollution Damage) Bill 2008 (the Bill),
including those creating some strict liability offences[4] for both ships masters
and owners are generally in accordance with similar past
legislation such as the Maritime Legislation Amendment
(Prevention of Air Pollution from Ships) Act 2007 and the
Protection of the Sea (Harmful Anti-fouling Systems) Act
2006.
The Explanatory Memorandum states that there are no financial
implications arising from the Bill.
Clause 4 is a fairly standard provision stating
that while Commonwealth, State and Territory governments are bound
by the Bill, they cannot be prosecuted for any offence under it. A
ship that is owned or operated by a Commonwealth, State and
Territory government will only be potentially subject to the
liability regime if was being used for commercial purposes:
clause 9.
Under clause 6, unless the contrary intention
appears, the Bill (and thus relevant parts of the Convention)
applies outside of Australian waters. So for example,
Australian-registered ships operating in international or foreign
waters could still be potentially subject to relevant requirements
imposed by the Bill.
Part 2 of the Bill sets out the liability of
shipowners for pollution caused by bunker oil. Clause
11 states the relevant liability provisions of the Bunker
Oil Convention[5]
have the force of (Commonwealth) law. Financial liability only
applies where the pollution damage occurs in Australia or its
exclusive economic zone (EEZ), or where preventative measures are
taken outside the EEZ in order to combat pollution that threatens
the EEZ.
Note that as is commonly the Australian practice in relation to
implementation of certain IMO maritime pollution conventions,
States and Territory Governments may give effect to the relevant
conventions through their own laws, In such cases, the provisions
Bill will not apply: clause 10. However, there are
restrictions on when this ousting of Commonwealth law will occur
for example the Bill would continue to apply where the relevant
ship(s) involved in the pollution incident was engaged in an
international voyage: subclause 10(2).
Part 3 requires that certain ships carry
insurance certificates relating to liability for pollution damage.
Ships under 1,000t gross tonnage, and government ships used for
non- commercial purposes, are exempt from this. Certificates may be
issued by both the Australian Maritime Safety Authority (AMSA) or
an authority of a foreign country, depending on the
circumstances.
Clauses 16-17 set out the offence provisions
applying to the ships master and owner if the relevant ship does
not have the appropriate insurance certificate.[6] For ease of reference, a table in
clause 15 sets of the type of certificate that is
required, depending on where the ship is registered, and who owns
or operates it.
For foreign-registered ships, the offence provisions seem only
to relate to when the ship enters or leaves an Australian port or
offshore facility. Thus they would not apply to a foreign ship that
is merely transiting Australian waters. The offence is one of
strict liability (ie no fault has to be proved), and carries a
maximum penalty of 500 penalty units ($55 000). However, if the
ship owner is a corporation, the maximum penalty for a prosecution
would be five times that, or $275 000. The fact that the offence is
one of strict liability and applies to both ships masters and
owners is common practice in recent Commonwealth maritime pollution
legislation of this type. The Explanatory Memorandum
comments:[7]
It is appropriate that an offence for breach of
clause 16 be a strict liability offence for consistency with the
equivalent offence in the Protection of the Sea (Civil
Liability) Act 1981. The offence is directed only at the
registered owner or master of a ship. Such a person can be expected
to be fully aware of the requirements of the legislation (and of
the Bunker Oil Convention) and the need to have an insurance
certificate on board a ship.
The collective liability of the registered
owner and master for an offence against clause 16 is appropriate
for a number of reasons. Firstly, although the master has immediate
responsibility for ensuring that appropriate certificates are
carried on board a ship, it is the registered owner's
responsibility to ensure that the ship is insured to cover the
owner's liabilities under the applied provisions of the Bunker Oil
Convention. It may be the case that the registered owner has not
arranged for the appropriate insurance cover nor obtained an
insurance certificate. In such a case, although it is the master
who has committed the actual act that breached the law by, for
example, bringing a ship without a certificate into a port, the
owner is equally culpable.
Secondly, where an offending ship is foreign
owned, there is unlikely to be any jurisdictional presence of the
owner, which will jeopardise any prosecution against an owner. The
arrest of the master may encourage an owner to submit to the
jurisdiction in exchange for dropping a prosecution against the
master in order to allow the ship to sail. This mechanism allows
the prosecution of a defendant who may have greater culpability and
who would otherwise escape liability.
It is also well established in shipping law
that offence provisions should apply collectively to the master and
the owner. There is precedent in both State and Commonwealth
legislation. This is the basis for the comment in A Guide to
Framing Commonwealth Offences, Civil Penalties and Enforcement
Powers that provides that "collective responsibility is well
established in shipping law [where] it has been traditional for
offence provisions to apply to master and owner".
Clause 17 is similar to clause
16 but applies to Australian registered ships. However,
the offence may occur at any time the ship is in operation .
Clauses 18-19 are administrative provisions
that deal with the issuing of insurance certificates to ships
registered either in Australia or a country that is not a Party to
the Bunker Oil Convention. Notably, AMSA must be satisfied that the
registered owner (or the operator, if it is a ship leased and
operated by the Commonwealth, or a State or Territory Government)
has financial insurance cover at least up to the limits of
liability applying to ships the Bunker Oil Convention. Insurance
certificates applying to non-government ships may be subsequently
cancelled by AMSA if it is satisfied that the registered owner no
longer has the appropriate financial cover: clause
22. Such a cancellation, as well as any refusal to issue a
certificate in the first place, is reviewable by the Administrative
Appeals Tribunal: clause 24.
Clauses 20-21 deal with powers of enforcement
officers . These are customs officers, surveyors appointed under
the Navigation Act 1912, or persons included in a class of
persons prescribed by regulations: clause 3.
Enforcement officers can require the ships master or other person
in charge to produce the appropriate insurance certificate:
clause 20. A failure to comply with the
requirement is a strict liability offence, carrying a penalty of 20
penalty units ($2 200).[8]
Clause 21 enables an enforcement officer to
detain a ship attempting to leave an Australian port if they have
reasonable grounds to believe that the ship does not have the
relevant insurance certificate. Should a ship be detained, and then
leaves (or attempts to leave) before being released from detention,
both the ships master and owner commit a strict liability offence,
carrying a maximum penalty of 2,000 penalty units ($220,000), or
$1,100,000 if the owner is a corporation.
Part 4 deals with miscellaneous matters.
Notably, clauses 28 and 29 deal with the situation
in which the owner of a ship that comes within the jurisdiction of
the Bill is a partnership or unincorporated association. Under
these clauses, each member of the partnership, or each member of
the association s management committee, may be liable for an
offence as owner of the relevant ship, but only where they can be
proven to have known, or reasonably ought to have known, that the
partnership or association was the registered owner.
Angus Martyn
12 May 2008
Bills Digest Service
Parliamentary Library
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