Oil spill clean-up an insurance nightmare
Australia’s shipping industry has backed the company involved in the Moreton Bay oil spill in March, hitting out at the Queensland and federal governments over their demand it pay all clean-up costs.
Shipping Australia CEO Llew Russell says the announcement last week that Swire Shipping must pay all clean-up costs as a result of the Pacific Adventurer’s spill has been met with disbelief by members.
The Hong Kong cargo ship spilled 270 tonnes of fuel oil into Brisbane’s bay after a container pierced the fuel tank in a heavy storm.
“The nature of shipping operations is such that potential liabilities that may be incurred are out of all proportion to what a ship owner must invest in the enterprise,” Mr Russell said.
“The real question is how do you insure against an unidentifiable risk which could range up to many hundreds of millions of dollars?”
Queensland Premier Anna Bligh says her Government has always insisted the “polluter” must pay the clean-up cost, estimated at $34 million.
Swire Shipping says it has always promised to meet its full responsibilities under Australian law for the clean-up but never stated it would cover all costs.
“All costs are still unknown and there is a limit to the amount of claims the company and its insurers can accept,” the company said.
“Any decision to offer compensation that is significantly above the limit determined by the Convention on Limitation of Liability for Maritime Claims would risk becoming a precedent in international law. As a result, insurance premiums and freight rates could rise significantly.”
Shipping Australia CEO Llew Russell says the announcement last week that Swire Shipping must pay all clean-up costs as a result of the Pacific Adventurer’s spill has been met with disbelief by members.
The Hong Kong cargo ship spilled 270 tonnes of fuel oil into Brisbane’s bay after a container pierced the fuel tank in a heavy storm.
“The nature of shipping operations is such that potential liabilities that may be incurred are out of all proportion to what a ship owner must invest in the enterprise,” Mr Russell said.
“The real question is how do you insure against an unidentifiable risk which could range up to many hundreds of millions of dollars?”
Queensland Premier Anna Bligh says her Government has always insisted the “polluter” must pay the clean-up cost, estimated at $34 million.
Swire Shipping says it has always promised to meet its full responsibilities under Australian law for the clean-up but never stated it would cover all costs.
“All costs are still unknown and there is a limit to the amount of claims the company and its insurers can accept,” the company said.
“Any decision to offer compensation that is significantly above the limit determined by the Convention on Limitation of Liability for Maritime Claims would risk becoming a precedent in international law. As a result, insurance premiums and freight rates could rise significantly.”