Queensland threatens maritime convention
The Queensland Government has rejected an offer by the shipping company responsible for the Moreton Bay oil spill in March. But it shouldn’t expect any support from marine insurers.
In a meeting with Premier Anna Bligh last week, Swire Shipping offered a payment substantially above the $14.5 million limit of liability that applies to the Pacific Adventurer fuel oil spill and on top of the $2 million it has already spent on the clean-up.
Swire’s Australia CEO Bill Rothery says while the company has offered to pay a “significant” contribution, it will not accept unlimited liability that could undermine the internationally accepted Convention on Limitation of Liability for Maritime Claims.
But Ms Bligh is adamant the company must pay the full estimated cost of $34 million for the clean-up. She is now threatening that ships stopping at Queensland ports will pay a new tax on top of their port charges to recoup the cost of the spill.
State Climate Change Minister Kate Jones says Swire should “do the right thing and pay for the full cost of the clean-up”.
Associated Marine Insurers MD Stephen Ford told insuranceNEWS.com.au it’s important that the convention is not undermined because it provides certainty to shipowners about their potential exposures in the event of a pollution incident.
“This allows them to arrange appropriate insurance cover,” he said. “Their protection and indemnity (P&I) cover – which is usually with a London-based mutual P&I club – permits shipowners to commit their capital.
“Without this certainty the business of shipping would be much less attractive, and certainly more expensive. That would lead to more expensive shipping costs with an inevitable impact on local and international trade.”
Mr Ford believes the Queensland Government’s only options to avoid a similar incident or to recoup costs are to ban vessels from Queensland waters or ask them to pay more – “but that is not going do the Queensland economy much good”.
In a meeting with Premier Anna Bligh last week, Swire Shipping offered a payment substantially above the $14.5 million limit of liability that applies to the Pacific Adventurer fuel oil spill and on top of the $2 million it has already spent on the clean-up.
Swire’s Australia CEO Bill Rothery says while the company has offered to pay a “significant” contribution, it will not accept unlimited liability that could undermine the internationally accepted Convention on Limitation of Liability for Maritime Claims.
But Ms Bligh is adamant the company must pay the full estimated cost of $34 million for the clean-up. She is now threatening that ships stopping at Queensland ports will pay a new tax on top of their port charges to recoup the cost of the spill.
State Climate Change Minister Kate Jones says Swire should “do the right thing and pay for the full cost of the clean-up”.
Associated Marine Insurers MD Stephen Ford told insuranceNEWS.com.au it’s important that the convention is not undermined because it provides certainty to shipowners about their potential exposures in the event of a pollution incident.
“This allows them to arrange appropriate insurance cover,” he said. “Their protection and indemnity (P&I) cover – which is usually with a London-based mutual P&I club – permits shipowners to commit their capital.
“Without this certainty the business of shipping would be much less attractive, and certainly more expensive. That would lead to more expensive shipping costs with an inevitable impact on local and international trade.”
Mr Ford believes the Queensland Government’s only options to avoid a similar incident or to recoup costs are to ban vessels from Queensland waters or ask them to pay more – “but that is not going do the Queensland economy much good”.