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French, Justice Robert --- "Compensation for marine pollution" (FCA) [2007] FedJSchol 23

Speeches

Admiralty Judges' Seminar
Federal Court of Australia

Compensation for Marine Pollution

Justice RS French

25 October 2007


Introduction

1 History and mythology demonstrate long-standing beliefs that the sea is a solvent that washes away all evils. In the closing passage of her recent book: The Sea Can Wash Away all Evils - Modern Marine Pollution and the Ancient Cathartic Ocean, Professor Kimberley Patton said:

Assumptions about the ocean's ability to sequester and to purify, which have been expressed religiously in the traditional conflation of moral and religious danger - the ancient Greek catharsis of murder's stain in the sea; the Inuit migration of human transgressions to the hair of an angry undersea spirit; the medieval Hindu mare-fare, burning with ill-managed divine wrath, who must dwell on the submarine floor and feed on seawater - are now, in the developed world, expressed literally in the entrenched practices of shoreline pollution and ocean dumping. [1]

Fortunately as Professor Patton observed these practices have come to be challenged albeit relatively recently. In the second half of the twentieth century there was ample evidence of accelerating concern about marine pollution. Since 1948 a significant number of international Conventions, to which Australia is a party, have been made to protect the marine environment and to provide compensation for those affected when oil spills and other major polluting events occur in it. This paper reviews those international instruments and their application in Australian domestic law with particular emphasis on the provision for compensation for damage caused by marine pollution.[2]

International law on maritime safety and the protection of the marine environment

2 Maritime treaties date back to the 19th century. The most important international treaty relating to the Safety of Life at Sea, known as The SOLAS Convention, was made following the sinking of the Titanic in 1912. In 1926 an attempt was made to establish an International Marine Conference but the relevant Convention was not ratified.

3 In 1948, a Conference was held in Geneva under the auspices of the United Nations. It adopted a Convention setting up the Inter-governmental Maritime Consultative Organisation (IMCO). Because of concerns about the effect of the Convention on their sovereignty held by some maritime nations it did not enter into force until 1958. It was then ratified by the necessary 21 States. In 1982 the IMCO became the International Maritime Organisation (IMO). Today it has some 167 member states. It is based in the United Kingdom . It has about 300 staff. Its purposes are set out in Article 1(a) of the Convention. As currently formulated they are:

To provide machinery for cooperation among governments in the field of governmental regulation and practices relating to technical matters of all kinds affecting shipping engaged in international trade; to encourage and facilitate the general adoption of the highest practicable standards in matters concerning maritime safety, efficiency of navigation and prevention and control of marine pollution from ships.

4 Independently of the IMCO, a Convention for the Prevention of the Pollution of the Sea by Oil, OilPol 54, was established at the instigation of the British Government following a Royal Commission. The Convention was adopted by an International Conference on 12 May 1954 and came into force on 26 July 1958. It was the first Convention which had the object of preventing marine oil pollution by tankers. It prohibited tankers from discharging oil in specified zones. In 1959, the IMCO took over its administration. It was amended in 1962 and 1969. The 1969 amendments imposed more stringent requirements for operational discharges. They were consistent with the "load-on-top system" used by oil tankers.[3]

5 The Geneva Convention on the High Seas 1958 included two provisions about marine pollution. Under Article 25 State Parties were required to take steps to prevent pollution from the dumping of radioactive waste. States accepted a general obligation in relation to activities involving radio active or other harmful agents.

6 In 1967 the oil tanker, the Torrey Canyon, ran aground in international waters off the coast of England. About 100,000 tonnes of oil spilt from the ship and polluted the coasts of England and France. A few days after the incident the United Kingdom government bombed the ship in order to burn remaining oil. Strictly it had no right to do so at international law as the Torrey Canyon was a foreign flagged vessel and was beyond three nautical miles of the English coast.

7 As a result of the Torrey Canyon incident, the International Convention on Civil Liability for Oil Pollution Damage 1969 (CLC) was made under the auspices of the IMCO. Under the Convention a compulsory insurance scheme was established to provide for compensation for oil spills from tankers. Strict liability was to be imposed on shipping owners subject to an upper limit. Claims could be made directly against the insurer. It was supplemented by a voluntary compensation scheme, the Tanker Owners' Voluntary Agreement Concerning Liability for Oil Pollution 1969 (TOVALOP) entered into by shipping insurers and P & I Clubs. Ship owners who were parties to the agreement were indemnified for payments made by the fund so established. Another Convention was also made in 1969 to provide for action of the kind taken by the United Kingdom to destroy the Torrey Canyon in international waters. That was the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties. It was known as the Intervention Convention. It conferred on coastal States power to take self-help measures beyond the limits of their territorial waters following upon a maritime accident resulting in oil pollution which could have major harmful consequences. In 1973 a Protocol to the Intervention Convention extended it to pollution by substances other than oil (PROT).

8 In 1971 the International Convention on the Establishment of an International Fund for Oil Pollution Damage (the Fund Convention) was made. Under the Convention ompensation under the 1971 Fund Convention would be payable when a valid claim against the CLC exceeded the maximum for which the CLC provided. Another voluntary scheme was established in 1971 called CRISTAL, the "Contract Regarding an Interim Supplement to Tanker Liability for Oil Pollution". Oil companies agreed under that scheme to pay monies into a fund which supplemented the Fund Convention. TOVALOP and CRISTAL ceased on 20 February 1997.

9 The 1970s also saw the making of a Convention relating to Civil Liability in the field of Maritime Carriage of Nuclear Material (1971) and a Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (1972) (London Convention). The London Convention regulated the deliberate disposal at sea of substances including oily waste, dredging and land generated wastes. It did not apply to oil pollution from operational discharges in the normal operation of ships. Nor did it apply to pollution caused by maritime casualties.

10 In 1973 the important International Convention for the Prevention of Pollution from Ships (MARPOL 73) was established. Its object was to prevent pollution of the marine environment from operational and accidental discharge of oil and other harmful substances. It was initially made at a Conference convened by the IMCO in 1973. As there were insufficient ratifications for it to come into force a second Conference was called in 1978. that Conference approved a Protocol which subsumed the 1973 Convention. The second MARPOL Convention was known as MARPOL 73/78. The Amoca Cadiz spill in March 1978 stimulated the ratification process and the revised Convention came into force in 1983.

11 MARPOL 73/78 is a very large Convention. It has six Technical Annexes. The sixth Annex relating to air pollution from ships was adopted at an IMO Conference in 1997 by a Protocol designated MARPOL PROT 1997. The Technical Annexes are entitled as follows:

Annex 1 - Regulations for the Prevention of Pollution by Oil

Annex 2 - Regulations for the Control of Pollution by Noxious Liquid Substances in Bulk

Annex 3 - Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form

Annex 4 - Prevention of Pollution by Sewage from Ships

Annex 5 - Prevention of Pollution by Garbage from Ships

Annex 6 - Prevention of Air Pollution from Ships

Annex 1 by itself comprises 109 pages and has recently been comprehensively amended with effect from 1 January 2007. The various Annexes came into force at different times and have been amended from time to time. Codes have been made under MARPOL 73/78. They relate to the construction and equipment of ships carrying dangerous chemicals.

12 An International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC) was made in 1990 and came into force on 13 May 1995. The International Convention on Liability and Compensation for Damage in connection with the carriage of Hazardous and Noxious Substances by Sea (HNS) was made in 1996 and has not yet come into force. It would provide a system for compensation and liability covering all kinds of hazardous and noxious substances. The ship owner would have strict liability with greater maxima than are presently available. It also proposes a system of compulsory insurance and insurance certificates. The liability of ship owners would be supplemented by an HNS fund financed by cargo interests. Contributions to the fund would be levied on persons within the territory of the Contracting Parties who received a certain minimum quantity of HNS cargo during a calendar year. It goes further than the oil pollution regime as it covers not only pollution damage, but also the risks of fire and explosion.

13 A 1996 Protocol to the London Convention represented a major change in regulation of the use of the sea as a depository for waste material. It introduced a "precautionary approach" which requires "appropriate preventative measures be taken when there is reason to believe that wastes or other matter introduced into the marine environment are likely to cause harm even when there is no conclusive evidence to prove a causal relationship between inputs and their effects". It also provided that the polluter should in principle bear the costs of pollution.[4]

14 In 2000 a Protocol on Preparedness, Response and Cooperation to Pollution Incidents by Hazardous and Noxious Substances (HNS Protocol) was made. 2001 saw the making of the International Convention on Control of Harmful Anti-fouling Systems on Ships (AFS). In 2002, a new Convention was agreed relating to liability and compensation for damage and cleanup costs flowing from oil spills from non-tankers. This was the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001. It provided for a compulsory insurance liability and compensation system for oil spills from cargo and passenger ships. Its terms are similar to the CLC.[5] In 2004 an International Convention for the Control and Management of Ships' Ballast Water and Sediments was also made.

15 In addition to the IMO Conventions there are United Nations Conventions which have a bearing on marine pollution. The United Nations Convention on the Law of the Sea 1982 (UNCLOS) includes, in Article 192, an obligation to protect the marine environment. Article 211 imposes general obligations to prevent, reduce and control pollution of the marine environment from vessels. The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal entered into force in 1992 and filled a loophole left by the London Convention.

The International Oil Pollution Compensation Funds

16 There are three International Oil Pollution Compensation Funds (IOPC Funds). These are the 1971 Fund, established pursuant to the 1971 Fund Convention, the 1992 Fund, established pursuant to the 1992 Fund Convention and the Supplementary Fund. The organisations administering the funds were established in 1978, 1996 and 2005 respectively. They have a joint secretariat which is based in London. They provide different maxima for compensation and have different Member States. The 1971 Fund Convention ceased to be in force on 24 May 2002 following a number of denunciations and does not apply to pollution incidents occurring after that date. It no longer has Member States but continues to be available in respect of incidents occurring prior to the cessation date. The number of States which are party to the 1992 Fund has increased. The Supplementary Fund provides additional compensation over and above that available under the 1992 Fund.

17 As at 31 December 2006 the 1971 Fund, which was established in October 1978, had been the subject of claims arising out of 100 incidents. The total compensation paid out of the Fund amounted to £329 million or US$631 million.[6] Incidents involving the 1971 Fund in which the total compensation paid exceeded £2 million are listed as follows:

Table 1

18 The 1992 Fund has been the subject of claims arising out of 31 incidents since its creation in May 1996. Total compensation paid out of that Fund amounts to £224.6 million or US$438.6 million. There are three incidents in respect of which the 1992 Fund has made compensation payments exceeding £2 million. They were:

Table 2

As at 14 September 2007 no claims had been made on the Supplementary Fund.[7]

The International Tanker Owners' Pollution Federation

19 The International Tanker Owners' Pollution Federation Ltd (ITOPF) was set up in 1968 to help tanker owners meet their obligations under CRISTAL. Its main function is advising and assisting in cleaning up of oil spills. Although CRISTAL ended in 2002, ITOPF continued to operate. It acts on behalf of tanker owners and bareboat charterers. It also keeps oil spill statistics.[8] These statistics are revealing of a significant decline in the volume of oil spills since the 1970s. Decade by decade they are as follows:

1970s 3,142,000 tonnes

1980s 1,176,000 tonnes

1990s 1,138,000 tonnes

2000-2006 176,000 tonnes

The statistics indicate that the major part of the volume spilt came from a few large spills. Most spills were small involving less than 7 tonnes of oil.

Commonwealth and State laws relating to marine pollution

20 Under the Offshore Constitutional Settlement between the Commonwealth and the States entered into in 1979 the Commonwealth enacted the Coastal Waters (State Powers) Act 1980 (Cth) in reliance upon s 51(xxviii) of the Constitution. Under that Act the States have concurrent power with the Commonwealth to legislate up to three miles offshore. Commonwealth laws on marine pollution and environmental protection apply outside the three mile limit unless the State or Territory has not made a relevant law within the limit or, for example, the State Act only partly covers the field.

21 Relevant Commonwealth laws are as follows:

1. Protection of the Sea (Prevention of Pollution from Ships) Act 1983

2. Navigation Act 1912 Div 12, 12A, 12B and 12C

Marine Orders Pts 91-96 covering oil, noxious liquid substances, harmful packaged substances, garbage and sewage. All of the above give effect to MARPOL 73/78.

3. Protection of the Sea (Oil Pollution Compensation Fund) Act 1993.
This and like State legislation give effect to the Fund Convention.

4. Protection of the Sea (Powers of Intervention) Act 1981. This gives effect to the Intervention Convention.

5. Protection of the Sea (Civil Liability) Act 1981. This gave effect to the CLC.

6. Protection of the Sea (Shipping Levy) Act 1981 and Environment Protection (Sea Dumping) Act 1981.
These give effect to the London Convention.

7. The Hazardous Waste (Regulation of Exports and Imports) Act 1989. This gives effect to the Basel Convention.

8. The Environment Protection and Biodiversity Conservation Act 1999.

22 In addition there is an array of State and Territory laws giving effect to Convention obligations within the three mile zone. They include the following:

1. Transport Operations (Marine Pollution) Act 1995 (Qld). This gives effect to MARPOL and follows the same structure.

2. The Environmental Protection Act 1994 (Qld).

3. Transport Operations (Marine Safety) Act 1994.

4. Coastal Protection and Management Act 1995 (Qld).

5. Marine Parks Act 2004 (Qld).

6. Marine Pollution Act 1987 (NSW). This Act also gives effect to MARPOL. It applies in New South Wales' State waters. In addition there is a large number of other New South Wales statutes dealing with pollution, not only of the sea but also of harbours, bays and rivers.

7. Pollution of Waters by Oil and Noxious Substances Act 1986 (Vic). This Act also gives effect to MARPOL.

8. Environment Protection Act 1970 (Vic). Its application is concurrent with that of the Pollution Act.

9. Pollution of Waters by Oil and Noxious Substances Act 1987 (Tas) which gives effect to MARPOL.

10. Environment Management and Pollution Control Act 1994 (Tas).

11. Protection of Marine Waters (Prevention of Pollution from Ships) Act 1987 (Tas). This gives effect to MARPOL other than Annex 4 which deals with sewage. As with all the State Acts the Air Pollution Annex 6 is also not yet covered.

12. Environment Protection (Sea Dumping) Act (1984) (SA) gives effect to the London Convention but has never come into operation.

13. Environment Protection Act 1993 (SA).

14. Pollution of Waters by Oil and Noxious Substances Act 1987 (WA) gives effect to MARPOL.

15. Environment Protection Act 1986 (WA).

16. Western Australian Marine (Sea Dumping) Act 1981 (WA) gives effect to the London Convention.

17. Marine Pollution Act (NT) gives effect to most elements of MARPOL.[9]

Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (Cth)

23 The Act binds the Crown in right of the Commonwealth, each of the States and Norfolk Island (s 4). It applies within and outside Australia and extends to every external Territory and to the exclusive economic zone (s 6).

24 Part II of the Act is entitled "Prevention of pollution by oil" and gives effect to Annex 1 to the MARPOL Convention. It provides by s 8 that words used in the Act will have the same meaning they have in the Annex unless a contrary intention appears. This model is followed for each of the Parts of the Act which relates to a particular Annex to the MARPOL Convention.

25 The primary prohibitions in relation to the discharge of oil at sea are found in ss 9 and 10 of the Act. Section 9(1) defines an offence which has as an element recklessness or negligence:

If:

(a) a person engages in conduct that causes a discharge of oil or of an oily mixture from a ship into the sea; and

(b) the person is reckless or negligent as to causing the discharge by that conduct; and

(c) one of the following subparagraphs applies:

(i) the discharge occurs into the sea near a State, the Jervis Bay Territory or an external Territory and there is no law of that State or Territory that makes provision giving effect to Regulations 4, 15 and 34 of Annex 1 to the Convention in relation to that sea;

(ii) the discharge occurs into the sea in the exclusive economic zone;

(iii) the discharge occurs into the sea beyond the exclusive economic zone and the ship is an Australian ship;

the person commits an offence punishable, on conviction, by a fine not exceeding 2,000 penalty units.

26 Section 9(1B) defines a qualified strict liability offence applicable to the master or owner of a ship. It provides that where an oil or an oily mixture is discharged from a ship into the sea in one of the three categories of waters described in s 9(1)(c) then the master and owner of the ship each commits an offence punishable on conviction by a fine not exceeding 500 penalty units. There is no criterion of recklessness or negligence as an element of the offence. In s 9(1C) it is stated that an offence against subs 9(1B) is an offence of strict liability.

27 Defences against the strict liability offence apply where the oil was discharged for the purpose of securing the safety of the ship or saving life at sea. If the oil escapes from the ship as a result of non-intentional damage to the ship or its equipment and all reasonable precautions were taken after the occurrence of the damage or discovery of the discharge for the purpose of preventing or minimising the escape, then that also is a defence. The concept of "damage" in this setting was held by the High Court in Morrison v Peacock [2002] HCA 44; (2002) 210 CLR 274 not to extend to defects resulting from wear and tear. That case concerned a similar provision in s 8 of the Marine Pollution Act 1987 (NSW). The High Court construed the term "damage" by reference to the history, context and objects of MARPOL. So construed, the word, as used in s 8, had a meaning narrower than its ordinary meaning which would have extended to deterioration in the ship or equipment because of wear and tear. The Court said (at [26]):

… once "the full scope of [the] meaning" of "damage" is rejected, the better construction is that the section is referring to a sudden change in the condition of the ship or its equipment that was the instantaneous consequence of some external or internal event. The objects of the 1973 Convention support this construction of "damage".

This construction has effectively been enacted by s 9(3A) which was introduced into the Act in 2006.

28 It is a defence to the strict liability offence, in the case of an oily mixture, that the discharge was for the purpose of combating specific pollution incidents to minimise the damage from pollution and was approved by a prescribed officer and, where the discharge occurred in the jurisdiction of the government of a country other than Australia, by that government (s 9(2)). The non-intentional damage defence is qualified. It does not extend to circumstances in which the master or owner of the ship acted intentionally or recklessly or where the damage arose as a result of the negligence of the master or owner. Certain classes of discharge are taken out of the scope of the strict liability offence by s 9(4). That establishes thresholds for rates of discharge and the oil content of the effluent.

29 Section 10 of the Act prohibits the discharge of oil residues in the sea. There is a duty to report incidents involving oil or oily mixtures which is imposed by s 11A. Each Australian ship is required to have a shipboard oil pollution emergency program under s 11A and to keep an oil record book (s 12). If a prescribed operation or occurrence is carried out or occurs an entry must be made in the book. The book is to be retained for a minimum period of one year after the day on which the last entry was made in the book (s 14).

30 Part III of the Act deals with pollution by noxious substances and gives effect to Annex 2. Part IIIA deals with the prevention of pollution by packaged harmful substances. This gives effect to Annex 3 and it seems the International Maritime Dangerous Goods Code. Part IIIB deals with prevention of pollution by sewage and gives effect to Annex 4. Part IIIC relates to prevention of pollution by garbage and gives effect to Annex 5. Part IV contains miscellaneous provisions. Each Part, giving effect to a particular Annex, has broadly the same structure.

Protection of the Sea (Civil Liability) Act 1981 (Cth)

31 The Act imposes a qualified strict and limited liability on an owner for damage done by oil which has escaped from the owner's ship.

32 The Act binds the Crown in right of the Commonwealth, each of the States, the Northern Territory and Norfolk Island . It applies within and outside Australia and extends to every external Territory (ss 4 and 5). It schedules the 1969 CLC and the 1992 Protocol to the CLC. Certain provisions of the CLC, as amended by the 1992 Protocol, are given the force of law by s 8 of the Act. One of those Articles is Article III which, as amended by the 1992 Protocol, reads, inter alia:

Except as provided in paragraphs 2 and 3 of this Article, the owner of a ship at the time of an incident, or, where the incident consists of a series of occurrences, at the time of the first such occurrence, shall be liable for any pollution damage caused by the ship as a result of the incident.

33 Article III(2) excludes liability for pollution damage resulting from an act of war, hostilities, civil war, insurrection or a natural phenomenon "… of an exceptional, inevitable and irresistible character". Nor does liability attach if the damage was wholly caused by an act or omission done with intent to cause damage by a third party or by the negligence or other wrongful act of any government or other authority responsible for the maintenance of lights or navigational aids. The burden of proof of the exempting condition is on the owner. The owner may also be "exonerated wholly or partially" from liability to a person where the damage resulted from an act or omission done with intent to cause damage by that person or from the negligence of that person.

34 Article III(4) provides that no claim for compensation for pollution damage may be made against the owner otherwise than in accordance with the Convention. Subject to Article III(5) no claim for compensation for pollution damage under the Convention or otherwise may be made against:

(a) the servants or agents of the owner or the members of the crew;

(b) the pilot or any other person who, without being a member of the crew performs services for the ship;

(c) any charterer (howsoever described, including a bareboat charterer), manager or operator of the ship;

(d) any person performing salvage operations with the consent of the owner or on the instructions of a competent public authority;

(e) any person taking preventive measures;

(f) all servants or agents of persons mentioned in subparagraphs (c), (d) and (e)

unless the damage resulted from their personal act or omission, committed with the intent to cause such damage or recklessly and with knowledge that such damage would probably result.

35 Article IV is also given the force of law. It provides:

When an incident involving two or more ships occurs and pollution damage results therefrom, the owners of all the ships concerned, unless exonerated under Article III, shall be jointly and severally liable for all such damage which is not reasonably separable.

36 Article V, also given the force of law by s 8 of the Act, provides for the limits on civil liability to the owner of a ship. The limit in respect of any one incident is an aggregate amount calculated as follows:

(a) 3 million units of account for a ship not exceeding 5,000 units of tonnage;

(b) for a ship with a tonnage in excess thereof, for each additional unit of tonnage, 420 units of account in addition to the amount mentioned in subparagraph (a);

provided, however, that this aggregate amount shall not in any event exceed 59.7 million units of account.

The term "unit of account" is the "Special Drawing Right" defined by the International Monetary Fund (Article V(9)).

37 The limit of liability does not apply where it is proven that the pollution damage resulted from the owner's personal act or omission committed with the intent to cause such damage or recklessly and with knowledge that such damage would probably result (Article V(2)).

38 In order to attract the benefit of the limitation on liability, the owner is required to constitute a fund for the total sum representing the limit of its liability with the Court or other competent authority of any one of the Contracting States in which action is brought under Article IX or, if no action is brought, with any Court or other competent authority in any one of the Contracting States in which an action can be brought. The fund can be constituted either by deposit or by the production of a bank guarantee or other guarantee acceptable under the legislation of the Contracting State where it is constituted and considered to be adequate by the Court or other competent authority.

39 It is a requirement of Article VII(1), given force of law by s 8, that the owner of a ship registered in a Contracting State and carrying more than 2,000 tonnes of oil in bulk as cargo, is required to maintain insurance or other financial security in the sums fixed by applying the limits of liability prescribed in Article V(1) to cover liability for pollution damage under the Convention.

40 Section 9 of the Act confers jurisdiction on the Supreme Courts of the States and Territories in the following terms:

The Supreme Courts of the States are invested with federal jurisdiction, and jurisdiction, to the extent that the Constitution permits, is conferred on the Supreme Courts of the Territories, to hear and determine claims for compensation under the applied provisions of the Convention in respect of incidents:

(a) that have caused pollution damage in a place to which the Convention applies; or

(b) in relation to which preventive measures have been taken to prevent or minimize pollution damage in a place to which the Convention applies.

41 Section 4(3) of the Admiralty Act 1988 (Cth) defines general maritime claims which include under s 4(3)(b):

A claim in respect of the liability of the owner of a ship arising under Part II or IV of the Protection of the Sea (Civil Liability) Act 1981 or under a law of a State or Territory that makes provision as mentioned in subsection 7(1) of that Act.

42 Section 9 of the Admiralty Act provides:

(1) Jurisdiction is conferred on the Federal Court, the Federal Magistrates Court and on the courts of the Territories, and the courts of the States are invested with federal jurisdiction in respect of proceedings commenced as actions inpersonam:

(a) on a maritime claim; or

(b) on a claim for damage done to a ship.

Thus a claim for compensation or to determine the limit of liability under the Act may be brought in the Federal Court. It would seem that, by virtue of the provisions of the Admiralty Act and the definition of general maritime claim, an application brought under a State equivalent of the Commonwealth Act could be brought in the Federal Court. Whether the designation of claims under the State Acts as general maritime claims for the purposes of the Admiralty Act is enough to federalise an action under State law is debatable.

Protection of the Sea (Oil Pollution Compensation Fund) Act 1993

43 Chapter 1 of this Act contains preliminary provisions including an interpretation section which refers, inter alia, to the 1971 Fund and the 1992 Fund, the 1971 Convention, the 1976 and 1992 Protocols which amended it, and the 1992 Convention which resulted. As with the other relevant Commonwealth statutes the Act binds the Crown in right of the Commonwealth, the States and the Territories and applies within and outside Australia and extends to every external territory (ss 4 and 5).

44 Chapter 2 has been repealed. Chapter 3, which contains the substantive provisions, is explained in s 27 in simplified outline thus:

(a) the 1992 Fund is liable to provide compensation for certain oil pollution damage (Part 3.5);

(b) certain persons who receive oil in Australian ports and terminals are liable to contribute to the 1992 Fund (Part 3.6);

(c) the Australian Maritime Safety Authority is empowered to collect information about contributors and give the information to the 1992 Fund (Part 3.7).

45 Section 28 provides that unless the contrary intention appears, an expression used in Ch 3 and in the 1992 Convention has the same meaning in Ch 3 as in the 1992 Convention.

46 The 1992 Fund is given legal recognition by s 29. It has "… the same legal personality as a company incorporated under the Corporations Act 2001 and, in particular, may sue and be sued". The Director of the Fund is its legal representative for the purposes of Ch 3 (s 30). The term "Director" is not defined in the Act but appears in Article 16 of the 1992 Convention which provides:

The Fund shall have an Assembly and a Secretariat headed by the Director.

47 By s 31 of the Act certain provisions of the 1992 Convention are given the force of law. In particular, Article 4, as amended by the 1992 Protocol, provides:

For the purpose of fulfilling its function under Article 2, paragraph 1(a), the Fund shall pay compensation to any person suffering pollution damage if such person has been unable to obtain full and adequate compensation for the damage under the terms of the 1992 Liability Convention,

(a) because no liability for the damage arises under the 1992 Liability Convention;

(b) because the owner liable for the damage under the 1992 Liability Convention is financially incapable of meeting his obligations in full and any financial security that may be provided under Article VII of that Convention does not cover or is insufficient to satisfy the claims for compensation for the damage; an owner being treated as financially incapable of meeting his obligations and a financial security being treated as insufficient if the person suffering the damage has been unable to obtain full satisfaction of the amount of the compensation due under the 1992 Liability Convention after having taken all reasonable steps to pursue the legal remedies available to him;

(c) because the damage exceeds the owner's liability under the 1992 Liability Convention as limited pursuant to Article V, paragraph 1, of that Convention or under the terms of any other international Convention in force or open for signature, ratification or accession at the date of this Convention.

Expenses reasonably incurred or sacrifices reasonably made by the owner voluntarily to prevent or minimize pollution damage shall be treated as pollution damage for the purposes of this Article.

48 The Fund is not obligated where the pollution damage results from acts of war, hostilities, civil war or insurrection or was caused by oil which escaped or was discharged from a war ship or other ship owned or operated by a State or used, at the time of the incident, only on government non-commercial service or where the claimant cannot prove that the damage resulted from an incident involving one or more ships.

49 There is a limitation in Article 4(3). If the Fund proves that the pollution damage resulted wholly or partially from an act or omission done with intent to cause damage by the person who suffered the damage or from the negligence of that person, the Fund may be exonerated wholly or partially from its obligation to pay compensation to him. The fund will, in any event, be exonerated to the extent that the ship owner may have been exonerated under Article III(3) of the 1992 Liability Convention.

50 The liability of the Fund is limited in respect of any one incident so that the total sum of the amount for which the Fund is liable and the amount of compensation actually paid under the 1992 Liability Convention shall not exceed 135 million units of account. This is qualified by other provisions of Article 14(4). Where the amount of established claims against the Fund exceeds the aggregate amount of compensation payable under Article 4(4), the available amount shall be distributed so that the proportion between any established claim and the amount of compensation actually recovered by the claimant shall be the same for all claimants.

51 Article 9 is also given the force of law. By that Article the Fund is subrogated to such rights as the person compensated may enjoy under the 1992 Liability Convention against the owner or his guarantor.

52 Jurisdiction to entertain claims for compensation against the Fund is conferred directly upon the Federal Court and the Supreme Courts of the States or Territories by s 32 of the Act. The courts may transfer actions between themselves. Section 33 provides that the 1992 Fund may intervene in proceedings under the Protection of the Sea (Civil Liability) Act 1981.

53 There is liability to make contributions to the 1992 Fund. For that purpose Article 10 of the 1992 Convention (other than subpara 2(b)), in so far as it relates to ports or terminal installations in Australia , has the force of law as part of the law of the Commonwealth. The Act provides for recovery of contributions and late payment penalties and for record keeping and returns and for the making of regulations.

Protection of the Sea (Powers of Intervention) Act 1981 (Cth)

54 This Act, as it states in its long title, authorises the Commonwealth to take measures for the purpose of protecting the sea from pollution by oil and other noxious substances discharged from ships, and for related purposes.

55 A core provision is s 8(1) which confers certain power on the Australian Maritime Safety Authority (the Authority). It provides:

(1) Where the Authority is satisfied that, following upon a maritime casualty on the high seas or acts related to such a casualty, there is grave and imminent danger to the coastline of Australia, or to the related interests of Australia, from pollution or threat of pollution of the sea by oil which may reasonably be expected to result in major harmful consequences, the Authority may take such measures, whether on the high seas or elsewhere, as it considers necessary to prevent, mitigate or eliminate the danger.

56 The powers of the Authority include powers to move the relevant ship, remove cargo from it, salvage it or any of its cargo and to sink or destroy the ship or part of the ship. The power to sink or destroy the ship or part of the ship must not be exercised without the approval of the Minister (s 8(2A)). The Authority may also issue directions to the owner or master of the ship or to any salvor in possession of the ship or any other person. The Authority is given similar power to take measures to prevent pollution of the sea by substances other than oil following a maritime casualty on the high seas (s 9). There are immunity provisions in relation to the Minister and the Authority (s 17A) and provision for the expense of compliance with certain directions under the Act to be recovered from the owner of the ship (s 17B). It is an offence to contravene a direction under the Act (s 19).

57 Section 22 of the Act provides for compensation where the acquisition of property is involved:

(1) If the operation of this Act would result in an acquisition of property from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person.

(2) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in:

(a) the Federal Court of Australia ; or

(b) any other court of competent jurisdiction;

for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.

Examples of claims for compensation in foreign courts

58 There appears to be no reported case of a claim for compensation for marine pollution arising under any of the Acts to which reference has been made. There have been claims in foreign courts however. To the extent that they are concerned with the application of the relevant Conventions, they may have some relevance to claims brought in Australian courts in similar cases. Some claims are set out below which were resolved or decided in the period 1990 to 2007.

(i) Spain - The Aegean Sea

59 The Greek oil bulk ore carried, Aegean Sea, broke in two on 3 December 1992 near La Coruña harbour in north-west Spain . It was carrying about 80,000 tonnes of crude oil. A large area of the La Coruña coastline was contaminated.

60 Claims for compensation in Spanish courts amounted to £195 million. Many were settled. A special settlement agreement was signed on 30 October 2002 between the Spanish Government, the 1971 Fund, the shipowner and its insurer - the United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited. Under that agreement the 1971 Fund paid £24.4 million to the Spanish Government on 1 November 1992.

(ii) United Kingdom - The Braer - the Landcatch case[10]

61 On 5 January 1993, the Liberian tanker Braer spilt 84,700 tonnes of crude oil and 1,600 tonnes of bulk fuel oil at sea. The area of the spill was in the vicinity of Shetland. Following the spill, the UK Government imposed a fishing exclusion zone along the west coast of Shetland which prohibited the use, landing and supply of fish from that zone.

62 Landcatch Limited carried on business at Ormsary, Argyll, 500 kilometres from Shetland. Its business involved the rearing of salmon from eggs to smolt. Its commercial activity was not directly affected by the Braer activity but it claimed that its business had suffered because of the contamination and the ban imposed by the government.

63 Landcatch brought an action against the 1971 Fund for payment of compensation under s 4 of the Merchant Shipping Act 1974 (UK). That Act gave effect to the 1971 Fund Convention. Section 4 of the 1974 Act provided, inter alia, that:

(1) The Fund shall be liable for pollution damage in the United Kingdom if the person suffering the damage has been unable to obtain full compensation under section 1 of the Act of 1971…

(b) because the owner or guarantor liable for the damage cannot meet his obligations in full …

The action was also brought against the owners of the vessel and its insurers under s 1 of the Merchant Shipping (Oil Pollution) Act 1971 (UK) which gave effect to the 1969 Civil Liability Convention. Section 1 of that Act provided that:

Where, as a result of any occurrence taking place while a ship is carrying a cargo of persistent oil in bulk, any persistent oil carried by the ship (whether as part of a cargo or otherwise) is discharged or escapes from the ship, the owner of the ship shall be liable, except as otherwise provided by this Act:

(a) for any damage caused in the area of the United Kingdom by contamination resulting from the discharge or escape…

64 It was held at first instance in the Outer House of the Court of Session that Landcatch's claim was not compensable. On appeal, the Second Division Inner House Court of Session affirmed the trial judge's decision. Lord Justice Clerk said (at 329):

In these circumstances I consider that "loss", as included in "damage" for the purposes of s 1(1) of the 1971 Act, does not cover secondary or relational claims. I have arrived at that conclusion by applying considerations similar, though not identical, to those which have led to the development of a rule against such claims in actions at common law.

Lord McCluskey said (at 335):

The whole corpus of cases cited to us from different fields in which the common law or the legislature have conferred rights to compensation, reparation or damages for loss demonstrates, in my view, that the test of remoteness is too well established to be excluded except by express and unambiguous enactment. That test would exclude a claim such as is now advanced by Landcatch on the ground that it was indirect, relational pure economic loss which is too remote from the causal factor which makes the causer liable. I do not consider that Landcatch have succeeded in showing that the words used in the statutes creating liability for this particular compensation have displaced these familiar principles.

(iii) United Kingdom - The Sea Empress

65 The Landcatch decision was applied by the Court of Appeal of England and Wales in Alegrete Shipping Co Inc v International Oil Pollution Compensation Fund 1971 (The Sea Empress) [2003] 1 Lloyd's Rep 327.

66 On 15 February 1996 the tanker Sea Empress grounded at St Ann 's Head, Milford Haven, discharging approximately 72,000 tonnes of crude oil into the sea. Following the incident, a fishing ban in the area around Wales extending from St. David's Head to the Gower Peninsular was imposed. R. J. Tilbury & Sons Ltd. (Tilbury), a company engaged in the business of fish processing based 200 miles from the site of the incident, brought an action against the owners of the Sea Empress for loss of profits resulting from the incident and the consequent ban. The claim was brought in the limitation proceedings that were commenced by the owners on 29 April 1999. The totality of the claims arising out of the incident was in excess of the owners' limitation fund and by virtue of s 175 of the Merchant Shipping Act 1995 (UK) (the 1995 Act), the 1971 Fund was responsible for all claims above the owners' limit and thus intervened in the limitation proceedings.

67 At first instance[11], the High Court (Queen's Bench Division (Admiralty Court)) determined that Tilbury's claim for loss of profits did not constitute "damage caused … by contamination resulting from the discharge or escape" of oil from the Sea Empress within the meaning of s 153 of Schedule 4 to the 1995 Act.[12] Steel J held (at 129) that the claim was inadmissible as "secondary, derivative, relational and/or indirect" and that lack of proximity rendered it too remote.

68 The Court of Appeal upheld the decision. In comparing the facts of the case and those of Landcatch, Mance LJ said at 336 that:

[Tilbury] was not engaged in any local activity in the physical area of the contamination. Its interest was in landed whelks, not in the whelks in their natural habitat. The contamination has prevented local fishermen, whose physical activities are closely affected by the contamination of the waters and of whelks, from supplying the appellant with the landed whelks for which it had contracted. The appellant's resulting loss arises from its inability to carry out processing and packing and deliveries of processed and packed whelks at points far away from the contaminated areas. I consider that this is a form of secondary economic loss, which is outside the intended scope of a statute which is closely focused on physical contamination and its consequences. I do not regard the undoubted differences between the circumstances in Landcatch, where the contamination prevented the pursuers supplying further smolt to the contaminated area, and those here, where the contamination prevented the fishermen supplying further whelks to the appellant, as sufficient to justify a different conclusion with regard to the essentially secondary nature of any loss caused to the appellant in the United Kingdom by the contamination resulting from the discharge or escape of oil from Sea Empress.

(iv) Italy - The Patmos

69 On 21 March 1985 the tanker Patmos,carrying 80,000 tonnes of oil, collided with the Spanish tanker Castillo de Monte Aragon, causing a spill of approximately 2,000 tonnes of oil in the Straits of Messina, between Sicily and Calabria (Italy). The Italian Ministry of the Merchant Marine filed a claim before the Tribunal of Messina for damage to the marine flora and fauna. The claim was based on Article I (6) of the 1969 Civil Liability Convention which defined pollution damage as:

loss or damage caused outside the ship carrying oil by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge may occur.[13]

The Ministry submitted that the Convention's definition could include damage to the environment per se (meaning natural-resource damage). This contention was resisted by the 1971 Fund.[14] On 30 July 1986 the Tribunal of Messina rejected the claim on the basis that:

… the rights exercised by the State on its territory and territorial seas are rights of territorial sovereignty, not of private ownership, and cannot therefore be violated by acts committed by private subjects. The territorial sea has to be considered res communis omnium and the marine fauna and flora res nullius. … Therefore the State cannot claim compensation for damage to the marine environment, unless it can prove to have suffered any loss or profit or incurred any costs as a result of the alleged damage to the territorial waters.[15]

70 The decision was appealed by the Ministry. The Court of Appeal of Messina, in an interim judgment[16], held the 1971 Fund, the ship owner and the Indemnity Club liable for environmental damage on the basis that "although the environmental assets affected by the oil spill did not have a market value and were therefore difficult to assess, this was not a reason for denying the claim made by the Italian Government."[17] The Court of Appeal held that "compensation for environmental damage claimed by the Ministry was consistent with the provisions of the 1969 Civil Liability Convention" and that "the definition of pollution damage contained in Article I (6) of the 1969 Civil Liability Convention is broad enough to include any damage caused to the coasts and the related interests of coastal States."[18] The Court said that "environmental damage has got economic value even if it does not correspond to an arithmetical concept."[19] The Court considered that environmental damage could be evaluated on the basis of equitable criteria provided for under Article 1226 of the Italian Civil Code.[20]

71 A group of experts was appointed to assess the damage caused to the affected marine areas. On the basis of the equitable criteria and the experts' reports, on 24 December 1993, the Court awarded the Italian Government £827,000. The 1971 Fund was not requested to make any payments. The policy of the 1971 Fund reflected in Resolution 3/1987 was:

the assessment of compensation to be paid by the IOPC Fund is not to be made on the basis of an abstract quantification of damage calculated in accordance with theoretical models.[21]

(v) Italy - The Haven

72 On 11 April 1991 the Cypriot tanker the Haven,was involved in an incident which caused significant pollution on the coasts of Italy , France and Monaco . The Italian Government's claim for damage to marine fauna and flora was rejected by the 1971 Fund. Pursuant to the terms of Law No 349 of 1986[22], establishing the Italian Ministry of the Environment and entitling the State and other public bodies to pursue claims for damage to natural resources, a claim was brought before the Court of First Instance of Genoa. The Court dismissed the Fund's interpretation of "pollution damage" stating that "the definition in the oil-pollution conventions has such a wide meaning that it does not lend itself to any restriction, except as regards the cause of the damage."[23] Italy was awarded £16.8 million in compensation for damage to natural resources.

73 The decision was appealed by the 1971 Fund which, contemporaneously, started negotiations for a settlement of the dispute out-of-court. A settlement agreement was reached in March 1999. The 1971 Fund and the ship owner's insurer (the UK Mutual Steamship Assurance Association Ltd) paid £25.5 million and £17.3 million, respectively, in respect of all the Italian State's compensation claims.[24]

74 The 1971 Fund did not recognise any right to compensation from environmental damage per se. Article 6 of the Settlement Agreement provided:

The IOPC Fund [the 1971 Fund], … and the UK Club reaffirm that there is no right to compensation for environmental damage under the 1969 CLC and the 1971 Fund Convention and that this Agreement does not imply any acknowledgement on their part of such a right, but only of the right of the Italian State under the said Conventions to compensation for its costs and expenses in relation to the "HAVEN" incident.[25]

(vi) France - The Erika

75 On 12 December 1999 the tanker Erika, carrying a cargo of 31,000 tonnes of heavy fuel oil, broke in two in the Bay of Biscay, 60 nautical miles off the coast of Brittany in France . As a result, around 400 kilometres of shoreline were affected by the oil spill. Following this incident, 796 claimants brought legal action against the ship owner, its insurer and the 1992 Fund. As indicated in the IOPC Funds' Secretariat 2006 Annual Report, during that year, 26 judgments were delivered by French Courts, the majority of them being in favour of the 1992 Fund. Most of the judgments related to issues of admissibility of claims for pure economic loss.[26]

(vii) Spain - The Prestige

76 On 13 November 2002 the tanker Prestige, carrying 77,000 tonnes of heavy fuel oil, broke in two off the coast of Galicia in Spain releasing around 25,000 tonnes of cargo. The spillage resulted in heavy contamination of the coasts of Spain and France. A considerable number of claims were brought in the courts of Spain, France and Portugal against the ship owner, the London Club and the 1992 Fund.

77 Spain commenced a legal action in the United States District Court for the Southern District of New York against the American Bureau of Shipping (ABS) - the classification society of the Prestige - requesting compensation for damage caused by the incident. In August 2005 ABS requested the Court to issue a summary judgment dismissing the State's action pursuant to Article III (4)(a) of the 1992 Civil Liability Convention, under which:

… Subject to paragraph 5 of this Article, no claim for compensation for pollution damage under this Convention or otherwise may be made against:

(a) the servants or agents of the owner or the members of the crew;

unless the damage resulted from their personal act or omission, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result.

78 ABS also submitted that United States (US) courts were not competent to hear the case due to the fact that the US was not a party to the 1992 Civil Liability Convention and also that the incident took place in Spain. A decision on this issue has yet to be made by the Court.[27]

IOPC Funds criteria for admissibility of claims for compensation

79 The governing bodies of the IOPC Funds have adopted criteria for the admissibility of claims for compensation which are summarised as follows:

Claims for pure economic loss are admissible only if they are for loss or damage caused by contamination. The starting point is the pollution, not the incident itself.

To qualify for compensation for pure economic loss, there must be a sufficiently close link of causation between the contamination and the loss or damage sustained by the claimant. A claim is not admissible for the sole reason that the loss or damage would not have occurred had the oil spill not happened. When considering whether such a close link exists account is taken of the following factors:

  • the geographic proximity between the claimant's business activity and the contaminated area
  • the degree to which a claimant was economically dependent on an affected resource
  • the extent to which a claimant's business had alternative sources of supply or business opportunities
  • the extent to which a claimant's business formed an integral part of the economic activity within the area affected by the spill

The 1992 Fund also takes into account the extent to which a claimant was able to mitigate his loss.

As regards the tourism sector, a distinction is made between a) claimants who sell goods or services directly to tourists and whose businesses are directly affected by a reduction in visitors to the area affected by an oil spill, and b) those who provide goods or services to other businesses in the tourist industry, but not directly to tourists. It is considered that in this second category there is generally not a sufficiently close link of causation between the contamination and the losses allegedly suffered by claimants. Claims of this type will therefore normally not qualify for compensation in principle.

The assessment of a claim for pure economic loss is based on a comparison between the actual financial results of the individual claimant during the claim period and those for previous periods. The assessment is not based on budgeted figures. The particular circumstances of the claimant are taken into account and any evidence presented is considered. The criterion is whether the claimant's business as a whole has suffered economic loss as a result of the contamination.[28]

80 These criteria would not appear to have any binding force in any court with jurisdiction to entertain a claim against the Fund. They are rather to be treated as administrative opinions. No doubt the bulk of decisions which might be negotiated in respect of such funds will be negotiated within the framework of those criteria.

Conclusion

81 Neither the Federal Court, nor so far as appears, any of the State Supreme Courts, have had experience of claims for compensation for marine pollution under the Commonwealth Statutes or their State equivalents. Such claims, if and when they occur, are likely to involve interesting questions of international law, its application to domestic law and probably some difficult questions of fact.

Annexure

Overview of Relevant International Instruments and Commonwealth Statutes

1. Historical Cultural Perceptions of the Sea - Vast Invulnerable

Patton K - The Sea Can Wash Away All Evils - Modern Marine Pollution and the Ancient Cathartic Ocean
(Columbia University Press, November 2006)

Grotius - 1625

Vattel - 1750

2. Practical Imperatives for an International Legal Regime

20th Century - oil
- noxious substances Oil Oil Spill Statistics - ITOPF
1970s 3,142,000 tonnes
1980s 1,176,000 tonnes
1990s 1,138,000 tonnes
2000 - 2006 176,000 tonnes

Major part of volume spilt from a few large spills
Most spills small - less than 7 tonnes
Loading, discharging and bunkering

Other forms of pollution
Washings from tanks
Sewage
Garbage
Contaminated ballast
Land based pollution
Nuclear waste
Air pollution
Seabed based oil wells

3. Development of International Maritime Organisation (IMO) and Associated Conventions

1926 International Maritime Conference - Convention not ratified
1948 Convention of the Inter-Governmental Maritime Consultative Organisation (IMCO Convention)
1958 IMCO Convention ratified by necessary 21 States
Article 1(a) IMCO purposes
IMCO became the International Maritime Organisation (IMO) in 1982
167 Member States
300 staff
UK based
1954 Convention for the Prevention of the Pollution of the Sea by Oil - OILPOL 54 - UK Government inspired
1958 OILPOL 54 in force
1959 IMCO takes over OILPOL 54
1967 OILPOL 54 amendments
1967 Torrey Canyon accident - bombed by UK in international waters to burn oil
1969 International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (Intervention Convention)
1969 International Convention on Civil Liability for Oil Pollution Damage (CLC)
1969 TOVALOP - Voluntary Agreement between Tanker Owners to assist in meeting civil liabilities
1971 International Covenant on the Establishment of an International Fund for Oil Pollution Damage (Fund Convention)
1971 CRISTAL - Voluntary Oil Industry Agreement
1971 Convention Relating to Civil Liability in the Field of Maritime Carriage of Nuclear Material
1972 Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter (London Convention)
- Amended 1996, amendments in force March 2006
1973 Protocol Relating to Intervention on the High Seas in Cases of Pollution by Substances other than Oil (PROT)
1973/78 International Convention for the Prevention of Pollution from Ships (MARPOL 73/78)
1976 Convention on Limitation of Liability for Maritime Claims
1982 IMCO becomes IMO
1990 International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC)
1996 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS)
2000 Protocol on Preparedness, Response and Cooperation to Pollution Incidents by Hazardous and Noxious Substances (HNS Protocol)
2001 International Convention on Control of Harmful Anti-fouling Systems on Ships (AFS)
2001 International Convention on Civil Liability for Bunker Oil Pollution Damage
2004 International Convention for the Control and Management of Ships Ballast Water and Sediments

4. MARPOL 73/78

MARPOL is the principal international convention dealing with the prevention of pollution of the marine environment by ships from operational or accidental causes. It includes regulations designed to prevent and minimise pollution from ships, both accidental and from routine operations. It includes six technical Annexes.

Annex 1 Regulations for the Prevention of Pollution by Oil

Annex 2 Regulations for the Control of Pollution by Noxious Liquid Substances in Bulk

Annex 3 Prevention of Pollution by Harmful Substances Carried by Sea in Packaged Form

Annex 4 Prevention of Pollution by Sewage from Ships

Annex 5 Prevention of Pollution by Garbage from Ships

Annex 6 Prevention of Air Pollution from Ships

Annex 1 by itself comprises 109 pages and has recently been comprehensively amended and came into force in the amended form on 1 January 2007

5. United Nations Conventions

1982 United Nations Convention on the Law of the Sea (UNCLOS)

Article 192 - Obligation to protect marine environment

Article 211 - General obligations to prevent reduce and control pollution of the marine environment from vessels.

1989 Basel Convention - The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal

- Entered into force 1992

- It fills a loophole left by the London Convention

6. Commonwealth/State Legislative Powers

Commonwealth/State statutes to be understood in the light of the Offshore Constitutional Settlement between Commonwealth and States of 1979

Application of s 51(xxviii) of the Constitution

Coastal Waters (State Powers) Act 1980

Power to States to legislate up to 3 miles offshore.
Concurrent power.

Commonwealth laws on marine pollution and environmental protection apply outside the 3 mile limit unless the State or Territory has not made a relevant law within the limit, eg where State Act only partly covers the field.

7. Commonwealth Laws Implementing Marine Pollution Conventions

7.1 Protection of the Sea (Prevention of Pollution from Ships) Act 1983
Navigation Act 1912, Divisions 12, 12A, 12B and 12C
Marine Orders Parts 91-96 covering oil, noxious liquid substances, harmful packaged substances, garbage and sewage
All giving effect to MARPOL 73/78
7.2 Protection of the Sea (Oil Pollution Compensation Fund) Act 1993
And associated States giving effect to 1992 Fund Convention
7.3 Protection of the Sea (Powers of Intervention) Act 1981
Giving effect to Intervention Convention
7.4 Protection of the Sea (Civil Liability) Act 1981
Giving effect to CLC.
7.5 Protection of the Sea (Shipping Levy) Act 1981
7.6 Environment Protection (Sea Dumping) Act 1981
Gives effect to London Convention
7.7 Hazardous Waste (Regulation of Exports and Imports) Act 1989
Gives effect to Basel Convention
7.8 Environment Protection and Biodiversity Conservation Act 1999

8. There is also an array of State and Territory Laws giving effect to Convention obligations within the 3 mile zone.

9. The Protection of the Sea (Prevention of Pollution from Ships) Act 1983

Seven parts - each Part includes an interpretation provision giving to its terms the same meaning as the same term in the equivalent MARPOL Annex - prohibition provisions - eg on discharges of oil or oily mixtures - s 9 creates offence - like prohibitions with respect to noxious substances etc

10. Criminal and Civil Liability

10.1 Criminal liability imposed by the Protection of the Sea (Prevention of Pollution from Ships) Act
and equivalent State Statutes.

10.2 Civil liability imposed by the relevant Civil Liability Acts.

Conclusion

Marine Environment Protection and associated provisions relating to criminal and civil liability, compensation and insurance and a large array of regulatory requirements constitute a complex system and one changing rapidly. The rate of amendment to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 is indicative of the dynamic nature of this field. There have been 30 amendments to the Commonwealth Act since it was enacted in 1983.

Reported cases are few and far between in the area of civil liability. There is a substantial list of prosecution proceedings with reference to outcomes on the AMSA website.

Further reading:

White MWD, Australasian Marine Pollution Laws (2nd Edition, Federation Press, 2007)

Halsbury's Laws of Australia Vol 12 s 180 - Environment Ch (7) Marine Pollution

The Laws of Australia Vol 14 Ch 3 - Marine Pollution

For brief High Court consideration of the MARPOL history see: Morrison v Peacock [2002] HCA 44; (2002) 210 CLR 274



[1] Patton K, The Sea can Wash away All Evils - Modern Marine Pollution and the Ancient Cathartic Ocean (Columbia University Press, November 2006) p 134.

[2] Required reading in this area is Michael White's book, Australasian Marine Pollution Laws (2nd ed, Federation Press, 2007). I have found that text of assistance in the preparation of this paper. I also acknowledge the assistance of the Federal Court Research Directorate in relation to claims in foreign courts for compensation for damage caused by marine oil spills.

[3] The load-on-top system was developed by the oil industry in the 1960s. When embarking on a ballast voyage a tanker takes on ballast water, known as departure ballast, in dirty cargo tanks. Other tanks are washed to take on clean ballast. The tank washings are pumped into a special slop tank. The departure ballast settles over a few days and oil flows to the top. Clean water underneath is decentered while new arrival ballast water is taken on. The upper layer of the departure ballast is transferred to the slop tanks. After further settling and decanting the next cargo is loaded on top of the remaining oil in the slop tank - See IMO explanation of MARPOL 73/78 at .

[4] ESCAP Virtual Conference, www.unescap.org.

[5] White M, Australasian Marine Pollution Law (2nd ed, Federation Press, 2007) 4.6.

[6] Secretariat of the International Oil Pollution Compensation Funds Annual Report 2006 p 51.

[7] Secretariat of the International Oil Pollution Compensation Funds (IOPCF), The International Regime for Compensation for Oil Pollution Damage: Explanatory Note (September 2007), .

[8] I have drawn this description from White M, Australasian Marine Pollution Law at 4.7.

[9] The list of statutes is taken from the list set out with more extensive summaries in White op cit.

[10] Landcatch Limited v International Oil Pollution Compensation Fund [1999] 2 Lloyd's Rep 316.

[11] Alegrete Shipping Co Inc v International Oil Pollution Compensation Fund 1971 (The Sea Empress) [2003] 1 Lloyd's Rep. 123.

[12] The Merchant Shipping Act 1995 (UK) ("the 1995 Act") consolidated the Merchant Shipping (Oil Pollution) Act 1971 (UK) and the Merchant Shipping Act 1974 (UK). The 1995 Act implements the 1969 Civil Liability Convention and the 1971 Fund Convention. Section 1(1) of the Merchant Shipping (Oil Pollution) Act 1971 (UK) is the predecessor of s 153 of Schedule 4 to the 1995 Act, whereas s 4(1) of the Merchant Shipping Act 1974 was re-enacted as s 175(1) in Schedule 4 to the 1995 Act.

[13] As reported by ibid.

[14] See Ibrahima D, 'Recovering Damage to the Environment per se Following an Oil Spill: The Shadows and Lights of the Civil Liability and Fund Conventions of 1992' (2005) 14 (1) RECIEL 63 at 63 and 67.

[15] Summary provided by Montini M, 'EC Developments. Marine Pollution: Compensating Environmental Damage Caused by Marine Oil Spills' (1995) 4 (4) Review of European Community & International Environmental Law ("RECIEL") 340 at 341.

[16] Court of Appeal of Messina Civil Section, 30 March 1989, The Ministry of the Merchant Marine and Others v Patmos Shipping Corporation and the United Kingdom Mutual Steamship Assurance Association and Others (Com Cas. Reg. Nos 391, 392 393 398 426 459 460 and 450/1986) reported in (1990) 5 Rivista Giuridica dell'Ambiente 525.

[17] Ibrahima D, at 67.

[18] Montini M, at 341.

[19] Ibid.

[20] Article 1226 of the Italian Civil Code on 'Equitable Measure of Damage' provides that "If damages cannot be proved in their exact amount, they are equitably liquidated by the Court." Translation provided in Beltramo M et al, The Italian Civil Code and Complementary Legislation (1991) p 14, as reported in Ibrahima D, at 67, note 33.

[21] As reported in Montini M, at 342.

[22] See Legge Ordinaria del Parlamento No 349 del 08/07/1986 'Istituzione del Ministero dell'Ambiente e Norme in Materia di Danno Ambientale' Gazzetta Ufficiale (S.O. No 162, 15 Luglio 1986) p 5.

[23] Ibrahima D at 67.

[24] See Settlement Agreement, Article 2, as reported in 1971 Fund Executive Committee, Incidents involving the 1971 Fund: Haven, 61st Session (29 March 1999) FUND/EXC.61/2, pp 23-24: (viewed 24 September 2007).

[25] Ibid, Article 6, pp 26-27.

[26] Ibid p 89. See also, IOPCF, Report on the Erika Incident (viewed 13 September 2007).

[27] See 1992 Fund Executive Committee, Incidents involving the 1992 Fund: Prestige, 38th session (10 September 2007) 92FUND/EXC.38/7, p 7: (viewed 24 September 2007).

[28] IOPCF Annual Report 2006 p 90.


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