Clause 1 - Power to give effect to revisions of the international arrangements relating to compensation for oil pollution from ships

Merchant Shipping (Pollution) Bill [Lords] – in a Public Bill Committee at 10:30 am on 7th February 2006.

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Photo of Julian Brazier Julian Brazier Shadow Minister (Transport) 10:30 am, 7th February 2006

I beg to move amendment No. 2, in clause 1, page 2, line 10, after ‘way’, insert

‘which shall require proof of intent or proof of reckless conduct.’.

Clause 1(4)(d), the context of amendment No. 2, will

“create summary offences or offences triable either way (but subject to the limitation that the Order may not authorise the imposition, on conviction on indictment, of a term of imprisonment exceeding two years)”.

We are concerned that the breadth of the clause will allow Ministers to implement directive 2005/35/EEC on the basis of a statutory instrument alone. That will criminalise the accidental discharge of oil.

On Second Reading, I mentioned concerns raised with us by a number of outside bodies about the idea of criminalising merchant seamen when there was no intent or even reckless disregard. Since then, further representations have been made. A joint press release issued by Lloyd’s Register of Shipping, the International Salvage Union, the Greek Shipping Cooperation Committee and the International Association of Independent Tanker Owners, or Intertanko, said that

“the Directive already has had a detrimental effect on the morale of seamen, and ... this will have adverse implications for the retention and recruitment of high quality crews.”

Hans van Rooij, president of the International Salvage Union, has also made the point that salvage companies are the last line of defence against catastrophic pollution: if a directive introduces the serious negligence concept, salvors will have no choice but to seek immunity before intervening in the waters of EU states, with their reputation for aggressive behaviour in maritime accident situations. I do not have to underline the point that if salvage crews become reluctant to intervene, a bad pollution situation might get rapidly worse, compounding the problem.

On Second Reading, I paid tribute to the promotion, by the tonnage tax that the Government have introduced, of a recovery in the tonnage of our merchant shipping. However, the fact remains that no significant recovery has taken place in the merchant navy’s officers and crews, serving under the British flag. The numbers have hardly changed. I have given two relevant examples, but there is other verbal testimony about this: the measure will have a real effect on people’s willingness to join the merchant navy and serve on vessels.

Effectively, under the provision, somebody who is held to be negligent in respect of an oil discharge can be convicted. Ministers will have the power to introduce a statutory instrument, with the small amount of scrutiny involved in that, which could result in seafarers being sent to prison for up to two years for an accident involving oil, even when there was not reckless disregard, let alone intent. The distinction, of course, is that reckless disregard means behaving sufficiently stupidly—for example, getting drunk on   watch—that it must be obvious to the person concerned that there is a risk to safety or, in the case that we are considering, a risk of pollution.

In my view, that is not something that anyone in the shipping world will welcome, and I do not believe for a moment that it will mean less pollution. In producing the relevant directives, the EU’s approach has perhaps been coloured by the fact that there was first a French and then a Spanish Commissioner. They were from the two countries that have had the worst experience of oil pollution. I do not mean that in a petty “little Englander” sense, but there is a real worry that, in their desperation to prevent another accident of that sort, they have lost the plot.

The way to prevent oil pollution is to have vessels properly operated by good, well-trained seafarers. Discouraging good-quality people from joining the seafaring profession and allowing, as will inevitably happen, more oil to be handled by crews from countries that may operate under flags without proper insurance—the Minister’s letter acknowledged that we have no way of checking, and of course we do not, that a vessel transiting our waters has proper insurance—is not the way to promote safety on vessels or to prevent pollution.

It appears that, in any case, such measures and the EU’s demands conflict with the international convention for the prevention of pollution from ships, known as the MARPOL convention, which explicitly exempts accidental discharges. The provision will put us in an absurd conflict with our international obligations.

This is a modest little amendment. All it would do is restrict the powers of the Minister to make regulations so that they applied only to cases involving either intent or reckless disregard. Given that he made some sympathetic noises on Second Reading, I hope he feels able to accept it.

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport

I am unable to accept the amendment, but I understand the hon. Gentleman’s underlying concerns. First, I also acknowledge that although tonnage tax has been a huge success, it has not yet brought the benefits of increased UK employment at sea that I expected. I intend to do something about that and am working closely with the Chamber of Shipping, unions, shipowners and so on to find ways to increase the number of people employed on British ships.

The hon. Gentleman is absolutely right in that if we are working across the industry, in all the different sectors, to increase the number of British people employed at sea, and at the same time introducing unfair penalties or criminalising people for acts that are not deliberate or reckless, we will put people off going into seafaring. If that happens, at the end of a generation we will find that all our onshore maritime industries, which are worth many billions of pounds to the British economy, no longer have the people with the necessary experience of sea life, and we will lose those industries as well. We will lose not only jobs at sea, but, ultimately, an incredibly valuable sector of British industry.

I entirely agree with the hon. Gentleman’s theme, although I disagree with him on some points. The Bill is fundamentally about compensation arrangements, so any offence it creates must also relate to compensation arrangements. I can guarantee that our intention is not to introduce any offence that penalises seafarers in the way he has described.

The case involving Intertanko, which the hon. Gentleman referred to, relates to directive 2005/35/EC, which requires member states to put in place sanctions against the discharge of oil. In other words, the directive deals with people who release oil into the environment, and sanctions to prevent them from doing that. The Bill is about compensation arrangements, so offences of the sort to which he refers fall outside the scope of the Bill.

When that directive was being negotiated, we made our views clear, and our constant policy was, as with all European Union legislation with respect to maritime affairs, to ensure that legislation is made at international, rather than EU, level. Any EU legislation that we must have should be entirely compatible with international legislation. That was our position on the directive, which has been agreed, and we are in the process of transposing it to UK law. However, the directive deals with different circumstances from the ones dealt with in the Bill, which is purely about compensation arrangements.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

It would perhaps be helpful if the Minister made it clear what offences his advisers say fall within the scope of the Bill.

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport

One that immediately comes to mind might relate to a requirement that shipowners take adequate steps to ensure that they have the funds to contribute to the compensation fund. That might be an offence of the sort that is covered, but if any more come to mind in the next few minutes, perhaps I will give them to the hon. Gentleman when we debate clause stand part.

I can give one categorical assurance: any offences that we introduce under the Bill will not be of the category to which the hon. Gentleman is referring. We will ensure that they do not put inappropriate pressure on British mariners and that they relate only to the compensation regime, rather than to the acts covered by the EU directive.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport) 10:45 am, 7th February 2006

I am grateful to the Minister for being generous in giving way, as he always is. However, the assurance he is giving is not quite the one that we need in order to not press the matter to a Division. There is one crucial question. Is he telling us that parliamentary counsel says that such offences will not fall within the scope of the Bill? Unless he can give us that assurance, there will still seem to be no reason for not accepting our amendment, which would prevent any future Government—there might be a Minister who is less sympathetic and knowledgeable on the subject than he—from introducing such offences.

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport

Clause 1 is concerned solely with liabilities that are governed by international laws, and specifically the strict liability of the shipowner for pollution damage caused by persistent oil, whatever the cause. In most cases, the shipowner is able to limit his liability and must also obtain insurance to meet that limit. There are no offences for causing pollution in the underlying civil liability convention, the existing UK provisions implementing the oil pollution compensation regime or the supplementary fund protocol. The only offences required under the regime are already in place and concern failure to carry evidence of insurance or failure to report annual oil receipts for the purpose of calculating contributions to the International Oil Pollution Compensation Fund or the supplementary fund. The offences that the hon. Gentleman describes are not appropriate to the Bill and offences for penalising people are out of its scope.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

We support the clause wholeheartedly. It will achieve a much needed improvement to the fund, although, as the Minister acknowledged, the scale of these tragedies, sadly, has moved on. We may yet, as he hinted, need a supplement to the supplement. The clause none the less will increase the fund available to compensate for an oil spill from £160 million to £600 million and involves the speedier application of the fund to clean up after a spill.

I shall not detain the Committee by reading out the absolutely horrendous table provided for us by the Royal Society for the Protection of Birds on bird deaths resulting from recent oil spills. I shall simply give one example. The RSPB believes that the sinking of the Prestige off the Spanish coast killed more than 750,000 birds. The damage to the local ecology is severe in many cases and permanent in some.

You very kindly said, Mrs. Anderson, that you would allow me in the stand part debate to touch just for a moment on new clause 2, which you understandably chose not to select. It proposed:

“Within one year of the passing of this Act, the Secretary of State shall bring forward proposals to establish Marine Environmental High Risk Areas.”

In looking at the clause and the whole business of compensation to deal with the after effect of these spills, we must keep in the back of our minds the importance of preventing them in the first place. We know the Government are committed to these environmental high-risk areas because they have said so many times, but nothing has happened.

We are all aware that the device of calling for an annual report is used simply to get a debate on an issue. It is disappointing that there is still no progress on the designation of these areas and steps to ensure that tankers do not pass close to them. Bodies such as the RSPB and others that deal with the ecology of our coastline—not only in relation to birdlife, but as an   asset for the population to visit and enjoy—are concerned about this. I want to give the Minister the opportunity to say how he sees the Government proceeding on this and whether that side of the equation will be addressed before very long.

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport

I am happy to respond to that point. The Secretary of State and I discussed marine environment high-risk areas not an hour ago in talking about when we will make the announcement. I can assure the hon. Gentleman that, although I am not in a position to tell him exactly today, he will very shortly have all the answers he wants about how we intend to deal with the matter.

I explained in some detail on Second Reading what the clause will do. As the hon. Gentleman said, it is at the very heart of the Bill. Unless other hon. Members have questions to ask me, I do not think that it is necessary for me to go through it again. The clause will allow us to make an Order in Council to join a fund that will make a significantly large amount of compensation available to people or British interests when their property and rights are damaged by pollution. The legislation is essential; we are currently exposed, and I have not heard anybody argue that it is not appropriate for us to move rapidly to bring it into effect.

The key point on such clauses that always interests Committees is where affirmative and negative resolutions will be used. Where an Order in Council relates only to the supplementary fund protocol, or is made under subsection (4)(b), the negative resolution procedure will apply. Any other Order in Council made under the Bill will be subject to the affirmative resolution procedure. Not only is the legislation important, but there is adequate protection for Parliament to consider the matters involved should it wish to do so.

Photo of Robert Goodwill Robert Goodwill Conservative, Scarborough and Whitby

Has the Department analysed the effectiveness of the current compensation scheme? I read yesterday that three years after the Prestige disaster, only 15 per cent. of the money that could have been allocated has been, because of the difficulty of ascertaining the long-term environmental impact. In the short term, that means that much important environmental work in Galicia has not taken place.

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport

That is exactly right, and it is why we need the legislation before us. Compensation payments are held up for so long because, as soon as there is doubt whether the pot of money will be enough to meet everybody’s needs, it becomes difficult to provide people even with interim payments, because we know that they will get only so many pennies on the pound. If more money is given out than people will ultimately be able to get, there will be difficulty in getting money back. That means that money cannot be given out until the totality of the damage is known. That is what happened with past disasters.

Although I take the point that the hon. Member for Canterbury (Mr. Brazier) made, to which I referred on Second Reading, events have to some extent overtaken us while we have been negotiating the international   treaty. There have been accidents that would have exceeded even this pot of money, although thankfully not by much. I hope that such events will be very rare, and in the case of almost any accident that happens on our shores there will be sufficient money available to meet all the compensation. That will mean that compensation, or at least interim payments, can be given much more quickly so that people can be paid to get on with fixing the problems that the pollution has caused.

Photo of Anthony D Wright Anthony D Wright Labour, Great Yarmouth

On the point about clearing up, there was an incident just over 20 years ago in which the Eleni V ran aground off the coast at Great Yarmouth in my constituency. The local authority was landed with a hefty bill and did not get compensation until three to four years later. What will the position be in that circumstance? Will a local authority, for instance, be able to access funds more or less immediately, rather than have to wait?

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport

It is difficult for me to give my hon. Friend a precise answer, because I do not know what the claim was for in that case or the legal niceties of the matter, but I can tell him that, in principle, that will be the position under the new legislation. People who have incurred a loss through pollution should be able to get their money much more quickly—as soon as possible after an accident has happened, I hope.

I remind the Committee that in the last few weeks there has been another accident in the channel—the one that affected the Ece. We hope and believe that, thankfully, it will not have a significant long-term environmental impact, but it demonstrates that the risks are with us, and the quicker we get the legislation on the statute book, the better.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.