New Clause 1 - Supplementary fund protocol: annual report on ratification

Merchant Shipping (Pollution) Bill [Lords] – in a Public Bill Committee at 10:45 am on 7th February 2006.

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‘The Secretary of State shall publish and lay before Parliament annually a report on progress towards full ratification of the Supplementary Fund Protocol.’. —[Mr. Brazier.]

Brought up, and read the First time.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

I beg to move, That the clause be read a Second time.

A moment ago, the Minister alluded to the two ships that were involved in a collision in the channel last week. Both vessels were flying flags of convenience. As it happens, the Marshall Islands and Malta are two of the more responsible flag-of-convenience states, but neither is a full member of the supplementary fund or its protocol, although I understand that both are in the bottom tier.

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

I did try to cover this on Second Reading. There was a reference from, I think, one of the hon. Gentleman’s colleagues concerning the Marshall Islands. The comment implied some criticism of the Marshall Islands, but, without having the white list to hand immediately, I was unable to restore its reputation. I want to put the record straight: since that debate, I have checked the position and the Marshall Islands is relatively high on the white list, as well as a very responsible flag.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

I hope I made that point, but the Marshall Islands is not a signatory to the protocol we are discussing. The new clause asks that the Secretary of State publish, and lay annually before Parliament, a report on progress towards ratification of the supplementary fund protocol. So, although I do not wish to attack the Marshall Islands, I want to make it clear that there is concern among those on the Opposition Benches that there are free riders.

Let me go back to the exchange on Second Reading and the Minister’s letter. I made the point that there are free riders in the system, and the Minister intervened to say that it is a statutory requirement to have insurance. Subsequently, he made clear what I think we knew anyway, which is that there is, of course, no way to ensure that all vessels are insured when they cross our waters or come near to our coastline if, as is often the case, they are not visiting a British port.

That point is peripheral, however, because we are dealing with large spills that insurance cannot cover, and the point of the Bill is to cover them. For those purposes, countries on the white list of flags of convenience such as the Marshall Islands are just as much free riders as those that are less responsible.

There are 32 flag-of-convenience countries, one of which, Liberia, has 7.5 per cent. of the world’s fleet. More than half the ships lost in the last few years—by tonnage, nearly two thirds—came from flag-of-convenience states. Putting that in plain English, although flags of convenience may account for less than a quarter of the world’s shipping, they account for the bulk of the potential problems dealt with in the Bill, yet they are free-riding on the system. They pay nothing into it, yet they are supported by the rest.

As I said, the device of calling for an annual report simply enables us to put it on the record and draw the Committee’s attention to the fact that the problem exists. More could be done to put pressure on these ships. I do not suggest for a moment that Her   Majesty’s Government can police it on their own, but through our respected and powerful membership of international bodies and through the EU we could surely do more to put pressure on the freeloaders. It is extraordinary that Malta, an EU member, has not signed the protocol; I do not know whether there are others.

In the last resort, surely it is not beyond the means of man for the EU to say that in a certain number of years, if a reasonable period of notice is given, we will stop accepting visits from ships from countries that do not sign the protocol. That might be a possible way of addressing the matter.

Photo of Stephen Ladyman Stephen Ladyman Minister of State, Department for Transport 11:00 am, 7th February 2006

I encourage the hon. Gentleman to be cautious before he criticises other members of the EU who have not ratified the protocol. We have not ratified it yet, and that is why we are here. We can hardly criticise others if they are going through the same process as we are in respect of the time scale.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

I am grateful for the Minister’s intervention. He can correct me if I am wrong, but my understanding is that Malta is still on the first tier; we are talking about ratifying the third tier. What about the second tier, which we ratified a long time ago? I am happy to give way to the Minister again if I am mistaken on that point.

Malta has a relatively small register compared to that of Liberia or of Panama, but the practical point is that all EU members should by now have signed up for the second tier and should be considering signing the third tier, the supplementary fund protocol to which has been referred.

I have probably said as much as there is to say on the issue. This worthwhile Bill sets up a framework that will ensure that more money is available for larger spills. It will cover the concern of hon. Members on both sides of the House of Commons to ensure that the problems are addressed in a more timely fashion. It seems extraordinary, however, that so little is being done to pick up the freeloaders who are most likely to cause the problems in the first place, and I look forward to hearing what the Minister plans to do about it.

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

I hope that the hon. Gentleman can be persuaded to withdraw the new clause. It would be a shame if the Committee had to divide on any part of the Bill, which has the Committee’s agreement.

I understand the hon. Gentleman’s point about what he calls freeloaders, but I remind him that if a state does not become part of the agreement and does not pay into it, it cannot benefit from it either. Our citizens will benefit from the fund if there are any problems; irrespective of who causes the pollution a compensation regime will be available to us. We have very limited scope, of course, for forcing others to join an international agreement. We need to convince them and work with them.

Many of the flags of convenience that the hon. Gentleman referred to are considering whether to become signatories to the agreement. The day after   Second Reading a detailed article appeared in Lloyd’s List; it had approached several such states and asked them their intentions. Broadly speaking most of them said that they were considering whether to join. We must encourage them and work with them. Diplomacy is the only tool that we have. The first step in encouraging them, with some credibility, is to become members. It is important to get the Bill on the statute book. I promise the hon. Gentleman that we will then use all our powers to encourage those states to join, and will be as persuasive as we can.

We shall remind our European colleagues that in March 2004 at the Transport Council it was agreed that all EU states should become members. We shall press them to move ahead as rapidly as they can.

As to reporting on the matter and the specific effect of the new clause—

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

Before the Minister goes on to talk about reporting, may I ask a question? He says that the news about the EU is welcome. Almost every vessel—every oil tanker, in this case—that transits our waters is heading for an EU port, often one of ours or a port in one of the Low countries or the Scandinavian countries. What is to stop the Government pressing the EU to take slightly stronger steps than diplomacy in the case of those countries which prove reluctant to sign up?

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

One thing to stop us is that the price of petrol would go through the roof. We should have to turn off the lights early every day and close factories, because if we refused to accept foreign-flagged ships simply because of a failure to sign the protocol we should not get the fuel and goods that we need to come into the country. There would have devastating effects on economic competitiveness in the European Union. The only way forward is persuasion and encouragement of the various states to join.

I remind the hon. Gentleman that it has taken more than 25 years for the International Oil Pollution Compensation Fund to reach 98 states, as members. It is not expected that membership of the supplementary fund protocol will be as broad as for the IOPC fund, but it is for individual states to decide whether they want to join. If they do not join, they will not have to contribute, but on the other hand they will not benefit.

I want to comment on the idea of our reporting on this matter. The IOPC secretariat already publishes an annual report containing details of the states that have joined the regime each year, as well as a great deal of useful information on oil spills that have occurred, and the compensation that has been paid. There is far more information in it than we could reasonably include in a report to Parliament. I hope that the hon. Gentleman will therefore agree that the information that he requests is already put annually in the public domain.

I hope, too, that the hon. Gentleman will accept my assurance that once we are members of the fund we shall use all the influence that that gives us, and our leadership in maritime affairs. We are seen by most people as the leading maritime nation. The International Maritime Organisation is in London and the IOPC is based there. Every shipowner in the world   has a base in London. We are seen as leaders in the area; we are pursuing several initiatives at the moment, such as encouraging the take-up of e-navigation and compliance with the IMO’s audit scheme, in which context we were the first nation to put ourselves forward for audit and the first to say that once the audit report has been reviewed and we have decided what to do with it we will put it into the public domain. In terms of the quality agenda and ensuring that accidents do not happen, there is no question but that we are leading the world. We will continue to lead. We will continue to use all our diplomatic skill to encourage other states to sign up to this fund too. With that assurance, I hope the hon. Gentleman will withdraw his new clause.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

In two respects I find the Minister’s answer uncharacteristically unconvincing. First, he repeated something that he said on Second Reading, which is that somehow or other only those people who are signed up to this measure will benefit from it. I cannot get my head around that: the people who will benefit from this are the communities who are devastated by oil slicks. As far as I know, neither Liberia nor Panama is particularly at risk from oil slicks. Liberia is not next to a busy shipping run, although Panama has the canal with the huge cargo traffic through it.

The people who benefit are the communities, not the people who operate the registers. If once again off some part of our coastline we have one of these dreadful tragedies involving, for example, a Liberian tanker, the money will be there, even though it was Liberian, but Liberia will not have contributed to the fund. It seems a nonsensical argument. This has been set up for the benefit of the people who suffer from the oil spills, not those who pay into it from the registers. I cannot see that there is any possible argument there to induce the Liberians, for example—I mention them because they are a particularly big one—to sign up.

The other point that I found odd in the Minister’s argument was the scare scenario of factories closing and the idea that we would blockade our ports. Nobody has suggested that. What we could do, collectively with the EU and on a timescale of many years, because we have three tiers to encourage people into, is to use a little bit of coercion and our huge lobbying power, gradually to push the shipowners in this direction. After all, that approach was used by earlier generations to get a reasonable standard of safety on foreign registered ships. I do not intend to push this matter to a vote as I do not particularly want to have it against my name that I pressed for an annual piece of paper. Nevertheless, I found the Minister’s answer rather disappointing.

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

May I rise to the defence of Liberia? Although it is not part of the supplementary fund yet—it may consider it—it is 10th on the white list. The Liberians are good guys. The hon. Gentleman should not bandy Liberia’s name about as if every Liberian tanker that comes through British waters is a rust bucket. That is certainly not the case. Liberia is in the first division and we should give it credit for that.

I should point out that the report that the hon. Gentleman seeks as a mechanism for encouraging us to encourage others in this respect is provided by the IOPC. I repeat again my assurance that we will use our diplomatic skills to encourage everybody to sign up to the fund.

Photo of Julian Brazier Julian Brazier Shadow Minister (Transport)

I am pleased with the positive note that the Minister produced at the end of his remarks. In the new-found spirit of cross-party co-operation, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Bill, as amended, to be reported.

Committee rose at fourteen minutes past Eleven o’clock.