New Commonwealth Offences and Higher Penalties for Ship Oil Spills

7 October 2011

Contacts

Introduction

By Jacinta Studdert and Brooke Newell

The Maritime Legislation Amendment Bill 2011 (Cth) (Bill) was introduced into the House of Representatives and received its second reading speech on 22 September 2011. The Bill is designed to amend the Navigation Act 1912 (Cth) (Navigation Act) and the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (Cth) (Protection of the Sea Act).  

The Bill creates new offences for oil pollution incidents, broadens the scope of liability to additional parties and increases penalties for pollution offences.

Prior to coming into force the Bill must pass both houses of Parliament and receive Royal Assent.

Why change the current legislation?

The proposed amendments are in response to recent pollution incidents by ships in Australian waters. The incidents highlighted the need for the regulatory system to be strengthened to provide a sufficient deterrent to shipping companies and their crews from engaging in unsafe and irresponsible actions at sea. On 11 March 2009 a cargo ship, Pacific Adventurer, lost 31 containers of ammonium nitrate overboard, which leaked into the sea, some seven nautical miles east of Cape Moreton, Queensland. On 3 April 2010 in an unrelated incident a bulk carrier vessel, Sheng Neng 1, ran aground on the Douglas Shoal, Queensland. The impact ruptured the ship’s fuel tanks and released approximately four tonnes of fuel oil into surrounding waters. Both of these incidents resulted in significant environmental damage.  

The amendments are designed to ensure compliance with the International Convention for the Prevention of Pollution from Ships (MARPOL Convention), to which Australia is a signatory. Article 4(4) of the MARPOL Convention states that “the penalties specified under the law of a Party pursuant to the present Article shall be adequate in severity to discourage violations of the present Convention and shall be equally severe irrespective of where the violations occur.” Currently, Commonwealth legislation giving effect to the MARPOL Convention is not in line with State legislation in Australia which imposes much higher penalties for marine pollution offences.

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What are the key changes?

Navigation Act

The amendments to the Navigation Act provide for new offences where:

  • the master of a ship operates the ship in a negligent or reckless manner that causes pollution or damage to the marine environment in Australian waters (s 267ZZI) or in waters of the high seas outside Australia (s 267ZZL); or
  • the master of a ship fails to ensure that the ship is not operated in a negligent or reckless manner that causes pollution or damage to the marine environment in Australian waters (s 267ZZJ) or in waters of the high seas outside Australia (s 267ZZM).

An offending corporation may be liable for fines of up to $3.3 million where serious harm to the environment has occurred or may occur as a result of the incident (s 267ZZN).

The Bill also proposes amendments to Division 14 of Part IV of the Navigation Act which provides for mandatory reporting by a ships master in relation to the movement of their ship in prescribed areas, for example the Great Barrier Reef Particularly Sensitive Area. The proposed amendment creates a strict liability offence where the master of a ship fails to report in a mandatory reporting area. Being a strict liability offence, the intention or state of mind of the master will not need to be proved in establishing the offence.

A new Division 3A has been proposed to set out the means, other than by prosecuting for criminal offences, through which compliance with the requirements of the Bill may be enforced. The new Division establishes a scheme by which the Court may require an offender to pay a pecuniary penalty to the Commonwealth, otherwise known as a civil penalty order, rather than imposing criminal liability. To be liable for a civil penalty order the offender must have contravened a provision of the Bill, which sets out a pecuniary “civil penalty” as an appropriate sentence. Civil penalty orders impose more significant fines than criminal penalties within the Bill; however, they do not constitute a criminal offence (s 399H).

Protection of the Sea Act

The proposed amendments to the Protection of the Sea Act broaden the scope of liability for oil pollution offences beyond masters and owners of ships. Charterers will now also be liable where there is the discharge of oil, an oily mixture or an oily residue from a ship into the sea near the coastline of Australia or one of the external territories, or into Australia’s exclusive economic zone or, in the case of an Australian ship, on the high seas (s 9(1B) and s 10(3)).

The term “charterer” is not a defined term in the Act nor has it been subject to parliamentary or judicial consideration.

Defences are available to masters, owners and charterers of ships for offences involving the discharge of oil or an oily mixture from the ship, including:

  1. if the discharge was for the purpose of securing the safety of the ship or saving life at sea;
  2. if the oil or oily mixture, as the case may be, escaped from the ship in consequence 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 minimizing the escape of oil or oily mixture; or
  3. in the case of an oily mixture, if the discharge was for the purpose of combating specific pollution incidents in order to minimize 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)).

In regards to the second defence above, “non-intentional damage” means that the owner, master or charterer did not act with intent to cause damage or did not act recklessly with the knowledge that that the damage would probably result (s 9(3)). Further, “damage to the ship or its equipment” does not include deterioration resulting from failure to maintain the ship or equipment or defects that develop during the normal operation of the ship (s 9(3A)).   

The Bill will increase the maximum fine for a corporation from $1.1 million to $11 million for an offence under the amended provisions (s 9(1B) and s 10(3)).

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What are the implications?

The Bill will create new offences, significantly increase penalties and broaden liabilities to those parties involved in pollution incidents. In addition to the master and the owner of a ship being liable for pollution offences under the Bill, charterers of ships may also be liable for offences involving the discharge of oil from a ship under the Protection of the Sea Act.  

Additionally, the master of a ship will have an obligation under the Navigation Act to ensure that a ship is not operating in a reckless or negligent manner. Failure by a master to report the movement of their vessel in prescribed areas may also result in a criminal offence on the part of the master.

These amendments, subject to the passing of the Bill, will require both individuals and companies to assess and where required update their environmental management plans and reporting systems to reduce the risk of civil penalties and criminal liability.  

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