Merchant Shipping (Pollution) Bill [HL]

My Lords, last week when we were considering the Road Safety Bill my noble friend Lord Davies of Oldham said, in his charming, self-deprecating way, that he was a glorified amateur. Your Lordships have in front of you now someone of an even lower order, who is an enthusiastic amateur. My credibility for leading on this Bill comes down to my good old uncle Nick, who was a merchant seaman. This has been a small but perfectly informed and knowledgeable debate on an issue of immense importance both to our country and internationally. My noble friend set out the Bill’s principles and in the main noble Lords have welcomed its thrust, although I noticed that the noble Lord, Lord Hanningfield, and particularly the noble Lord, Lord Bradshaw, think that it is a timorous beastie. I shall briefly underpin some of the issues surrounding the Bill’s two sections on compensation and air pollution. Then I will go on to respond to noble Lords who have asked a number of salient questions. I will answer where I can and write to noble Lords where I cannot or if I run out of time. The Bill’s provisions relating to oil pollution compensation will greatly improve the protection we can give to those who may suffer the consequences of tanker disasters. Of course we will do all we can to create the conditions and regulations needed to prevent shipping incidents happening in the first place, including preventing the operation of substandard shipping—to which several noble Lords, including my noble friend Lord Clinton-Davis, referred. But we must accept that the sea can be a dangerous environment and accidents will occur from time to time, some regrettably near our coasts. When they do, we must ensure that the communities and businesses that have to bear the brunt of a major oil pollution incident are not left having to suffer the trauma of needless difficulties in recovering their legitimate costs.   We have seen here in the UK, as the noble Lord, Lord   Hanningfield, reminded us, how the public purse has had in the past to bear some of the costs arising from oil tanker incidents when the existing fund has been overstretched. We have seen compensation problems elsewhere, and the Government are determined to ensure that we provide our citizens and our coastal environment with the best possible legal and financial protection that is available. We will, of course, continue to press for the international regime to develop further, so as to remain effective in responding in all circumstances to oil pollution from tankers. Implementation of those compensation provisions now before the House will, I am sure, soon be complemented by the Government’s efforts to implement a framework of the other maritime liability agreements that have already been negotiated. They will further protect our coastline from other marine pollutants and offer financial protection for passengers on seagoing ships. On air pollution, it is important that the UK implements Annex VI of the MARPOL Convention. The UK played a key role in negotiating that annex at the International Maritime Organisation. Major oil spills are a rare occurrence, but atmospheric emissions from ships are constant. The new international standards and requirements are important because they will help to reduce air pollution from ships trading worldwide, and cleaning the atmosphere around the UK’s shores and harbours would assist the Government’s commitment to controlling climate change. The UK coast is interspersed with both large and small ports. The large ports are mainly concerned with internationally trading ships such as container ships, tankers, bulk carriers and cruise ships. The smaller ports deal with passenger and cargo ferries and fishing vessels and are predominantly used by domestic trading ships, although some have international trade routes to the European continent. That can result in many ship movements per day. Clearly, if such ships were required to make less polluting exhaust emissions through the use of cleaner fuels and improved technology, the air quality around UK sea ports, and hence around the UK coastline, would be improved. In addition, it would help to address concerns over air quality in major UK ports, where the high concentrations of trucks, ships and heavy industry can cause notable and localised reductions in air quality. Those measures will incidentally contribute to the reduction of trans-border air pollution carried from the UK to the European continent by the prevailing westerly airflow. It has been assessed that the projected reductions in sulphur oxide emissions from all vessels in UK ports and UK waters equate to an annual reduction of £3   million worth of material damage to buildings and structures in the UK, with one third of the benefits in the vicinity of UK ports. A reduction in air pollution from the marine industry will assist the Government to   meet our EC partnership commitments in the EU strategy to reduce atmospheric emissions from seagoing ships. Human health benefits are also to the fore. In coastal and port communities, human health benefits will result from the reduction of localised pollutants such as low level ozone. It is estimated that implementing MARPOL Annex VI will result in 20   fewer deaths and a £26 million reduction in associated economic loss annually. In particular, I emphasise that the Bill will enable us to make legislation to regulate air pollution from UK flagged ships wherever they are located in the world, but we do so in a manner that is wholly compliant with international law and ensures a level playing field for UK industry. That will have the effect of protecting both the environment and human health from the impact of air pollution from ships. Shipping is an international industry, and the implementation of agreed international standards is the appropriate manner to regulate it. That measure will allow us to maintain such an approach. I will rattle through the questions asked by noble Lords as quickly as possible to get as many answers in as possible. In his excellent contribution, the noble Lord, Lord Hanningfield, asked about ships’ waste being discharged into the sea. The UK already has regulations in place that implement MARPOL Annex V, which concerns ship-generated garbage. The UK has other regulations in place that require UK ports to have reception facilities for all sorts of ship-generated waste and that require ships to discharge their waste unless specific conditions apply. The noble Lord, Lord Hanningfield, also asked whether the Government had consulted British shipping industry interests. The United Kingdom delegation to the IMO consulted widely and worked closely with the industry in playing a full and active part   in securing international agreement on those new   measures and the subsequent addition to the MARPOL Convention. The industry has also been widely consulted about secondary legislation. The noble Lord went on to ask why we have delayed in ratifying the convention. There have been a number of parallel EU directive considerations on air pollution. In the light of the current high profile of atmospheric emission issues, the UK considered it prudent to ensure that related matters were taken into consideration when developing the legislation that was required to ratify the convention. We are confident that the proposed secondary legislation will accommodate those additional considerations. The noble Lord also asked what the oil industry’s response was to public consultation on the Supplementary Fund Protocol. The oil industry supports the implementation of the Supplementary Fund Protocol as part of the overall review of the regime, and it was represented at the diplomatic conference that adopted the protocol. The noble Lord also asked why it has taken the UK so long to give effect to the Council decision. This is the first opportunity that the UK has had to secure the powers in primary legislation necessary to implement the Supplementary Fund Protocol. The noble Lord also asked whether it would be better to reform the existing regime rather than to introduce a new regime. The UK was one of the first states to press for revision of the existing regime. That led to the setting-up of a working group to review the present regime. The most pressing problem was the potential shortfall in available compensation. Other reforms are being discussed, and the UK is pressing for further necessary revisions. We continue strongly to support the revising of the underlying regime to complement the supplementary fund. In short, we are doing both. The noble Lord, Lord Bradshaw, asked about the ratification of the MARPOL annexes. We welcome his good sailing for the Bill and the welcoming points that he raised on it. Ratification of MARPOL Annex I to II entered into force on 2 October 1983 and the number of contracting states was 131. MARPOL Annex III entered into force in July 1992 and the number of contracting states was 116. MARPOL Annex IV entered into force on 27 September 2003 and the number of contracting states was 101. Annex V came into force on 31 December 1988 and the number of   states was 120. The MARPOL protocol 1997, Annex   VI, came into force on 19 May 2005 and there were 23 contracting states. The noble Lord, Lord Bradshaw, was concerned about flag states becoming parties to the regime. The supplementary fund does not rely on flag-state participation. It is also worth pointing out that the major flag states and the shipping industry supported the supplementary fund being set up. All tankers coming into our ports have to meet the compulsory insurance regulations and liability limits of the regime. The noble Lord, Lord Bradshaw, asked about ship-owner and cargo interests and share of the burden. He was concerned that those causing the pollution paid so little. He expressed concern about sanctions for lack of insurance. The international system is based on the balance of responsibility between ship and cargo. Lack of proper insurance will lead to a tanker being detained in the UK until effective insurance under the civil liability convention is put into place. In practice, such detentions are very rare indeed. The flag states support the insurance rights of the regime. The noble Lord also asked why so few cases came to court. The CLC fund regime is designed to avoid costly and time-consuming claims in court and to settle claims outside court. He also asks what happens to ships that do not contribute to the compensation system or that come from countries that are not party to the regime. It is an entry-into-port requirement that all vessels carrying oil in bulk as cargo must maintain insurance to cover the liability under the regime. They must also have a state-issued certificate, attesting that suitable insurance is in place. Failure to carry a certificate is punishable by a fine of £50,000. A vessel may also be detained if it attempts to leave port. We very much welcome the contribution and expertise of the noble Lord, Lord Greenway. We take note of his positive approach to the Bill and of his specific cause for caution in certain areas as we move forward. The noble Lord, Lord Clinton-Davis, also has great experience in such maritime matters and adds important substance to our deliberations. We listened carefully to what he had to say. He and the noble Lord,   Lord Hanningfield, asked about the share of compensation borne by states—for example, Spain—rather than by the regime. It is true that at present claims from the ““Prestige”” incident are being paid at only 15 per cent by the IOPC fund. The supplementary fund should ensure that in future the regime bears the full cost. The shipping and oil industries will pay. That is in line with the ““polluter pays”” principle to which the UK fully subscribes. In any pollution event, it is always important not to accept at face value the headline estimates of damages and costs. All claims have to be assessed to ensure that they fully meet the relevant criteria. The fund’s criteria are more flexible than may be the case with many legal systems. The noble Lord, Lord Clinton-Davis, also asked some questions about the skills base. What are the Government doing to ensure the maritime skills base is improved and what are we doing to ensure greater investment for maritime training? I shall write to him more fully, but the minimum training obligation, which is a unique feature of the UK tonnage tax scheme, requires each shipping company entering into the scheme to recruit and train one officer trainee each year for every 15 officers in its fleet. The training commitment to that for 2004-05 is over 1,200. The maritime training scheme has been running since April   1998 and provides support for the training of officers and ratings. The current budget is £9.4 million per annum. My noble friend Lord Simon rightly raised many concerning incidents of pollution and we welcome his   contribution. He draws attention to other forms of pollution, including ballast water and plastic bags. He asked for an e-mail response, which we shall endeavour to ensure he receives. The ballast water convention was adopted at the International Maritime Organisation in 2004. Currently, guidelines are being developed under the convention and by the IMO to try to reduce the damage caused by organisms transmitted in ships’ ballast water, to which my noble friend referred. The noble Earl, Lord Mar and Kellie, when summing up for the Liberal Democrat Front Bench, asked which countries will be cosignatories of the convention. The Supplementary Fund Protocol’s cosignatories are France, Spain, Japan, Norway, Denmark, Portugal, Sweden, Ireland, Finland and Germany. They have already become party to the protocol and we expect other European Union states to join. On MARPOL Annex VI, there are 23 signatories, including Azerbaijan, the Bahamas, Bangladesh, Barbados, Bulgaria, Cyprus, Denmark, Finland, Germany, Greece, Japan, Liberia, Marshall Islands, Norway, Panama, Poland, St Kitts and Nevis, Samoa, Singapore, Spain, Sweden and Vanuatu. I shall write to the noble Lord on the other questions that he raised. The noble Lord, Lord Dixon-Smith, talked about coverage for granting a place of refuge. His view was that the international regime should pay. The international regime would pay for damage arising from a tanker like the ““Prestige”” being granted a place of refuge. I very much agree with him that granting such refuge is usually the better course in an emergency. I shall also ensure that the noble Lord has answers in writing to his other questions. In conclusion, each of the provisions in this small but important Bill is much needed. Each will contribute very significantly to improving the maritime environment and protecting the interests of the UK’s extensive coastline and of our coastal communities. Therefore, I commend the Bill to the House. On Question, Bill read a second time, and committed to a Grand Committee.