Significant change to pollution liability in Australia

Further to our web alert of 20 December 2011, strict liability offences for the discharge of oil or an oily mixture from a ship into the sea by a master and/or owner of a ship has been extended to the charterer under new amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (“the Act”). This is a departure from previously settled law in Australia and many other common law jurisdictions.  

The bareboat, time and voyage charterers of a ship now face criminal penalties if an offence is committed, regardless of any actual fault on their part or on the part of the master or owner. 

The discussion papers surrounding the amendments are silent on the rationale behind this change, but the assumption of various commentators is that the rationale is to expand the class of persons who can be prosecuted and held liable in respect of oil pollution, thereby presumably acting as a general deterrent against pollution.   While this is an understandable and laudable intention the extension is controversial given that charterers usually have little if any control over the operations and actions which may result in oil pollution. 

As noted in our previous web alert the amendments also increase the maximum penalties for oil pollution to A$11 million for a corporation. Charterers who regularly trade to Australia should urgently review their existing insurance and contractual arrangements.

For the text of the Act please seen here.