MERCHANT SHIPPING (OIL POLLUTION) BILL

Order for Second Reading read.

The Minister for Communications and Minister for Labour (Mr Ong Teng Cheong): Mr Deputy Speaker, Sir, I beg to That the Bill be now read a Second time."

This Bill will give effect to the International Convention on Civil Liability for Oil Pollution Damage adopted in Brussels on 29th November 1969. The Convention came into force on 19th June 1975. So far, 45 countries have accepted the Convention.

The Bill ensures that compensation is available to persons who suffer from oil pollution damage caused by accidents involving ships carrying oil as cargo. Except for a few cases like an act of God, an act of war, or where the damage was caused by the negligence or wrongful act of any government or authority maintaining navigational lights or aids, shipowners will be liable for any oil pollution damage regardless of whether the oil escaped or was discharged through his fault.

If the shipowner is not to blame, however, he may limit his liability in any one incident to an aggregate sum not exceeding 133 special drawing rights for each ton of the ship's tonnage up to a maximum of 14 million special drawing rights. However, the owner will not be able to limit his liability if the incident occurred through his fault.

As in the Convention, the Bill requires ships carrying more than 2,000 tons of oil as cargo to maintain insurance or other financial security in sums equal to the owner's total liability for one incident. All Singapore-registered ships wherever they may be and any ship of any country entering or leaving Singapore waters and carrying oil as cargo must also be so insured.

The Bill is necessary to safeguard ourselves against the expensive cost of clearing oil pollution from the many ships that now pass through our waters.

Sir, I beg to move.

Question proposed. 3.18 p.m.

Mr Ng Kah Ting: Mr Deputy Speaker, Sir, I rise to speak in support of this Bill. Undoubtedly, it is an important piece of legislation which, when passed, will enable Singapore to give effect to the International Convention on Civil Liability for Oil Pollution Damage done in Brussels on 29th November 1969 and the Protocol thereto done in London on 19th November 1976. But before I deal with the various clauses of the Bill, I would like to make some general remarks.

First of all, it is a fact that Singapore is located at a strategic point in the Straits of Malacca, and hence it lies at the crossroads of busy international sea-lanes. Singapore is the world's third largest port and a large number of ships come into our port and traverse our waters, or are harboured in our port. In a way, we can call it a port state. Also, we can call it a flag state as many ships have been registered with Singapore and are carrying our flag. But above all these, Singapore is a state whose economy also depends on maximum freedom of international navigation and communications, whether by air, sea or telecommunications, We have to bear all these important factors in mind as they affect our national interests.

But, Sir, because we are a coastal state, a busy port and because of our strategic location, we are, therefore, very vulnerable to oil pollution by ships. The effects of oil pollution are too well known to all, especially the effects on fishing. And the precious little beaches that we have for recreation will also be adversely affected. In the long-term, the serious effects on ecology caused by oil pollution can upset the delicate life cycle that supports all life on earth. So it is both a national and an international problem.

It is, therefore, both imperative and definitely in our interests to support measures which will provide for effective and remedial measures to combat oil pollution at sea.

At the same time, we have also to look after our own national interests as dictated by our role as a major port and its vital importance to world shipping. Hence the measures to combat pollution must be proportionate to the problem. I say it must be effective but they must not be disguised to arbitrarily or unreasonably interfere with legitimate international shipping.

Therefore, this Merchant Shipping (Oil Pollution) Bill, 1981, together with the Prevention of Pollution of the Sea (Amendment) Bill, 1981, take the approach of attaching liability on the basis of effects or harm or damage done within Singapore or Singapore waters.

The important reason is that if only the territorial basis of jurisdiction is to be used for measuring liability, then ships will be liable only if they are physically within our territorial waters at the time of causing damage by pollution.

Sir, this is clearly untenable, as the waters of the ocean know not nor respect any man-made boundaries. In other words, oil pollution occurring outside territorial seas can be brought by currents into territorial waters and beaches of one or more countries.

Ships, therefore, should not be allowed to abuse the concept of freedom of the high seas by polluting the high seas. If the pollution they caused in the high seas subsequently cause damage to our state or other states, they must well know that they will be liable. This basic principle seems to be well covered in this Bill.

But one major problem envisaged will be that of enforcement, investigation and establishment of facts. This is important if liability is going to be established. So can the Hon. Minister for Communications enlighten the House on whether we have adequate facilities for investigation and enforcement? Of course, in the case of a collision or disaster, the situation is well known and facts may not be disputed. However, it may be very different where vessels which are traversing our waters discharge oil indiscriminately. I say that we should have sufficient means to investigate and establish the facts. Otherwise, all these legislative provisions on liability will be rendered meaningless.

Therefore, whatever efforts we take to ensure that our waters are free of pollution, as we are a coastal state, such efforts will be negated if there is no international co-operation. Similarly, because of tides and fast currents, pollution occurring in one place can be a cause of concern to countries in neighbouring places. What I have in mind is the close cooperation and coordination of the ASEAN countries in this context. May I ask the Hon. Minister how such a cooperation can be brought about?

I am aware that the Third United Nations Law of the Sea Conference (UNCLOS III) has been going on for some years, and it is significant that this Conference is now presided over by Singapore's Permanent Representative to the United Nations. This draft Convention of the Law of the Sea which has emerged from the numerous sessions contains elaborate provisions for prevention, reduction and control of pollution of the marine environment. The provisions deal with enforcement by flag states, port states and coastal states. The concept of the Exclusive Economic Zone (EEZ) also complicates the issue. Hence, I do not intend to go into this in detail. But I have to mention them in order to highlight the global nature of pollution and the consequential need for international co-operation. Hence, the question to the Minister on how cooperation amongst ASEAN states can be achieved.

Further to this, I would also like to ask the following questions:-

1 Under existing circumstances, how is compensation obtained?

2 What are the main causes of oil pollution in our waters?

3 Since we know that much money has been spent on the prevention and control of pollution, the House would welcome the Minister's disclosure as to how much has been spent and whether enough has been done?

4 Why is the Bill necessary and what is the intention of acceding to the CLC Convention?

Sir, I now come to the various clauses of the Bill. Whilst the House is grateful to the Minister for his explanation of the provisions in the Bill, there are clarifications to be made. For example, clause 3 makes a ship owner liable for oil pollution damage in Singapore and for the cost of measures taken to prevent or minimize such damage resulting from the escape of oil from a ship while carrying oil in bulk as cargo. The question is: What about the discharge of u"d oil in this respect? The Minister mentioned just now that it pertains only to ships carrying oil in bulk as cargo. That is not the escape of oil from a ship while carrying oil in bulk as cargo, but a ship cleaning itself on a high sea. As I have said earlier, tides and fast currents can pollute our waters as such.

As regards clause 4, the onus of proof lies on the owner; in other words, he will not be liable if he can show that the oil escaped as a result of an act of war, hostilities, or wilful act of a third party, or negligence of an authority responsible for navigational aids, In the case of a wilful act of a third party or negligence, the owner may try to establish that he is not liable. Therefore, I do not think that this clause is adequate enough.

Clause 5 restricts the owner's liability. This is not clearly spelt out, especially clause 5(b) which states that:

'no servant or agent of the owner nor any person performing salvage or cleaning operations with the agreement of the owner shall be liable for any such damage or cost.' Well, I must add that this Bill is highly technical and though I have very limited knowledge of the technicalities of the Bill, can I have the Hon. Minister's assurance that this Bill has been carefully thought out and drafted accordingly? For example, clause 17(1) states that:

'The provisions of this Act shall not apply in relation to any warship or any ship for the time being used by the government of any State other than for commercial purposes.' Can the Hon. Minister clarify this? Also, if I may ask the Hon. Minister whether, in the enforcement of this Act, the authority, in this case the Port of Singapore Authority, has sufficient manpower as well as equipment and facilities to implement this Bill when passed, and, if necessary, to carry out the enforcement. If I can get the assurance, I will definitely give my full support to the Bill. 3.33 p.m.

Mr Ong Teng Cheong: Sir, perhaps I will deal with the specific questions raised by the hon. Member for Punggol first, before coming to the other more general questions.

The Member asked how is compensation obtained under existing circumstances. Under existing circumstances we base our claim for compensation under section 3 of the Civil Liability (Oil Pollution) Act, 1973. The owners of vessels, however, under this section, may limit their liability under section 295 of the Merchant Shipping Act, which is approximately $203 per ton of the ship's tonnage.

The Member wants to know what are the main causes of oil pollution. Roughly, it could be due to equipment failure and human error during cargo operation at terminals. It could also be due to the transfer of cargo from ship to ship and during bunkering operations. It could also be due to the indiscriminate discharge of oil and contaminated water from the bilges of harbour craft. Another possible cause of pollution is through maritime accidents, including collisions, grounding of vessels and fire. It could also be due to discharge of effluent from foreshore industries and inland watercourses.

In the past ten years, PSA has spent a total of approximately $46 million on capital projects for this purpose. In addition, PSA incurred an annually recurrent expenditure of approximately $4 to $6 million. I can assure the Member that adequate measures have been taken to prevent and control oil pollution. However, PSA is closely monitoring the situation and, if necessary, make the necessary adjustments and improvement to the facilities and manpower.

The hon. Member also asked, "Why is the Bill necessary?" There are advantages in acceding to the International Convention on Civil Liability for Oil Pollution Damage (1969). Ships carrying more than 2,000 tons of oil in bulk as cargo are required to maintain insurance and other financial security. The shipowner's limit of liability is increased. This means that, in the event of an oil pollution, Singapore will be adequately compensated on the damage suffered.

Regarding his question, "What is the intention of acceding to the Convention?", Sir, most of the leading maritime states have already acceded to the Convention, and the merchant ships of these states represent 79% of the world's total shipping tonnage. In any case, Singapore registered tankers calling at ports of Convention states, in other words, states which have acceded to the Convention, have to carry certificates attesting that appropriate insurance or other security is in force against oil pollution damage, even though Singapore is not a party to the Convention. So, in acceding to the Convention, there will be no extra burden imposed on Singapore ships.

The Member asked, "What about the discharge of used oil" instead of simply oil in bulk as cargo, and whether used oil comes under the definition of "oil pollution" or otherwise. It could come under either the Merchant Shipping (Oil Pollution) Bill, i.e. the Bill that we are currently debating, or it could come under the next Bill which I will be taking its Second Reading later in this Chamber, i.e. the Prevention of Pollution of the Sea (Amendment) Bill, which deals with other forms of pollution. So, in as far as the points that the Member has raised are concerned, they will be dealt with either under this Bill or under the Prevention of Pollution of the Sea (Amendment) Bill.

The Member questioned about clause 5 of the Bill which deals with the liability of shipowners. He asked why servants and agents of the owners are prevented from incurring liability for damage. This is mainly for enforcement reasons. It would be difficult for the authority to go about identifying the responsible party for causing pollution. In as far as the authority is concerned, the owner of the ship is responsible. If there is any dispute between the owner and the ship-repairing agents or servicing agents, then it is for the ship-owner to take it up separately with his agents.

The hon. Member wants to know why warships do not come under the provisions of this Bill. We know that warships and government ships do not normally come under any international convention because any damages caused by warships or government ships in foreign pods are matters for the respective government to tackle. They do not have to go through a court of law. It is for the respective government to tackle it separately.

The hon. Member also wants the assurance that the Port of Singapore Authority has sufficient manpower to carry out enforcement action. I can assure the Member that the operation of this law is not new. It has been pan of the Authority's day-to-day operations for some years already. This Bill is concerned only with tightening up the law and acceding to the Convention. I can assure him that the Authority has adequate manpower and facilities to deal with the necessary enforcement required under this Bill.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Ong Teng Cheong].

Bill considered in Committee; reported without amendment; read a Third time and possed.