MERCHANT SHIPPING (AMENDMENT) BILL

Column: 1107

MERCHANT SHIPPING (AMENDMENT) BILL: Order for Second Reading read.

The Minister of State for Transport (Mrs Lim Hwee Hua): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Objective of Bill

Sir, the Merchant Shipping (Amendment) Bill 2004 contains two amendments to the Act. First, it gives effect to Singapore's accession to the 1976 International Convention on Limitation of Liability for Maritime Claims, which is known as LLMC 76. Second, the

Column: 1108

Bill broadens the definition of "ships", so as to allow the registration of offshore vessels, such as mobile oilrigs under the Singapore Registry of Ships.

Rationale for Accession to LLMC 76

Sir, let me now provide the rationale for accession to LLMC 76. The LLMC 76 was adopted by the International Maritime Organisation (or IMO), to address the shortcomings of its precursor, the 1957 International Convention on the Limitation of Liability of Owners of Sea going Ships, otherwise known as Brussels 57. Singapore is currently a party to Brussels 57.

Like Brussels 57, LLMC 76 sets out the rules on the limitation of liability for maritime claims. Maritime claims include those for death, injury, loss or damage occurring on board or in connection with the operation of a ship.

Although the liability limits under the Brussels 57 have served us well, the industry has given us feedback that these limits are now too low to meet their needs. Owing to the nature of the Convention, claimants are now more inclined to take their cases to Court under Brussels 57, to challenge the shipowner's right to limit his liability. This creates great uncertainty for all parties concerned and almost always delays the payment of compensation.

Part VIII of the Merchant Shipping Act presently gives effect to the provisions of Brussels 57. Under the proposed amendments in clauses 3 and 4 of the Bill, this would be replaced with a new Part VIII to give effect to LLMC 76. The benefits of acceding to LLMC 76 are as follows:

(a)Firstly, it provides higher liability limits than the 1957 Brussels Convention, which are better able to meet the

Column: 1109

industry's requirements in today's environment; and

(b)Secondly, it protects the interests of shipowners, insurers and claimants by making it very difficult to break the shipowner's right to limit his liability, thereby creating more certainty for all parties concerned.

Sir, the accession to LLMC 76 will therefore address the shortcomings of the current Brussels 57 Convention. It will also align our standards with other maritime nations, such as Hong Kong, Japan and most EU states; and enhance Singapore's position as a global hub port

and international maritime centre. LLMC 76 will also make it more favourable for parties to use Singapore law in their shipping contracts. This should lead to greater use of the dispute resolution and judicial process in Singapore, and help develop our maritime legal and arbitration services.

Accession to LLMC 76 would also entail a consequential amendment to the Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act. Section 11 of that Act is relevant only because we continue to be party to the 1957 Brussels Convention. It should accordingly be deleted upon accession to LLMC 76. This is set out in the Notice of Amendments in respect of the Bill.

Amendment to the definition of "ship"

Sir, this Bill also seeks to broaden the definition of "ships" under the Merchant Shipping Act. Clauses 2(a) to 2(c) amend the definition of "ships" to include mobile oil rigs.

With increasing global demand for energy, we are seeing a corresponding

Column: 1110

increase in oil and gas exploration and production activities. This has led to the growth of the offshore drilling and support facilities industry. Although Singapore does not possess such energy resources, we have, over the years, established ourselves as an offshore and marine hub, with capabilities in the building, repairs, conversions and management of offshore vessels.Singapore shipyards, such as Keppel Fels and Sembawang, are leaders in this sector. While these offshore structures are frequently constructed herein Singapore, they are currently registered in other countries, such as the UK, Norway and Australia. This is because our Registry of Ships does not allow for the registration of mobile oil rigs.

Allowing such vessels to be registered under the Singapore Flag will enable Singapore to benefit from the growth in the oil and gas sectors as a one-stop "build, register and operate" centre. This will help attract the ship owners and operators to base their activities in Singapore, and further enhance our efforts to develop maritime ancillary services such as ship financing, marine insurance, maritime legal and arbitration services.

Sir, let me conclude by saying that the proposals to accede to LLMC 76, and to allow the registration of mobile oil rigs under the Singapore Registry of Ships, will further strengthen our position as a global hub port and international maritime centre.

Sir, I beg to move.

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. - [Mrs Lim Hwee Hua].

Bill considered in Committee.

Column: 1111

[Mr Deputy Speaker (Mr S Iswaran) in the Chair]

Clauses 1 to 4 inclusive ordered to stand part of the Bill.

New Clause -

"Consequential amendment to Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act: - Section 11 of the Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act (Cap. 180) is repealed." - [Mrs Lim Hwee Hua].

Brought up, and read the First time.

Clause read a Second time and added to the Bill.

Mr Deputy Speaker: The new clause will be inserted immediately after clause 4.

Long Title -

Mrs Lim Hwee Hua: Sir, I beg to move,

In page 1, after "therewith", to insert ", and to make a consequentialamendment to the Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act (Chapter 180 of the 1999 Revised Edition)".

The long title is amended to comply with Standing Order No. 72(2), which states that if the Committee wishes to make an amendment not within the title of the Bill, it shall amend the title accordingly. The amendment allows the Bill to make a consequential amendment to the Act stated.

Amendment agreed to.

Bill reported with amendments; read a Third time and passed.