Wreck Removal Convention Bill

Lord Addington Excerpts

Friday 10th June 2011 Lords Chamber

[Lord Berkeley]

My Lords, I shall also speak to Amendment 2 for the convenience of the Committee. Before I start on the substance of the amendment, I record my thanks to the Minister and his officials for a very useful meeting yesterday. I look forward to continuing discussions and this debate today.

I remind the Committee that I am a harbour commissioner of the port of Fowey in Cornwall. At Second Reading, we had a good debate. I said that I supported the Bill in principle; I think it is a very good Bill. I want to focus on one issue, that of wreck recovery: who does it and who pays for it. As the Bill says, as the wreck occurs, it is generally marked by a harbour authority or a GLA. However, under the Bill, dealing with the wreck is now the responsibility of the Government, who can instruct—and I mean instruct—the harbour authority, conservation authority or GLA. The idea is that the costs incurred in doing it can be recovered from the ship’s owners or insurance. That also seems fine and complies with the wreck conventions that the Bill is designed to incorporate into legislation.

We are told by the Minister that all ships will be insured because the insurance documents will be inspected at UK ports. The first question one has to ask is how robust the arrangements for this inspection are. The noble Lord, Lord Bradshaw, who sadly cannot be with us today, asked a Written Question to which the Answer from the Minister stated that in 2010 there were 12 instances where an inspection of the insurance documents revealed a deficiency in them.

Rather more serious is a recent statement by Vice-Admiral Massey, the chief executive of the Marine and Coastguard Agency, to an all-party parliamentary group, as reported in Lloyd’s List of 28 March. He said that the agency is,

“missing some ‘high priority’ ship inspections”,

particularly at night and at weekends. Therefore, one could argue that there is a certain lack of robustness about the inspections, which could mean that some ships which are not insured will not be caught by these inspections. There is also the question of the ships that go round our coasts but do not enter our ports, which will not have to show their certificates to anyone.

On Second Reading, the Minister said that all ships will be insured and therefore the costs can be recovered, but what happens if the harbour authority or GLAs cannot recover them? As the Bill stands, they cannot refuse an instruction from the Secretary of State. The trouble is that the instruction is not accompanied by a commitment to fund a problematic wreck removal. On Second Reading, noble Lords said that this would not happen very often, it was very unlikely to happen and the cost would not be very high. However, I do not know what would happen if the cost was high. If the cost was high, it could cause severe financial problems, or management problems, for small harbour authorities or GLAs. Of course, they will do their best in this regard but it could put them in financial difficulty. The British Ports Association supports these amendments and strongly opposes a requirement which would mean that the harbour authorities were financially liable for cleaning and removing uninsured, or even occasionally unowned, wrecks. Ports have a problem with small boats the world over, but the association is saying that ports authorities would possibly be less willing to accept boats which are in difficulty into their harbours if they thought that in so doing they would be liable for a big financial penalty. One should take that into account.

We have heard that Trinity House supports the Bill in its entirety, but I argue that it would do so as its job is to mark wrecks. That is part of its work, and it does it very well. However, if it were called on to manage and undertake a major salvage operation, the problem is that it would probably have to pass on the costs of doing so to ships in the form of light dues, because that is the way Trinity House is financed. Trinity House could even argue that—I hope that it would not—it needed to buy bigger and larger ships to undertake this new responsibility, but I trust that it would not do that. The Chamber of Shipping in particular is rightly concerned that the measure puts an extra cost on insured ships that comply with the regulations, and that some of that cost is to cover ships which do not comply, and have not complied, with the regulations. That body has asked whether the Crown will indemnify the General Lighthouse Fund against costs that cannot be recovered, given that the costs arise as a direct consequence of the Government’s decision to sign the convention. We could discuss that for a long time.

We should note that the Transport Select Committee in another place investigated this matter in 2008 and stated that,

“if the General Lighthouse Authorities were to be directed, under new powers in the Bill, to undertake activities other than those which they would have undertaken in the past, there is a possibility that the liability of the General Lighthouse Fund for unrecoverable costs could increase. This legislation should not be used by the Government to transfer further the financial risk resulting from uninsured ships to other shippers through the General Lighthouse Fund”.

Therefore, a lot of people do not think that this is a terribly good idea.

Finally, the Minister for Shipping, Mike Penning MP, said that the Bill enshrines the principle that the polluter pays. He is wrong, because while it certainly makes the polluter pay, in making the GLF pay, it achieves the opposite effect, because the owner of the uninsured wreck will not have contributed to the GLF, but is being saved.

These amendments would remove the requirements for the harbour authorities, conservation authorities and GLAs to comply with a Secretary of State’s instruction to deal with a wreck. If the amendments were accepted, these organisations could still be asked to do so, and in many cases they would accept. However, without the amendments, they could not refuse. Without some financial assurance, those organisations, or the legally operated ships paying light dues, could on a few occasions be put at severe financial risk. It would not happen often and it may not happen for 10 or 20 years—but it still could happen. It is not the polluter paying but the good ones paying for the bad ones.

There is a strong argument for the Government to accept these amendments on the basis that it is a more equitable arrangement for the very few occasions when somehow the costs of dealing with a wreck cannot be recovered from the insurers or the owners. If the Minister and the noble Baroness who has put her name to the Bill do not accept the amendments, it would be important for the Minister to provide some assurance that the Secretary of State will not direct GLAs, harbour authorities or conservation authorities to remove a wreck, unless that can be carried out using their normal vessels and personnel as part of their normal business. That would give comfort to the harbour authorities in particular that they will not be exposed to a small risk with a very high cost. I beg to move.

[Lord Addington]

My Lords, in the absence of my noble friend Lord Bradshaw, I have looked at the amendments and issues relating to the Bill. The noble Lord, Lord Berkeley, may be technically correct, but it occurs to me that if we get away from the fact that people will break the law and you make law only for people who will comply with it, what does the noble Lord think will be the political cost of a Government who went to an authority—whether the harbour authority or the general lighthouse authority—and said, “Do something you can’t do or we’ll bankrupt you for functions that are important”? You would be asking a Minister to pay an almost suicidal political price. The House and another place would rip that person apart. How real is that danger? That is the only thing that comes to mind. The noble Lord may be technically correct, but I wonder how real that danger is in the world in which we actually live. No one will leave in place a dangerous provision that restricts commercial activity and endangers people. I leave that sitting there, because it should be mentioned in these discussions.

[Lord MacKenzie of Culkein]

My Lords, in short, these amendments are about leaving the obligation for the removal of wrecks by default with the Secretary of State. That effectively means leaving the taxpayer with the liability. Clearly, ship operators have to be concerned about costs—and rightly so. However, the Bill—unless I have misread it and I do not think I have—is not, as was recently alleged in the shipping newspaper Lloyd’s List, about shifting the financial burden for the removal of wrecks to shipping. As I understand the Bill, it is about maintaining the status quo as regards unrecovered costs. If the Bill becomes an Act, it will not make any difference so far as unrecovered costs are concerned. An uninsured ship could go down in a conservancy area or a harbour authority area and there would be exactly the same situation as that which pertains at the moment.

As the Bill provides that there will be a mandatory requirement, for the first time, that all vessels over 300 gross tonnes have wreck removal insurance and there is strict liability on the ship owner to remove that wreck, it is highly unlikely that there will be any increased costs to the General Lighthouse Fund or to harbour conservancy authorities. I know that my noble friend Lord Berkeley is understandably concerned about the cost to a small harbour authority if an uninsured vessel requires removal after an accident, but Section 255J states clearly that the UK ship or a foreign-owned ship may not enter or leave the UK port. In default of that, the master or operator of a vessel is guilty of an offence.

So it is more likely in future, that that requirement will be widely known by all ship owners and operators and much less likely that uninsured vessels will seek to enter our ports. I agree that it would be useful if the noble Earl could say something about small harbour authorities, which unlike, for example, Southampton, Felixstowe or Clyde Port, may not have the funds to effect removal in the unlikely event of an uninsured casualty which is a hazard to navigation. Overall, it is much more likely that the introduction of the convention will lead to reduced costs, to the benefit of the General Lighthouse Fund and, thus, to ship owners.

While some wrecks and strandings are beyond the control of any ship operator or ship master, far too many of them are a consequence of negligence. Casualties arise from one or more of causes such as poor navigation, poor watchkeeping practice, and underqualified officers. We know that it is possible to have people with fake qualifications on the bridges of ships. We have undermanned bridges. There are problems with alcohol and fatigue and, not least, inadequate maintenance. In that connection, in 2009-10, the Marine Coastguard Agency found that 1,265 vessels had safety issues and had to detain 59 of them until matters were put right. Sir Alan Massey has reported that there was insufficient rigour in some of those investigations. He is in a position to put that right. If the Bill is enacted, I hope that he will do so and that there will be proper examination of certificates. Of course, that would ensure that ships without those certificates do not come into our ports.

However, where maritime accidents occur in the circumstances that I described, it is quite wrong that the taxpayer should be expected to be the insurer of last resort, and therefore wrong to seek dilution of the clause, as proposed in my noble friend's amendment. It is for shipping operators and owners to be properly insured and for them to arrange prompt removal of any wreck that is a hazard to navigation. I have not the slightest doubt that most shipping companies—good ship operators—will be properly insured.

The requirement for mandatory ship insurance is long overdue. It is a valuable addition to maritime safety and should be supported. I recognise my noble friend's concerns but I hope that, having listened to the debate in Committee, he will feel able to withdraw the amendment so that we can give the Bill safe passage.