Gordon Campbell on who should pay for the Rena clean-up

So Transport Minister Stephen Joyce will be meeting this morning with the Mediterranean Shipping Company, the Greek firm that chartered the Rena from its Greek owners, Costamare Inc – with a view to getting MSC to front up to take some responsibility for how the ship was being operated.

Good luck with that. The cost of the Rena clean-up is likely to run into the tens of millions – and it is still unclear how much of that cost, if any, will be met by the insurance carried by the ship’s owners, and/or by the insurers for MSC, the charter operators of the vessel. Last week, MSC issued a press release pushing all the responsibility back onto the owners, Costamare:

In relation to the container vessel Rena accident, off the coast of New Zealand, MSC Group confirms that it is neither the owner of the involved vessel nor responsible for its management or the crew on board.

That’s plainly ridiculous. If you are the charter operator, you are the operational manager of the vessel, and have (immediate) responsibility for the state of the ship and the working conditions of the crew on board. The owners also have some responsibility. Like MSC, Costamare is a huge international player in the world of container shipping. While an apology for the grounding has been issued by Costamare’s managing director Diamantis Manos, it is still unclear how willing Costamare is to pay for the cost of the clean-up.

Costamare is owned by the billionaire Konstantakopoulos family, and it made most of its money in the China trade of containers to and from Asia. The family patriarch was Vassilis Konstantakopoulos (known as ‘Captain Vassilis’ in Greek shipping circles) who died in January of this year.

Before dying, Vassilis pumped a good deal of the family fortune into a luxury golf resort in the Pelopponese called Costa Navarino. The people of the Bay of Plenty who have been picking dead seabirds coated in oil off their beaches will find it bitterly ironic that the birdwatching of migratory species is listed prominently (in company advertising) as being among the environmental attractions at Costa Navarino. In fact, Costa Navarino depicts itself as a model of green tourism, one that positively embraces environmental regulation as a driving force in its operations:

* Regulation: The strict legislation regarding….sensitive habitats and ecosystems was the leading incentive for the creation of this eco-friendly hotel, as Messinia is one of the regions with the highest biodiversity in Europe, both in terms of species and ecosystems.
* Market demand: The combination of luxury services with environmental protection positions the hotel in a niche market.
* Green ethics: Environmental measures far exceed legal obligations….

If it has to, New Zealand should be willing to retaliate against the hypocrisy of Costamare Inc marketing the Costa Navarino in such terms, while the money that drives this exercise in luxury green tourism is being amassed by the sort of substandard container ship operations exemplified by the Rena.

According to Phil Goff, the government could have minimised its exposure to the cost of the cleanup if only it had ratified the International Convention on Civil Liability for Bunker Oil Pollution Damage.

The Bunker Convention certainly does seem relevant to the Rena situation:

The Convention applies to [pollution] damage caused on the territory, including the territorial sea, and in exclusive economic zones of States Parties. “Pollution damage” means:

(a) loss or damage caused outside the ship by contamination resulting from the escape or discharge of bunker oil from the ship, wherever such escape or discharge may occur….
(b) the costs of preventive measures and further loss or damage caused by preventive measures. The convention is modelled on the International Convention on Civil Liability for Oil Pollution Damage, 1969. As with that convention, a key requirement in the bunkers convention is the need for the registered owner of a vessel to maintain compulsory insurance cover.

Another key provision is the requirement for direct action – this would allow a claim for compensation for pollution damage to be brought directly against an insurer.

Ironically, the Mediterranean Shipping Company put out a press release on the 4th October ( one day before the Rena grounding) saying that from November 1st onwards, all of its clients would be covered by the Bunker Convention.

Surely in the circumstances, this should give the government some leverage to get MSC to backdate its coverage by a month? While the government has conceded it ‘ dropped the ball’ by not signing the Bunker Convention, it has also blamed successive governments for not signing New Zealand up to its protections.

That point has some validity, given that the Convention was adopted in March 2001, and came into force in November 2008 – and selective memory did appear to be at work when Labour leader Phil Goff was lambasting the government this morning for its failure to sign the Bunker Convention. Where was Goff between 2001 and 2008 on this point? Even so, the current government’s carelessness is reprehensible – especially given that the potential for oil spill damage to Bay of Plenty and East Cape beaches received a lot of publicity last year, during the furore over the awarding of oil exploration contracts to the Brazilian oil firm Petrobras.

Why didn’t the Petrobras furore spur the likes of Energy Minister Gerry Brownlee and Transport Minister Stephen Joyce into preventive action? One can only put the government’s slackness down to its ideological hostility to the regulation of business, and to its willingness to attract investment to this country by offering lowest common denominator environmental standards and labour conditions.

What New Zealand has done since the early 1990s is to de-regulate coastal shipping and virtually invite flag-of-convenience vessels (with their attendant substandard equipment and work conditions) to dominate our coastal shipping trade. It did so without ensuring that local and regional councils had in place viable oil spill contingency plans (OSCPs) and the equipment and management systems to enable a ready response.

Those are the lessons the Key government should be taking from this disaster. In particular, we need to ask what steps will Stephen Joyce and his Cabinet colleagues now (belatedly) be taking to ensure (a) that all local and regional councils have credible OSCPs in place and (b) that all ships plying our coastal waters carry sufficient insurance cover to meet the cost of any oil spill damage they cause?


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