PROVISION OF SECURITY AS CONDITION OF REGISTRATION (Hansard, 13 January 1971)

§ Mr. Albert Booth (Barrow-in-Furness)
I beg to move, That the Clause be read a Second time.
The purpose of the Clause is to ensure that the Board of Trade can require, as a condition of the registration of a vessel in the United Kingdom, the provision of 157 security for any fine or damages awarded in civil proceedings arising from a discharge of oil in navigable waters which constitutes an offence under the 1955 Act, the 1963 Act or this Measure.
As, under the Bill, Britain is to be responsible for all offences committed by U.K. registered ships outside our territorial waters as well as for offences committed by the discharge of oil within them, I trust that the House will agree that if there is to be the provision of such security it is appropriate that it should be made operable from the time at which the ship is registered.
However, the main bone of contention which the House must consider at this stage is whether this form of security is necessary. I believe it to be necessary in part because of the nature of the shipping industry. It is an industry the major assets of which are mobile. Nobody can guarantee that any of the major assets of a shipping company will be in United Kingdom ports at any time when there is an action as the result of an offence. This of itself constitutes a need for special guarantees to operate in respect of damages or fines for breaches of legislation in respect of oil in navigable waters.
8.0 p.m.
Some of us contended in committee, that it was desirable to have some provision whereby a ship could be held in a United Kingdom port if it was suspected of having committed an offence. The Minister very properly, as I thought, argued that it would be wrong to take this power because by holding the ship and keeping it off the high seas one was depriving its owners of the ability to earn a certain amount of money, and perhaps causing them further charges without having established that they were guilty of the offence, and, if subsequently found to be not guilty, they would still have been penalised. That is a powerful argument against taking power to hold a vessel in order that one has some security against the payment of fine or damages if those responsible are found to be guilty, but it does not in any way solve the problem of guaranteeing that there is a security. We are therefore now forced to consider the provision of a security from the time of registration of the vessel.
We must also consider the problem of the need for security in relation to the 158 very difficult nature of legal proceedings in respect of the discharge of oil in navigable waters. In this instance one has to secure damages from a unit operating in a multi-national industry. It is possible for a vessel to be owned by a subsidiary company in one country and, for tax purposes, leased to the parent company, which is in a second country. The vessel can be registered in a third country, but have a crew comprised entirely of nationals of a fourth country, and can be chartered by a company in a fifth country. This may seem to be stretching the laws of probability rather far, but it is not. In fact, complicated multi-national ownerships and arrangements for the operations of tankers even to the degree I have just described are comparatively common.
I therefore contend that if in addition to the legal complications deriving from this multi-national type of operation, there is doubt whether any fines imposed or damages awarded can be obtained, there will be a very considerable disincentive to commence a legal action. We must ensure that there is no such disincentive, but that there can be effective legal action against those who dump oil at sea. It has, in part, to be effective to deter others, but it is also certainly necessary in view of the known saving in cost which can be obtained by flouting the provisions of this legislation.
I believe that Britain is one of the first countries to seek to legislate the provisions of the international convention in respect of oil discharged as a result of bad operating procedures. We are therefore designing the legal means whereby we may safeguard against pollution by those operating procedures. In carrying through the Bill, therefore, we may be creating a pattern for international legislation, and in view of this we must seek to guarantee its absolute effectiveness. If we fail to do this, we shall fail not only those whom we represent by virtue of our membership of the House but a worldwide community whose crucial marine environment is at stake.

§ The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)
The new Clause would require persons who seek to register a ship in the United Kingdom to deposit a sum of money to be specified by my Department, as 159 security for the payment of any fine imposed or any civil damages awarded as a result of an offence under the Measure.
In the first place, the House should understand that the Clause could apply only to persons seeking to register ships in the United Kingdom, and would thus discriminate unfairly against British shipowners acquiring new ships or buying existing ships which had not previously been registered in this country. Since most owners of United Kingdom registered ships are resident or have assets in this country, the problem of enforcing the payment of fines or damages, if it were a problem, would be far less difficult in respect of those ships than of ships registered in foreign countries.
But it is not a problem. Although there may frequently be difficulty in securing sufficient evidence to prosecute a master or owner of a ship which has caused pollution or to bring a civil action for damages, we know of no instance in which, once a fine has been imposed or damages have been awarded, difficulty has been experienced in securing payment. Hon. Members are no doubt aware that Section 13(1) of the Oil in Navigable Waters Act, 1955, gives the courts power to enforce payment of fines imposed for offences under that Act by seizing and selling the offending vessel, its tackle, furniture and apparel.
Further, I remind the House that we shall shortly be bringing forward legislation to enable us to give effect to the International Convention on Civil Liability for Oil Pollution Damage, drawn up in 1969. This will oblige ships carrying oil cargoes to and from our ports to be satisfactorily insured against their potential liability for oil pollution damage, and to carry evidence that they are so insured. In the meantime, hon. Members will be aware that some 80 per cent. of the world's tanker tonnage has banded together in a voluntary agreement known as the Tanker Owners' Voluntary Agreement concerning Liability for Oil Pollution—"TOVALOP", as I understand it rather more easily—which ensures that compensation is available for oil pollution damage caused by the negligence of a participating tanker.
In short, the Clause is discriminatory and in my judgment unnecessary, and I must invite the House to reject it.

§ Mr. R. J. Maxwell-Hyslop (Tiverton)
I noticed that my hon. Friend used the word "negligence". What happens if the pollution is due to the deliberate act of the master of a vessel rather than to oversight or negligence?

§ Mr. Grant
If my hon. Friend is referring to a civil suit by a party which has suffered damage, I am advised that this provision will be just as applicable, and that the party's rights will exist just as much if the pollution is caused by a deliberate as by a negligent act.