§ 7.30 p.m.
§ The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)
I beg to move Amendment No. 1, in page 3, line 1, after ' owner ', insert :' nor any person performing salvage operations with the agreement of the owner '.
§ Clause 3(h) follows the 1969 Convention and provides that a servant or agent of a tanker owner who may be liable under Clause 1 shall not be liable for oil pollution damage. The reason for this is that the Convention and the Bill impose a special liability on the owner and contain special provision for insuring and enforcing that liability. Provision is also made in paragraph (a) that the owner should not be liable in any other way for oil pollution damage. If proceedings were possible against the owner's servants or agents, behind whom an owner would normally have to stand, a way would be open indirectly to further proceedings against an owner. A salvor who carries out salvage operations with the agreement of the owner is in much the same position as a servant or agent of the owner although, as an independent contractor, in law he might not come 110 within the meaning of the phrase, and consequently it seems to us equitable, particularly having regard to the considerations to which I shall come in a moment, to put a salvor legally on the same footing as the owner's servant or agent for the purposes of the Clause.
§ The risk of unlimited liability for pollution damage and difficulties in obtaining insurance cover are causing salvors to hesitate before undertaking salvage operations to tankers. Not long ago there was the incident of the "Panther", and I am informed that one reason for the delay in getting on with the salvage was the discussion over indemnity from the owners.
§ As hon. Members know, the maximum figures for shipowners' liability for oil pollution contained in the 1969 Civil Liability Convention, and reflected in the Bill, represent the maximum available insurance cover. We have been told that salvors are consequently finding it impossible to obtain cover in the insurance market for their potential oil pollution liability when assisting tankers because if an oil spill results liability could attach both to the tanker and to the salvor. The insurance market is not prepared to put itself at double risk, and therefore excludes oil pollution liability from the salvors' cover. This leads salvors to seek to cover themselves by means of a full indemnity from the tanker—which in effect means from the tanker's insurers—but this is likely to be refused since the insurers are not prepared, in this way, to increase their cover for oil pollution damage.
§ The general objective of the Bill is to ensure that adequate compensation is available to those who suffer damage from oil pollution. Important as that objective is, however, I am sure the House will agree that it is even more important, where possible, to prevent the damage from being caused in the first place, and one major way in which that can be achieved is by prompt action to salvage a damaged tanker and to minimise any escape of oil. Marine salvage is, of course, a service provided voluntarily by those who are equipped to do so, on the basis that they can expect high rewards if they are successful, but will get nothing if they fail.
§ The situation that I have outlined could mean that at best valuable time could be 111 lost in starting salvage operations because of arguments about liability, and at worst that the salvage of a damaged tanker would not be undertaken at all. The Amendment gives a salvor protection if, but only if, he is carrying out salvage operations with the agreement of the owner, since it is only in such circumstances that he can be regarded as in an analogous position to the owner's servant or agent.
§ We think that the Amendment is not unreasonable in itself, and will help to remove hesitations, which have occurred, on the part of salvors. This is done in the wider interests of facilitating prompt action by salvors and is, in any event, as I have explained, in accordance with the general principles behind the Clause. For those reasons I invite the House to agree to the Amendment.
§ Mr. Roy Mason (Barnsley)
This seems to be a sensible Amendment, and one with which we agree, but one question arises from the hon. Gentleman's short speech. He knows that in recent months the Government have decided unilaterally to change the law so as to be able, if necessary, to take steps to stop pollution, or further pollution, by an oil tanker which has been stranded, or been in collision, beyond our territorial limits.
The hon. Gentleman said that in order to safeguard salvors the salvage would be done with the agreement of the owner. What will happen if there is a stranding, or a collision, involving a tanker beyond our territorial limits, and the Government in their wisdom, fearing a major pollution threat—and I think that I am quoting the previous Act correctly—decide, before the owner concurs, to initiate action to stop pollution, or further pollution, which necessitates salvors going beyond our territorial limits and taking action to stop further pollution? Will they be able to take that action without necessarily waiting for the owner's consent?
§ Mr. Anthony Grant
My answer, at short notice, will be a little off-the-cuff.
It is true that powers were taken in the other Act to enable the Secretary of State to take certain steps in the event of the danger of major oil pollution, but one would not expect that power to be used except in the most extreme cases. In most cases it would be for the owner 112 to instruct salvors, and the purpose of the Amendment is to remove any inhibitions or nervousness, due to financial reasons, which salvors may have about taking the necessary action.
In the extremely unlikely event of the Secretary of State himself having to instruct salvors, I do not think that the Amendment would necessarily alter his position. In fact, I think that it would assist, because salvors would be able to undertake any task given to them by the Secretary of State without incurring liability under the Bill.
I think that my off-the-cuff answer to the right hon. Gentleman is that in the unlikely event of the Secretary of State having to take extreme powers under the other Statute no inhibitions would be placed in the way of salvors undertaking any work that he might want them to do.
§ Amendment agreed to.