MERCHANT SHIPPING BILL [H.L.] (Hansard, 20 May 1974)

§ LORD BESWICK

My Lords, I beg to move that this Bill be now read a Second time. This Bill, which was in Committee stage in another place at the dissolution of the last Parliament, will enable the implementation of the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 and Amendments that are now incorporated in the International Convention for the Prevention of Pollution from Ships 1973. We have played a leading part in bringing these Conventions to fruition and want to be one of the first to ratify them.

The similar Bill at the dissolution contained powers to delegate certain statutory surveys to classification societies. That 1251 proved to be the only controversial part and it now has been dropped. The other change is that we have now included provisions (Clause 19) on offences by seamen.

Before I go on to describe the present Bill, including Clause 19, let me say just a few words about why we have excluded the delegation of survey work. Concern was expressed by the union side about taking this work out of the hands of the Department's marine surveyors. It was decided there was no point in unnecessarily making a contentious issue of this matter. However, may I make it clear that the decision implies no denigration, in any sense, of Lloyds Register, which deservedly holds a high reputation in this country and worldwide. There are other types of survey which we still propose to delegate to them which do not require primary legislation; e.g. tonnage measurement. After consultation with both sides of industry, this will be achieved by administrative means or, where necessary, by Statutory Instrument.

Part I enables the United Kingdom to ratify the International Convention on the Establishment of an International Fund adopted in 1971 at Brussels. The pollution resulting from the accident to the giant tanker, the "Torrey Canyon", off Lands End in 1967, made it clear that the 1957 International Convention on the Limitation of the Liability of Seagoing Ships set limits which were totally inadequate to compensate for pollution damage on the scale which modern supertankers were capable of causing. In 1969, as a first step, a conference convened by the Intergovernmental Maritime Consultative Organisation (IMCO) adopted the International Convention on Civil Liability for Oil Pollution Damage. It raised the limit of shipowners' liability set by the 1957 Convention, but not far enough to ensure full compensation; indeed, exemptions from liability could have left some victims entirely without compensation. The United Kingdom recognised that the 1969 Convention was inadequate, bur decided to encourage progress in this field and accordingly enacted the Merchant Shipping (Oil Pollution) Act 1971 which gave effect to the Liability Convention.

In 1971 IMCO convened a second international conference which adopted the Convention on the Establishment of an 1252 International Fund for Compensation for Oil Pollution Damage; this was supplementary to the Liability Convention of 1969 and open only to parties to that Convention. The Fund set up by the 1971 Convention would be financed by levies imposed on receivers in contracting countries of 150,000 tons or more per annum of crude oil and fuel oil by sea; the bulk of this tonnage would be imported, but contributions would also be levied on coastal traffic since this also carries pollution risks.

The primary function of the Fund would be to provide compensation for oil pollution damage by identified ships to claimants—usually States—in contracting countries in cases where the shipowner was not liable, or where that liability had not been met, or the damage exceeded the shipowner's liability. The Fund would have the secondary function of relieving shipowners in contracting countries of a part of the additional liability imposed by the 1969 Convention, subject to conditions designed to ensure compliance with international safety standards. The Fund would pay compensation up to a maximum of nearly £15.;7 million in respect of any one incident; but the Assembly of the Fund could agree to raise this ceiling to nearly £31.4 million. Thus within these limits the Exchequer will be relieved in full of any obligation.

These two Conventions, Liability and Fund, provide an interlocking system of a fund, shipowner liability and compulsory insurance that is likely to be generally welcomed by other Governments. In some countries legislation has already been introduced to give effect to the two Conventions. It is to be hoped that it will not be too long before both Conventions come into force, but, of course, under their terms this depends both on the number of States which ratify them and on the quantity of contributing oil received by Contracting States in the preceding calendar year.

Part II provides enabling powers to limit both the arrangement and the size of tanks in tankers. The United Kingdom can take credit for getting international agreement. We put forward proposals in the Intergovernmental Maritime Consultative Organisation in 1969. After discussions with industry and other countries a generally acceptable formula was 1253 worked out. The formula is broadly side tank limitation to 30,000 cubic metres and centre tank to 50,000 cubic metres. There is also limitation on the arrangement of tanks so that spillage, if two adjacent tanks are breached, is less than 30,000 cubic metres—there is a sliding scale upwards for mammoth tankers, with an absolute ceiling of 40,000 cubic metres.

We regard this as a major step forward in minimisation of pollution and it should be effected very quickly. After consultation among major maritime powers, Governments were urged to implement these requirements without necessarily waiting for the formality of them coming into effect. The requirements relate to new ships for which contracts were placed after January 1, 1972, or in the absence of a building contract, whose construction was started after June 30, 1972, and for all ships delivered after January 1, 1977. I point this out because it is the intention to apply the legislation retrospectively in order to comply with international agreements, and Clause 11 subsection (5) enables this to be done.

The shipping industry was warned before the end of 1971 of the then Government's intention to implement the requirements as soon as an opportunity could be found for the necessary legislation and this has been confirmed since. If concerted action is taken we hope that, in due course, tankers which do not comply with IMCO requirements will themselves be at commercial disadvantage.

Part III gives protection of shipping and trading interests. In recent years some Foreign Governments have used economic regulation of shipping to promote the carriage of goods in their own flag ships—a practice commonly known as flag, discrimination—or to regulate freight rates in such a way as to reduce the cost and increase the attractiveness of their own exports at the expense of imports to their countries, and/or of shipping lines. Our view is that the common interest of all countries lies in the efficient carriage of world sea-bourne trade which would be best served when there is free competition on the world's trade routes, and the users of shipping services are not compelled by law to support a particular flag, and when such matters as the level of freight rates and the frequency of services are left to commercial interests directly concerned to decide.

1254 However, intervention by Governments in pursuit of their own national interest is increasing and as a result either our shipping lines suffer, as they have done through flag discrimination, or our trading interests may be penalised because an artifically low freight rate for someone else's exports has to be compensated for by a higher rate for our own exports. The Government have no wish to engage in the economic regulation of international shipping services, since we consider it essential to avoid the chaos which would result if such regulation were adopted on a worldwide scale. But so long as we do not regulate ourselves and cannot defend ourselves against the actions of others, our shipping lines and traders are vulnerable.

We share the view of the previous Administration that the time has come to provide some protection to these interests. Many other maritime countries have contingency powers of this kind, and there have been discussions with our friends in Western Europe concerning the kind of powers contained in this Bill. The Chamber of Shipping and the British Shippers' Council fully endorse the need for powers of this kind. We expect and indeed hope, that the powers in this Part of the Bill will rarely be used, and certainly not without an attempt to reach a solution through commercial and diplomatic channels. We shall, however, not hesitate to use them if necessary in the last resort. I should perhaps emphasise, because there was some discussion of this point when a similar measure was in another place last Session, that the powers are not aimed at flags of convenience. These raise different problems which are being examined separately and internationally.

I should mention briefly the United Nations Convention on a Code of Conduct for Liner Conferences recently concluded in Geneva. As I explained last week in a reply to a Question from the noble Lord, Lord Shinwell, the United Kingdom found it necessary, with great regret, to vote against this Convention in the company of several other important maritime and trading nations. A number of others abstained. The United Kingdom has, however, consistently supported the concept of a universally acceptable code based on fully commercial and competitive relationships and has 1255 demonstrated much sympathy and support for those countries, particularly in the developing world, whose aim is to build up their own merchant marines. The powers in the Bill are not designed to combat those pursuing legitimate aims by reasonable means, nor would we use them in that way. But if foreign Governments attempt to foster their own maritime and trading interests by unfair means at our expense, that will be altogether a different matter.

Part IV deals with submersible apparatus. The previous Government indicated during a debate on the predecessor to this Bill that consideration was being given to legislation to enable the Secretary of State to make rules for the safety of miniature submarines and other submersible apparatus, and experience gained since the "Pisces" incident indicates that it would be wise to take powers to make rules going beyond those which we make for conventional shipping. This Part of the Bill and its associated Schedule 5 enable such rules to be made.

Clause 16 describes the submersible apparatus to which the Bill applies. Broadly speaking, this is any submersible apparatus used within our own territorial waters or operated anywhere in the world from a United Kingdom ship. The reference to supporting apparatus will enable the Government to impose requirements on support vessels and other associated equipment. Clause 17 describes the matters in respect of which the Secretary of State may make regulations.

It is worth noting in this context that submersible apparatus falls broadly into two groups. One group comprises that which may be said to be in fairly widespread use, such as conventional diving suits, and for these general regulations will be appropriate. The other group comprises submersible vessels of the kind which inspired these proposals, relatively few in number and potentially diverse in character, for which it would be extremely difficult to draft a common set of general regulations. We therefore propose to deal with them by a licensing system, which was tentatively suggested in the joint DTI/Vickers report into the "Pisces" incident. However, should we eventually see the development of fleets of submersible vessels in such numbers as to warrant the application of general regulations, it 1256 would equally be possible to deal with them in this way, and to cover all safety matters including design, construction, equipment, manning, operational methods and rescue procedures.

These powers which we propose for the Secretary of State for Trade will overlap with those of his colleagues at the Department of Energy in respect of off-shore installations, and at the Department of Employment as regards certain aspects of diving operations within territorial waters. This overlap is preferable to an attempt to define areas of responsibility in the Bill. There will, of course, be full consultation with other Departments.

I turn now to Part V. Clause 18 contains a provision for broadening the membership of the Northern Lighthouse Board which runs lighthouses in Scotland and the Isle of Man so as to make a wider range of expertise available to the Commissioners. Clause 19 of the Bill—and this is an important clause—amends sections of the Merchant Shipping Act 1970 relating to offences by seamen. The changes proposed are somewhat complicated.

The disciplinary provisions of the 1970 Act were based upon recommendations of Lord Pearsons' Court of Inquiry following the seamen's strike of 1966. Those recommendations eased the disciplinary régime which had previously existed for employment in sea-going ships. The Pearson Court of Inquiry re-affirmed. However, that there was a need for a special disciplinary régime on board ship for the purpose of safety of the ship and of the crew. Good order and discipline is essential in the close community of a ship which is both the working and living accommodation of those aboard. There appears to be no disagreement with this general principle either between interested organisations or within the Department of Trade. Differences such as there are, are confined to means.

The relevant sections of the 1970 Act are Sections 27 to 34 which deal with offences of varying severity. Section 27, which applies to the shipping and fishing industries, deals with the most serious offence—misconduct endangering the ship or persons on board. The penalty for this can be a term of imprisonment of two years or a fine which on summary conviction is at present limited to £200. There is general agreement that this 1257 section should remain in force, and indeed we are proposing to increase this figure to £400. At the lower end of the severity scale is Section 34 which provides, for the shipping industry alone, for regulations to be made allowing a master to impose fines on seamen for disciplinary offences; for example, striking another member of the ship's complement or smoking in a prohibited place.

§ LORD BESWICK

My Lords, my noble friend is quite right. Those are the provisions in the Bill. When I complete my statement possibly he will see our approach to these problems as far as any further changes are concerned.

Smoking on a tanker is clearly a serious matter, and we are proposing to increase the maximum fine which a master can impose for this offence from £10 to £20. Serious offences of this kind could be dealt with under other disciplinary sections of the Act; but they involve proceedings ashore, and many believe that in practice discipline may be best enforced by fines imposed by masters en the spot.

Between the two extremes of Section 27 and Section 34, with the regulations made under it, are Sections 28 to 31. Section 28 deals with being under the influence of drink or drugs on duty and applies to both shipping and fishing; it provides for a fine on summary conviction not exceeding £50. Section 29 provides for a similar fine for wilfully disobeying a lawful command relating to or likely to affect the operation of the ship or its equipment. Section 30 provides for a fine on summary conviction of double this amount for persistent and wilful neglect of duty, persistent and wilful disobedience of lawful commands and combining with other seamen to disobey lawful commands or to neglect duty or to impede 1258 navigation or the progress of a voyage—the latter sometimes being termed the "mutiny provision". Finally, Section 31 provides for a fine, again not exceeding £100 on summary conviction, for absence without leave at the time of sailing. It should be noted that the last three sections, Sections 29, 30 and 31, do not at present apply to the fishing industry, though there is provision in Schedule 2 of the 1970 Act for extending this to fishing vessels by regulation.

My Lords—and this is why I left the answer to my noble friend until now—an undertaking was given both by the last Labour Government and by the last Administration to review these sections which prescribe criminal offences in respect of misconduct at sea and are not popular with seamen. The review began last autumn and its results were not available when the Merchant Shipping Bill was introduced in the last Parliament. Now, however, although the review is not complete, we know enough of the attitude of the various interests consulted to propose certain changes which can be implemented in this Bill. I have already referred to the increases in fines under Sections 27 and 34 of the 1970 Act. In addition, we now find that there is a general consensus in the shipping industry that Section 29, dealing with the single disobedience of a lawful command, should be repealed—that, I hope, goes some way to meet what my noble friend says, that Section 31, dealing with absence without leave, should also be repealed, leaving such absences, which occur ashore, to be dealt with as a normal industrial matter; and that Section 30 should be amended to confine the "mutiny provision" in subsection (c) to when the ship is at sea.

I emphasise that these three sections of the 1970 Act have applied only to the shipping industry and not to the fishing industry.

We are satisfied, and I hope my noble friend is satisfied, that these changes can be made without risk to safety. Proceedings under Sections 27 to 31 are fortunately very rare and any value claimed for them is as a deterrent; but with Sections 27, 28, 30 and 34 still in force, we believe that misconduct at sea is adequately dealt with. In any event, the general provisions of criminal law are available to buttress these sections. The 1259 safety of the ship and the crew is a matter of the utmost importance.

We believe that all the interested parties recognise the need for special provisions to maintain good order on board ship and we know that those responsible for discipline consider it important that Sections 27, 28 and 30 of the 1970 Act remain in force and also the Disciplinary Offences Regulations made under Section 34. However, we recognise that this is a matter in which conflicting views are honestly held. Some sections of the industry attach considerable importance to the existence of special criminal offences as a positive aid to ensuring discipline and good order on board ship. Others feel that greater reliance should be placed on normal industrial relations between employer and employee. Therefore it is our intention to establish two Working Parties, one for the Merchant Navy and one for the fishing industry, each charged with the task of inquiring into the disciplinary requirements appropriate to sea-going employment with a view to making recommendations for any further changes which they may think are necessary.

We shall invite relevant organisations in both industries to be represented on these groups. Special attention will be paid to drink and drugs; and in this connection no change is to be made in Section 28 which deals with drink and drugs. This will be a thorough investigation of disciplinary problems, an area in which there has not previously been a study in the depth we now consider necessary. When the working groups report we shall be in a much better position to make long-term judgments, based on objective consideration. If my noble friend has any further point to make on this, then those Working Parties will be glad to consider them.

My Lords, what we are proposing marks a definite advance in labour relations. We are taking steps to discard unnecessary legislative provisions at the earliest possible opportunity, while increasing monetary penalties in provisions which we retain. Thus, we are producing, we think, a favourable climate and a sense of urgency for two thorough reviews in which both sides of the two industries and the interested Government Departments will be invited to participate. It is part of the Government's general approach in the field of industrial 1260 relations that both sides of industry should sit down together rather than invoke the law and the courts. The Government believe that all interests should approach the studies of the two working groups without any prejudices, but with a sense of purpose and of urgency—and a real determination to ensure a suitable and modern régime on board vessels which will facilitate equally safety and effective operation.

I hope that your Lordships will agree that the Bill has value. It is widely welcomed. It is the product of a good deal of consultation. I hope that it will be helped to a speedy passage in another place. My Lords, I beg to move that the Bill be now read a second time.