Merchant Shipping and Maritime Security Bill [H.L.]

HL Deb 07 November 1996 vol 575 cc731-80

3.40 p.m.

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen)

My Lords, I beg to move that this Bill be now read a second time.

This important Bill develops and builds upon the Government's long-standing commitment to the highest standards of maritime safety and of vigilance to prevent the pollution of our waters and coast. We believe that the measures in this Bill will make an important contribution to those aims. We have been encouraged by the wide support that the thrust of our proposals has received during public consultation.

Our approach to meet those commitments is fourfold: entailing the prevention of incidents occurring in the first place; mitigating the effects when they do happen; ensuring that those who suffer the consequences receive timely and fair compensation; and learning the lessons that will help to prevent a recurrence.

The Government have long taken steps to investigate the causes of incidents, a function now discharged by the independent Marine Accident Investigation Branch. As well as investigating incidents, it makes recommendations about how they could be avoided in future. However, following the grounding of the "Braer" tanker in January 1993, we decided that a broader view was needed and we appointed the noble and learned Lord, Lord Donaldson, as chairman of an inquiry into what further steps could be taken to improve safety at sea and to prevent pollution.

The noble and learned Lord, Lord Donaldson, rose to the occasion with his thorough and challenging report Safer Ships, Cleaner Seas published in May 1994, in which he made 103 recommendations for action. We warmly welcomed his report and our detailed response was published in February 1995. We accepted 91 recommendations and have now implemented over half of them. I have arranged for the latest progress report of action taken to be placed in the Library of the House. As well as having a major impact on UK maritime policy, his report has been acknowledged internationally as an authoritative major work of reference on the subject. The report recognised that much has already been done. But it identified a number of areas where measures already in place could be reinforced or where there were gaps which could be plugged.

The Government acted quickly in many areas where there was no need for international agreement or legislation. We have pursued international action on key issues and this Bill will implement the recommendations which the Government accept which require legislation.

The Bill's provisions can be grouped under a number of headings: measures designed to minimise or prevent marine accidents or marine pollution; measures to better deal with such accidents when they occur; measures to ensure that insurance is available and that reasonable compensation can be paid; and the statutory framework for a possible future charging mechanism for marine services. The opportunity is also being taken to legislate on a number of other matters relating to maritime security and safety.

I turn first to the question of prevention. We are proposing in Clause 8 to apply appropriate safety standards to foreign as well as UK registered ships operating in our waters, save those on innocent or transit passage. We are also establishing our right, recognised in international law, to inspect ships found within our territorial waters and to detain them if they are unseaworthy. Where a ship could pose a safety or pollution hazard and has no valid reason for being in our waters, we are taking powers to order them to move on, regardless of whether it is seaworthy. For both measures, rights of innocent and transit passage would be preserved.

The report looked particularly at the problem of ships undertaking fish transhipment in our waters, commonly known as "klondykers". Klondykers can provide a useful market for UK fish but it is true that they have a poor track record for safety and pose a pollution threat to our coastline. Action by the fisheries departments to restrict the numbers of licences on grounds of fish conservation has already reduced their number. We now propose, through Clause 11, to provide for safety standards to be applied to such vessels. If they are not found to comply, the clause provides for the transhipment operations of the vessel to be suspended.

To reduce the possibility of marine pollution, the report made specific reference to the adequacy of waste reception facilities in our ports. Following wide consultation, I announced in January a package of 18 measures to prevent illegal discharges of waste from ships. The measures mix the "carrot and stick" approach providing for better use of port waste reception facilities and enhanced detection and punishment of those who continue to illegally discharge at sea.

We see port waste management plans as an important way forward. Many ports are already preparing these on a voluntary basis and that is our preferred approach. However, Clause 5 would allow us to make such plans mandatory for all ports, harbours and marinas to require them to alter charging practices, if those were acting as a disincentive to the use of reception facilities and to make the discharge of wastes mandatory. If such measures were necessary, they would be carried out by order and would follow further public consultation with interested parties. The Bill also provides for five-fold increases to the fines which a magistrate may impose for an illegal discharge, through Clause 7. This is part of our policy of preventing pollution by increasing both incentives and deterrents.

I turn now to emergencies at sea. We are committed to doing all we can to take preventive action, and when incidents do occur, to minimise their impact. The first four clauses of the Bill would all assist in this aim. Clause I would give the Secretary of State the power to issue a direction to establish a temporary exclusion zone around a casualty at sea for reasons of safety or the prevention of pollution. No ship would be allowed to enter a temporary exclusion zone unless directed by the Secretary of State or unless exercising a right of transit passage. Ships entitled to exercise these rights would be encouraged to avoid the zones for their own safety. For other ships, failure to comply with the zones would be an offence. The inspiration for exclusion zones follows what has already been established for temporary exclusion zones in the air.

The report recommended strengthening the Government's powers of intervention to minimise the impact in cases or threatened cases of pollution from a shipping incident. The current test for intervention stipulates that the power can be exercised where an accident has occurred to or in a ship where pollution is likely to occur "on a large scale". Clause 2 would make the test less onerous by changing the wording to "significant". The clause also extends the geographical limit of the powers. The opportunity is also being taken to give greater flexibility for fire services to fight fires at sea in Clause 4, by amending the Fire Services Act 1947.

The third group of measures covered by the Bill relate to liability and compensation and to insurance. The UK has played an active part in negotiations to secure agreement where international co-operation is necessary. A recent major success has been the adoption by the International Maritime Organisation—the IMO—of the Hazardous and Noxious Substances Convention. The UK played a key role in the negotiation, ensuring that the final instrument was both balanced and workable. We believe that that convention provides major additional protection to coastlines. The UK was the first state to sign up last month. The Bill will enable legal effect to be given to the convention, through Clause 13. Its implementation is supported by all UK interests. We are working within Europe and with other key states to bring about a co-ordinated ratification, and so reduce the potential competitive disadvantage to any single nation.

The Bill contains provision in Clause 14 for the UK to implement and ratify a protocol to amend the 1976 Convention on Limitation of Liability for Maritime Claims. The protocol would increase the amount of compensation available for non-oil claims.

In addition, we are taking action internationally on insurance. As a result of a UK-led initiative, the IMO is considering the development of an international regime to require all ships to carry documentary evidence of the owner's ability to meet third party liabilities. No such requirement currently exists, except for oil tankers. An irresponsible minority of shipowners operate without insurance, and are thus able to gain a commercial advantage over responsible shipowners. Clause 15 contains an enabling power for the United Kingdom to introduce a requirement for shipowners to have insurance. Our preference would be to exercise this power in the context of international agreement.

When the Government invited the noble and learned Lord, Lord Donaldson, to make his report, he was asked to consider the international and economic implication of any new measures. He endorsed the user pays and polluter pays principles, in accordance with which the shipping industry should bear the costs it imposed.

Clause 12 contains enabling powers to recover the standing costs of emergency response, emergency towing, the costs of inspection where not already recovered and the costs of standard setting activity. However, we recognise that such charges could have implications for the competitiveness not only of UK ports and shipowners based in UK ports but also for exporters and importers using our ports. We take these issues very seriously indeed for the competitiveness reasons that I detailed. We have, therefore, clearly stated that our preferred approach would be to implement these provisions in the context of an international agreement. I take considerable pains to re-emphasise that statement.

We are also taking measures to amend the way that the General Lighthouse Fund may work in the event of international agreement on charging. These changes may be necessary because the existing General Lighthouse Fund arrangements may not be compatible with any new international scheme or, indeed, may conflict with such a scheme. The provisions in the Bill relating to the fund are designed to address that precise problem. However, I understand that there are concerns from certain quarters that the effects of these clauses may go substantially further than that. That is why I can assure the House that there are no wider implications or intentions. I take the opportunity of this Second Reading debate to emphasise that assertion which was not perhaps sufficiently well explained before the Bill came to your Lordships' House.

The opportunity is also being taken to introduce a number of other, mostly minor, changes to merchant shipping legislation. For example, we are seeking to lighten the burden on the registrar general to record and preserve all documents transmitted to him, of which most are seldom required.

The measures contained in the Bill are the result of extensive work and consultation and they owe much to the careful deliberations of the noble and learned Lord, Lord Donaldson. It is a Bill which contains a wide variety of measures, all of which are designed to reduce the possibility of pollution and indeed to make our ships safer. I see that the noble Lord wishes to intervene. I give way.

Lord Clinton-Davis

My Lords, I am grateful to the Minister for giving way. My noble friend Lord Berkeley has been to the Library to ascertain whether in fact the progress report to which the noble Viscount adverted in the first few moments of his speech is available there. At present I am told that the document cannot be located, is it not somewhat surprising that a report which ought to have been available to enable noble Lords to enlighten themselves as regards its contents, which are relevant to today's debate, should have been placed in the Library—indeed, if it is there at all—at such very short notice?

Viscount Goschen

My Lords, if the document has not been placed in the Library, I certainly apologise. It should have been; and, indeed, I was informed that it had been. I can only apologise to the House. However, it is worth pointing out that it is merely an update of an update as regards where we are at present. The information about our response to the report has been available for nearly 18 months and there has been a full update on it. The progress report merely identifies the most recent developments. Nonetheless, I certainly take the noble Lord's point. I shall endeavour to find out what has happened in that respect.

The noble Lord interrupted me as I was about to approach the last sentence of my Second Reading introduction speech. Beyond thanking the noble and learned Lord again for his contribution to bringing matters to where we are now, I was merely going to say that the measures contained in the Bill are wide and varied. They are all designed to ensure that our shipping is safer and that we have less chance of pollution around our coasts.

Moved, That the Bill be now read a second time.— (Viscount Goschen.)

3.55 p.m.

Lord Clinton-Davis

My Lords, I should like to thank the Minister for his explanation of the Bill. It was not my intention to be unhelpful, but in future perhaps such a document should be placed in the Library of the House at an earlier stage. It must be relevant to consider the most recent developments. However, the Minister is quite right to say that we have had an opportunity to consider the Government's response to the report of the noble and learned Lord, Lord Donaldson. Nevertheless, it is important to be brought up to date. We have no opportunity today to consider the document.

I should also like to echo the plaudits offered by the Minister to the noble and learned Lord, Lord Donaldson, and his committee for the outstanding contribution that they have made, both nationally and internationally, in connection with maritime safety and, indeed, as regards the protection of the maritime environment. I should like to assure the noble and learned Lord that classification societies, about which I know and with which I am in contact, have examined with great care what he has had to say. In fact, the whole maritime industry has shown its keen interest by the contributions that it has made to the Government's request for it to be involved in the consultation. My only reservation about that is the very short period that the Government gave for the consultation. I believe that it should have been longer because, in many respects, this is a highly technical Bill. It is in no way contentious from a party political point of view. Indeed, it would have been better if such matters had been addressed with rather longer deliberations. But, there it is; that is in the past.

While examining the Bill with care, as I am sure the Minister would expect us to do—and, indeed, I am sure that the noble and learned Lord, Lord Donaldson, would expect us to deliberate very carefully about the Bill—we wish to give the legislation a fair passage. We have agreed to a shortened Committee stage by agreeing to the Bill being considered in a committee off the Floor of the House in the Moses Room. I believe it is right that this should be the case.

I should like to thank the Minister for the very careful consideration that he has given to most of these matters, perhaps to all of them. If I may say so, the noble Viscount is an extraordinarily helpful Minister. I say that while speaking from this Dispatch Box, although I may not be here for much longer. Indeed, I may be on the other side of the House quite soon.

Noble Lords

Oh!

Lord Clinton-Davis

Be that as it may, my Lords; indeed, I did not expect to receive wide acclamation from the other side of the House on that point.

At the outset I ought to declare an interest. I am president of the United Kingdom Pilots' Association (Marine) and the noble Lord who preceded me in that respect is also present in the Chamber today. That is something of a handicap in relation to such debates because I shall not address the pilotage issues. As and when they arise, they will be dealt with by my noble friend.

There are areas which are not included in the Bill at this stage; for example, where the Government accept recommendations in principle or are engaged in consultation about them, especially international fora. The House will expect the Government to advise it of the progress being made in the course of the debates that we will have at a later stage. We shall seek to make those opportunities available.

However, in addressing the Bill, it is impossible to divorce its provisions from the general maritime malaise which affects this country and indeed Europe—but perhaps more this country than most other countries in Europe. The effectiveness with which we are able to address maritime safety (integrally related as it is to issues affecting pollution) especially in the medium and long term, are to some extent at least influenced by the state of our own shipping industry.

I congratulate the Government in respect of many of the initiatives which they have taken in the IMO. However, it would be nothing other than superficial to deny that the strength of our own maritime industry is integrally related to the influence that we can wield in the councils of the world. I wish to make a few points about that at the beginning of the debate before I discuss the provisions of the Bill, in respect of which I wish to ask the Minister a number of questions.

It was some six years ago that the Department of Transport—I believe the noble Lord, Lord Parkinson, was Secretary of State at the time—and the General Council of British Shipping, the predecessor of the Council of Shipping, produced a report of a joint working party. That report was produced because the GCBS, the owners, the unions and the Government—the Department of Transport at least—were deeply concerned about the state of our maritime industry. The report referred to British shipping as a vital national asset. It is, and it was then of course. The report referred to the significance of this country's strategic defence. It referred to the critical importance to this country of the industry because we are a trading nation. The report mentioned deep concern about the industry's decline. Of course it paid obeisance, I suppose, to the fact that the Government were part of this; it stated that the industry was leaner and fitter. I disputed that then, and I dispute it now. The report drew attention to the disturbing shortage of junior officers and to the detrimental effects of an industry in decline on marine-related activities in the City and in many other organisations dependent upon skilled mariners.

The number of seafarers and officers had declined then; it has declined substantially since then. Overall, the situation has undoubtedly become worse. Recruitment and training are woefully inadequate. Although the Minister will say there has been some improvement in recruiting cadets, it is still grossly inadequate to meet the needs of this country today and in the future as, internationally, the shipping industry begins to burgeon. Are we capable of capturing a substantially increased share of that market? I fear the answer would indicate a pessimistic situation. I believe that the root cause of all this is a familiar combination of weak management, an undue pressure for fast profits and, most particularly, government inaction.

Over the past few years we have seen an emergence from the depths of recession on the part of international shipping. Certainly the European Commission is seeking to address that as regards European shipping. Incidentally, I should like to know what the Minister's reaction is to the latest document which has been produced by the Commission, and DGVII in particular. I do not think the Minister serves the cause of shipping well in this respect. I know he tries hard and I salute him in what he is able to do, but it is not right to pretend that things are other than what they are. When we have addressed these issues to the Minister he has said, in a succession of debates—as did his predecessors—that our shipping is leaner and fitter.

Viscount Goschen

Hear, hear!

Lord Clinton-Davis

My Lords, the Minister says "Hear, hear!". It is certainly leaner to the point of being anorexic, but it is also geriatric. Perhaps I should not use that word in this Chamber, but I have done so in relation to shipping. Old ships are more vulnerable. Our ships are ageing remarkably. That is not good for British shipping because we need to have our ships replaced or refurbished, especially in the liner trades. We must have properly certificated officers and crews coming into the profession on a much greater scale than is happening at the moment if it is to take advantage of this upturn in international shipping.

Flagging out by shipowners of their ships to other and often less reputable registries goes on. Over the past 16 years the number of ships flying European Union flags has more than halved; in Britain the position is even worse than that. In 1980 the flags of member states of the European Union carried 33 per cent. of world shipping. The figure is now down to 14 per cent. We know that flagging out takes place for labour and tax reasons. Huge tax advantages accrue to shipowners regardless of the true interests of member states and of the European Union as a whole. The question which has to be addressed is how we can establish conditions whereby European Union flags will be supported by shipowners on economic grounds. The relevance of what the Commission puts forward in that regard is important. I should like to know the Minister's views on that.

We have to ensure that inspections of substandard vessels, or vessels which are alleged to be, or suspected of being, substandard, are increased. Therefore there must be no reduction in the number of trained inspectors. The quality and number of inspections throughout the European Union must achieve a much higher standard uniformly. Some ships (not all flags of convenience ships) are, as the Transport Select Committee of the House of Commons said the other day, "flags of shame". Indeed that is demonstrated vividly by the incidence of shipping accidents in the first six months of 1996. Over 7,000 lives have been lost in that short period as against half that number in the whole of 1995. Therefore we must make it increasingly difficult for substandard ships to operate and to remain in business. I submit that all these are points which are indivisible from the purposes of this Bill and the report.

Although the Bill is generally commendable, I wish to discuss some areas where we shall wish to probe the Government closely as to their intentions and purposes. I just give notice of that at the moment. At the outset I should say that the Bill introduces a number of miscellaneous measures which have to be read in the context of the 1995 Act, which lays down the consolidated regime. We are addressing here a wide, complex area. It is necessary to undertake considerable research to become really informed about this matter. Is that the best way to procure clarity in the legislation? What reasons did the Government seek to adduce for failing to accede to the United Nations Convention on the Law of the Sea which came into force about two years ago, after many years of gestation? What is the Government's position on that? One of the difficulties, it seems, is that the Government are unable to secure voting rights in the Law of the Sea tribunal until that is done. If they are concerned about maritime limits around Rockall, I believe that constitutes no substantive reason for not acceding. Is that the Government's position?

Clause 1 represents a significant power to enable the effective control of an actual or threatened pollution incident. That is to be welcomed. The power is restricted to territorial waters, or waters defined in Section 129 (2)(b) of the 1995 Act. What are the Government's intentions concerning the specification of such waters? As far as I know, no such Orders in Counsel have yet been laid. Am I right about that? I certainly stand to be corrected. But should not the Government ensure that the power is available regarding waters beyond the territorial sea, as permitted in Article 221(1) of the Convention on the Law of the Sea?

Having raised those issues, perhaps I may say how much we welcome the widening of the definition of harm to "significant" in Clause 2 which was recommended by the noble and learned Lord.

Clauses 1 to 3 deal with powers of intervention after a casualty or risk has arisen. Recommendation 59 of the report advocated a new concept of marine environmental high risk areas—I do not much like the acronym MEHRAs—to prevent or mitigate the risk of pollution. In response the Government say that the issue is under consideration. What are the Government's proposals? What is their timetable?

Clauses 4 and 5 deal with port reception facilities. In that context, seafarers are often placed in unenviable situations where, despite their own desire to avoid pollution, ports do not provide adequate facilities and owners do not wish to delay a ship for cost reasons. It is the owner, I believe, on whom greater emphasis needs to be placed in terms of prosecution and ultimate conviction and penalty. But why should not harbour authorities be obliged to provide plans for those now? How would the Government implement such requirements? Would it be by primary legislation or other means? What proposals do the Government have in that regard?

The Government were encouraged in recommendation 27 of the report to pursue a North Sea agreement to secure a greater harmonisation of approach regarding European ports. Is anything happening in that regard?

Clauses 9 and 10 deal with enhancing port state control powers. A definition of a "port" was suggested in recommendation 102. I may have missed it, and perhaps the Minister will put me right if that is so, but has that definition been applied in the Bill?

Clause 10 applies only to the territorial sea in preventing the parking of vessels. Have the Government any plans to extend such powers to waters beyond the territorial sea in circumstances where we should be entitled to do so under the Law of the Sea Convention?

Perhaps I may say a word of caution about the power to move on vessels. I do not believe that it would be wise to overlook the fact that ships carry seafarers, and their interests could be jeopardised if a ship is moved on in certain circumstances. If the ship is unseaworthy or improperly operated we should proceed to detain it until the deficiencies have been rectified.

Clause 11, implementing recommendation 77, fails to implement the recommended requirement that vessels should have adequate insurance. The Minister dealt in part with that in relation to klondykers. It is true that Clause 15 provides powers regarding insurance. But why does not Clause 11 include insurance as a prescribed requirement for holding a licence? The Minister commented, in some respects adversely, about klondykers. It is an important issue. I recognise that the Government would prefer international action in this regard and I share their concerns about the issue. But it has been raised, as the Minister said, at the Legal Committee of the IMO. However, unless swift action can be guaranteed, we shall have to consider other steps. In our view no commercial vessel should be allowed to operate without appropriate, effective and enforceable insurance covering third-party risks and cover regarding hull and cargo. I also believe that it would be wise to make the proceeds of any such insurance payable to the maritime creditors and not to the owners because there have been far too many abuses in the past. It is, after all, innocent third parties who all too often are the victims of unscrupulous behaviour in that regard.

I turn from that to the environmental consequences of deliberate or accidental discharges of oily waste. It is right to bear in mind that, in the context of pollution of the sea overall, it is land-based sources which constitute between 85 per cent. and 90 per cent. of such pollution. Having said that, we cannot be complacent about the situation affecting direct pollution of the sea by vessels. Damage to birdlife is absolutely colossal. A huge number of birds were oiled in the "Braer" incident, and nearly four times as many in the "Sea Empress" incident. Added to that is the whole question of compensation which should be payable.

One of the issues which arose in relation to the "Sea Empress" was the adequacy of salvage tugs around the United Kingdom coast. The Government have been giving the matter consideration since, I think, June 1994 or 1995—over a long period. Charges are currently being made by people who have been directly affected. But the existing arrangements for compensation are not working satisfactorily. Perhaps the Minister will say something about that when he winds up.

So far as concerns the "Sea Empress", the Minister will recall that I took the view—I discussed the matter with him outside this Chamber—that just as in the "Braer" case, the MAIB inquiry should have been coupled with a reconvening of the Donaldson Committee. I believe that the noble and learned Lord would have been prepared to have had his committee reconvened. There are wider issues than can be covered by the Marine Accident Investigation Branch. There were lessons that could have been learnt on a broader basis. I ask the Minister even now, delayed though it has been, to give consideration afresh to this proposal.

I have not had time to deal with as many issues as I would have wished. I should have liked to have dealt with the auditing work of classification societies. I believe that the Minister should move with care about further delegation, as was recommended by the noble and learned Lord, Lord Donaldson. I believe that it is important, too, to examine carefully, as the Minister indicated, all the implications of charging for the standing costs of counter-pollution measures, emergency towing, and so on. Overall, however, I adopt the same belief as the Minister about the way in which that has to be handled. I am not convinced that it is a matter which should fall on the taxpayer rather than the industry; and that is the approach that the Minister adopted.

We need to look carefully at the role of the coastguard in directing operations when we have polluting incidents of a serious kind.

It is not my intention to be unduly critical of the Bill. We support its purposes. We believe that it is absolutely right that the Government have acted. I have some reserve about the period of consultation; I believe that we would have benefited from hearing further views. However, I wish the Bill well. I hope that in the course of our further deliberations the Minister will be able to answer some of the questions that I posed. In other words, I give him notice as regards the remaining stages of the Bill. We support the Bill.

4.18 p.m.

Lord Perry of Walton

My Lords, first, I must apologise to the House. Because of previous commitments I am unable to stay until the end of the debate. We, too, on these Benches very much welcome the thrust of the Bill which implements many of the recommendations in the report of the noble and learned Lord, Lord Donaldson. I should like to add my word of praise for the report. It is beautifully written and a pleasure to read. Would that many of the other reports that we receive and read were to meet that standard.

The report studied ways of preventing pollution from merchant shipping and, as mentioned, made no fewer than 103 recommendations. Many of those called on the Government merely to press for action by international organisations, principally the IMO but also the European Union in the Paris memorandum of understanding on port state control. Unilateral action by the United Kingdom could not be effective in such cases. One recommendation called on the IMO to complete at an early date its overhaul of the STCW, the convention on standards of training, certification and watch-keeping. I shall refer to that later. Other recommendations called on the Government to take action themselves. It is these that the Bill sets out to implement.

The Bill is largely devoted to making the polluter pay. I shall mention some of its most important provisions. First, to help minimise the deliberate discharge of oil, harbour authorities will be obliged to provide at suitable charges waste reception facilities so that ships can clean out their tanks safely. Shipowners will become liable for fines of up to £250,000 for illegal discharges of oil and up to £25,000 for discharging other hazardous pollutants. They will be required to have insurance or other financial securities to cover the cost of a clean-up operation and the associated compensation payments that could arise after an accident at sea. The Government will also have power to establish a temporary exclusion zone to isolate a marine casualty from other vessels and to require an affected ship to move in order to prevent or minimise the risk of pollution. Those are all highly desirable provisions.

In addition to measures to minimise pollution, the Bill strengthens the Government's ability to impose stringent safety regulations for all ships, United Kingdom and foreign, that enter our waters. That is the aspect on which I shall concentrate.

Schedule 1 to the Bill will come into effect as soon as the Bill is passed. It will give far greater powers to port state authorities to take action against sub-standard ships. They already publicise the worst cases that are detected—called the "rust buckets"—in a monthly list of "ships of shame". The key role of port state authorities in that respect was emphasised by the noble and learned Lord, Lord Donaldson, in this House on 25th January 1995 in a debate that I introduced on accidents at sea. The noble and learned Lord said: I am certain that I shall never live to see the day when the IMO is in a position to control shipping on a world-wide basis". He added: Port state control is our only defence at the moment"— [Official Report, 25/1/95; cols. 1116–1117.] It would be splendid if the extended powers of the port state authorities were to be effectively implemented. That might turn port state defence into attack. There are, however, problems. One is that port state inspectors are on the whole very reluctant to detain ships, whatever the deficiencies. There are a number of reasons for that. First, causing undue delay to a ship carries a penalty in that owners must be compensated; and determining whether the delay is undue is always a value judgment.

Secondly, inspectors often feel under pressure. They know the fear of harbour authorities that when ships are detained and occupying berths the normal flow of traffic will be interrupted and that that has financial implications for them. Finally, since there are brownie points to be garnered by inspectors from the number of inspections they carry out, there is always a temptation to choose to inspect safe ships, which can be done very quickly, and to avoid prolonged inspections of ships which are known to be in poorer condition. I hope that all those difficulties can be overcome and that, as a result, the owners of "rust buckets" are forced to scrap them.

Most sub-standard ships are registered under flags of convenience. Since their owners pay little for maintenance, often engage poorly trained crews and are charged little in taxation, they can as a result offer very low freight rates. Were the new powers of port states to lead to their removal from the sea, there could be a much needed increase in freight rates and reputable shipowners could embark upon building new ships. Accidents at sea are much commoner among old ships, and the merchant fleets of the world, not only that of the United Kingdom, are ageing rapidly.

The future of world shipping could hang upon the efficient use by port state authorities in many countries of the powers now vested in them. There might even be a chance for the number of ships on the UK register to go up, thus helping to reverse the steep decline in our shipping industry to which the noble Lord, Lord Clinton-Davis, referred.

The powers of port state inspectors have been increased in another way, quite separately from the Bill. As I mentioned, the report of the noble and learned Lord, Lord Donaldson, asked the Government to press the IMO to hasten a revision of the STCW convention. One of the most striking signs of real urgency to do something about the state of world shipping was the way in which the IMO responded—possibly as a result of pressure from our Government. Not only did the revised convention introduce new provisions; it was also agreed that it would come into effect in February 1997, unless by then a significant proportion of member states objected. The normal IMO practice of requiring positive ratification by member states—a process which can take years to complete—was abandoned.

Port state authorities had long been entitled to check the structure and equipment of ships and also to check that crew members were all properly certificated by the flag state. They were, however, bound to accept the validity of such certificates. But a wise convention gave them the new power to test, after any accident or polluting incident, whether crew members actually possessed the skills that had been certified.

Introducing the debate on 25th January 1995 I quoted one of the responses to a Nautical Institute questionnaire sent out in 1994. It stated that, far too many flag authorities are able to issue so-called STCW certificates of competence which are not worth the paper they are written on".—[Official Report, 25/1/95; col. 1103.] Many maritime colleges in countries such as the Philippines, which supplies large numbers of mariners, are known to be very poorly staffed and equipped. The importance of the new powers in the revised STCW convention is clear. If the convention can bring about improvements in the competence of crews, that will be just as important for safety at sea and for the avoidance of accidents leading to pollution as will the elimination of sub-standard ships.

All in all, we welcome the Bill and hope that it reaches the statute book at an early date.

4.29 p.m.

Lord Donaldson of Lymington

My Lords, perhaps I may begin by thanking noble Lords for the very kind, indeed flattering, remarks that were made about the report, Safer Ships, Cleaner Seas. From time to time I feel some embarrassment at the extent to which my name, so to speak, has become unilaterally connected with that report. It was not a one-man venture. There were, in fact, a team of four, all of whom made substantive and very considerable contributions to the work as a whole. They were: Mr. John Rendle, Professor McIntyre and someone who tends to be forgotten, Mrs. Angela Moss from the Department of Transport. The report is as much their work as mine and if they get round to reading the Official Report they will be as appreciative as I am of the tributes that have been paid to their work as much as mine.

I welcome the Bill, not because it gives effect to so many of the recommendations in the report, but because I am convinced that it will make a real contribution to the United Kingdom's abilities in the fight against pollution.

I do not wish to go through the Bill clause by clause, saying what a good thing it is. I just wish to say a few words about three of the clauses: Clause 2, which deals with the intervention powers; Clause 15, which enables the Secretary of State to bring in compulsory insurance; and Clause 12 and Schedule 2, which deal with funding.

As noble Lords will see, Clause 2 seeks to amend Section 137 of the 1995 Merchant Shipping Act by providing a more sensitive trigger for the right of the Secretary of State to intervene following a shipping casualty. The Minister pointed out that there is an alteration in wording as to the type of pollution that confronts him and the geographical area. Where the provision fails to go far enough is in a quite different respect. It fails to widen the categories of person to whom directions can be given under Section 137 of the 1995 Act. At present one can give directions to the owners of the ship, the master of the ship and to salvors in possession of the ship. However, there is no power at present to give any direction to harbour authorities in whose harbour or near whose harbour the ship may be; nor is there a power to give any direction to cargo owners.

I say nothing about what happened in the case of the "Sea Empress" because I do not know the facts. Like your Lordships, I merely read about it in the newspapers and, also like your Lordships, long experience suggests that that is the least reliable source from which to investigate anything. The "Sea Empress" illustrates the point that we can have a major incident which involves a harbour authority as well as the various other people to whom Section 137 applies at present. I could have found out but I do not know whether the "Sea Empress" was within harbour limits at the time when she hit the rock. I suspect that she was but it does not matter for present purposes. However, I have no doubt whatever that where many people are involved, including harbour authorities, ultimately there must be one person who is in charge. The buck must stop with someone and that someone must be the representative of the Secretary of State.

Of course, it is not a military operation in which the field marshal, the representative of the Secretary of State, issues a battle plan and no argument is allowed. Of course there must be discussion; of course advice must be taken and whoever is in charge will seek co-operation and will usually get it. But the Secretary of State must accept ultimate responsibility. In my view, if the buck is to stop in that way, it is essential that the representative should have the power to tell harbour authorities what they are to do and what they are not to do. He should have overriding power.

The Government's answer to that heretofore, in response to private representations, has been to refer to the Dangerous Vessels Act 1985. It provides the Secretary of State with some intervention powers strictly defined by that Act. In my view, they are quite insufficient for present purposes. Under Section 3 of the 1985 Act, the Secretary of State's powers relate only to the securing of the safety of the vessel or the safety of a person. They make no reference whatever to pollution. If an oil tanker is leaking heavily but is not itself in danger because the difference in specific gravity between the oil and the seawater which is replacing it is relatively small, the Secretary of State would have no power to act under the Act.

Furthermore and even more seriously, the powers only come into force or the Secretary of State only has the right to exercise them if he decides to cancel an order by the harbour master, either refusing to allow a vessel to enter the port or requiring it to leave the port. That could happen. But if the vessel is in the middle of the port and the harbour master chooses to do neither, the Secretary of State has no powers at all. So I ask the Minister to consider carefully whether he should make the relatively simple amendment of adding harbour masters to the persons to whom directions should be given under Section 137.

I also mentioned cargo owners. With a container ship with a massive cargo, there is nothing they can do to help; but with an oil cargo or with certain specialised types of cargo, it may well be that the cargo owner has better facilities than anyone else for discharging that cargo or assisting in its discharge and receiving it ashore. I fail to see why, if he cannot obtain co-operation, the Secretary of State or his representative should not be entitled to give directions to the cargo owner as to how he should assist in the general operation. It has been said in the past and it may be said that those powers will never really be needed. As to that, I only say that I am sure that co-operation works in many cases, but the powers have been used no fewer than six times since 1978. In my view, their existence is just as important as their exercise.

Perhaps I may mention the apocryphal story of the office boy who was summoned to the presence of the managing director to discuss his rather curious behaviour and even more curious dress when in the office. The managing director was a kindly man; he ended by addressing the office boy: "Well, Jones, you've heard what I have said. They are only suggestions, but I hope you will remember who is making them". That is the position in which I wish to place the Secretary of State's representative.

Clause 15 concerns insurance. The provisions are only enabling provisions but very necessary as such. The two points I wish to raise which I hope the Minister will bear firmly in mind are the following: first, it is essential that we go further than requiring a contract of insurance to be produced. I could enter into a contract whereby I insure the vessel against its liabilities. On the face of the Bill as it stands, assuming that it is implemented, the shipowner would have fulfilled his obligations. When a claim was made on the policy, it would be found that there was a woeful lack of assets to back that policy. So some change will have to be made in the wording. It may be that an "approved" contract of insurance is required, I do not know. But some qualifying words are needed to ensure that not just any policy will do.

My other point has already been mentioned. If at all possible, it is important to ensure that the claimants against the ship have direct rights against the insurer. If they do not, a number of things may happen. The shipowner may collect the money and depart; he may collect the money but, being unable to depart with it, may find it shared out by his other multitude of creditors; or situations may arise in which the insurers start alleging breaches of contract by the ship as an excuse for not paying out. I accept that those problems may not be soluble other than in an international convention-based context, as they have been solved in the context of the oil convention and the HNS convention. But I hope that they will be borne in mind. My point about a Donaldson contract of insurance being wholly unacceptable is something which could be dealt with on a domestic basis.

My final words concern Clause 12 of Schedule 2 and the charging provisions—the user pays, the polluter pays and so on. It is very dangerous ground for an ex-judicial Member of this House to trade in. It is highly political dynamite. I simply say that the report goes very carefully into a possible solution involving two different funds. Who contributes to them is not a matter for me. I should like just to emphasise that the point of having funds was to ensure that, in so far as the industry does pay, its payments are ring-fenced and cannot merely be used by the Treasury as an additional source of taxation. I hope that, whichever way round the Dispatch Boxes may be after April, that will be borne in mind and in so far as the industry does pay, its funds will be ring-fenced.

Again, I thank your Lordships for the very kind reception given to such work as I have done that has contributed to the Bill.

4.40 p.m.

Lord Campbell of Croy

My Lords, I thank my noble friend the Minister for the very clear explanation that he gave in introducing the Bill. I am also exceedingly glad to follow the noble and learned Lord, Lord Donaldson, who mastered the subjects involved in this very wide maritime field. Soon after his report was published, I presided over a very large meeting of the Parliamentary Maritime Group at which he spoke on his report and answered most effectively a penetrating range of relevant questions.

The Bill is mostly concerned with the recommendations in the Donaldson report, which was published in May 1994. The Donaldson inquiry was established after the "Braer" incident in January 1993, but it was a general inquiry. I make that point because there has been misunderstanding in the media and elsewhere to think that it was just looking into the "Braer" incident. It was a much wider inquiry. I congratulate the noble and learned Lord and his team, whom he mentioned, on what they have done. Since the publication of that report, the "Sea Empress" accident occurred in February. That disaster underlined the need for most of the Donaldson recommendations to be acted upon soon. I welcome the fact that a place has been found for the Bill in this shorter than usual Session of Parliament. The Government have accepted the large majority of the Donaldson recommendations.

The virtue of a Second Reading debate is that one can consider those recommendations which are included in the Bill and also recommendations which are not in the Bill. It seems that most of the recommendations which require legislation are in the Bill. I note that the noble Lord, Lord Clinton-Davis, made use of this Second Reading debate to make a wide-ranging speech about the international shipping industry in general. He made use of this valuable opportunity.

In the Bill I welcome the proposals for powers to be granted to the Government to establish temporary exclusion zones and to extend the scope for intervention by the British Government both in general and on occasions when pollution incidents have occurred. As my noble friend Lord Goschen and other noble Lords will recall, in the Bill there are two particular subjects which have been raised by me in debates and at Question Time. The first is about improving at ports and terminals reception facilities for waste, and not only oily waste. The principle has been generally accepted. What is now needed is a comprehensive system which is then made obligatory. We also need to encourage foreign ports, especially in western Europe, to adopt similar arrangements.

The second subject is the application of fines for marine pollution offences. In the Bill (Clause 7) the maximum is increased fivefold. My noble friend the Minister gave me a foretaste of that in response to my questions a few months ago, and again I welcome it. But what I pointed out and about which I complained was the low level of fines that in practice have been imposed. The average fine recorded in annual figures has been derisory compared with the maximum. I accept that this is a delicate matter and the Government cannot dictate to the courts or interfere. That is a principle that we all respect. The decisions are for the magistrates to take in the circumstances of each different case. But I hope that after the Bill is enacted the Government will ensure that the new maximum fine is made widely known to all concerned.

Most of the pollution of the seas, originating at sea rather than from rivers and land sources, is the result of deliberate discharges at sea or in or near ports. Pollution which is most difficult to police is not near land but where winds and currents can distribute it along our coasts. It includes garbage as well as oily wastes. In Recommendations 15 to 28, the Donaldson report made excellent suggestions in this field. Some have been accepted by the Government and others are under consideration. Monitoring, detecting, identifying and penalties are the essential parts of this deterrent operation.

I am glad that the Bill contains provisions for the fish factory ships, following Recommendation 77 in the Donaldson report. As has already been mentioned, these are known as klondykers. I remind your Lordships that their main function is to be at anchor receiving fish caught by local fishermen. In the United Kingdom most of them have been stationed on the coast of the Scottish West Highlands at Ullapool, for more than 20 years; more recently they have been stationed at Lerwick in Shetland. They have provided a very useful secondary market for our fishermen, especially when there is a surplus of fish being caught. In the United Kingdom they deal mostly in mackerel.

The klondykers have come from eastern Europe and beyond, not from within the European Union. They themselves do not fish in European Union waters. For them it was a time of crisis when the Soviet bloc and the Soviet Union were breaking up and after that period. Some of them had inadequate insurance, if any, and Clause 15 should help deal with that in the future. Some were simply substandard rust buckets. I hope that as the countries of eastern Europe settle down, following the disappearance of the Iron Curtain, only ships in a good state and properly insured will come to the United Kingdom. They are needed by British fishermen and those foreign seamen are, on the whole, popular in the maritime areas of Loch Broom and Shetland, where they are anchored for weeks or months. I raise the question—the matter can be pursued in Committee or at Report stage—as to whether stronger powers should be granted to our Government and Parliament to control those klondykers in the future.

Points of interest in the Donaldson report but not matters for legislation are, for example, the suggestion in Recommendation 20 for the worldwide use of the English language in maritime affairs. That is in order to improve safety. That is accepted in principle by the Government, but I see that there may not be international approval for it, particularly from the French, who are always possessive about their language.

Another recommendation is for the use of transponders by wider categories of vessel. They are automatic ways of identifying vessels from the land and there should be a programme for introducing them internationally. The Government accepted that in principle. It is not a matter for legislation but I draw your Lordships' attention to that excellent recommendation.

Recommendation 61 on routeing and navigation off North-West Scotland is of particular interest to me. I am glad that the Government accepted that and will support it through the IMO.

The noble Lord, Lord Callaghan—I am an old-timer in these matters, having been in both Houses of Parliaments for nearly 40 years—was the founder of an organisation known as ACOPS (Advisory Committee on Pollution of the Sea, now called the Advisory Committee on the Protection of the Sea). That was a far-sighted act and I must declare an interest because for two periods I was chairman of that organisation. We must pay tribute to the noble Lord, Lord Callaghan, because that was the first organisation in the United Kingdom to monitor and record oil pollution and make recommendations as to how it should be dealt with.

Lord Clinton-Davis

My Lords, I omitted to declare my own interest in that regard and offer my apologies to the House. I am currently chairman of the organisation and I pay tribute to the work that was done in the past by the noble Lord, Lord Campbell of Croy, in supporting my noble friend Lord Callaghan.

Lord Campbell of Croy

My Lords, I am grateful to the noble Lord for making that comment. It indicates that this is a measure on which there is all-party support and we ought to make sure that the Bill proceeds through Parliament quite quickly, though we make the points we want to make about improvements or future measures that can be taken to follow it up.

As a somewhat light-hearted postscript perhaps I may point out that the clearing of the beaches in Wales this year after the "Sea Empress" episode was carried out with great industry and efficiency. But two days ago it was reported in the press that some areas had again been polluted by oil—this time it was 4,000 bottles of suntan oil unintentionally dislodged from a cargo vessel at sea. That confirms the intention of the Bill to cover all possible, even unexpected, sources of pollution.

4.53 p.m.

Lord Chorley

My Lords, this is the second Second Reading this week of a Bill which is of importance to the National Trust, and once again we warmly welcome the Government's proposals. The reason it is important to the trust is simply that we protect for the nation, mostly through ownership, around 600 miles of coastline. That is a lot of coast and comprises nearly 40 per cent. of what is officially designated as Heritage Coast. Almost all of that coast is open to the public and is enjoyed by hundreds of thousands of visitors, mostly for its superb scenery and wildlife.

A pollution disaster like that of the "Sea Empress" grounding off St. Ann's Head was a traumatic shock for us, not least because St. Ann's Head is in the trust's ownership, as is much of the Pembroke coast and the Gower, all of which were affected. Mercifully, the oil slick stopped just offshore of Lundy island, just off the North Devon coast. That was literally providential. Nevertheless, along the South Wales coast our staff and hundreds of volunteers worked around the clock seven days a week on the big clean-up. I do not need to go into that in any detail except to remark that our visitor numbers are 10 to 15 per cent. down, bookings of our holiday cottages suffered and the coastline at our Stackpole education centre was badly affected.

Like a major fire or a break-in of a country house, pollution disasters are the kind of thing one hopes will not happen. When it does it is traumatic. It is for that reason that we regard this as a timely Bill. As has been said, it is also a technical Bill and I confess that I do not understand all its detail. I shall therefore restrict my remarks to just a few points.

The essence of the Bill is to implement the great majority of the excellent recommendations of the noble and learned Lord, Lord Donaldson of Lymington, and his team, whose report was published in 1995. The Bill before us does not deal with two of the recommendations, Nos. 59 and 85, both of which were referred to by the noble Lord, Lord Clinton-Davis, in his opening remarks. The first concerns the marine environmental high-risk areas and the second the need for adequate provision of salvage tugs at strategic locations.

I do not need to add to what the noble Lord, Lord Clinton-Davis, said, except perhaps to remark that it has been stated that if there had been a proper salvage tug in Milford Haven last February, the worst of that disaster might have been avoided. I am aware that both recommendations are under consideration and I accept that neither needs legislation. I note also that they are part and parcel of the raft of necessary measures required to protect our coast adequately and both are in urgent need of progressing.

I turn now to the Bill itself. In general terms, it will do a lot to improve the protection of our shores. In particular, we welcome the provisions relating to port reception facilities (Clause 5) to which I shall return in a moment. We also welcome the realistic fines which are proposed. In that connection, am I right in believing that the quantum of fine can be altered—for example, to take account of inflation—by Order in Council or by some other simple method? I should know the answer to that, but perhaps the Minister (who knows all these things) can confirm whether that is right. The provision in Clause 10 for powers to move ships is important, as is the power to inspect and detain vessels in Schedule 1.

I turn to two aspects—I believe I speak for the Royal Society for the Protection of Birds as well as for the National Trust—which need to be tightened up. I want to make a third point also relating to clarification. First, in relation to waste management plans (Clause 5), the noble Lord, Lord Clinton-Davis, said all that needs to be said. We support him over the need to make the harbour authorities prepare plans rather than making it the responsibility of the Minister to start the relevant process.

Secondly, a similar point arises as regards the making of regulations in respect of the transhipment licences—the Klondykers. There again, the noble Lord, Lord Clinton-Davis, probably said all that needs to be said. He also included in his remarks the suggestion that such licences should also require adequate third party insurance or other security. In that respect, Clause 15 is perhaps not quite sufficient.

Finally, and following on the last point, it appears that the present position of third party losses is currently unsatisfactory if our experience of the "Sea Empress" case is anything to go by. I refer to the difficulty of fully recovering our clean-up costs and business losses. It is probably the case that Clause 15 will now deal with this situation in future in a more satisfactory way.

There is the further point as regards damage to what I believe are termed "non-use resources"—that is to say, resources to which a monetary value cannot readily be ascribed. The obvious example is the destruction of wildlife; for example, birds. I understand that in the United States liability for such damage is now provided for under the Oil Pollution Act 1990. I shall be most interested to know either today or through a letter what the Government's thoughts are on that matter. As I see it, Clause 15 does not go into it. I accept that this is a very difficult area, but the losses incurred are nevertheless very real, albeit difficult to estimate.

I suggest that these three points—waste management, transhipment licences and insurance cover—can best and most easily be examined in Committee. In the meantime, I congratulate the Government on bringing forward this measure and I wish it a speedy passage.

5 p.m.

Lord Murray of Epping Forest

My Lords, I join my noble friend Lord Clinton-Davis in thanking the Minister for bringing forward the Bill. I also commend him for the other ways in which he has sought, perhaps not always successfully, to improve maritime safety. I and my colleagues in the National Union of Marine, Aviation and Shipping Transport Officers, of which I am a trustee and in which I declare an interest, wish him success, not least in his arguments with the Treasury.

A measure of the importance of the Bill is that some 6,500 foreign ships visit our ports every year. There are some 80,000 ship arrivals annually in the United Kingdom of which 32,000 are tanker movements. Increasingly, cargoes carried by ships are potentially hazardous or polluting, as we have heard. Those pollutants include oils, chemicals and gaseous mixtures. So Clause 13, which brings into effect the 1996 convention on hazardous and noxious substances is welcome.

As has been emphasised, shipping accidents are increasingly likely to cause immense environmental and economic damage, long-term damage to marine life and devastation to fishing and tourism. Oil pollution is simply the most visible form of environmental damage caused by shipping accidents. Some of the chemical cargoes carried in ships are so noxious that they can still be toxic in large concentrations of water as, for example, in the case of the flag of convenience cargo ship "Perentis" which sank in the Channel in 1989. It carried six tonnes of the chemical Lindane, which is toxic to the nervous system and used as a pesticide. It is banned in many countries. The container has never been found and is lying at the bottom of the sea, presumably waiting to break up and discharge. It is one of the many environmental time bombs in our waters.

The waters around the United Kingdom contain some of the world's busiest and most dangerous sea routes, requiring the highest standards of shipping and, I emphasise, as did the report of the noble and learned Lord, Lord Donaldson, seamanship. So Britain has a vested interest in marine safety. But, increasingly in our waters, we are seeing substandard ships, which are poorly maintained, poorly operated and crewed by seafarers many of whom are only there because they are prepared, or are forced, to work for coppers.

As the noble Lord, Lord Clinton-Davis, said, the Minister has shown a welcome awareness of the dangers inherent in the situation. Therefore, we welcome the adoption of the Standards of Training, Certification and Watch-Keeping Convention 1995, which should come into effect next spring. The decision to invite the noble and learned Lord, Lord Donaldson, to undertake the inquiry was far-sighted, as demonstrated by the results.

The Bill is a partial response to the report and in itself can provide only a partial response to the critical needs of the situation. I hope that the Bill will be improved in detail and that it will be backed up through executive action by the Government. National legislation cannot provide the whole response. On the one hand, owners, seafarers and their unions, charterers and insurers all have their part to play as well as the Government. On the other hand, as has been emphasised again and again, co-operation in setting and enforcing standards at the international level is critical.

In their report the noble and learned Lord, Lord Donaldson, and his colleagues looked beyond the "Braer" grounding and drew attention to the impact of the depression suffered by the shipping industry. We, too, must look beyond this Bill and see it in the context of our failures of over-tonnaging, debilitating competition and an increasing rate of exodus to the flag of convenience registers. Many of those registers lack the ability or the political will, or both, to police effectively, if at all, the standards of the ships on their books. Many have little or no connection with the country whose flags the ships fly. The Bill seeks to grapple with the rise in the number of such registrations, which has been matched by a decline in worldwide shipping safety standards. Flags of convenience now account for some 40 per cent. of the world's fleet, but they account for 60 per cent. of the world's shipping losses. These are the ships sailing into our ports and now carrying more than twice the volume of UK deep sea trade carried in United Kingdom registered ships. That is why we need to take action to deal with them.

What the Minister said about the importance of international co-operation was emphasised by both employers and seafarers' unions at this year's maritime session of the ILO, which made some welcome, agreed progress on hours of work, minimum standards and labour inspection. The Minister and others have paid tribute to the IMO. I would like to pay tribute to the determined leadership given by Mr. Bill O'Neill, secretary of the International Maritime Organisation, in the drive towards improving shipping safety, notably through better implementation of IMO agreements by flag states, which again is reflected to some extent in this welcome Bill.

However, merely improving our capacity to monitor and deal with the substandard and dangerous foreign tonnage, which is infesting and, as we have heard, often polluting our waters, is not enough. We have to deal with the root causes. If we are going to deal effectively with them, it means that, as the noble and learned Lord, Lord Donaldson, has reiterated time and time again, we have to make it more expensive for owners and managers to run, and for charterers to hire, a dangerous ship. The OECD study on the competitive advantages of the non-observance of international standards, published earlier this year, showed that shipowners can more than halve their costs by flouting internationally agreed safety rules.

Clause 12 of, and Schedule 2 to, the Bill seek in part to address that point. But the danger is that they may be a move in the wrong direction or at best a wrong move in the right direction. In the port state control context, charges or even fines are less likely to reduce sub-standard operation than punitive detention. I would like to see the Government affirming their support for the principle of punitive detention in appropriate cases and working for agreed action on an international basis by all port state control states.

Even if it is accepted that charging may be part of the answer, it would in my view be wrong to impose on all shipowners blanket charges for a range of services such as port state control, the investigation of marine accidents, search and rescue, and emergency towing. That would, according to the compliance cost assessment, impose charges of some £20 million to £30 million a year on the maritime sector as a whole and good owners would be subsidising substandard operators.

I took note of the caveat expressed by the Minister and of his hope that we should not find it necessary to impose such charges, but I suggest that to put such provisions on the statute book would be a constant temptation, if not to him, then to the Treasury. What we should be doing is punishing the malefactors. While port state control costs about £1 million a year to operate, barely £60,000 a year is generated by charges for second inspections of ships failing checks. Such charges do not provide a sufficient deterrent to substandard operators. They should at least be increased to a generally punitive level and, where appropriate, be complemented by punitive detention. That would begin to make some of the rust-bucket operators sit up and take notice.

But are the Government prepared to address their mind to ways of penalising other parties who contribute to the survival and operation of substandard ships, including classification societies, cargo owners and charterers? Are the Government prepared to address their mind to ways of encouraging good practices? There is in particular ample evidence that many classification societies completely fail to establish and enforce satisfactory safety standards. Too many of the ships failing port state control inspections are "in class", as demonstrated on occasion by their masters producing faxed certificates of safety provided without any actual inspection.

Insurers, too, have a responsibility. Perhaps in the spirit of the comment made by the noble and learned Lord, Lord Donaldson, the insurance market might suggest to the Liberian authorities that unless they mend their ways—and their ships—their ships and cargoes will not get any insurance. If that is regarded as too draconic, how much more open to criticism is the owner who deliberately sends a ship to sea in a condition which endangers the lives of its crew? And how much more reprehensible are the governments and classification societies which actively connive with him in doing so? Perhaps, as an alternative, we should, as the noble and learned Lord, Lord Donaldson, has been heard to suggest, require owners to travel on their ships.

What I hope your Lordships will resist is any attempt to introduce charging into this area as a means of raising revenue for the Treasury—in effect imposing a new tax on those who operate safe ships. I echo the suggestion of the noble and learned Lord, Lord Donaldson, that any revenue so raised should be ring-fenced. Any revenue which might accrue from selective and punitive charging should be applied to enforce standards of safety and, in particular, to reverse the cuts in expenditure imposed by the Department of Transport on the two major maritime safety agencies, the Coastguard Agency and the Marine Safety Agency. Those cuts are ill advised, reduce the ability of the front-line agencies to combat the increasing problems around our coast and, indeed, run counter to the purported direction of the Bill.

The noble and learned Lord, Lord Donaldson, practically opened his report with the statement: It is generally accepted that human error is the cause of about four fifths of marine accidents". He continued: We are surprised that the figure is so low: we believe that human error, at some stage … is the root cause of virtually all accidents". A third-world crew can be employed for around one-third of the rate of a north-west European crew. What owners are buying for that is inexperience, poor training, inadequate or non-existent certification and language and communication problems—in short, they are buying unsafe ship operation. What we are getting are hazards on our seaways and in our ports, pollution, environmental contamination and deaths at sea. The revised STCW convention and the new international safety management code will do something to address poor operational standards. What they will not in themselves do is make good the shortages of skilled and experienced officers or counter the continuing fall in cadet recruitment to which your Lordships, among others, have repeatedly drawn attention and to which my noble friend Lord Clinton-Davis referred today. Only if we get that right will the main provisions of this useful Bill and the international conventions to which it seeks to give effect secure the objectives of improving maritime security and increasing the safe operation of the world's merchant fleet.

5.16 p.m.

Lord Boyd-Carpenter

My Lords, as one who over 30 years ago was Minister of Transport and Civil Aviation. I very much welcome the Bill, which deals with a number of very important issues. It was lightheartedly described by my noble and learned friend Lord Hailsham as a "rag-bag of useful changes". Characteristically of him, that is probably an accurate description. I rise mainly to say how glad I am that Her Majesty's Government are tackling possible changes which could improve the position of British shipping.

Although very little has been said about it in the course of the debate, we are considering the Bill against the background of a serious and alarming decline in the British Merchant Navy. Many of us find it sad to see how British commercial shipping has diminished. Not only is that sad; it is also dangerous. Not only is it economically damaging for the country, but it could be a military danger. If we were ever involved in a war—I hope that we will not be, but we may be—it is possible that we might be blockaded and shipping from other countries might not be able to reach us. I hope and believe that it is the intention of the Government to reverse that alarming decline in the British Merchant Navy.

The reduction in the number of British ships has undoubtedly affected the matter and it is to remedy that position that a good many of the Bill's provisions are being brought forward. I very much hope that they will be effective. I shall refer to only one or two matters in a Bill of which, generally, I fully approve and which I enthusiastically support.

I turn first to Clause 7 which covers the penalty for discharging oil in certain UK waters. The amount that can be imposed by way of fine in respect of that matter is very much increased. The figure is multiplied by five. I ask my noble friend the Minister why a limit is being imposed at all. If damage in excess of £250,000 is inflicted, why should those responsible not pay for it? Given both the increasing size of tankers and the price of oil, it is more than possible that a disaster may occur in which considerably larger amounts will be involved.

Viscount Goschen

My Lords, it may assist my noble friend if I intervene at this stage. I believe that the fines to which he refers relate to deliberate rather than accidental discharge, although the two may come together. The provision is designed primarily to address circumstances in which people make a deliberate decision to discharge oil. There is a compensation regime in place to take account of oil that is discharged by accident. I hope that that helps my noble friend.

Lord Boyd-Carpenter

My Lords, I am obliged to my noble friend. However, as I read Clause 7(1), if oil is accidentally discharged and does damage that is greater than the worth of the figure prescribed in the Bill, it will not be possible to impose a fine on those responsible for the discharge above that figure. Will my noble friend consider whether there is any need for a limit to be imposed in the Bill when it could simply provide that there was a liability for whatever damage was shown to be effected?

Viscount Goschen

My Lords, perhaps it is more appropriate for me to pick up that point in my concluding remarks. I understand that the fines relate specifically to the magistrates' court, but if a case goes to the Crown Court there is no limit to the fine.

Lord Donaldson of Lymington

My Lords, contrary to all traditions of the House, perhaps I may try to assist at this stage. One is considering fines, not compensation. There is no simple limit to compensation. Compensation may run to millions of pounds. Nothing about the size of the fine will affect the amount of compensation. The fine goes to Her Majesty but the compensation goes to the people who are injured.

Lord Boyd-Carpenter

My Lords, I am much obliged to the noble and learned Lord, who knows more about this subject than anyone else in the House. I am considerably relieved to hear that if more than £250,000 worth of damage is done, that higher amount can be recovered from those responsible for it. In that case there seems to be even less point in imposing a limit on the other aspect. I hope that that will be carefully looked at again.

Clause 16 makes very proper arrangements for the provision of discharge books to British seamen employed on foreign ships. That is an extremely helpful proposal and can mean a great deal to individual seamen. Unfortunately, foreign ships now carry a good deal of our trade. Sadly, many of them have a large number of British subjects serving in them as seamen. If that is so, it is right that they should be entitled to discharge books when they leave that employment.

Finally, Clause 15 gives the Secretary of State power to require that the insurance of ships covers, inter alia, any damage that they do. That seems to me to be of the greatest importance. If it means that ships using certain waters must be insured for damage that they do up to any amount, that is extremely reassuring. But on my reading of the Bill I am not sure that that is the fact. When my noble friend comes to wind up I should be very grateful if he would confirm that.

Meanwhile, it is a very great pleasure to see a Bill of this kind tabled in this House. It is also good to see that the Opposition support the Bill, as the Opposition spokesman made clear in his excellent speech. The best we can do is to make such suggestions as we can, as I have ventured to do, for minor improvements but, on the other hand, to speed the passage of the Bill into law, because the sooner it is law the better.

5.26 p.m.

Lord Greenway

My Lords, I join with other noble Lords who have welcomed the Bill, which seeks to give legal effect to a further raft of recommendations in the excellent report of the noble and learned Lord, who sits behind me, and his consorts. I am not quite so happy about the funding arrangements in Clause 12, but I will return to those later.

Speaking generally, all of us are appalled by maritime disasters such as those involving tankers that have affected our coast recently. All of us have good reason to he highly concerned about this matter. None of us can fail to be moved by pictures of oil-covered seabirds dying and all the rest of it. However, I am delighted that the Government have sought to go down the road of careful consideration of the implications of those incidents rather than legislate on the hoof, as was the case in America following the "Exxon Valdez" incident where the Oil Pollution Act 1990 turned out to be a real disaster. I welcome the measured response of the Government in reaction to these disasters.

It is inevitable and understandable that those most affected by the disasters who live in the locality should be the loudest protesters, but it must not be forgotten that we are an island race and we live by trade. Ships are vitally important to us. I cannot help feeling that the same people who are so quick to protest would also be the first to complain if they got into their motorcars to fill up at the local petrol station and found that none was available. These matters must be kept in context.

Referring to pollution and oil pollution in particular, one tends to forget that in global terms a very large percentage arises from natural sources. I believe that the figure is approximately 70 per cent. That is also something of which we should not lose sight.

As I have said, we are an island race and we trade by the sea. I am as concerned as other noble Lords who have voiced fears over the decline of the Merchant Navy. For years we led the world, and I believe that we did a very good job. Inevitably, matters decline after a certain time. The shipping industry is by nature cyclical. Therefore, I think one must accept in some part the decline that has taken place. My hope is that we have now reached a point where we can build upon what is left. Far from the merchant fleet being a poor measly skeleton that is about to disappear—as the noble Lord, Lord Clinton-Davis, suggested—at present it is extremely efficient. Indeed, in some ways we lead the world. I am sorry that the noble Lord, Lord Sterling of Plaistow, is not in his place today. When I spoke to him last night he said that he hoped to be here. The recent tie-up that he has engineered between his own P&O container company and that of Nedlloyd, the Dutch container company, astounded the rest of the container shipping world and is a pointer to the way ahead; they have taken the lead. Therefore, I believe that our shipping industry is far from dead.

The measures that we are taking to deal with the oil disasters are proceeding slowly and, by and large, effectively. Obviously, we cannot get it right straight away; it will take time. I understand that there is widespread concern that the existing arrangements for compensation through the International Oil Pollution Compensation Fund are not working as well as had been hoped. I know that many of the fishermen at Milford Haven feel dissatisfied that they are not being adequately compensated. There is a general feeling that the fund in its dealings is not being as just as insurers generally are.

Before turning to the Bill, I must declare an interest in that I am a director of a company which carries out a certain amount of consultancy work in European marketing for Associated British Ports. Speaking on behalf of British ports, perhaps I may touch certain aspects of the Bill. I know that, generally, the proposals are welcome and that the Government have listened to what the ports have said during the consultation process. The proposals in Clause 1, dealing with temporary exclusion zones, are most welcome and go some way towards offsetting a weakness in the existing arrangements in the areas outside port limits. However, the ports believe that where temporary exclusion zones are set up within the harbour areas they should be made by the harbour master, using his existing powers of direction. I believe that the coastguard is strongly in support of that point of view.

As regards waste reception facilities, I know that ports welcome the Government's acceptance of a flexible voluntary approach in preference to a mandatory system. I know that there are moves elsewhere in the Community to make the discharge of waste mandatory in ports and therefore that means mandatory reception facilities. If we are to come to that in due course, I seek an assurance from the Government that the principle of mandatory discharge of waste will only be pursued in such a manner that port authorities do not require to take over liabilities which properly rest between the shipowner and the waste reception industry. I realise that that route would require close consultation between the Departments of Transport and the Environment, which are not noted for getting on too well with each other.

Clause 6 deals with indemnities in connection with counter-pollution measures and that is important as regards ports. One of its main uses might be to indemnify a port authority where, by reason of circumstance, it is appropriate for a harbour master to use his resources to deal with an incident which is technically outside the harbour limits. The proposal is a welcome step forward.

As regards Clause 20, there is an element of disappointment that the Government have not taken the opportunity in the Bill to address the problem which exists for harbour authorities when the owners and insurers of a vessel simply abandon it as a wreck. I understand that the Government intend to address that problem and will be consulting. Perhaps the Minister will confirm that, not necessarily tonight but later.

I turn to the concerns regarding Clause 12 and funding. When the Bill was published it came as something of a bombshell to the general lighthouse authorities. I refer to Trinity House, the Northern Lighthouse Board and the Commission for Irish Lights. Again, I must declare an interest as a younger brother of Trinity House, albeit a non-pecuniary interest.

The general lighthouse authorities were not consulted in the initial consultation process in February which dealt with charges for maritime services. It was consulted when the draft Bill was published in June. Indeed, some of its recommendations have brought forth Clauses 17 and 18, which are very welcome. However, there was no mention of funding in the draft Bill. The General Lighthouse Authorities were not consulted on the funding aspect until it saw what the Bill contained.

As we have heard, Clause 12 provides enabling powers for extending the scope for charging for maritime services. They also empower the Secretary of State to terminate the General Lighthouse Fund and to amend, modify or repeal provisions of the Merchant Shipping Act 1995 relating to general light dues or general lighthouse authorities if, in the view of the Secretary of State, the levying of general light dues becomes incompatible with the UK's obligations under Community law or international agreement. The Minister has referred to that and has struck a slightly apologetic note for the fact that the consultation process was not quite as it should have been. I accept that and hope that he will comment further on it at the end of the debate.

I understand that as regards international agreement discussions have been taking place in Europe with the idea of persuading other European countries to follow our system of light dues, which we believe is the best and the fairest. Shipowners pay in proportion to their use, no cost is imposed on government and the system works very well. Therefore, it is right that the Government should seek to persuade the rest of Europe to follow our example. I also understand that those discussions still have a long way to go and that certain countries do not like the idea. Therefore, I find it hard to believe that that can be used as a reason for inserting a provision into the Bill at the last moment without consulting with those who are most directly affected. Of course, one must not forget that the General Lighthouse Fund is shipowners' money. It also includes Trinity House pensions—I shall only touch on that because it is a complex subject—and the Secretary of State is, in effect, trustee of those moneys.

I believe that those are proper concerns and I hope that in winding up the Minister will be able to give us a little more confidence that the funds will not be used for other purposes. We have already heard calls from the noble Lord, Lord Murray, and my noble and learned friend Lord Donaldson that the money should be ring-fenced. I believe that we must ensure that the money must not be used for other purposes.

Perhaps I may make a general comment touching on training and seafarers, mentioned by two noble Lords. I believe that the training of personnel is fundamental to increasing safety at sea. During the course of visits to the Missions to Seamen and other organisations, I have seen many ships. There is no doubt that conditions on some ships are appalling and I do not know how the crews manage to survive. On the other hand—and this is part and parcel of the great changes that have taken place in shipping—modern container ships carrying 6,000-plus containers are run by 14 people. That may be very efficient in economic terms but it is a far cry from the days when a 10,000 tonne cargo ship had a crew of 60 or 70 people. There was a community on board, a community of spirit. You could find people to talk to. On some of these modern ships, you are very lucky if you can find anyone at all to talk to. That does not make for good conditions at sea. It is a very lonely life today compared with what it used to be; added to which, ships do not stop in port for weeks on end where the crew can go and enjoy themselves in the fleshpots. Modern ships are in and out of port in a matter of hours.

Therefore, we must not forget the enormous changes which have taken place in shipping. They are not always for the better. One looks towards the human element involved in running those ships. I make that a passing comment to wind up my remarks. But I welcome the Bill and I know that we shall have further deliberations on it, to which I look forward.

5.41 p.m.

Lord Simon of Glaisdale

My Lords, I am very proud to follow my noble friend Lord Greenway, who speaks with such great authority on matters maritime. Like my noble friend, I must decare an interest and, indeed, it is the same interest because we share membership of the Brotherhood of Trinity House.

Your Lordships may remember an occasion when Winston Churchill, wearing a strange uniform, was seen by a French military attaché. On being asked what it was, he said that it was that of the Le frère ainé de la Trinité. Although I do not appear in that garb, it is in that capacity that I have to declare an interest. But my objections to the provisions to which my noble friend drew attention in Schedule 2 are based not in any way on membership of that lighthouse authority but on the fact that they are grossly offensive on constitutional grounds.

I share in the general approbation and admiration expressed for my noble and learned friend Lord Donaldson and his masterly report. I certainly share the general approval of the main provisions of the Bill. That being so, it makes it more extraordinary that there are these provisions in Schedule 2.

Your Lordships may remember a story, almost certainly apocryphal, but widely believed, which goes back to the days when a divorce could be obtained only by an Act of Parliament. That was before the Family Law Act of last Session, whereby a spouse can be repudiated without cause on the giving of 18 months' notice. But before that it required a parliamentary provision.

The story goes that a town clerk, having tired of his wife, was promoting a local Private Bill and slipped into the schedule a provision divorcing his wife. I thought of that immediately when I saw this admirable Bill which has tucked into the schedule a piece of gross bureaucratic aggrandisement.

What does it do? In the first place, it is a Henry VIII clause. It gives the Secretary of State power, by delegated legislation, to amend primary legislation. But it is a particularly virulent Henry VIII clause which calls to mind the unpleasant old age of that monarch. Not only does it give power to amend primary legislation by statutory instrument but it does more, as my noble friend pointed out. It gives power to transfer and to wind up the General Lighthouse Fund which, as my noble friend said, is the shipowners' money, and convey it to the Consolidated Fund. And it does that, as I said, without recourse to primary legislation.

But it does even more. It gives future powers dependent on the view of the Secretary of State that the law requires to be brought into line with some as yet unknown, undefined European provision or provision of public international law.

As my noble friend pointed out, those provisions have not been discussed at all with the lighthouse authorities. The Secretary of State is not necessarily the last word in legal wisdom. There have been all too many cases in the past few years when the Government have been reversed not only in the municipal courts but in the European and international courts. Why then should we vouchsafe to the Secretary of State power to alter the law to transfer other people's funds on the happening of some unspecified future event?

Of course, that provision being a Henry VIII clause, it will go before the Delegated Powers Scrutiny Committee. But I beg the noble Viscount not to try to brazen out the case before that committee, but with graciousness to withdraw those objectionable provisions which have no real relevance to the Bill.

5.47 p.m.

The Earl of Caithness

My Lords, I thank my noble friend Lord Goschen for the way in which he introduced this important piece of legislation. It brings back many memories. It seems that I was working on this only yesterday, but it was some years ago. I am glad that the Government have found time to introduce this Bill. It is worthy of a speedy passage through both Houses of Parliament because there has been a great deal of consultation on much of the Bill and that consultation has been taken into account.

However—and this has not yet been said—we must not lull ourselves into a false sense of security and think that, because we have this Bill, all accidents will stop and that the Government can do everything. Shipping is not that type of industry. As the noble Lord, Lord Greenway, said, much of the pollution which comes from the sea arises through natural causes. But moreover, there is a huge responsibility on the flag states and the IMO because shipping is such an international business. The more we tighten the screw at this end, and quite legitimately, the more it will mean that certain ships and certain owners will move from this country and go overseas. Because we have tighter controls in this country, some will be tempted to take their cargoes to the Continent where they will not be subject to such strict port state control—at least, they hope not. They will then break bulk and bring their goods over here in smaller vessels. That will probably not do our merchant fleet or our ports any good.

However, we are right to commend the Government on not moving from the point that they have strongly upheld; namely, that there should be the right of innocent passage and the right of transit. I remember that after the "Braer" incident there was an immediate outcry from all quarters that we should automatically close the international right that we had entered into for an innocent right of passage. I am glad that the Government did not give way to that outcry then and I am equally glad that they have not done so now.

It was as a result of the "Braer" incident that my right honourable friend John MacGregor asked the noble and learned Lord, Lord Donaldson, to look into the whole issue of safety at sea around our coasts. I, too, should like to thank the noble and learned Lord and his team for the very hard work that they undertook and accomplished so quickly and effectively. From my experience, many such reports which have been prepared at the request of Secretaries of State—and the noble Lord, Lord Clinton-Davis, will be aware of this—have gathered dust on shelves without having been implemented or even read. But this report has been most widely and, indeed, internationally read. I hope that it will become a benchmark for other countries as well as our own.

I should like to take up one point which arose in the preamble of the noble Lord, Lord Clinton-Davis. I am sorry that his preamble took so long and he was unable to get to the Bill, or indeed most of it. The point that I should like to raise refers to the reduction in the number of seafarers. Of course shipping has changed and the number of seafarers in ships has reduced, but my concern is for the future. As the noble and learned Lord points out in his report, port state control is probably our most effective barrier. The reason that we administer port state control so well in this country is that the majority of our inspectors have been at sea, have lived in the conditions which exist on boats and can, therefore, argue with the captain from their experience. I hope that we shall continue to produce inspectors of that calibre, not just inspectors who know it from the book and from diagrams but who have not actually worked at sea, survived the storms and learnt from experience what ships can take. That is my main concern in regard to seafarers.

I turn now to the Bill. I should like to mention a few points just briefly. Most of what I had intended to say has already been covered, especially by the noble Lord, Lord Greenway, so I shall not repeat those points. As regards Clause 7, I very much took the point made by my noble friend Lord Campbell of Croy. It is all very well having a large fine, but how are we to get the magistrates to impose it if they will not impose a smaller fine effectively? Does my right honourable friend the Secretary of State for the Home Department intend to issue a circular to magistrates asking them to take particular note of the provision in that clause?

Clause 15 deals with insurance. It brings me back to an earlier point that I made; namely, that where we tighten the screw in this country there is likely to be an effect on shipping and shipowners. Can my noble friend the Minister please tell me what is happening in Europe with regard to insurance? Are they going to insist on the same rigorous standards as we do, especially as regards the point made by the noble and learned Lord, Lord Donaldson, concerning the need to have effective insurance and the money to substantiate the claim? Alternatively, are we going ahead of the pack? Finally, what are the other states doing in that respect?

I turn now to the controversial issue regarding Clause 12 and Schedule 2 to the Bill. It does not surprise me that I find myself on the opposite side of the fence to the noble Lord, Lord Greenway, and the noble and learned Lord, Lord Simon of Glaisdale. I thoroughly support both the clause and the schedule. I understand the concerns about enabling powers, but I believe that it is quite right that the polluter and the user should pay. The maritime industry, like any other industry, should indeed bear the full cost of what it incurs. At present, we cannot claim back some of the costs that we use for port state control and the inspection of ships. That has always seemed to me to be rather ludicrous. It seems to me to be even more ludicrous now as a result of the report of the noble and learned Lord. I am glad that the opportunity has been taken to include in the Bill provision whereby that could be increased. I give way to the noble and learned Lord.

Lord Simon of Glaisdale

My Lords, I am much obliged. The noble Earl has missed the point which arises at the end of that schedule and in connection with the matters to which we referred; namely, the appropriation of the General Lighthouse Fund, the making of subordinate legislation to alter primary legislation and to do it before any question has yet arisen, because we do not know what the state of the law will be.

The Earl of Caithness

My Lords, I should tell the noble and learned Lord that, as I said, I understand his concerns about the enabling part of the provision. However, I believe that the lighthouse funds are ring-fenced at present. That is the point that I was about to make. I was also going to say that I hoped that any funds arising in this respect in the future would continue to be ring-fenced.

My final point deviates from the Bill and returns to the general point that I made about the international nature of shipping and incidents. Can my noble friend the Minister tell me what has happened so far as concerns the captain of the "Braer"? For example, what action has the flag state taken? Further, what have the management company or, indeed, the Greek authorities done? Of course, I may be a little out of date and my noble friend may already have given the House such information. If that is the case, I apologise. Nevertheless, it seems to me that this is a good example of where we ought to know whether the international community is working in the same direction as we are. If it is not, we shall have even more work to do in the IMO and with the other port state control countries to encourage the laggards to come up to our high standards.

5.58 p.m.

Lord Cooke of Islandreagh

My Lords, I wish to add my welcome to the Bill which has been welcomed by all noble Lords who have spoken so far. I consider it to be an important Bill, as it will improve safety at sea and go some way towards overcoming the difficulty of dealing with pollution problems. However, some of its clauses do not relate to the Donaldson Report; I wish to speak on those which apply to the general lighthouse authorities.

I declare an interest which will, perhaps, also indicate the background to what I have to say. For many years I was a commissioner of Irish Lights, including a term as chairman. The commissioners of Irish Lights are the general light authority (GLA) responsible for the aids to navigation around the coasts of Ireland. I have recently retired as a commissioner but retain certain connections with the commissioners.

Clause 17 clarifies the GLAs' ability to lease out excess capacity. There was previously some doubt about procedures and the GLAs support this clarification. Clause 18 is important as the GLAs require information from government departments to support collection of light dues. Both these clauses were the subject of consultation with the Department of Transport with which the GLAs have an open and constructive relationship. At least, they thought they had such a relationship until they read Schedule 2 to the Bill at the end of last week. That schedule, if passed, will give the Secretary of State extraordinary powers which could prejudice the working arrangements of the GLAs. It seems remarkable that a policy of open consultation should suddenly change to one of secrecy on fundamental matters. Inevitably, the question comes to mind: what is the hidden agenda?

Schedule 2 and Clause 12, if passed, will give the Secretary of State power to wind up the General Lighthouse Fund and pay this into the consolidated fund. The GLF is a deposit account for shipowners' moneys paid over to fund the GLAs statutory responsibilities. It has been recognised as a private fund. To pay that into the consolidated fund in my view would be improper and may verge on misappropriation. The noble Lord, Lord Greenway, has spoken on the matter at length and I support all that he has said. I know that similar views are held by the Northern Lighthouse Board. The Lights Advisory Committee, LAC, is the shipowners' committee which represents the views of shipowners to the Department of Transport on all matters concerning the GLAs. The LAC also finds the proposals objectionable and wishes them to be removed. It has made representations. The Chamber of Shipping has similar views.

There are at present no signs that the Community is about to introduce a uniform method of dealing with payments for light dues. It is difficult to understand why the department should have attempted to deal with a hypothetical question whose form is unknown and which may be many years away. If a Community obligation or any international agreement were to require change in the levying of light dues, primary legislation will almost certainly be required. Therefore, why put these powerful measures in the Bill? I hope that the Minister can enlighten us. I hope that the Government have not given up efforts to persuade other members of the European Union that the UK method of collecting light dues has many advantages as it is in line with Community policy that the user pays. The GLF holds moneys paid by shipowners and the Secretary of State, in effect, acts as trustee for that fund and has a duty to ensure that the aids to navigation provided are necessary and are operated efficiently. That came out in evidence to the Public Accounts Committee in 1982.

The GLF also holds staff contributions of the three GLAs towards pension provision. Staff pensions as they arise are paid for out of the GLF and the Secretary of State, in addition to being trustee for the shipowners' funds, is de facto trustee of the GLAs' pension funds. These pension funds are a matter of concern to the three GLAs and raise difficulties with the auditors of the GLAs' accounts. This matter is well known to the Department of Transport which is working to find a solution. It would seem absurd if the complexities of pension funds have to be included in the Bill. If Schedule 2 remains part of the Bill, that will certainly be necessary.

If passed in its present form the Bill will grant the Secretary of State wide-ranging powers without apparent reason, and subject only to approval by resolution of the House of Commons. I wonder whether the Secretary of State might fear that the possibly greater knowledge of this subject in this House is an obstacle to be avoided. In view of the opposition to these powers, which has been expressed by all interested parties, I join the noble and learned Lord, Lord Simon of Glaisdale, in asking the Minister to remove Schedule 2 from the Bill so that any problems which arise can be dealt with by the normal process of consultation.

6.5 p.m.

Lord Napier of Magâla

My Lords, I join noble Lords who have already spoken in welcoming the Bill. Any measures that lead to safer ships and cleaner seas are to be welcomed. I believe that the Bill generally achieves its objectives. I also wish to add my voice of admiration for the comprehensive report produced by the noble and learned Lord, Lord Donaldson, and his team. It is a most excellent report.

However, as the noble Earl, Lord Caithness, said, we must recognise that the measures in the Bill—even assuming that the enabling legislation can be translated into effective regulations—would not have done anything to prevent the "Braer" disaster in the Shetlands in 1993 which initiated the report of the noble and learned Lord, Lord Donaldson, nor to prevent the "Sea Empress" disaster in South Wales earlier this year. We have to recognise that there is a malaise in world shipping. I disagree with the noble Lord, Lord Clinton-Davis, that it is such a significant matter in the UK, but there is irresponsible shipping in the world.

I believe that the most effective clause in the Bill in the long term could prove to be Clause 15. That concerns the enabling legislation for compulsory insurance. I believe most people in the country would be amazed that ships can sail around the world without insurance. It is a sad state of affairs in this organised world that we do not have some sort of regulation on that already. Obviously it would be better if that were achieved with worldwide agreement and the IMO could proceed with that matter. However, it is a difficult matter. I believe it can take 10, 15 or sometimes more years for the IMO to adopt resolutions. I wonder whether the noble Viscount has any information as to whether any progress in the international sphere on the question of ships' insurance could be brought forward using the faster procedures that have been introduced in the IMO recently. In the absence of international agreement, do the Government intend to proceed alone in that matter, in which case by how much do the Government think such a measure will raise shipping costs in the UK? Is that a worthwhile cost in terms of the extra protection that it might give to our coasts?

I wish to comment on Clause 5 which concerns waste reception in ports. Presumably the objective is to encourage ships to use the shore reception facilities. I received a slight impression this afternoon that this was considered something new. The noble Lord, Lord Perry, implied that there was something new in having shore facilities. Of course the MARPOL conventions have been implemented since the mid-1980s and have been subsequently refined in regulations in this country both as regards oily noxious liquids and garbage wastes. Have there been complaints from shipping companies as regards the inadequacy of reception facilities in ports in this country? Obviously shipowners are always complaining about costs, but have there been substantive complaints about that matter? Are there not already sufficient regulations to rectify that matter?

Clause 12 deals with the funding of maritime services. I sympathise with the noble and learned Lord, Lord Simon of Glaisdale, the noble Lord, Lord Greenway, and the noble Lord, Lord Cooke. Why do the Government wish to introduce the change in the funding system at this stage? It is a general clause. It is flexible and to that extent it is commendable. However, until it is known which direction the remainder of the EC and other countries of the world will take as regards funding government responsibilities, and possibly lighthouse navigational aids' costs, is the provision relevant in the Bill? Does it not detract from what otherwise would appear to be a highly commendable Bill? I am glad that the Government recognise the competitive nature and value of shipping and ports in this country. I am glad that the Bill will go forward.

6.11 p.m.

Lord Beaumont of Whitley

My Lords, it has been a good and interesting debate, despite the fact that, unusually in your Lordships' House, it has not attracted a single bishop or a noble Baroness. In its way it has been a somewhat monochrome debate but nonetheless expert for that.

My noble friend Lord Perry of Walton spoke, as did a great many noble Lords, on shipping. In speaking from these Benches at this stage, it is my duty to pick up one or two of the environmental points which have been raised by noble Lords. However, perhaps I may make a brief comment on Schedule 2. It has not been pointed out that in its report on the Bill the Delegated Powers Scrutiny Committee commented on this matter. In paragraph 4 of its report it stated that the affirmative procedure is in the House of Commons only and that that is the appropriate degree of parliamentary control over the Henry VIII provision. Perhaps the Minister will comment on that when he speaks on Schedule 2 with which no doubt he will deal in detail.

On the environment side, there is a problem in dealing with klondykers. In Clause 11, the Bill will give the Secretary of State the power to take action against klondykers in certain circumstances. That is right and proper. However, I wonder whether it is right that the Bill provides only an enabling power. The pollution problem from klondykers in the UK, notably Shetland, has been well documented. It is a current problem. We therefore recommend that the Bill should provide the necessary regulations without the interim step of an enabling power.

Section 100G(5)(a) of the 1995 Act provides for fines not exceeding the statutory maximum of £5,000. The noble Lord, Lord Campbell of Croy, spoke about that point. In addition to provision for higher fines, the section should also provide for trans-shipment licences for a particular vessel to be withheld for a defined period. That is because experience in Shetland has shown that certain klondykers, for example, the "Borodinskoye Polye" and the "Pionersk", have a poor record of paying what they owe, at least regarding clean up bills. Almost certainly there should be some strong enforcing power to back that up.

Thirdly, the question of uninsured ships has been dealt with fairly generally. Section 192A gives the Secretary of State the power to require ships to be insured. An enabling power alone is appropriate for most classes of vessels but is possibly not enough in dealing with klondykers. There is already evidence that klondykers operating in UK waters are not insured; and that, coupled with recent pollution incidents in Shetland involving klondykers, should be adequate justification for the Government to include specific regulations for klondykers in the Bill. Following his admirable report, I was interested in the point made by the noble and learned Lord, Lord Donaldson, about the need to amend the power to give directions to harbour authorities and cargo owners.

As your Lordships have been told, and as most erudite noble Lords know, MEHRAs are marine environmental high risk areas. One major disappointment in the Bill is the omission to address ships' routeing measures and the identification of marine environmental high risk areas. The international debate on particularly sensitive sea areas—the internationally recognised term for the identification of areas of sea that are extremely sensitive and threatened by shipping activity—has ground to a halt. It requires national action to stimulate the international framework through the International Maritime Organization to provide the necessary protection for our coastline and marine environment from shipping activity.

In his report, the noble and learned Lord, Lord Donaldson, recognises that ship routeing measures adopted so far in the UK have been essentially reactive. The report identified the need for a new type of area—the marine environmental high risk area—and recommended that the Government and their statutory advisers identify areas meriting special protection. The report suggests some examples of possible MEHRAs including Skomer off the Pembrokeshire coast, adjacent to the site of the grounding of the "Sea Empress".

While MEHRAs may not be officially sanctioned by the international community through the International Maritime Organization, the international shipping world could not afford to ignore them. Furthermore, the identification of sites at a national level which are perceived to be extremely sensitive and threatened by shipping activity, and the complementary introduction of associated measures to address shipping activity within and adjacent to the area, for example, through routeing measures such as areas to be avoided, would help to stimulate the international debate on the identification of particularly sensitive sea areas.

The Government are missing a one-off opportunity to introduce measures for the identification of MEHRAs, to provide the appropriate measures for safe shipping within and adjacent to MEHRAs, and to stimulate the international debate on particularly sensitive sea areas. We welcome the Bill. We hope to give it as fair a wind as possible. But there is room for improvement. We shall hope to address that aspect in Committee.

6.18 p.m.

Lord Berkeley

My Lords, first, as have other noble Lords, I pay tribute to the noble and learned Lord, Lord Donaldson, for what I believe is a comprehensive and far-sighted report. It has given us a fantastic base from which to discuss the Bill. I pay tribute, too, to the Department of Transport for its helpful response, which arrived reasonably quickly. It has been useful.

As my noble friend Lord Clinton-Davis said, we welcome the Bill. We have had a wide-ranging discussion, with contributions from experts on all sides of the House. The debate reflects the interest and commitment of this House in supporting the principles of the Bill in a positive way, with the possible exception of lighthouses, to which I shall come later. I was also grateful to receive a large amount of briefing from interested parties. In winding up, perhaps I may comment on a few of the main items of concern in the Bill and on what is not in the Bill.

Earlier this year we discussed the "Sea Empress". That ship was owned by one country, chartered by a company registered in a second country, with a cargo of oil owned by a third country but being sold to a fourth, and crewed by members of a fifth or possibly sixth country. It was eventually saved by an ocean-going tug crewed by six or seven Chinese speakers. We discussed that previously. It is not surprising that there was a problem in co-ordinating the rescue. That is an example of the problems in defining what is a UK ship. When considering the Bill, we must bear that point in mind.

Shipping is something of a free-for-all industry. As my noble friend Lord Murray of Epping Forest said, it carries environmental time bombs. I like the idea of owners travelling in their ships. Perhaps that would improve the safety of some. There is little regulation and little control; and there is an element of passing the buck to other countries, coupled with a fear that any unilateral regulation or stronger enforcement would have a very serious effect on the competitive edge of ships serving UK ports.

Given the drastic run-down of the UK fleet, as my noble friend Lord Clinton-Davis said, we really cannot refer to "UK registered ships"—although the noble Lord, Lord Greenway, referred to the P&O fleet. It would be interesting to know where those ships are registered and which nationals crew them. I am sure it is a very effective fleet but I doubt very much whether all British nationals are involved. The noble Lord was concerned about the price of petrol. But I am not sure that that is an argument against any regulation. All transport is subject—

Lord Greenway

My Lords, perhaps the noble Lord will give way. I was not concerned about the price of petrol. I was trying to say that people shout and scream about certain disasters, but if the ships that bring oil to our shores were not allowed to come here for environmental reasons there would be no petrol at the pump with which to fill up their cars. They cannot have the argument both ways.

Lord Berkeley

My Lords, I am very grateful to the noble Lord. I understand what he says and I agree with him.

My point is that all transport has to be subject to some kind of regulation and control. It has to be subject to monitoring, enforcement and accident investigation. If we consider other types of transport, in the air industry the CAA plays a major role; road transport is to some extent regulated and controlled by the Department of Transport; for the railways there is the Health and Safety Executive. However, even in the Bill, I still detect a comparative free-for-all for the big shippers. Perhaps the word "klondykers" fits here. Perhaps the Minister will explain what the word means in the circumstances referred to by so many noble Lords in the debate.

I have a feeling that the Government are frightened of introducing too much regulation. Trade has to come to the UK somehow. The noble Earl, Lord Caithness, expressed a fear that ships would go elsewhere. Freight has to come to this country, by ship, tunnel, air or whatever. As we found in legislation following the "Herald of Free Enterprise" disaster, if Britain leads it is often followed by the European Union. My message to the Government is to have a little more courage, more power to the elbow. The Bill is a good start—but it is only a start.

To turn to one or two of the main points in the Bill, we welcome the new wording in Clause 2, "significant pollution", as providing a wider definition of the scope of the legislation. The noble and learned Lord, Lord Donaldson, made the very powerful point that it probably needs to be widened a little further so that real control can be exercised by the Government when a disaster occurs. We certainly support that.

Nick Ainger, the Member of Parliament for Pembroke, where the "Sea Empress" accident occurred, has also stated on many occasions that he believes that experts responsible only to the Government must take charge of a salvage operation and have the power to commission commercial salvage contractors with the resources to provide successful salvage rather than allowing commercial interests to outweigh the national and environmental interest. That is a very strong point.

I turn to Clause 10, which deals with the parking of ships. My noble friend Lord Clinton-Davis referred to the matter. Several consultees have commented that this measure would simply transfer the problem of parked ships to somewhere else. That may be true, but it is better than leaving matters as they are. If elsewhere the European Community follows this lead, it is a start. It is no reason for not having this legislation, which we strongly support.

There is, however, concern on the part of pilots that they may be required to become involved with a ship that is not capable of being moved. They remind us that Clause 21(1) of the Pilotage Act 1987 states that a pilot shall be guilty of an offence if he, does any act which causes or is likely to cause the loss or destruction of, or serious damage to, the ship or its machinery". Those matters will need to be examined in Committee.

I now turn to lighthouses. I am no expert, although I do a spot of sea-sailing. The noble Lord, Lord Greenway, the noble and learned Lord, Lord Simon of Glaisdale, and the noble Lord, Lord Cooke of Islandreagh, spoke very powerfully about the idea of winding up the General Lighthouse Fund. I cannot add anything of the quality that they brought to the debate. However, the noble Viscount, Lord Goschen, said that the legislation is required because the present regime may conflict with future legislation. I am not sure that that is a very good reason for doing it now.

We received very strong comments from the General Lighthouse Fund. As we have heard, it is private money. The private status of the fund was confirmed by the Government in evidence to the Public Accounts Committee in 1982. The Treasury saw the GLA service as being provided by the private sector for the private sector. Is this back-door nationalisation? I hope the Minister can give some explanation as to why this measure is so necessary now.

The noble Lord, Lord Napier of Magdâla, and my noble friend Lord Clinton-Davis spoke about insurance. Both were strongly in favour of comprehensive insurance policies for all ships coming to British ports or waters. Road vehicles are insured; train operators must have £155 million of cover. That figure came out of the privatisation process. I do not think anybody would necessarily disagree with it. The air industry has insurance, so why not shipping in the same way? I refer to any shipping entering UK waters, not just visiting ports.

Perhaps the Minister will explain the purpose of Clause 19, relating to the Royal National Lifeboat Institution, and say whether the RNLI approves it. I am sure that the idea is excellent, but what is the purpose of it? I should like to hear some explanation.

I now turn to what was not included from the Donaldson Report. A general comment would be: "information". There are many ways in which the report identifies the lack of information on ships; the quality of the mechanical equipment; the electrical equipment; the crews; the cargo, and what is discharged. The noble Lord, Lord Campbell of Croy, mentioned tagging. It is an extremely important method of knowing where a container or load is. I know of a new approach called "active tagging" which is being tested at the moment on some dozen ships around the world. One of the containers bearing such a tag got lost, and about a month later was found well into the middle of the Sahara in Upper Volta being used as a chicken-house. It is useful to be able to locate a container in that way and that example emphasises the importance of proper and adequate statistics, monitoring, records and assessment of where the risks are.

Lord Graham of Edmonton

It's a fowl situation!

Lord Berkeley

My Lords, I thank my noble friend.

The Advisory Committee on the Protection of the Sea has made strong representations that there need to be detailed surveys of shipping volumes and practice to enable appropriate recommendations for change to be made. That is a matter for the IMO. Crew competence, age, conditions, maintenance and identity of the flag state are also mentioned. However, I can see nothing in the Bill to deal with the various elements of "information".

I move to paragraph 22 of the Donaldson Report and the Government's response which concern non-accidental discharges of oily wastes, garbage and noxious liquid substances. Recommendation 22 suggests that the Government should, regard the adoption of the North Sea, the English Channel and the Irish Sea as special areas for oily waste as a long-term aim". The response states that the point is under consideration. Perhaps the Minister could tell us when the consideration will be complete.

I turn to Recommendation 59 of the Donaldson Report. Several noble Lords mentioned MEHRAs or marine environmental high risk areas. We support the principle and the recommendation that, the Department of Transport should monitor MEHRAs to see whether Masters' behaviour has changed". There is a half-page response stating that it is "under consideration" by the Government. I have a feeling that they do not wish to make it too complicated by putting extra lines on marine charts. If you cannot read a marine chart, you should not be driving a vessel anyway. The Government use that as a weak excuse for not putting a different coloured line to designate an extremely important recommendation from the Donaldson Report.

Recommendation 99 is for the Government to make an annual report to Parliament on the implementation of the Donaldson Report. The CAA and the railway inspectorate produce them. It would not be a marine inspectorate report but a progress review on an extremely important accident report by the noble and learned Lord, Lord Donaldson. The Minister kindly told us that there was a report in the Library. I could not find it but, as usual, our Library did so and it was delivered to us late in the day. We have not had a chance to study it because it is 60 pages long. I thank the Minister for at least telling us about it, although it was too late for the debate. May we expect an annual report on progress?

In conclusion, we welcome the Government bringing forward the legislation. Information, monitoring and enforcement will be the key to its success. From the Minister's opening remarks, it appeared that he is adopting an open mind on some details in the Bill. That was my impression and I therefore look forward to a positive discussion in the Committee stage that will follow soon.

6.33 p.m.

Viscount Goschen

My Lords, I feel sure that we shall have a positive discussion in future stages of the Bill. At this point I wish to say how much I enjoyed listening to the noble Lord, Lord Berkeley, winding up this incredibly interesting debate for the Opposition. I understand that it is the first time he has performed the task from the Opposition Front Bench so he has our congratulations. We have had an interesting debate and it has again shown the level of expertise contained within your Lordships' House, particularly on all matters maritime.

My noble friend Lord Boyd-Carpenter commented that the Bill might be described as a "rag-bag" of various measures. That would be a difficult assertion to contradict. The number of measures in the Bill is large and the provisions are wide and varied.

Lord Boyd-Carpenter

My Lords, perhaps my noble friend will allow me to intervene. I did not make that comment. I quoted a remark made by the noble and learned Lord, Lord Hailsham.

Viscount Goschen

My Lords, I stand corrected. With two such notable neighbours on the Privy Council Benches, it is important for me not to confuse their remarks by attributing one to the other. No doubt my noble friend endorsed the remark. Suffice it to say that the Bill examines a wide variety of areas of shipping policy all addressed to producing a safer and more pollution-free environment.

The first point is that shipping is an important business in the United Kingdom. We are an island nation and, as we heard, 95 per cent. or thereabouts of our goods arrive and depart by sea. It is therefore of key economic importance to the competitiveness of industry to have and be served by a strong shipping sector.

There was little in the speech of the noble Lord, Lord Clinton-Davis, with which I disagree, but we must be careful about talking down the shipping industry in the United Kingdom. It has proved itself to be highly competitive. We are world leaders in a number of sectors. We should consider the container sector, the crew sector, the ferry sector; and there is a wide variety of expertise in high-tech shipping in the ports industry here. We do very well. Of course, we recognise changing world circumstances and the tendency towards flagging out, but that does not alter the fact that a great deal of effort is put in by the United Kingdom shipping industry, which is often represented by the Chamber of Shipping, promoting the industry and recognising its ability to compete.

As was pointed out by the noble Lords, Lord Murray of Epping Forest and Lord Clinton-Davis, there are a number of unfair subsidies faced by British shipping. To go into the wider arena, one area of our policy must be that in our response to Commission documents when we are discussing shipping in Europe we must stand firm against unfair state subsidies.

The other area in which there can be significant unfairness—and one searches for an expression other than "level playing field", but I believe we understand what that means in the circumstances—is over sub-standard shipping. That is why the Government put so much effort into port state control and working within the International Maritime Organization to attempt to level the unfair advantage. First, there are the safety and anti-pollution benefits; and, secondly, there is the competitive angle.

At the beginning of my remarks I wish to endorse what was said by my noble friend Lord Caithness: one cannot legislate against accidents. But we all realise that we must put into place the best framework that we can to try to prevent accidents and pollution where possible. However, I certainly endorse what my noble friend said about the impossibility of legislating against accidents.

To conclude my introduction to the wider issues of shipping, which were dwelt on at length by the noble Lords, Lord Clinton-Davis and Lord Murray, we do not believe in following some of our European neighbours into an ever-spiralling level of state subsidies. We believe we should keep up the pressure on sub-standard shipping through port state control, by putting funding into training and by raising the number of cadets coming into the industry. The schemes that we have had—the Government's assistance for training schemes and the development of the certificated seafarers scheme—have been a great success. That targeting has produced benefits in terms of the number of cadets coming into the industry from the low point in the mid-1980s. We have also sought to deregulate and remove any reasons that shipowners might have to flag out, but keeping our tight safety regime.

The noble Lord, Lord Clinton-Davis, asked about the United Nations Convention on the Law of the Sea. The Government consider that the long-term interests of the UK will be best served by accession to the United Nations' convention. The timing of our accession remains under review. A number of uncertainties with regard to fisheries and related issues mean that now is not an appropriate time to accede.

The pollution exclusion zone was established by order earlier this year. It affords us the means to provide full protection within the zone. That was one of the noble Lord's associated points. The international convention and the Law of the Sea Convention both confirm the right of coastal states to take measures beyond the territorial sea following a shipping casualty to protect the coastline from a serious threat of pollution. In those circumstances, therefore, a temporary exclusion zone established under the power provided by Clause 1 would be binding on all ships, UK or foreign. In all other cases, an exclusion zone beyond territorial waters would be binding on UK ships only.

The provisions of the Bill and UK powers are not affected by the fact that the UK is not yet a party to the Law of the Sea Convention. The terms of the convention are widely regarded as customary and international law.

The noble Lord, Lord Clinton-Davis, and a number of other noble Lords, including the noble Lord, Lord Berkeley, questioned the name of the klondykers. It just appears to have happened. Presumably there is something of a gold rush fever about heading for transhipment licences. In that connection, the noble Lord, Lord Clinton-Davis, asked why insurance is not a prescribed requirement for holding a licence. Clause 11 provides for transhipment activities to be suspended if insurance requirements are not met. I hope that that will meet his point.

When Clause 15 is enacted, we shall first look at its application to klondykers. Certainly, there have been considerable problems with uninsured klondykers, including a number of the vessels in the area around the Shetland Islands, to which the noble Lord, Lord Beaumont, alluded.

The noble Lord, Lord Clinton-Davis, asked why Recommendation 102 on the definition of a port had not been implemented. The purpose of the recommendation was to enable detention in a port but the Bill goes wider. The amendments made in Schedule 1, in particular to Sections 95 and 284 of the Merchant Shipping Act, allow detention anywhere in our territorial waters. By that means the Bill goes considerably beyond what was recommended.

The noble Lord, Lord Perry, talked at some length about port state control, which we clearly believe is a very important factor in our ability to control substandard shipping. He felt that there was a tendency to target good ships. That is not the case. Of course we shall still inspect some good ships, but the clear emphasis must be on seeking out those which are substandard. Our inspectors are required to make professional judgments and commercial matters would not enter into their decisions on the actions that must be taken when they find a substandard ship. So the policy is to target vessels and that means making the best use of the port state control resources at our disposal.

The noble and learned Lord, Lord Donaldson, mentioned a number of points with regard to the intervention powers. As we heard, under Section 137 of the Merchant Shipping Act 1995 the Secretary of State has overriding authority to direct operations following a shipping casualty if it is necessary to minimise pollution. The powers of the Secretary of State in relation to marine pollution are exercised by the marine pollution control unit of the Coastguard Agency. As stated in the national contingency plan, the MPCU's normal approach to a marine emergency is to consult the owner, master, salvor and insurer of the ship in order to agree the course of action to be pursued. In most cases there will not be cause to use the Secretary of State's statutory powers of intervention; but, rather like the office boy and the boss, to which the noble and learned Lord alluded, they are there as a powerful reserve. We must also take into consideration the speed at which consultation can take place and so forth. Nonetheless, the intervention powers are there. They are extremely powerful.

I listened carefully to what the noble and learned Lord said about what he considered to be two omissions from the ability of the Secretary of State to direct. As we heard, the Dangerous Vessels Act 1985 gives harbour masters the power to exclude dangerous vessels. However, the Secretary of State can countermand the direction of the harbour master if he considers that it is necessary to provide a ship with a safe haven. Intervention powers can also be used to override a harbour master's power if the Secretary of State considers that it is necessary to prevent pollution. Nonetheless, I shall certainly consider very carefully the noble and learned Lord's suggestion that even with those powers there is a gap. We shall consider between now and another stage whether there is a gap and whether it can be plugged. I welcome that suggestion from the noble and learned Lord.

Much the same is true about the question of cargo interests. The noble and learned Lord made a proposal to the effect that the Secretary of State's intervention powers should be extended to enable directions to be given to cargo interests. That met with considerable interest around the House. I certainly agree that it needs to be given further thought, just with the proviso that we need to guard against any possible conflict between the proposed power and current international law. But, again, it is certainly worth considering.

On the subject of insurance, the noble and learned Lord evinced concern that if Clause 15 were enacted as currently drafted, shipowners could have insurance documentation with no substantive backing—just a paper policy with nothing behind it. The intention behind Clause 15 is to enable the Secretary of State to specify the types of insurance or other security that would be acceptable. But we shall look to see how we could provide for effective—I stress that word—insurance, addressing the point about dubious contracts, without trying to do the impossible, which would be to try to become the world's policeman on the matter. That clearly is not something we could do. But, again, we shall consider the problem very carefully.

Lord Clinton-Davis

My Lords, I am much obliged to the noble Viscount for giving way. He is giving a very positive response to the debate and I am sure the whole House appreciates it. With regard to the question of insurance, which is a very basic issue, does he propose, in the light of this debate and prior to the Committee stage, to enter into further consultations with experts on this issue? I feel that it is tremendously important.

Viscount Goschen

My Lords, experts via your Lordships' House, and indeed Members of this House are experts on this matter as well, have given opinions. But we would welcome receiving other opinions. I am sure that this is something that will be discussed in considerable detail at Committee stage, which I understand is to take place using the Moses Room procedure. The Government are very grateful to the House that that has been proposed. Nonetheless, we shall certainly be open to consideration of that matter.

The level of fines was discussed by my noble friends Lord Campbell of Croy and Lord Boyd-Carpenter. As has been widely acknowledged, it is not appropriate for the Government to tell magistrates the level of fines that they should impose, beyond setting the maximum. It is for the courts to determine the appropriate penalty for each individual pollution offence, having considered all the relevant information. My noble friends recognised that point.

I believe that it was my noble friend Lord Caithness who asked whether we would promulgate information on the subject. We shall provide information on the aims of government policy on marine pollution. We shall write to the Magistrates' Association to explain why we have decided that increases in the maximum fines are needed. The proposed increases have already been drawn to the attention of the working group on the enforcement of financial penalties.

The noble Lord, Lord Chorley, described the work of the National Trust and its responsibilities, voicing his concerns at maritime pollution. He spoke briefly on the "Sea Empress" incident. Those issues have been considerably rehearsed but there are some important points that I should like to take up, not at this point but perhaps at a later stage of the Bill or in another forum, where we can talk at greater length about the specific "Sea Empress" issue.

The substantial clean-up work following the "Sea Empress" incident has been completed. However, recent storms resulted in some oil reflecting dramatic and unexpected movements of sand on beaches. Oil has been uncovered and recovered. It came ashore at Tenby and was cleaned up as it did so. There are now four people in a single hit squad and three engaged on beach walking. At the peak of activity, around 220 people were engaged in clean-up operations, though the total number involved was very much higher than that. While it is considered that the clean-up operations have gone well, their effectiveness will be considered by the committee established by my right honourable friend the Secretary of State for Wales to see what are the environmental implications of the incident.

Comment was made by a number of noble Lords on compensation. We should recognise the valuable work done by the P & I Club and the IOPC Fund in reacting as quickly and efficiently as they could. However, I recognise that there are anxieties in relation to the level of compensation and the agreement or otherwise of some claims. The position is that £5 million has been paid to date in compensation, mainly to fishermen. It is too early to assess the total financial effect of the incident. The 75 per cent. limit on compensation payments remains but we hope it will be lifted at the next meeting of the international fund's executive committee. However, that is a matter for the members of the committee. In the meantime, arrangements for the payment of additional moneys in cases of genuine financial hardship remain in place.

The noble Lord, Lord Chorley, commented specifically on compensation for financial losses with regard to birds and general amenity. I can advise him that the IOPC Fund provides for reasonable measures to restore the natural environment following an oil spill and the proposed HNS Convention about which we have heard will do the same. The IOPC Fund also provides compensation for the costs of bodies such as the RSPCA to clean oiled birds. We do not subscribe to the notion of punitive damages per se as applies in the USA oil pollution Act of 1990.

The noble Lords, Lord Chorley and Lord Beaumont of Whitley, among others, discussed the issue of marine environmental high risk areas. Concern was expressed that the Bill contained no specific provisions regarding their establishment. We do not believe that such provisions are necessary as we consider that we already possess adequate powers to declare an area as high risk. However, any interference with or restriction of rights of innocent or transit passage would have to be submitted to and approved by the International Maritime Organization.

I turn to what has perhaps been the uniquely controversial part of the Bill; that is, the provisions with regard to charging and in particular with relation to the General Lighthouse Fund and any changes to it. On the wider point of charging, I understand the anxieties put forward by the shipping and other industries affected by the costs imposed concerning our national competitiveness. I seek to re-emphasise that our preferred approach is to react to international agreements and to take forward our charging proposals on that basis.

More specific questions were raised with regard to the General Lighthouse Fund itself. I listened carefully to what the noble Lords, Lord Greenway and Lord Cooke of Islandreagh, and the noble and learned Lord, Lord Simon of Glaisdale, had to say on the subject. Ministers before me have quaked in their boots upon hearing the noble and learned Lord, Lord Simon, on the subject of Henry VIII clauses. I hope the House will tolerate my speaking in some detail on the thinking behind these provisions, though I feel sure that even with the no doubt eminently satisfactory explanation that I shall attempt to provide there will be further questions which I hope we will be able to address further at a later stage.

The Bill contains a proposal in Schedule 2, paragraphs 3 and 12, which provides for contingent powers to amend light dues and the consequent operation of the General Lighthouse Fund. Those provisions are explicitly contingent on other events, which I shall set out. They were not included in any detail in the consultation document, mainly because the relationship between the GLF and any fund established to meet the costs of a marine emergency had not been fully evaluated at that time. However, there was reference to light dues in the February 1996 consultation document. I acknowledged before and am happy to do so again that it would appear that communication was not adequately taken forward in terms of fully explaining the Government's plans and for that I apologise.

The Government believe that it would have been unwise to contemplate the creation of new arrangements for funding maritime services without also considering the potential effects on the existing GLF. Including contingent proposals for the GLF in the Bill raised some questions in regard to the Government's intentions, many of which we heard this evening. I contend that ignoring the GLF would have been an unsatisfactory approach.

The current initiative within Europe to develop a "user pays" principle in regard to the funding of maritime services carries full government support. I was urged by at least one noble Lord to reinforce our commitment to see more development within Europe towards the application of "user pays" and I can more than happily re-emphasise that at this Dispatch Box. Indeed, we raised the issue at the Council of Transport Ministers in Luxembourg at the beginning of October, arguing that a system of funding and charging ought to be developed. Such a system may require changes to the GLF so as to integrate current UK arrangements into a broader system. The nature of any European arrangements has not yet been settled but it seemed sensible to make provision for that on a contingent basis.

I offer a further assurance that nothing in the Bill changes the statutory position of the responsibilities of the three general lighthouse authorities to provide aids to navigation. Any possible change in their role is in connection with light dues and that is purely a consequential development of the contingent proposal in Schedule 2 to amend or replace light dues. I am advised that the provision at Schedule 2, paragraph 5, is narrowly drawn to deal only with the precise function of collecting light dues.

In summary, the proposals in the Bill with relation to the GLF are not based on any proposal to reorganise the three authorities as some people—though not in the course of tonight's debate—have said. Proposals deal with the possible implications for the General Lighthouse Fund and the introduction of a more broadly-based funding system for maritime services. Such a system does not yet exist but it seems sensible to make contingent provision for it. There is no provision for a funded pension scheme which would cost a considerable amount to create. Therefore, raiding the GLF, as has been put forward as being the Government's intention, would be a significant cost on the Exchequer because of the large liabilities attached to it that have to be met.

I hope that those remarks about the funding arrangements with particular regard to the GLF will have given some comfort to noble Lords who are understandably concerned about that. Nonetheless, I certainly undertake to read extremely carefully what has been said about these matters. When we come to future stages of the Bill, I am sure that they will be heavily debated.

I am well aware of the clock and that I am going on at some length this evening. I hope that the House will tolerate that. The noble Lord, Lord Murray, made a remark about the Liberian flag. It is often seen to be an inadequate flag, but we certainly wish that many other flags achieved and maintained the same standards. It is commonly, and erroneously, said to be a very poor flag.

I have trespassed considerably on the patience of the House in giving such a long response. Nonetheless, I hope that I have been able to address at least a number of the concerns that have been put forward.

Lord Clinton-Davis

My Lords, will the noble Viscount accept from us that we have not only tolerated it well, but we welcome the fact that he has dealt with the matter at length and answered many of the points raised by noble Lords, or at least given the Government's version? We do not believe that that was wrong on his part. He has done the House proud tonight.

Viscount Goschen

My Lords, I am grateful for those words. It is kind of the noble Lord to say so.

There are a couple of other points that I was asked. One referred to the RNLI. I can assure the noble Lord, Lord Berkeley, that the request came from the RNLI, with its full support.

I believe that this is an important Bill. The provisions have been soundly and widely welcomed this evening. There is still some detailed work to be done and we look forward to that.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

House adjourned at two minutes past seven o'clock.