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Insurers warn shipowners over Australian pollution penalties

P&I Clubs are warning shipowners over large security demands being made by the Australian authorities for “relatively minor” pollution offences.

In advice to members the Standard P&I Club and Skuld warned over a recent case where the Australia Maritime Safety Authority (AMSA) demanded security of A$20.4m ($18.6m) for “what may be a relatively minor breach”.

Skuld described the Australian policy makers as having “a low (zero tolerance) for pollution of the sea”. Under Australian law AMSA can detain a vessel "clear grounds for believing that a pollution breach has occurred". The maximum fines payable for oil and oily water pollution A$3.4m for individuals and A$17m for corporations.

“AMSA has indicated that they must demand security in the maximum amount of all penalties that could be payable. This suggests that AMSA believe that they do not have discretion to request a lower amount of security for minor offences. This has far reaching ramifications for owners and their insurers,” Skuld warned.

Starndard Club had a similar warning and said: “Members trading in Australian waters should be aware of the risk of such security demands as it appears that AMSA are currently unwilling to apply any level of discretion under the legislation.”

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