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Swire Shipping denies bucking clean up responsibilities

Swire Shipping denies bucking clean up responsibilities

Sydney: Swire Shipping, the operator of the Pacific Adventurer (pictured), yesterday rejected assertions that it is not prepared to meet its responsibilities following the fuel oil spill that resulted from the vessel's loss of containers during Cyclone Hamish.

The company insists that it is in discussions with the State and Federal Transport Ministers and has written to Premier Anna Bligh saying that it wishes to achieve a mutually acceptable solution in line with its commitment to the people of Queensland. It has requested an opportunity to meet her to discuss the matter.

In a statement on its website, Swire said, "From the beginning, the company has always promised to meet its full responsibilities under Australian law for the accident clean-up. The company has not stated it would cover all costs. All costs are still unknown and there is a limit to the amount of claims the company and its insurers can accept.

As the Queensland Government is aware, Australia is a party to the Convention on Limitation of Liability for Maritime Claims (the LLMC Convention), which limits the liability of a ship-owner for third party claims. In the case of the Pacific Adventurer, the Convention limits this liability to the equivalent of approximately A$14.5 million. The Federal Government Minister for Transport, the Hon Anthony Albanese MP, has reaffirmed the applicability of this limit since the Pacific Adventurer incident.

The ship's insurer has already provided financial security to the Government by a letter of undertaking for up to A$20 million, a level of security accepted by the Government because it understood that the LLMC Convention was applicable.

In addition, immediately following the oil spill, the company provided $2 million of assistance with the clean-up. Swire's oil pollution experts flew from the Middle East and the company imported specialist equipment, which was donated to the Government.

The reason for the LLMC Convention is to place an upper limit on ship-owners' potential liability for a fuel oil spill. If ship-owners faced unlimited liability for such spills, the additional cost of insurance would result in a significant increase in freight rates, which would have a negative impact on international trade. Australian exports and imports would have to carry this additional cost.

Any decision by Swire Shipping to offer compensation that is significantly above the limit determined by the LLMC Convention would risk becoming a precedent in international law.As a result, insurance premiums and freight rates could rise significantly.

Swire Shipping wishes to express its sincere regret to the people of Queensland for the oil spill.The company is committed to resolving the matter in a fair and equitable manner and remains ready to discuss it with the Premier of Queensland.'  [07/07/09]