Merchant Shipping (Civil Liability Convention) Bill & Merchant Shipping (International Oil Pollution Compensation Fund Bill): adoption

NCOP Public Services

08 October 2013
Chairperson: Mr M Sibande (ANC, Mpumalanga)
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Meeting Summary

The Department of Transport gave a presentation on the Merchant Shipping (Civil Liability) Bill and the Merchant Shipping (International Oil Pollution Compensation Fund) Bill and requested the Committee to consider and approve them. The Committee raised concern that the Bills could not be adopted at their first introduction, and some Members proposed that the Committee should be given sufficient time to consider the Bills before it could approve them.

The Department presented the Bills and explained the importance of adopting them.  The Committee was informed that the Bills were important because they would deal with the question of liability and compensation for loss or damage. The state would be relieved from incurring liability, as the Compensation Fund would be established.

The Committee was concerned with the manner in which the Compensation Fund would operate and the fact that there had been no extensive public consultation.  It expressed concerns about the lodging of complaints, the endorsement of the Bills by companies without comments, and the role of the State.

Despite their concerns, the Committee adopted both Bills.

Meeting report

Adv Adam Masombuka, Chief Director: Legal Services, informed the Committee that the Deputy Director-General had sent an apology, owing due to other important commitments in the Department.  He also apologised on behalf of Ms Nosipo Sobekwa, Chief Director: Maritime Transport Regulation, who had arrived at the Cape Town airport, only to discover that she had left her purse containing ID and other important documents behind, and had had to return to Pretoria.

Mr Pilate Gwebu, Committee Secretary, informed the Chairperson that Ms L Mabija (ANC, Limpopo) and Ms R Rasmeni (ANC, North West), had sent their apologies.

Briefing by Department of Transport
Adv Masombuka informed the Committee that the briefing concerned two Bills -- the Merchant Shipping Civil Liability and the Merchant Shipping International Oil Pollution Compensation Funds Bills.  These twin Bills had been presented to the Portfolio Committee which had ultimately approved them under Section 231(2) of the Constitution, subject to some proposed changes. The original Bills had been amended in accordance with the Portfolio Committee’s suggestions and would be presented to it for consideration and adoption. He briefed the Committee on the substance of the Bills and drew their attention to the changes that had been effected. He first presented the Merchant Shipping (Civil Liability Convention) Bill [20B- 2013] before turning to the Merchant Shipping (International Oil Pollution Compensation) Bill [B19-2013].

Merchant Shipping (Civil Liability Convention) Bill [20B- 2013]
Adv Masombuka advised the Committee that the Bill sought to enact the international Maritime Organisation protocol of 1992, to amend the International Convention on Civil Liability for Oil Pollution Damage of 29 November 1969 (the Civil Liability Convention) into law. It formed part of a package of measures designed to give effect to the Republic’s obligations under the Civil Liability Convention and the International Convention on the Establishment Fund for Compensation for Oil Pollution Damage, 1971 (the Fund Convention). The Civil Liability Convention had been adopted under the auspices of the International Maritime Organisation (IMO). It dealt with the question of liability and compensation for loss or damage caused by contamination resulting from the escape or discharge of oil from tankers (i.e. ships constructed or adapted for the carriage of oil in bulk as cargo).  Under the Civil Liability Convention, claimants were entitled to compensation from the registered ship-owner (or the provider(s) of financial security for the ship-owner’s liability) for pollution damage suffered in the territory (including territorial sea) or exclusive economic zone of a contracting state.

Adv Masombuka indicated that amendments had been made to Clauses 1, 4, 7, 8, 17, 18, 20, and 21 of the original Bill. 

Adv Masombuka said that the Bill had first been published on 15 April 2009 in Government Gazette No. 32103 for public comment. The Department had not received any comments. Only the Maritime Law Association of South Africa had submitted comments and these comments had been considered. The Department had received a letter from the Maritime Law Association of South Africa expressing its satisfaction with the Bill. The Department had consulted extensively with the National Treasury from July 2009 to October 2012. A notice to introduce the Bill had been published in the Government Gazette No. 36561 of 13 June 2013. He emphasised that there would be no financial implications for the state and that the Bill would guarantee financial security for liability, and compensation, for loss or damage caused by contamination resulting from the escape or discharge of persistent oil from oil tankers. He explained that the oil companies would benefit enormously from this piece of legislation if it was passed, because it would introduce a form of financial insurance.

Adv Masombuka concluded by saying that the State Law Advisors and the Department were of the opinion that these Bills ought to be dealt with in accordance with the procedure established by Section 75 of the Constitution since they contained no provisions to which the procedure set out in Sections 74 or 76 of the Constitution applied.  Moreover, both the state law advisors and the Department were of the opinion that it was not necessary to refer these twin Bills to the National House of Traditional Leaders. He thanked the Committee for their patience and time.

The Chairperson called on Members of the Committee to interact with the Department’s delegates and to seek clarification on any issues that were not clear to them.

Mr Z Mlenzana (COPE, Eastern Cape) asked whether this was first time these twin Bills had been introduced to the Committee, and indicated that the question was directed to the Chairperson or the secretary of the Committee. With reference to the financial insurance, he asked what could be the benefit of the Bill, particularly towards the people concerned, if there were no financial implications. He sought further clarification on its implementation.

Mr M Jacobs (ANC, Free State) said that he did not remember the Department presenting the two Bills to the Committee in their original form. He pointed out that there was a need to move away from the perception that the Committee was aware of the Bills. With reference to the oil companies’ happiness, he was of the opinion that the Bills did not efficiently and effectively regulate the matters related to civil liability or any matter incidental to it. The Department should raise an eyebrow if the oil companies were happy with the Bills, instead of commenting critically on them.

Ms M Themba (ANC, Mpumalanga) said that the Committee had been placed in a difficult situation because the Committee had not been introduced to the Bills beforehand. As they did not know about the original Bills, it was difficult to know the changes that had been made. In the presentation, the Department could have highlighted at least the amendments so that Members could easily notice the amended part of a particular clause. 

The Chairperson said that the Department should elaborate further on the issue concerning the response received from public in terms of public participation. He said that the issues of publication and public participation could not be taken lightly. He further requested clarification on the feelings of stakeholders towards the Bills’ introduction of property insurance, as well as the notion of “no financial implication.”

Adv Masombuka explained that if the Bill was not turned into law, there would be a huge financial implications fot the state, because there would be no money to exonerate liabilities.  The state normally used national revenue to exonerate liabilities. As regards the public responses to the Bills, he indicated that the Bill had not drawn attention of public at large, but only people who were concerned with it. Stakeholders were happy with the fact that it introduced property insurance.

As regards highlighting the amended parts in some clauses, Adv Masombuku said that this could be done, to highlight those parts where an insertions or substitutions had been made. He accepted that it was the first time that the twin Bills had been presented to the Committee

Mr Sipho Mbatha, Head: Maritime Legislation, Department of Transport, explained that the first legislation regulating liabilities had been adopted in 1969 and the second legislation had been passed in 2004.

Mr Mlenzana sought clarification regarding the effectiveness of the Bill. He said that the Bill mentioned the Prince Edward Islands, and wanted to know if the Department had physically visited the island.

Ms Themba supported Mlenzani’s view concerning visits to the island.

Adv Masombuka explained that there was a section in the Department that could elaborate on the issue of Prince Edward Islands, because it was the one that provided reports on islands. Of course, it visited the islands in question.

Mr Mbatha further explained that the islands were not inhabited and were just used for research.

The Chairperson said that Mlenzana’s suggestion to visit the islands should be regarded merely as a comment.

The Chairperson asked whether the Committee agreed with the Department, and if there was any objection to the Bill.  Members said that they were happy with Bill.  The Chairperson said the Committee should scrutinise it clause by clause, specifically the amended clauses, to ensure there were no objections and that the Committee was satisfied by any further clarification it had sought.

Mr Mlenzana, however, cautioned the Department that it should in the future not request the Committee to adopt a Bill which had previously not been introduced to the Committee.

Merchant Shipping (international Oil Pollution Compensation Fund) Bill [19B-2013]
The Chairperson called on Adv Masombuka to present the  Merchant Shipping (International Oil Pollution Compensation Fund) Bill [19B-2013].  He asked the Committee to guide him as to how Adv. Masombuka should proceed, because the Committee had expressed unhappiness with the procedure used at the first Bill presentation.
Mr Mlenzana suggested that they could use a document of the amended Bill, and then scrutinise the Bill clause by clause.

Ms Themba suggested that the Committee should consider looking at both documents (the original and the amended) so that they could establish the changes that had been made, as this would provide them with an understanding of the Bill. As a result, they would be in a good position to consider whether they should adopt the Bill or not, or come across something important that had escaped the Portfolio Committee.

Mr Jacobs supported Mlenzana’s view, and opposed Ms Themba’s proposal.

Mr K Sinclair (COPE, Northern Cape) supported Ms Themba’s view.  He said that looking at the documents in their entirety would make them become clearer and enable Members to make an informed decision.

The Chairperson advised the Committee that the Department first presented the Bill [19B-2013] and Adv Masombuka would be presenting the Bill [20B-2013]. He reminded the Committee that these twin Bills complemented each other and that was the reason why they were being simultaneously presented to the Committee.

Adv Masombuka explained that no fundamental changes had been made to the Bill.
He went through the Bill clause by clause. Members of the Committee were given time to consider each clause before taking a decision to adopt them or not. There were no objections raised, but there were requests for clarification.

Mr Jacobs asked clarification on the funds ownership, who could make a claim, whether the Oil Pollution Compensation Fund was national or international, and what would happen if an individual or a state could not pay or contribute.

The Chairperson sought clarification on public involvement, and asked why there were so many acronyms in the presentation.

Adv Masumbuka explained that the Department had received comments from Transnet, Shell and the South African Petroleum Industries Association (SAPIA), and the Department of Transport (DoT) had consulted extensively with the National Treasury. 

Adv Johannes Mokgatho, Director: Corporate Legal, explained that National Treasury had raised some concerns regarding the collection of funds and wanted to be part and parcel of the process. This had led to the introduction of the Fund Administrative Bill and to the making of some amendments to the Money Bill.  National Treasury wanted the South African Revenue Service (SARS) to be responsible of collecting funds from stakeholders.

Mr Mbatha explained that the Oil Pollution Compensation Fund would be based in the United Kingdom.  Members states could contribute levies to the Compensation Fund. If there was a claimant (an individual, a company, or a state member), they would have to lodge a complaint in London. Money would be paid, because the state was obligated to meet its international obligations. Since 2005, South Africa had been a party to the Convention, but it did not contribute because the Convention had not been converted into national law.

Mr Jacobs further asked whether the companies paid levies or whether it was the state’s responsibility to do so.

Mr Mbatha told the Committee that companies would contribute levies, but money could not be transferred without being accounted for. That was why SARS should be responsible for collecting money, which it would then transfer to the Compensation Fund.

The Chairperson asked the Committee if there was any objection to adopting the Bill. The Bill was unanimously adopted, because all of the Members agreed with each clause as they were presented to the Committee.

The Chairperson thanked the delegates and excused them.

The meeting was closed.


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