The Response to the Iron Baron Oil Spill

Part A - Authority

Issue A1 Powers of Intervention, Legislation and Jurisdiction

Discussion

1. The roles and responsibilities of the many agencies involved in any shipping accident and in subsequent activities and responses are defined by agreed Administrative Arrangements supported by Commonwealth and State legislation.

2. Powers of intervention relate to the right of a State or the Commonwealth to direct a ship to take action to minimise the risk of damage to the marine environment. This may include State or Commonwealth agencies taking charge of the vessel or providing directions to the ship owner by notice.

3. The Commonwealth exercises its powers of intervention through the Protection of the Sea (Powers of Intervention) Act 1981. These powers relate to the high seas as well as to Australian Territorial waters, except where a State has its own intervention provisions relating to its own waters. Most intervention powers are vested with a Minister for Transport or by Ministerial delegation.

4. Under most marine-related legislation, if a State has complementary Acts in place, the Commonwealth has jurisdiction beyond three nautical miles seaward from the low water mark, with the state/territory having jurisdiction in the first three miles.

5. Tasmania has no legislation covering powers of intervention. It must rely on the cooperation of the Commonwealth Government to have appropriate action taken to minimise the risk of damage to the State's environment.

6. The Marine Act 1976 defines the roles and responsibilities of the Navigation and Survey Authority of Tasmania and of Marine Boards with regard to shipping and navigation safety in Tasmanian waters. It authorises the Harbour Master to direct shipping within the limits of a port. The Port of Launceston Authority (PLA), because it is also a Marine Board for the purposes of the Marine Act, has additional jurisdiction beyond port limits. This jurisdiction extends three nautical miles seaward from the low water mark between Cape Portland, south of Banks Strait and Badger Head east of Port Sorell.

7. The boundaries of the Port of Launceston lie south of a line joining Low Head, Hebe Reef Light and West Head. The Iron Baron grounded outside port limits (north of Hebe Reef light). For the Harbour Master to direct operational activities beyond the port limits but within the coastal jurisdiction of the Marine Board, it was necessary for the Port of Launceston Board to authorise the Harbour Master to act.

8. On 12 July, in order to clearly establish the situation regarding the vessel, the Australian Marine Safety Authority (AMSA), having first consulted with the National Plan State Committee, wrote to BHP advising them of the Commonwealth's powers of intervention. In its letter, AMSA sought information from BHP on the condition of the vessel, refloating arrangements, management of the vessel following refloating and intentions regarding cargo discharge, etc.

9. Following refloating, the PLA was initially not prepared to allow the Iron Baron to enter port unless and until certain requirements and assurances were given by BHP.

10. On 20 July 1995, while the ship was at anchor beyond port limits undergoing hull inspection and removal of oil, AMSA issued a notice to BHP and to United Salvage under the Commonwealth Protection of the Sea (Powers of Intervention) Act 1981. This notice related to an earlier proposal (following refloating of the Iron Baron) to transit Commonwealth waters to determine if the ship was in a suitable condition to enter the Port of Launceston. The notice required a number of conditions, primarily relating to advice on the vessel's condition and an assessment of oil remaining on board, to be met before the ship would be permitted to leave the anchorage.

11. On 24 July 1995 it was reported that the ship had sustained extensive underwater damage. The possibility of transferring the cargo of manganese ore to another vessel had been ruled out by all parties because this would have placed the hull of the Iron Baron under too much stress. Later that day, the PLA formally advised BHP that, for structural and pollution reasons, the vessel could not enter the port of Launceston.

12. On 26 July 1995 Harbour Master Black, using his authorised powers to direct shipping within the Marine Board of Launceston's jurisdiction, formally advised BHP that the Iron Baron posed an unacceptable threat to the environment and to navigation. Under the provisions of the Marine Act, he ordered the ship to be removed from the Marine Board jurisdiction as soon as AMSA's requirements of the notice of 20 July 1995 ceased to apply. AMSA lifted the notice on the same day and directed that future movements of the Iron Baron be in accordance with the Navigation Act 1912.

13. Under the Commonwealth Environment Protection (Sea Dumping) Act 1981, and following a request by BHP, the Environment Protection Agency (EPA), on 26 July, issued a permit allowing the laden vessel to be dumped north east of Flinders Island.

14. Under the provisions of the Tasmanian Pollution of Waters by Oil and Noxious Substances Act 1987 (POWBONS) the Minister for Environment is required to approve response arrangements as a 'Declared Plan' before they can be put into effect. The Act also requires the State Committee to appoint an On Scene Coordinator (OSC) for the spill. Both requirements were met.

Findings

15. The exercise of powers of intervention by the Commonwealth met the requirements of this incident. Tasmania could not have exercised such powers without Commonwealth cooperation. The legal extension of Commonwealth powers to within the limits of a State is not clear. Some States have their own powers of intervention under marine legislation. These are normally exercised by a Minister for Transport.

16. Response arrangements and identification of On Scene Coordinators need to be under appropriate Contingency Plans. The obtaining of Ministerial or State Committee approval could delay initial arrangements. In this particular incident the requirement for a Ministerially approved Declared Plan did not hamper the PLA from putting into place initial response arrangements.

17. The need for the Board of the PLA to authorise the Harbour Master to direct shipping outside port limits did not hamper the response.

Recommendation 1

To ensure an unambiguous identification of powers between States and Commonwealth, the Tasmanian Government and other States should review their future needs to exercise powers of intervention, either through State legislation or by seeking delegation from the Commonwealth Minister for Transport under Commonwealth legislation.

Recommendation 2

The Tasmanian Government should review pollution legislation with a view to removing the requirement for the Minister to approve an individual incident response plan and the requirement for the State Committee to appoint an On Scene Coordinator.

Recommendation 3

The Tasmanian Marine Boards should examine appropriate delegations/authorisations of navigation powers beyond port limits to allow immediate direction to be given in the event of an emergency.

Issue A2 State Government

Discussion

18. Involvement by the State Government in the Iron Baron incident was restricted to the Premier and the Minister for Environment and Land Management. The Minister for Environment and Land Management is responsible for the State Oil Pollution legislation and is the Minister responsible for the coordinating agency in the spill, the Department of Environment and Land Management. The Minister also has a responsibility to declare a plan for responding to an incident.

19. The Chairman of the State Marine Pollution Committee (SMPC) briefed the Minister on the incident on the evening that it occurred and on subsequent occasions (mainly when plans had to be declared for the incident response).

20. The Minister authorised the SMPC Chair to brief the Tasmanian Leader of the Opposition, Shadow Ministers and the Tasmanian Greens on the response.

21. The absence of written situation reports (SITREPS) from the planning team during the early days of the response created difficulties in terms of the information flow from the State Committee to both the Premier's Office and the Minister's Office. This was rectified after the first two days and a formalised information flow for the incident was developed between the Minister and the SMPC.

22. The Premier and the Minister for Environment and Land Management were fully apprised of the ramifications of the incident, as these became known.

23. Both the Premier and the Minister travelled to the scene of the incident on the first day and were briefed by senior BHP officials during the first week of the incident.

24. On several occasions, the Minister of Environment and Land Management attended the scene to obtain first-hand information and provide support to the response workers.

25. The separation achieved between the Response Planning Committee and the SMPC, in operational terms, was similarly achieved between the SMPC and the Minister responsible. The Minister was regularly briefed, but left management of the spill response in the hands of the SMPC and Response Planning Committee.

Findings

26. The separation of operational and political responsibility worked extremely well, reflecting the positive attitude of all parties in responding to the problem.

Issue A3 Commonwealth Government

Discussion

27. The National Plan to Combat Pollution of Sea by Oil (National Plan) is a unique Commonwealth/State arrangement that came into operation in October 1973. It represents a combined effort by the Commonwealth and State Governments, with assistance from the oil, salvage and shipping industries, to help provide a solution to the threat posed to the coastal environment by oil spills. At a Commonwealth level the National Plan is managed by the Australian Maritime Safety Authority (AMSA).

28. Funding of the National Plan is through a levy on commercial shipping entering Australian ports. The levy is paid to AMSA.

29. The Commonwealth/State National Plan Administrative Arrangements nominate 'lead agencies' for combating oil spills within harbours, in State waters and in Territorial waters and the high seas around Australia. In the case of the Iron Baron incident the 'lead agency' was the Port of Launceston Authority (PLA).

30. AMSA has the role of coordination, provision of technical advice, logistic and maintenance support, training, and equipment and materials procurement. In fulfilling the Commonwealth role, AMSA was mobilised within two hours of the grounding.

31. In addition to their own employees, AMSA arranged for the support and assistance of employees of other National Plan agencies, including maritime agencies from Queensland, New South Wales, Victoria, South Australia, and Western Australia.

32. Approval for the dumping of the Iron Baron off the continental shelf north east of Flinders Island was provided by the Commonwealth EPA, following consultation with relevant Commonwealth and State agencies about the site.

33. Commonwealth Minister Laurie Brereton MP was kept fully briefed by AMSA and visited the incident site on 12 July 1995.

34. Minister Brereton announced an inquiry under the Navigation Act 1912 to determine the cause of the grounding. Minister Brereton and Tasmanian Environment Minister John Cleary also announced a review to assess the response, under the National Plan arrangements, to the oil spill resulting from the grounding.

35. A number of Tasmanian agencies praised the assistance provided by the Commonwealth. Both the On Scene Coordinator (OSC), Charles Black, and the State Marine Pollution Committee (SMPC) Chairman, John Ramsay, commented on the value of the support and cooperation they were given by AMSA and the National Plan.

36. A number of representations to the Review commented favourably on the effectiveness of the Commonwealth response. However, three submissions called for a Royal Commission to replace the Review.

Findings

37. The response mounted by the Commonwealth was appropriate and in accord with the National Plan administrative arrangements. There was good cooperation between the three tiers of government - Commonwealth, State and Local.

38. Commonwealth assistance provided by AMSA was supportive, efficient and professional. At all times AMSA recognised that the incident demanded a Tasmanian lead response with strong Commonwealth support.

Issue A4 Ship Owner/Protection and Indemnity Club

Discussion

39. BHP owns and charters an extensive fleet of international and coastal tankers, bulk carriers, general cargo and container ships. Iron Baron was on demise (bareboat) charter to BHP. The ship was registered in Australia and was required to comply with a number of Commonwealth statutes covering, amongst other things, the safety and environmental requirements of the Commonwealth Navigation Act 1912 and the Protection of Sea (Prevention of Pollution from Ships) Act 1983.

40. Protection and Indemnity (P&I) Clubs are third party insurers which provide public liability cover for a ship owner, including recovery of clean-up costs associated with a ship-sourced spill. Reimbursement of clean-up costs is on the basis that they have been reasonably incurred. The Iron Baron P&I Club insurer dispatched a UK representative, Dr Brian Dicks of the International Tanker Owners Pollution Federation Ltd London, to observe and advise the Club on the pollution response.

41. Settlement of insurance claims are a matter between BHP and their insurers.

Findings

42. The arrangements with the P&I Club worked well. Their representative was a valued member of the response team.

Issue A5 Salvage

Discussion

43. Lloyds Open Form 1995 (LOF95) requires salvors to use their best endeavours to salve the vessel, take it to a nominated place and, while performing the salvage, prevent or minimise damage to the environment.

44. LOF95 defines damage to the environment as "substantial physical damage to human health or to marine life or resources in the coastal or inland waters or areas adjacent thereto, caused by pollution, contamination, fire, explosion or similar major incidents".

45. The owner is required under the provisions of LOF95 to cooperate fully with the salvor to obtain entry to a nominated place.

46. United Salvage entered an LOF95 salvage agreement with BHP on 10 July 1995, with the nominated place being the Port of Launceston. From discussions held with BHP, United Salvage, PLA and the AMSA, the Review Group determined that the initial intent was for the vessel to enter the Port of Launceston.

47. An Owner can terminate LOF95 by giving reasonable notice in writing. At 1455 hours on 26 July 1995 the effective owners, BHP, terminated the LOF95 agreement with United Salvage. United Salvage maintain that they were not given reasonable notice.

48. During the currency of the LOF95, the Salvage Master from United Salvage had control of the vessel. On termination of the LOF95 that control reverted to the effective owner. However, in this instance, United Salvage were requested (and agreed) to maintain control of the vessel until the Tow Hire Agreement was signed on 27 July 1995. This agreement engaged United Salvage to tow and dump the vessel.

49. United Salvage experienced difficulties in determining appropriate reporting lines with BHP.

50. It was clear from submissions that the role of salvors is misunderstood in many quarters. United Salvage agree with this and, through meetings with State Pollution Committees and other bodies, are taking positive steps to foster a better understanding of the relationship between the salvage industry and statutory bodies.

51. A number of submissions questioned the conflict of interest that may have existed between the commercial obligations and interests of the salvor and its obligation to protect the environment.

52. United Salvage have stated that a conflict of interest does not exist. They state that salvors are obligated to use their 'best endeavours' to prevent or minimise damage to the environment under Clause 1(a)(ii) of LOF95. Importantly, salvors are remunerated for doing so. Any failure to use such 'best endeavours' would open the way for a case to be put to an arbitrator against the interest of the salvor. Any negligence in this area of operation would have the potential to open the way to heavy commercial penalties on the salvor.

53. As the question of salvage award and performance will be subject to arbitration it is not considered appropriate to comment extensively or make recommendations here in relation to this issue.

Findings

54. There was a number of authority/jurisdictional areas of uncertainty expressed by a number of respondents to the Review in relation to the salvage operations. These were probably caused by a lack of understanding of LOF95 agreements and of the Salvage Convention.

55. Because, during the incident, official priorities for the vessel changed from 'salvage and enter port' to 'tow and dump' there was some confusion in the minds of respondents.


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