House of Commons - European Scrutiny

Select Committee on European Scrutiny Eighteenth Report

SAFETY OF SEABORNE OIL TRADE

(21146)
7245/00
COM(00) 142

Commission Communication on the safety of the seaborne oil trade,
including:

(a) a draft Directive amending Directive 95/21/EC concerning the
enforcement, in respect of shipping using Community ports and sailing
in the waters under the jurisdiction of the Member States, of
international standards for ship safety, pollution prevention and
shipboard living and working conditions (port State control);

(b) a draft Directive amending Directive 94/57/EC on common rules
and standards for ship inspection and survey organisations and for the
relevant activities of maritime administrations; and

(c) a draft Regulation on the accelerated phasing-in of double hull or
equivalent design requirements for single hull oil tankers.

Legal base:	Article 80(2) EC; co-decision; qualified majority voting

Document originated:	21 March 2000
Forwarded to the Council:	24 March 2000
Deposited in Parliament:	19 April 2000
Department:	Environment, Transport and the Regions
Basis of consideration:	EM of 3 May 2000
Previous Committee Report:	None
To be discussed in Council:	June 2000
Committee's assessment:	Politically important
Committee's decision:	Cleared in respect of proposals (a) and (b). Proposal (c) not cleared. Further information requested

Background

5.1 The framework for international action on maritime safety is provided by the International Maritime Organisation (IMO). However, in more recent years, the Community has taken some actions in this area where IMO standards were lacking or deemed inadequate.

5.2 The Erika oil tanker disaster in December 1999 prompted the European Parliament and the Council to call on the Commission to review the maritime safety régime for oil tankers. The Erika was a 25 year old, Maltese registered, single hull oil tanker chartered by Total-Fina. It broke in two some 40 nautical miles off the southern tip of Brittany. More than 10,000 tonnes of the 30,000 tonnes of heavy fuel oil it was carrying were spilt. About 400 kilometres of coastline were polluted by the oil, causing serious damage to fauna, flora, fisheries and tourism, as well as potential public health consequences.

5.3 This was not the first accident of its kind in European Union waters. Earlier wrecks of oil tankers include Torrey Canyon, Olympic Bravery, Boehlen, Amoco Cadiz, Tanio, Aegean Sea and Braer.

5.4 Some 70% of the European Union's oil imports are transported along the Brittany coast and through the English Channel so these areas are particularly at risk. If such an accident were to occur in the Mediterranean, the effects would be equally disastrous.

The document

5.5 In his Explanatory Memorandum of 3 May 2000, the Parliamentary Under-Secretary of State at the Department of the Environment, Transport and the Regions (Mr Hill) summarises the three legislative measures as follows:

"Amendments to the Classification Societies Directive (94/57/EC) to monitor more strictly the organisations to which Member States already delegate power to inspect the quality of ships. The proposals will: harmonise by collective Community action the procedure under which the Societies are recognised, have their performance monitored or have recognition withdrawn; require a Society to maintain a good record on safety and pollution prevention as necessary condition of retaining recognition; make the Societies more liable in the event of negligence; require them to provide more information on the condition of vessels to port State control authorities and to receiving Societies when vessels move from one Society to another and to reinforce the maritime safety obligations of Member States as flag States; and

"The introduction of a Regulation to speed up in the Community (by comparison with the agreed international Convention dates) the replacement of single hull tankers with those having double hull or equivalent safety standards. The Regulation will also lower the size limit of ships affected to 600 tonnes deadweight. The deadlines and age-limits will be aligned with those in the US Oil Protection Act 1990 to prevent the "dumping" in Europe of single hull tankers banned from US waters from 2005. New double hull vessels will replace older single hull ships with the intention of giving better protection overall against the risk of accidental pollution."

5.6 A range of longer terms measures are set out, including, for example:

"— ensure efficient and uniform application of international safety rules through the creation of a European Maritime Safety Agency; and

"— improve the existing régime for liability and compensation by increasing the limits of the international régime, introducing a European compensation fund and introducing rules making parties liable for damage if they cause or contribute to oil pollution damage and deterrent sanctions on parties who cause or contribute to damage through gross negligence."

5.7 The Commission is also seeking a voluntary agreement with oil companies to establish principles which would make transporting oil less hazardous, for example, not to use vessels above 15 years of age unless safety has been proven through adequate inspection.

The Government's view

5.8 The Minister says:

"The UK shares the Commission's concerns to reduce pollution and safety risks. However, measures must be practicable, achievable quickly, avoid dislocating European oil supplies and distribution and avoid any jurisdictional conflict between the Community and the IMO. In our view the IMO remains the appropriate forum in which to develop international maritime safety and counter pollution standards, necessary as the business being regulated transcends the EU boundary."

5.9 As regards the three legislative proposals, the Minister says:

Port State control

"Arrangements for port State control are set by Directive 95/21/EC. Port States have an existing obligation to inspect 25% of foreign ships visiting each year but this simple quota system may not catch those vessels most in need of attention. The Commission propose to target Member State effort on problem types (such as elderly tankers) or on problem registers. It will also use the international right of port States to apply conditions for entry to port to secure greater advance data from ships before they arrive so as to target effort on vessels presenting the greater risks.

"This is a useful measure which picks up ideas which the UK has been developing since Lord Donaldson's report following the loss of the Braer. However the details will require careful consideration; and also the agreement of the non-EU States in the Paris Memorandum Group which covers the EU, Canada, Croatia, Norway, Poland and Russia.

"It is not proposed to change the nature or extent of port State control, but rather to target it more efficiently. Therefore, it is unlikely that this measure would involve any increase in the costs to business; indeed, compliant companies could gain from being subjected to less inspection effort as more is directed at operations which cut commercial and safety corners.

— Classification Societies

"These are private sector organisations to which flag States (including the UK) delegate some inspection functions. However, the Societies' main job is to supervise the construction and maintenance standard of ship's structure, acting for the ship's owner in relation to certification and insurance.

"Within the EU standards are regulated by Directive 94/75 but there has been fierce competition between Societies and performance has been variable. The Commission's proposal would increase external audit of the Societies' performance, including suspension or withdrawal of the right to operate within the EU. The Commission intends to take this power into its own hands, acting with an expert committee, rather than leaving it to uneven enforcement by Member States as at present.

"Insofar as it would level up standards among Societies, this measure is worth supporting, even though it would extend the Commission's influence. However, Member States will need to retain the right to select among the Societies which remain in good standing with audit for their own delegation purposes.

"The Societies which perform well will have nothing to fear from stricter external auditing. It is unlikely that the measures proposed would increase the cost to business of the Societies' operations.

— Single hull tankers

"The proposed Regulation on the accelerated phase out of single hull tankers would have direct effect following agreement. The Commission proposes to synchronise the withdrawal of single hull tankers with the existing US legislation (the Oil Protection Act 1990), rather than with the longer-term dates in the IMO Convention, to prevent elderly tankers being dumped in Europe. The deadlines in the Commission's proposal can be summarised as:

Type	Proposed deadline
Crude oil tankers 20,000 tonnes and oil product carriers 30,000 tonnes having no segregated ballast tanks in protective locations (SBT/PL)	2005
As above but with SBT/PL	28 years old or 2010 (whichever comes first)
Below size limits above and delivered before 6 July 1996	Age limit of 25 years for non-SBT/PL, 30 years for SBT/PL but end date of 2015

"The accelerated phase out is a controversial measure which, unlike the two amending Directives, does not distinguish between good and bad performance. A whole technology would be withdrawn by particular dates without regard to the records of particular ships or operators. Old tankers are not necessarily poor tankers; it is their maintenance and management which are likely to determine vulnerability to accident and pollution.

"Moreover, the proposed lower limit on ship size (600 tonnes deadweight) is too low. Not only does it go beyond what the IMO Convention requires but it also risks dislocating the distribution of oil products around the EU. It might even have the perverse effect of discouraging coastwise trade, a policy which the UK supports, in favour of land transport. The US proposals are framed in terms which, to some extent, spare their own coastwise trade from the effects of the accelerated phase out.

"The ports industry is also likely to object strongly to having its charging practices used in the way proposed by the Commission to distinguish between types of tanker. Many EU ports negotiate charges on a commercial basis rather than under Government direction. The difference in charges would have to be enormous to have a significant effect in deterring operators of single hull tankers from using a particular port.

"It seems likely that this proposal will have a significant economic impact. We could not agree to further progress on the measure in the absence of an urgent assessment of the economic consequences. Major questions remain outstanding about the speed with which replacement tankers can be built and where they will be constructed. A shortfall in the number of available tankers could pose a significant threat to oil imports to the EU as a whole.

"We are examining with the Commission the development of a proposal in the IMO to amend the existing Convention on the phasing out of single hull tankers; this could have a wider international effect than the EU legislation alone."

5.10 As regards the financial implications of the legislative proposals, the Minister says that the first two are unlikely to have any, and that the Government is pressing the Commission to produce a full assessment of the economic effects of its proposal for a regulation on accelerating the phasing out of single hull tankers.

Conclusion

5.11 This is an important package of proposals in an area of much public concern. We are glad to see that the Government supports the Commission's short term proposals to amend the existing Directive on port State control. It appears also that the Government supports the proposals for much stronger Community regulation and supervision of classification societies.

5.12 The proposal to phase out single hull tankers is obviously more controversial and problematic. We recognise that, apart from its effects on the industry, this proposal raises the issue of whether the Community (as distinct from the IMO) should make the rules for international traffic of this kind (though we note that US legislation to which the Minister refers (the Oil Protection Act 1990) set different and more rigorous standards than the IMO). The advantage of the adoption of rules by the IMO (setting world-wide standards for an international business) are obvious but where, as in this case, a major player has already acted unilaterally, the benefits of delaying actions at Community level in the expectation of eventual agreement in the IMO are not self evident. We recognise, however, that the Government is working to achieve an IMO proposal, amending the existing Convention on phasing out of single hull tankers. We note also the concern in the document that, unless some action is taken, the effect of the US laws is likely to be that older single hull tankers will increasingly be used in European waters.

5.13 The Government considers the proposed lower limit in ship size of 600 tonnes to be too low. We understand the concerns expressed about the possible practical effects of such a limit, but we ask the Minister to tell us why, from a safety perspective, he says this limit is too low and whether the safety record of such smaller vessels is demonstrably better than larger tankers.

5.14 We are content to clear the document in respect of:

the proposals for amending the existing Directives on post State control and classification societies;

the longer term proposals outlined on the basis that we shall consider these individually in due course; we shall examine with particular care any proposals for the creation of a liability fund, on strict liability for oil pollution damage and on sanctions for gross negligence.

5.15 We do not clear the document in respect of the proposed Regulation on the phasing out of single hull tankers. We ask the Minister to keep us in touch with developments and to give us an estimate of its economic effects. We would be glad to receive at the same time an estimate of the direct and indirect economic effects of disasters such as the Erika, as well as an answer to our question above on the proposed 600 tonne lower limit. We should also like to have an assessment of the prospects for the timely action by the IMO which might obviate the need for Community legislation, whilst also reducing the risk of "dumping" to which the Minister refers.