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Lord Berkeley: My Lords, I shall also speak to Amendment 2 for the convenience of the Committee. Before I start on the substance of the amendment, I record my thanks to the Minister and his officials for a very useful meeting yesterday. I look forward to continuing discussions and this debate today.
I remind the Committee that I am a harbour commissioner of the port of Fowey in Cornwall. At Second Reading, we had a good debate. I said that I supported the Bill in principle; I think it is a very good Bill. I want to focus on one issue, that of wreck recovery: who does it and who pays for it. As the Bill says, as the wreck occurs, it is generally marked by a harbour authority or a GLA. However, under the Bill, dealing with the wreck is now the responsibility of the Government, who can instruct-and I mean instruct-the harbour authority, conservation authority or GLA. The idea is that the costs incurred in doing it can be recovered from the ship's owners or insurance. That also seems fine and complies with the wreck conventions that the Bill is designed to incorporate into legislation.
We are told by the Minister that all ships will be insured because the insurance documents will be inspected at UK ports. The first question one has to ask is how robust the arrangements for this inspection are. The noble Lord, Lord Bradshaw, who sadly cannot be with us today, asked a Written Question to which the Answer from the Minister stated that in 2010 there were 12 instances where an inspection of the insurance documents revealed a deficiency in them.
Rather more serious is a recent statement by Vice-Admiral Massey, the chief executive of the Marine and Coastguard Agency, to an all-party parliamentary group, as reported in Lloyd's List of 28 March. He said that the agency is,
particularly at night and at weekends. Therefore, one could argue that there is a certain lack of robustness about the inspections, which could mean that some ships which are not insured will not be caught by these inspections. There is also the question of the ships that go round our coasts but do not enter our ports, which will not have to show their certificates to anyone.
On Second Reading, the Minister said that all ships will be insured and therefore the costs can be recovered, but what happens if the harbour authority or GLAs cannot recover them? As the Bill stands, they cannot refuse an instruction from the Secretary of State. The trouble is that the instruction is not accompanied by a commitment to fund a problematic wreck removal.
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We have heard that Trinity House supports the Bill in its entirety, but I argue that it would do so as its job is to mark wrecks. That is part of its work, and it does it very well. However, if it were called on to manage and undertake a major salvage operation, the problem is that it would probably have to pass on the costs of doing so to ships in the form of light dues, because that is the way Trinity House is financed. Trinity House could even argue that-I hope that it would not-it needed to buy bigger and larger ships to undertake this new responsibility, but I trust that it would not do that. The Chamber of Shipping in particular is rightly concerned that the measure puts an extra cost on insured ships that comply with the regulations, and that some of that cost is to cover ships which do not comply, and have not complied, with the regulations. That body has asked whether the Crown will indemnify the General Lighthouse Fund against costs that cannot be recovered, given that the costs arise as a direct consequence of the Government's decision to sign the convention. We could discuss that for a long time.
Finally, the Minister for Shipping, Mike Penning MP, said that the Bill enshrines the principle that the polluter pays. He is wrong, because while it certainly makes the polluter pay, in making the GLF pay, it achieves the opposite effect, because the owner of the uninsured wreck will not have contributed to the GLF, but is being saved.
These amendments would remove the requirements for the harbour authorities, conservation authorities and GLAs to comply with a Secretary of State's
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There is a strong argument for the Government to accept these amendments on the basis that it is a more equitable arrangement for the very few occasions when somehow the costs of dealing with a wreck cannot be recovered from the insurers or the owners. If the Minister and the noble Baroness who has put her name to the Bill do not accept the amendments, it would be important for the Minister to provide some assurance that the Secretary of State will not direct GLAs, harbour authorities or conservation authorities to remove a wreck, unless that can be carried out using their normal vessels and personnel as part of their normal business. That would give comfort to the harbour authorities in particular that they will not be exposed to a small risk with a very high cost. I beg to move.
Lord Addington: My Lords, in the absence of my noble friend Lord Bradshaw, I have looked at the amendments and issues relating to the Bill. The noble Lord, Lord Berkeley, may be technically correct, but it occurs to me that if we get away from the fact that people will break the law and you make law only for people who will comply with it, what does the noble Lord think will be the political cost of a Government who went to an authority-whether the harbour authority or the general lighthouse authority-and said, "Do something you can't do or we'll bankrupt you for functions that are important"? You would be asking a Minister to pay an almost suicidal political price. The House and another place would rip that person apart. How real is that danger? That is the only thing that comes to mind. The noble Lord may be technically correct, but I wonder how real that danger is in the world in which we actually live. No one will leave in place a dangerous provision that restricts commercial activity and endangers people. I leave that sitting there, because it should be mentioned in these discussions.
Lord MacKenzie of Culkein: My Lords, in short, these amendments are about leaving the obligation for the removal of wrecks by default with the Secretary of State. That effectively means leaving the taxpayer with the liability. Clearly, ship operators have to be concerned about costs-and rightly so. However, the Bill-unless I have misread it and I do not think I have-is not, as was recently alleged in the shipping newspaper Lloyd's List, about shifting the financial burden for the removal of wrecks to shipping. As I understand the Bill, it is about maintaining the status quo as regards unrecovered costs. If the Bill becomes an Act, it will not make any difference so far as unrecovered costs are concerned. An uninsured ship could go down in a conservancy area or a harbour authority area and there would be exactly the same situation as that which pertains at the moment.
As the Bill provides that there will be a mandatory requirement, for the first time, that all vessels over 300 gross tonnes have wreck removal insurance and there is strict liability on the ship owner to remove that wreck, it is highly unlikely that there will be any increased costs to the General Lighthouse Fund or to harbour conservancy authorities. I know that my noble friend Lord Berkeley is understandably concerned about the cost to a small harbour authority if an uninsured vessel requires removal after an accident, but Section 255J states clearly that the UK ship or a foreign-owned ship may not enter or leave the UK port. In default of that, the master or operator of a vessel is guilty of an offence.
So it is more likely in future, that that requirement will be widely known by all ship owners and operators and much less likely that uninsured vessels will seek to enter our ports. I agree that it would be useful if the noble Earl could say something about small harbour authorities, which unlike, for example, Southampton, Felixstowe or Clyde Port, may not have the funds to effect removal in the unlikely event of an uninsured casualty which is a hazard to navigation. Overall, it is much more likely that the introduction of the convention will lead to reduced costs, to the benefit of the General Lighthouse Fund and, thus, to ship owners.
While some wrecks and strandings are beyond the control of any ship operator or ship master, far too many of them are a consequence of negligence. Casualties arise from one or more of causes such as poor navigation, poor watchkeeping practice, and underqualified officers. We know that it is possible to have people with fake qualifications on the bridges of ships. We have undermanned bridges. There are problems with alcohol and fatigue and, not least, inadequate maintenance. In that connection, in 2009-10, the Marine Coastguard Agency found that 1,265 vessels had safety issues and had to detain 59 of them until matters were put right. Sir Alan Massey has reported that there was insufficient rigour in some of those investigations. He is in a position to put that right. If the Bill is enacted, I hope that he will do so and that there will be proper examination of certificates. Of course, that would ensure that ships without those certificates do not come into our ports.
However, where maritime accidents occur in the circumstances that I described, it is quite wrong that the taxpayer should be expected to be the insurer of last resort, and therefore wrong to seek dilution of the clause, as proposed in my noble friend's amendment. It is for shipping operators and owners to be properly insured and for them to arrange prompt removal of any wreck that is a hazard to navigation. I have not the slightest doubt that most shipping companies-good ship operators-will be properly insured.
The requirement for mandatory ship insurance is long overdue. It is a valuable addition to maritime safety and should be supported. I recognise my noble friend's concerns but I hope that, having listened to the debate in Committee, he will feel able to withdraw the amendment so that we can give the Bill safe passage.
The Earl of Caithness: My Lords, I apologise to your Lordships for not being here for Second Reading, but I have read Hansard carefully. Having just listened
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The noble Lord, Lord Berkeley, wants to do nothing more than transfer existing liability on to taxpayers, as the noble Lord, Lord MacKenzie, has pointed out. He has wrapped it rather cleverly with harbour authorities this time, but we know that the real beef of the noble Lord, Lord Berkeley, is the GLAs. He does not like them, and we are all used to that. I do not think I am alone in getting slightly concerned about this. It reminds me of the wolf story; he has been going on about GLAs for so long. He has been answered very properly and correctly, but I am no longer certain when he is being serious or when he is playing another agenda that I do not know about. That slightly perturbs me. If my noble friend Lord Attlee could comment on the MOU, which was mentioned at Second Reading, that might help to reassure the noble Lord. An update on that would be helpful.
Lord Greenway: I very much agree with what the noble Lord, Lord Mackenzie, has just said. Having debated these matters with the noble Lord, Lord Berkeley, for many years, we all know where his concerns lie, particularly in regard to expenses put on the ship owner through the payment of light dues.
The convention is quite clear, as has been said, in that it will require ships over 300 gross tonnes to carry wreck removal insurance and the onus of wreck removal is firmly placed on the registered owners of those ships. The instances where a ship might fall through the net, so to speak, will be very much reduced in future. As has been said, I think the possible cost to the General Lighthouse Fund will certainly be lower.
As far as I can make out, the amendments limit the options open to the Secretary of State, compared with what he has today. The Secretary of State and his representative-SOSREP-are well known to the general lighthouse authorities. They have worked together over many years and those authorities have been marking and removing smaller wrecks for 150-odd years, so they have some experience in this matter. It would be wrong to try to bypass that experience by getting the Government to appoint independent salvers to do a job; for example, they would not necessarily have the experience of marking the wreck in the first place. There is an argument for maintaining continuity in dealing with the marking of wrecks and their possible removal by one source that is used to dealing with them.
The memorandum of understanding was mentioned by the noble Earl, Lord Caithness. That is certainly something where I think many of these concerns can be thrashed out. I echo what the noble Earl said in asking the Minister whether he can give us an update on how that is proceeding. As I said before, there is already close co-operation between the Government's representative and the general lighthouse authorities. The harbour authorities are perhaps slightly different. Some of the smaller ones would not have the necessary vessels to cope with removing a wreck, but there is absolutely no question of the general lighthouse authorities using this Bill to extend their fleet with newer and larger ships. I think that that is a red herring.
I emphasise that the cost to the General Lighthouse Fund, over quite a number of years of removing wrecks, is very small. I have a figure of 0.004 per cent, and that went up to 3.2 per cent only as a result of the one-off exercise of the removal of the German First World War U-boat from the Dover Strait, when the Government required Trinity House to do that and it had to appoint separate salvage contractors.
I will mention one final point. The point of the Secretary of State being able under the Bill to direct harbour authorities or general lighthouse authorities to remove a default wreck is so that they can recover their costs. Without that direction, which in effect makes them agents of the state, they cannot recover them. That is an important point.
My noble friend raised again the issue of the possible high level of costs that might have to be borne in the event that, contrary to requirements, a ship is not insured, the insurance does not cover the full costs or there is a lengthy delay in the insurance money being paid after the costs have been incurred. I sense from what my noble friend said that this could be an issue particularly for some harbour authorities because of their financial reserves. I am aware that in the Second Reading debate, the Minister said that the Government were of the opinion that the provisions of the Bill would ensure that the risks of a shortfall in expenditure would be significantly less for bodies such as harbour authorities than they are now. The Minister referred later in the debate to a memorandum of understanding between the respective parties that would be agreed prior to the entry into force of the International Maritime Organisation's International Convention on the Removal of Wrecks.
There have been discussions already between my noble friend Lord Berkeley, the Minister and the noble Baroness, Lady Stowell of Beeston. I am sure that those discussions have been both appreciated and useful. I simply ask the Minister and the noble Baroness whether there is scope for further discussions with my noble friend Lord Berkeley on the issue that he has raised, and in particular whether any wording could be incorporated in the memorandum of understanding that might at least mitigate or lessen the concerns that have been expressed on this issue by my noble friend.
Baroness Stowell of Beeston: My Lords, I thank the noble Lord, Lord Berkeley, for initiating this lively and interesting debate which the noble Lord, Lord Davies of Oldham, promised me at Second Reading. I am sorry that he is not in his place, but I welcome the noble Lord, Lord Rosser, to the Front Bench for this Committee stage.
Your Lordships will not be surprised that I support noble Lords who have spoken in opposition to these amendments. As I pointed out at Second Reading-and as every noble Lord contributing to today's debate understands-the costs associated with removing a wreck can be substantial and also difficult to recover, particularly as at the moment there is no straightforward obligation on ship owners to be responsible for the removal of their wreck.
The Bill builds on the well-developed arrangements that already exist for dealing with maritime casualties. Above all, it provides legal certainty by placing the primary responsibility for the removal of a wreck that poses a danger to navigation or the environment on the ship owner and ensuring that, if the authorities have to step in, the owner will pay their costs for removing it. Under the Bill, the liability of the ship owner is strict; the claimant does not have to prove that the owner was negligent or at fault.
The amendment put forward by the noble Lord, Lord Berkeley, puts some of this certainty at risk. It would delete not just the discretionary power to direct authorities to remove a wreck, but, in doing so, the statutory link to cost recovery under the convention. This was referred to by the noble Lord, Lord Greenway. The Secretary of State's discretionary power to direct, included in the Bill, ensures that authorities will benefit from the convention's cost-recovery provisions when removing a wreck.
The noble Lord, Lord Berkeley, said that if this amendment were to be agreed, there might be occasions when the authorities would choose to carry out or participate in the removal of a wreck in any case. If that amendment were to be accepted, ship owners or insurers would undoubtedly argue that as there is no explicit linkage to the convention's cost-recovery provisions, they do not need to pay an authority's costs. As I have already said, the fact that that direction is in the Bill invokes the connection to the convention. That argument would be reinforced and could lead to all costs having to be recovered through harbour fees or the fund because the ship owner or insurer would be able to point to the inconsistency that the amendment would create because proposed new Section 255C, which provides a similar statutory link in respect of locating and marking, would remain in place, thus allowing authorities to recover those costs direct from the owner or insurer, just as the Bill intends for all costs. There would be direction for locating and marking but not for removal.
In addition to creating inconsistencies, these amendments would also delete the provisions in proposed new Section 255F(4) for the explicit extension of the general lighthouse authorities' areas of responsibility to the edge of the United Kingdom's convention area, which noble Lords will know is up to 200 nautical miles from shore. As such, a ship owner or insurer would doubtless claim that a general lighthouse authority
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The Bill's direction regime removes the real risks of such disputes by linking the authorities clearly and simply to the convention's cost recovery scheme. With the Bill imposing strict liability on the ship owner to remove a wreck and requiring mandatory insurance, it is clear to me that the risks of a shortfall in expenditure for recovering wrecks will actually be significantly less for these authorities than those they now experience. Other noble Lords have already pointed that out. As I understand it, as a percentage of GLA budgets, the costs of dealing with wrecks are already very small. The noble Lord, Lord Greenway, mentioned 0.04 per cent. However, to remove the provision allowing the general lighthouse authorities to obtain reimbursement for unrecoverable expenses from the General Lighthouse Fund on the rare occasion that it is not possible to recover all costs would be at odds with existing and established arrangements. Indeed, it would leave the GLAs with no obvious means by which to make up a shortfall, should they need to. I am concerned that the combined effect of these amendments would be to leave authorities wary of undertaking any wreck removal, notwithstanding what the noble Lord, Lord Berkeley, said, even though they have existing powers and experience. If that were to happen, it would be in no one's interest.
In summing up, I reiterate that the Secretary of State's powers of direction are discretionary, but they must exist and appear in the Bill for all the authorities to enjoy the benefits of the convention, as they have every right to do. I expect SOSREP to take control in the manner he now does under existing powers. As the noble Lord, Lord Greenway, described, SOSREP is aware of the authorities' capabilities, experience and capacity. If he needs to issue directions, I expect him to act reasonably and to issue them only to those he thinks capable of fulfilling them, not least for the reasons the noble Lord, Lord Addington, referred to. I will leave it to the Minister to expand further on this point if he wishes. For these reasons, I ask the noble Lord to withdraw his amendment at the appropriate time.
Earl Attlee: I am grateful to my noble friend Lady Stowell for her full response to the amendment moved by the noble Lord, Lord Berkeley. The noble Lord referred to discussions yesterday, and I am very happy to continue them, not least because they are so interesting, because the noble Lord genuinely seeks a solution to these problems. I understand his very real concerns, and I am delighted to have the opportunity to give a fuller response in Committee.
It may be helpful to noble Lords if I say a few words about the memorandum of understanding between the Department for Transport and the GLAs. This will provide guidance and understanding about how the convention would work in practice. The Committee will understand that the development of the MoU is in its early stages, as it will be a while before the convention comes into force. The noble Lord, Lord Berkeley, will want to keep abreast of developments, and I am sure that I will be able to facilitate that at the appropriate point.
The MoU will of course be based on several principles. Importantly, one of these is that one of the objectives of SOSREP giving a direction is to ensure that the authority being directed will benefit from the convention, as explained by my noble friend Lady Stowell. Another principle is that SOSREP should only give a direction when the authority being directed has the capacity to deal with the problem. By that I mean that it already has a ship or a facility that could help resolve the situation. Capacity would not include the capability to engage a salvor or other expensive facility. However, this would be trumped by the foremost principle of allowing the directed person to benefit from the convention, and I stress the word benefit. Thus, a harbour authority would benefit from being directed to remove a properly insured wreck from its domain. It would be inappropriate to put these arrangements on the face of the Bill or into secondary legislation. This is in order to ensure the clarity and certainty that will allow the directed person to benefit from the convention.
It may be that a small piece of wreckage has to be dealt with, such as an unidentified shipping container. In this case, it would be impossible to invoke any insurance. How this would be dealt with would be a matter of detail in the MoU, but neither the GLAs nor the harbour and conservancy authorities would be any worse off than they are now as they already deal with these problems within their existing resources. In the case of the GLAs, this is a tiny proportion of their annual turnover, and has been for many years.
As I have indicated, the MoU is being worked up by the Department for Transport, within which SOSREP works, and the GLAs. I would expect that the harbour and conservancy authorities would want the benefit of a similar MoU as well. It would be impractical to have tailor-made MoUs with all bodies and I would expect that the relevant trade associations would negotiate a joint MoU in due course. It would be rather odd if any MoU were not based upon principles including the two that I have just outlined.
The noble Lord, Lord Berkeley, may be concerned that the GLAs will increase their capacity in order to meet a new need, perhaps with specialist ships, a point touched on by the noble Lord, Lord Greenway. I doubt that they have any desire to do so, but in any case, this is not something which could be done unilaterally. Regular fleet reviews consider the vessel needs and provision for GLAs every five to 10 years. As part of this process, a full business case has to be considered. The Government would consider any proposal for an increase very closely indeed.
The noble Lord, Lord Berkeley, also referred to a Question for Written Answer tabled by my noble friend Lord Bradshaw, on uninsured ships. Some 12 ships had some deficiencies in their insurance, but noble Lords should remember that some of those deficiencies may well have been technical and could be rectified quickly. Inspections are targeted, and we would expect there to be good intelligence on those ships that are not properly insured, not least because that would be an extremely good indicator of ships that have other serious problems.
There is of course the problem of ships not calling at UK ports and our therefore being unable to undertake any port state control-a point made by the noble Lord, Lord MacKenzie of Culkein-but the Bill and the convention would help reduce this problem because it would be more impractical to operate a ship without insurance. I accept that we will not completely eliminate ships running without proper insurance, but, as I say, the Bill and the convention will help reduce this problem.
The noble Lord, Lord Addington, and the noble Earl, Lord Caithness, both suggested that the biggest problem that I was concerned about was the GLAs. That is not the case any more. If it was thought that the GLAs were going to spend too much money on recovering a wreck and would have a serious financial problem as a result, there are enough Members of your Lordships' House who have some relationship with Trinity House who would sort it out by asking questions here. That may well be the case; it is the way the political world works. For a small harbour authority, it might be slightly different. If it were an enormous wreck, I am sure that the Government would see to it that there was some financial settlement. However, there is something in the middle that could just happen, although it is not very likely. I was grateful for the Minister's response, because it went a long way towards satisfying many of my concerns.
The noble Lord, Lord Greenway, mentioned Trinity House marking wrecks. That is part of its job, and I
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I am grateful to the noble Baroness, Lady Stowell, whose Bill this is, for her response. If the wording of the amendment is defective in some way, then it needs looking at, but perhaps that will not be necessary. I need to reflect on what she and the Minister said. I was particularly pleased that he mentioned the idea of MOUs with harbour and conservancy authorities, because they are just as important as MOUs with the GLAs. However, he was quite right: the thought of having 30, 40 or 50 different MOUs with every harbour authority around the country cannot be very attractive to him or his officials. I shall certainly try to encourage the representative bodies of the harbours, of which there are two, to try to come together and come up with something based on the principles which he so clearly outlined.
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