Newcastle Port Corporation v MS Magdalene Schiffahrtsgesellschaft MBH [2013]

NSWLEC 210

This case concerns a heavy fuel oil spill in Newcastle NSW and the legal proceedings that followed. The case demonstrates how the law deals with complex issues relating to environmental protection. Both domestic and international law are relevant when making decisions regarding fault when environmental damage occurs.

The case is very relevant for legal students studying environmental protection law and regulation. Companies and their employees operating in Australia need to adhere to Australian law under the rule of law. Australia’s sovereignty allows both Federal and State parliaments to legislate for environmental protection relevant to their jurisdiction.  This case was heard in NSW but is relevant in all jurisdictions as oil spills are, thankfully, rare events in Australia.

Facts

In 2010 a bulk coal carrier ship from Liberia was berthed at the Port of Newcastle.  Whilst in port, the carrier started pumping out its ballast tanks. Ballast tanks are spaces in the hull of a ship that are usually filed with sea water, when the ship carries little or no cargo, so that it remains stable in the water.  When the ship takes on cargo, the ballasting water is no longer needed and so it is pumped from outlets in the side of the hull into the port, before the cargo is loaded.  In September 2017 the International Convention for the Control and Management of Ships’ Ballast Water and Sediments  came into force in Australia under the Biosecurity Act 2015 (Cth), (which was amended to include the terms of the convention).  This now means that, due to biosecurity risks, ballast water should be discharged out of port.

Whilst the ballast water was being discharged, 72,000 litres of heavy fuel oil were also released from the ship into the Hunter River at the Port of Newcastle.  This was the second largest oil spill in New South Wales.  The largest was the oil leak from the Laura D’Amato in Sydney Harbour in 1999.

Two deck officers were on watch on the ship at the time of the spill.

Law

The owner of the ship and the captain (defined as the ‘master’ under section 4 of the Marine Pollution Act 1987 (NSW)  – who is a person having command or charge of the ship) were charged with discharging oil or oily mixtures into State waters under section 8(1) of the  Act.  The Marine Pollution Act 1987 (NSW) has been repealed and replaced with the Marine Pollution Act 2012 (NSW).  Section 15 of the 2012 Act is similar to section 8 of the 1987 Act.The offence in the 1987 Act read as follows and is a strictly indictable offence.

(1)  If any discharge of oil or an oily mixture occurs from a ship into State waters, each crew member of the ship, and each person involved in the operation or maintenance of the ship, whose act caused the discharge is guilty of an offence punishable, upon conviction, by a fine…

It was agreed by the prosecution (The Newcastle Port Corporation) and both the accused, that the oil came into the ballast tank as a result of a 15 mm diameter corrosion hole in the tank wall between the fuel tank and the ballast tank.  The ship underwent a major inspection in 2009 and a maintenance inspection in February 2010 and the hole was not visible.

The oil was understood to have been leaking into the ballast tank for some time between the inspection in February 2010 and the release of the ballast water in Newcastle in August 2010.

The oil spill caused contamination of local pelicans, oil spotting on protected salt marsh and mangrove vegetation as well as contamination on mudflats.  Harm was caused within a National Park and protected wetlands.

The actual harm was ecologically significant because of the area in which it occurred. However, the spill also had the potential to cause further significant harm to international migratory birds – Corrs Chambers Westgarth

Court Decision and Sentencing

The harm was classed as being significant, but not permanent. Clean-up activities took six weeks and cost $1.9 million.  The ship’s owner paid $1.7 million of the clean-up costs.

The owner of the ship and the master entered early pleas of guilty to the offences.  The judge needed to consider  the appropriate penalty for such serious offences.

In sentencing in the Land and Environment Court of NSW, Sheahan J considered the following matters and noted that some should be given more weight than others:

  1. The ship had been well maintained;
  2. The oil spill was not catastrophic, nor as big as the spill in D’Amato;
  3. The spill was not caused by any human negligence;
  4. The defendants did not have any known criminal records;
  5. The defendants were unlikely to reoffend;
  6. Both defendants entered early pleas of guilty, they showed remorse and co-operated with the investigation.

The owner of the ship was fined $1.2 million. No conviction was recorded against the master and the charges against him were dismissed, he received a Section 10 under the Crime Sentencing Procedure Act 1999 (NSW).

“It was not part of the master’s duties to take personal charge of the port operation of the ship. I believe that he was entitled to rely on the “”qualified”” personnel” [306]

The court found that the master was not required to take charge of the port operation of the ship and that he could rely on his qualified senior officers on the ship.  Those officers did not keep an adequate watch whilst the ballast water was being released.

Their failure became the responsibility of the owner of the ship and not the master.

The court also considered whether the master should have arranged for the tank to be checked, before the ballast was released.  There was some argument that releasing bolts on the tank hatch would have taken about 20 minutes and would have disclosed the smell of the leaking oil.  

The court held that there were no procedures put in place by the owner, which required the master to undertake such an inspection, without a clear indication that it was necessary.  The master was new to the ship and took over as master shortly after it had undergone a major maintenance inspection. He may well have been entitled to rely on the ship as being sound and not requiring specific inspection of the tank before the ballast was released.

Whilst the master is responsible for the ship, this case demonstrates that the owner can also be responsible, when the issues relate to maintenance and procedures for supervision on the ship.  

Laws criminalising environmental damage are crucial in a country such as Australia. Protection of the environment by law allows for the regulation of human impact on eco systems. This is of particular issue in places of industrial and business activity such as harbours as the proximity to cities and towns means that the results of environmental damage can directly and immediately impact on the quality of life of the people living on the shore. The safety net of domestic law, international conventions, customary international law and state regulations allow for both legal and non-legal responses to incidents of environmental damage.

Discussion Points

Would it reduce the likelihood of spills and other incidents,  if the master were solely responsible?

What if the owner of the ship is thousands of kilometres away, perhaps has inadequate management processes in place or has not trained staff to undertake tasks at the required standard?

Can the master be responsible for the maintenance and training of staff, when they might recently have joined that ship and not know its background?