Merchant Shipping (Wreck Removal) Bill

Order for Second Reading read.

1.09 pm

The Coordinating Minister for Infrastructure and Minister for Transport (Mr Khaw Boon Wan): Mdm Speaker, I beg to move, "That the Bill be now read a Second time."

I shall be short and succinct. Singapore is situated alongside one of the world's busiest waterways and has one of the world's busiest ports. Ensuring safety of navigation and sustainability of the marine environment is, therefore, of utmost importance to us. That is why we are acceding to the Nairobi International Convention on the Removal of Wrecks, which was adopted by the International Maritime Organization (IMO) in May 2007 and entered into force in April 2015.

The Convention provides a set of international rules for State Parties to remove wrecks in their exclusive economic zones (EEZ) that pose a danger to navigation or to the marine environment. It allows State Parties to recover the costs of locating, marking and removing wrecks from the shipowners. The Convention also requires State Parties to certify that insurance or other forms of financial security for such liability is in force for ships under their registry.

The Merchant Shipping (Wreck Removal) Bill seeks to give effect to the Convention. Let me highlight the key provisions.

Clause 8 empowers the Director of Marine of the Maritime and Port Authority of Singapore (MPA) to remove a wreck determined by him to constitute a hazard, if the owner of the wrecked ship fails to undertake the removal or if immediate action is required. Under the Bill, the Director of Marine must use the most practical and expeditious means available and take into consideration safety of navigation and protection of the marine environment when removing the wreck.

Clause 10 provides for the owner of a ship wrecked in Singapore's EEZ to be liable for the costs of locating, marking and removing the wreck.

Clause 15 stipulates that a ship may not enter or leave the port of Singapore unless it carries on board evidence that it is covered by wreck removal insurance.

Clause 16 provides for the registered owner of a Singapore ship to apply for, and the Director of Marine to issue, certificates to attest that the ship is covered by wreck removal insurance.

Clause 17 provides the Director of Marine with a right of direct action against the insurer of the wrecked ship, for the costs of locating, marking and removing the wreck.

The shipping industry has been consulted and they are supportive of the Bill. At the corridor, Mr Louis Ng told me that he supports the Bill but he gave me some feedback from one industry contact.

I assured him that there would be minimal additional administrative and cost burden for shipowners as the application process for the wreck removal certificate is similar to that of other mandatory certificates. To further reduce any administrative inconvenience, MPA also has in place processes to renew the Wreck Removal Certificate as a package, together with the statutory certificates required under other international conventions. The fee for the issuance and renewal of the Wreck Removal Certificate will be $60, similar to that for other certificates. We are targeting to introduce the relevant subsidiary legislation and fees in the third quarter of this year.

MPA has also checked with the established marine insurance providers and understands that there will be no increase in premium for ships insured with them. The limits of liability for maritime claims provided by them to their members are already in excess of the limits required under the Convention.

In the event of an incident, MPA will work closely with the shipowner and the insurer from the onset to remove the wreck. The deadline to remove the wreck will be determined by MPA in consultation with the shipowner and the insurer. MPA will only take over the removal of wreck if the shipowner and insurer abandon the wreck or if the wreck constitutes a hazard to navigation or to the marine environment. In such instances, any surplus from the sale of the wreck will be held in trust. MPA will then call for claimants to provide evidence of their entitlement and disburse the surplus to the rightful beneficiary as expeditiously as possible. Should there be competing claims, MPA will seek the Court's determination. Mdm Speaker, I beg to move.

Question proposed.

Mdm Speaker: Mr Dennis Tan.

1.15 pm

Mr Dennis Tan Lip Fong (Non-Constituency Member): Madam, through this Merchant Shipping (Wreck Removal) Bill, Singapore will finally be ratifying the Nairobi International Convention on the Removal of Wrecks of 2007. Madam, according to the International Maritime Organization's (IMO) website, the number of abandoned wrecks, currently estimated at almost 1,300 worldwide, has increased, and the problem that the wrecks posed to coastal states and shipping generally has become more serious.

According to IMO, wrecks create various problems. One, the wreck may be a hazard to navigation, risking the safety of ships and their crew. Two, the vessel or their cargo may pose environmental risk, for example, pollution to the waters or environment may be caused by bunkers or cargo carried by the vessel. Coastal fishing may be affected. Three, the costs of marking and removing wrecks have always been an issue. Provision of compulsory insurance cover aims to deal with this issue of costs.

The Wreck Removal Convention will provide new international rules that will ensure prompt and effective removal of wrecks located beyond the territorial seas of all signatory countries. It took about seven years for the Convention to achieve the requisite number of ratifications, which was the number of 10 countries from around the world triggering the entry into force conditions. This took place on 14 April 2014. As a result, amongst the states which had ratified it earlier, the Convention entered into force on 14 April 2015.

Under the Convention, the registered owner of a ship is responsible for locating, marking and removing a wreck deemed to be a hazard in a state's Convention area. It will also provide states with a right of direct action against insurers.

Under the Convention, ships of 300 gross tonnage and above which are registered with the ship registry of a State Party to the Convention or which is entering or leaving a port belonging to a state party, will need to have insurance arrangements in conformity with the requirements of the Convention, leading to an insurance certificate or what is called a Blue Card to be issued by insurers. Ships are also required under the Convention to obtain a certificate from a state which is party to the Convention, attesting that such insurance is in place for each vessel. Such state certificate must be carried on board the vessel. The good news is that the insurance cover required has been made readily available by the key Protection and Indemnity (P&I) clubs within the International Group in the world, and this made for easier compliance for all ships and their registered owners, albeit adding to the costs of doing business.

Vessels registered in a state which is not party to the Convention but which perform voyages to countries which are parties to the Convention must obtain a certificate from a State Party. In fact, between 2015 and the present date, as Singapore delayed in its ratification of the Convention, MPA had issued an advisory to ships registered under the Singapore flag to obtain such certificates from other countries which have ratified the Convention earlier.

The Convention also includes an optional clause at Article 3(2) enabling state parties to extend the coverage of the Convention to wrecks within their territorial sea. May I clarify with the Minister whether we are doing that, especially given our relative proximity to neighbouring countries?

On the issue of penalties listed under sections 4, 15, 23 and 31 of the Bill, I am concerned whether the recommended maximum fines are sufficient to deter reporting or other offences.

Madam, we could have passed this Bill earlier, perhaps two years ago, when the Wreck Removal Convention came into force after 10 countries have ratified it. I would like to ask the Minister whether there is any reason for the delay in implementing this Convention under our national legislation. I note from an MPA circular of 2015 that preparations were being made to legislation to implement this convention and MPA directed the Singapore-flagged ships to the United Kingdom, Denmark, Germany, Marshall Islands, Liberia and Cook Islands for the issuance of the State Certificates. These countries had ratified the Convention before the Convention came into force. Notwithstanding the above, I am in support of the Bill.

Mdm Speaker: Minister Khaw.

1.19 pm

Mr Khaw Boon Wan: I thank the Member for his support for the Bill and also for helping to elaborate on my Second Reading speech. Thank you very much.

It is not unusual for countries to take time to accede to a convention. For this particular Bill, time was needed to consult the various stakeholders, and we wanted to make sure that it is something that the industry supports and owns the decision. In this instance, even though we take a few years, we are still among the earliest to have done so. I think, as of to date, less than 30 countries have acceded to the Convention, out of about 200 countries in the world, and, in Asia, we would be among the first.

As for the question on penalties, MPA have assessed them to be adequate. They have taken into account the other penalties imposed by the other sections of the Bill. There must be suitable parity involved.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Khaw Boon Wan.]

Bill considered in Committee; reported without amendment; read a Third time and passed.