Introduction

In early 2014, the Ministry of Transport sought public feedback on a proposal that New Zealand accedes to the Supplementary Fund Protocol, 2003. New Zealand’s accession to the Supplementary Fund Protocol, 2003, would give New Zealand access to compensation from the Supplementary Fund in the event of a major marine oil spill from an oil tanker. This would increase the compensation available to New Zealand from up to $385 million, to up to $1.432 billion*.

Accession to the Supplementary Fund Protocol would provide New Zealand with access to a relatively inexpensive global insurance scheme. The costs associated with the Supplementary Fund Protocol are relatively minor, and are considered appropriate to the level of risk that New Zealand is exposed to from the transportation of oil.

The Supplementary Fund does not apply to offshore oil installations.

*based on NZD exchange rate as at 21 July 2017.

Background

The Supplementary Fund is part of the International Oil Pollution Compensation (IOPC) funds. The IOPC funds are intergovernmental conventions that provide three levels of compensation for oil pollution damage from marine oil spills from oil tankers.

New Zealand has acceded to the conventions for the first and the second level of the IOPC funds, which together provide compensation for oil pollution damage from oil tankers of up to $385 million in the event of an oil spill, regardless of fault.

The Supplementary Fund Protocol provides an additional level of compensation. The Supplementary Fund can provide up to $1.432 billion of compensation for marine oil pollution damage from oil tankers.

New Zealand’s accession to the Supplementary Fund Protocol, 2003, would require New Zealand to contribute to the Supplementary Fund when compensation is required. Contributions would be collected through a levy on the quantity of oil received by ship, and would be paid by New Zealand oil importers that receive more than 150,000 tons of oil per year.

Consultation and next steps

The consultation document [PDF, 2.3 MB] – New Zealand’s accession to the Supplementary Fund Protocol – provides background information about the Supplementary Fund Protocol.

Consultation on the Supplementary Fund Protocol closed on 27 June 2014.

The Ministry of Transport considered all submissions made on the consultation document, and provided advice to Cabinet in December 2014.

On 8 December 2014, Cabinet agreed to accede to the Supplementary Fund Protocol, subject to the Parliamentary Treaty Examination process and legislative changes necessary to implement national obligations under the Protocol.

The Transport and Industrial Relations Select Committee conducted the treaty examination of the Supplementary Fund Protocol in February 2015 and reported to Parliament on 16 March 2015.

Amending legislation

The Maritime Transport Amendment Bill 2016, introduced on 10 November 2016, includes amendments to the Maritime Transport Act 1994 to implement the Supplementary Fund Protocol.

The Bill was referred to the Transport and Industrial Relations Select Committee on 16 November 2016. The Committee reported the Bill back to Parliament on 16 May 2017.

As at 28 July 2017, the Bill was awaiting its second reading in the House.