Evidence of meeting #13 for Transport, Infrastructure and Communities in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was liability.
A recording is available from Parliament.
9:20 a.m.
Conservative
Jeff Watson Conservative Essex, ON
What is the general amount of coverage? Does it vary ship by ship? There's no standard general liability or is there a standard general liability? What is that amount?
9:20 a.m.
Vice-President, Shipping Federation of Canada
It will be on a ship-by-ship basis. Each ship will have its own insurance and it will cover up to the limits of liability of the convention on civil liability for ships, which is currently incorporated via part 3 of the Marine Liability Act, because in shipping matters the liability of a ship is always capped at some point. You have different caps depending on the type of liability. So for the carriage of passengers it's incorporated in the provisions of another convention, the Athens convention. For crude oil, that's another one. For oil as a fuel, it's another one. For general liability that's the one that is incorporated in part 3 of the Marine Liability Act. Because the liability is capped to that level the ships that don't have another level of liability, because, for example, they are not tankers and don't carry oil as cargo, will not have additional insurance. Now because Canada has ratified the convention on oil carried on ships as fuel, the Bunker convention, it means that all ships basically have bunker on board so they all have this limit of liability for pollution by bunker as well, which is higher than the general liability. This is for pollution by bunker.
9:20 a.m.
Conservative
Jeff Watson Conservative Essex, ON
If we have an LNG accident, what is the amount of liability currently, without C-3?
9:20 a.m.
Vice-President, Shipping Federation of Canada
Without C-3 it will depend on the size of the ship because it's on a tonnage basis.
9:20 a.m.
Vice-President, Shipping Federation of Canada
I would have to go back to it because you have a gradation depending on the size, so it's kind of complicated, but I can send you a table after this hearing. It's lower than the HNS convention.
9:20 a.m.
Conservative
9:20 a.m.
Vice-President, Shipping Federation of Canada
Actually this general liability convention is being upgraded and amendments to the limits will come into force in 2015. It's been amended by a tacit amendment recently, and the upgrade will come into force in 2015, so I can send you upgraded limits in this note as well.
9:20 a.m.
Conservative
Jeff Watson Conservative Essex, ON
The committee would appreciate that information. Thank you.
I want to hopefully bring some clarity here. There has a been a conflation of several issues. I know there has been a lot of comment on the world tanker safety panel report, for example. Our response, with respect to oil, is a separate issue from what we're dealing with here today. We're dealing with C-3 and plugging a gap that exists currently with respect to HNS, hazardous and noxious substances.
I think, Madam Legars, your testimony, even though we don't have the exact numbers, points to the reality that we do need a regime, both for shipowners and shippers, that carries a higher liability. We may find out, yet again, that as a result of the world tanker safety panel report we may be revisiting the level of this, for example, as well. For now, we need to have a regime in place, and that's what the legislation gets to today, making sure that we have a start on that.
Maybe this is for the port to answer. This brings into the liability regime the requirements for oil handling facilities. First of all, we heard by testimony that we don't exactly know how many there are. There is an estimate of about 400. This will now make reporting requirements that be known to the regulator, that being Transport Canada.
What is the risk of an incident at a loading facility between a tanker and the oil handling facility? Is there a high degree or high likeliness of an incident occurring where there is a spill? What is the liability regime currently for a situation like that, where it occurs at the facility?
9:25 a.m.
Vice-President, Corporate Social Responsibility, Port Metro Vancouver
Thank you. I can address the first part of the question. Maybe the second part, in terms of liability, I can ask Captain Brown to address.
In terms of the safety around the loading procedure, at every terminal when you're loading a tanker there are very strict operating protocols. For example, you will have a crew, both on the dock and on the vessel, at the ready to close valves should there be an issue or a leak during that loading procedure. The current practice in the port is that all vessels are boomed during loading, so if there is a spill in the vicinity of the ship, it is contained and easily cleaned up.
In terms of liability, I think I should turn that over to Captain Brown.
9:25 a.m.
Capt Stephen Brown
Again, as Ms. Legars accurately pointed out, there are formulas under which the liability of the vessel—because this is an incident involving a vessel—would be calculated. In a general sense, under the international conventions today, it's about $1 billion of liability limitation.
On top of that, we have here in Canada very wisely preserved the Canadian ship-source oil pollution fund, which is another $400 million. The question of course has come about on a frequent basis: what happens if the expense of a cleanup were to exceed that? That issue is addressed in the tanker safety panel's report. I can talk to that, but I'm not sure if that's where you would like me to go.
9:25 a.m.
Conservative
9:25 a.m.
Conservative
Dave MacKenzie Conservative Oxford, ON
Thank you, Mr. Chair.
It's actually quite interesting for somebody who's not part of the committee to hear what the panel has provided here today, because I think it is an issue that Canadians as a whole have an interest in. Quite frequently we hear of the problems only after they develop. So I'm pleased to hear some of the comments with respect to how the industry itself looks at how it can mitigate the public's concerns and mitigate the damage caused when an accident does occur.
When I hear what you're talking about and I see what I see, I have a few questions. One of them would be to the port people.
First, in terms of the service requirements of the proponents in the case of an adverse incident, who would be responsible for that kind of an incident? Is it the port authority, the tanker, the coast guard? I'd just like to clear the confusion about who may or may not be responsible for taking care of the issue.
9:25 a.m.
Vice-President, Corporate Social Responsibility, Port Metro Vancouver
The incident command is the responsibility of the coast guard. Anyone, upon citing this bill or being aware of this bill, can contact Western Canada Marine Response Corporation and bring them into play to address the spill. In the case of the port itself, if our harbour patrol vessel identifies a spill, we have that ability. But incident command is the coast guard's responsibility.
9:30 a.m.
Conservative
Dave MacKenzie Conservative Oxford, ON
Incident command is under the authority of whom? Who operates that from a control perspective?
9:30 a.m.
Vice-President, Corporate Social Responsibility, Port Metro Vancouver
The Canadian Coast Guard does, but the actual cleanup is done by Western Canada Marine Response Corporation.
9:30 a.m.
Conservative
Dave MacKenzie Conservative Oxford, ON
Okay. Can you talk to us about what the relationship is amongst all three? Coming from a background in emergency response, I know sometimes there are issues around who takes what role. Obviously you're telling us that we've never had an incident of this magnitude, or any magnitude, before, so how would that relationship evolve?
9:30 a.m.
Vice-President, Corporate Social Responsibility, Port Metro Vancouver
Annually, there are emergency drills and preparedness exercises to test our readiness. I'd say the working relationship between the different agencies is excellent. There is one thing that has been a concern in the past, which I think continues to be an area that needs attention: in the event that someone tasks WCMRC to respond to a spill and there's uncertainty about the origin of that spill, there is some concern about the person who makes that call being liable. So if it's the port, are we liable for that cost?
In theory, the ship-source oil pollution fund is supposed to take care of that, but it's important that we be confident that we can step in and say we need to have a response in place.
9:30 a.m.
Conservative
Dave MacKenzie Conservative Oxford, ON
Fix the problem first, and worry about some of the other...afterwards.
