The Transport and Infrastructure Committee has reported on the Maritime Transport (Offshore Installations) Amendment Bill and recommends that it be passed with amendments.

The bill amends the Maritime Transport Act 1994 and seeks to clarify and strengthen the requirements on owners of offshore oil and gas installations to hold insurance or other financial security against possible damage to the environment in the event of an oil spill. Associate Transport Minister Julie Ann Genter is in charge of the bill.

The Committee considered 12 submissions and heard oral evidence from three submitters.

Recommended amendments to new section 385(J)

New section 385J clarifies the rights of third-party claimants against insurers of regulated offshore installations.

As introduced this section would only apply if the owner of an oil or gas installation had a liability to a claimant. The existing section 385J(1) allows for claimants to commence proceedings even if liability has not been proven or is still subject of a court judgment. The Committee recommends amending the section to clarify that a claimant may commence proceedings based on alleged liability of the owner.

As introduced, new section 385J does not include any requirement for a claimant to obtain leave of the leave of the court to commence proceedings against an insurer. The Committee believes that this requirement should be included to ensure that third-party claimants have a legitimate claim and therefore recommends inserting new section 385J(3A) to clarify that leave of the court must be obtained for action to proceed.

New sections 385J(3) and 385(4)(c)(i) allow for a claimant to commence proceedings, and for the insurer to use any defence that it would use if the claim were being made by the owner. The Committee is concerned that this would result in insurers relying on defences based on the actions or inactions of the owner during the claims process. The committee recommends inserting section 385J(4A) to confirm that, if a claimant commences proceedings against the insurer, the insurer would not be able to rely on those defences.

The bill as introduced includes section 385J(8), which references the rights of a claimant in relation to section 9 of the Law Reform Act 1936. Proposed section 385J(4A) would provide for a claimant to commence proceedings if given leave of the court, which makes this reference to section 9 of the Law Reform Act 1936 unnecessary, therefore section 385J(8) should be removed.