Speaker, the Merchant Shipping (International Oil Pollution Compensation Fund) Bill, along with its companion Bill, the Merchant Shipping (Civil Liability Convention) Bill, is long overdue, but nevertheless, most welcome. The purpose of the Bill is to amend the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage of 1971 into law.
The Bill is one of four in a package, which is designed to give effect to South Africa's obligations under the Fund Convention and International Maritime Organization Protocol of 1992 to amend the International Convention on Civil Liability for Oil Pollution Damage, which I will refer to as the Civil Liability Convention.
The other three Bills, that form part of the package, are the Merchant Shipping (Civil Liability Convention) Bill, a Money Bill in terms of section 77 of the Constitution, ie the Merchant Shipping (International Oil Pollution Compensation Fund) Contribution Bill, and, lastly, the Merchant Shipping (International Oil Pollution Compensation Fund) Administration Bill, which addresses the administrative requirements of the aforementioned money Bill. The Civil Liability Convention and the Fund Convention, which I have referred to, regulate the liability and consequential compensation to claimants for loss or damage caused by oil pollution from tankers.
In the case of the Civil Liability Convention, claimants are entitled to compensation from the registered shipowner for pollution damage that occurs in the territory and territorial sea or exclusive economic zone of a contracting state. While there are only limited exceptions and defences that the shipowner may appeal to in an otherwise stringent liability regime, this liability is limited according to the tonnage of the ship in terms of the Civil Liability Convention.
Depending on the exchange rate, the existing possible compensation for oil pollution and incidental costs through normal insurance is limited to approximately R900 million, hence the mechanism to guarantee compensation to claimants in respect of oil pollution damage is the fund convention that establishes the International Oil Pollution Compensation Fund. This fund is financed by cargo owners who receive in the ports and terminal installations of the contracting states more than 150 000 tonnes of contributing oil annually. At recent exchange rates, the maximum compensation that can be paid by the fund in respect of a single incident is just over R3 billion, which can be used to compensate claimants where they have either been unable to receive payment or full payment in terms of the Civil Liability Convention. This significantly increased sum illustrates the value of this package of Bills.
Currently, South Africa is severely exposed in the event of a major oil spill as the limits contained in the Marine Pollution (Control and Civil Liability) Act are very low indeed. Once this package of Bills is enacted, the risks associated with a major oil pollution disaster will be mitigated to a far greater extent. If, for example, a tanker broke at Ethekwini, there will be many individuals, commercial enterprises as well as government, with legitimate claims. Government will be faced with an extremely expensive and unanticipated clean-up bill; resorts, hotels, B&Bs and related support industries will be hard hit, with many established as well as marginalised entrepreneurs' livelihoods placed at risk, possibly for an extended period of time. Lastly, individuals who may not be directly involved in the leisure and accommodation sectors will be equally prejudiced if their own residential properties are near the affected area.
Being able to access the International Oil Pollution Compensation Fund in these circumstances of multiple, substantial and legitimate claims up to approximately R3 billion, illustrates clearly the benefits of this legislation. Claimants will now enjoy a far greater level of cover, not least the state itself, as a contributor of the last resort. Appropriately, the cost of a major oil spill or disaster will now be borne to a great extent by the industry concerned. That is how it should be, and why the DA is supporting this Bill. In this respect, we do agree with the Minister, but then again, she was quoting verbatim from the explanatory memorandum to the Bill.
In summary, this is a welcome and constructive Bill that will afford South Africa a far greater measure of comfort should we be unfortunate enough to suffer a major oil pollution disaster. The Bill has been improved by the valuable and voluntary inputs of the Maritime Law Association o SA and General Council of the Bar of SA, who have tightened up several poorly defined jurisdictional and overlapping legislation issues. The DA will support this Bill. I thank you. [Applause.]