Taxpayer may contribute to Rena's cleanup bill

  • 12/10/2011

By Kim Choe

The cleanup cost from the Rena is already in the millions – and rising.

But New Zealand law may limit how much of the bill will have to be picked up by the vessel’s owners and it’s hardly anything in comparison to other countries.

The 1989 Exxon Valdez oil spill in Alaska remains one of the most damaging ever; 40,000 tonnes of oil spilled into Prince Williams Sound, where it remains more than two decades on – and they’re still counting the cost.

“There are some folks that I cannot get to talk to anybody about the spill, because it brings back nightmares,” says resident Patience Faulker.

Exxon Mobil was ordered to pay compensation of US$5 billion to fishermen and residents, but the courts eventually reduced it to half a billion.

The 300-tonne Rena spill pales in comparison – but so too do the penalties faced by the vessel’s owners.

“They don’t compare favourably in my view,” says maritime lawyer Peter Dawson. “The maximum penalty that can be brought against the master or the company that employs him in New Zealand is $200,000 for oil pollution.”

Compare that to the 2009 Pacific Adventurer spill in Queensland, where the owner is facing a fine of up to AU$2 million, for a spill that was slightly smaller than the Rena’s.

The Adventurer’s owner also agreed to pay $25 million towards the cleanup, based on the size of the ship.

“My calculation is that the fund that would be available for the payment of cleanup costs and claims could be limited to as little as NZ$14 million.”

This afternoon, Prime Minister John Key conceded that the taxpayer may have to payout too.

“There is a cap on the level of insurance liability. Any costs beyond that would fall on the taxpayer.”

That cost is climbing with every day.

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source: newshub archive