Some six years after bulk carrier Shen Neng One grounded on the Douglas Shoal, off the coast of Queensland, the Commonwealth has opened its case in the Federal Court to determine who should pay up to $194 million in damages for the incident.
Commenting on the trial, the London Club – the insurer which had the vessel on its books – was critical of the actions of the Federal Government.
“Maritime insurer The London P&I Club has expressed regret that the matter of environmental remediation following the grounding of the Shen Neng 1 off Queensland has not been settled,” the group said.
“Attempts have been made to mediate with the Australian Government, however the Government has opted to have the matter heard in the Federal Court …
“The Shen Neng 1 incident was the result of an error by the chief officer of the vessel, who was employed by an independent ship management company – not the owners.
“Regardless, the Australian Government has decided to pursue the owners for environmental remediation costs.
“It is hoped that the Court process will provide clarity on the matter of costs.”
Shen Neng 1 grounded on the shoal on April 3, 2010, resulting in damage to more than two kilometres of reef, roughly 100 kilometres north-east of Gladstone.
There are significant differences in expert opinion when it comes to defining damage to the shoal.
The owner’s environmental experts say the damage is not as significant as some suggestions by the Commonwealth. The Commonwealth’s estimates have ranged from AUD $70 million to AUD $194 million.
“Such figures are unsubstantiated and unrealistic. Commonwealth government legislation limits the liability of ship owners in these circumstances to about AUD $25m (subject to change based on exchange rates),” London Club said.
“Additionally, as of the most recent survey in May 2016, there is evidence showing that large parts of the shoal are recovering naturally, and that going ‘all out’ with human remediation efforts, such as dredging as proposed by the Commonwealth, would be environmentally counter-productive.”
According to the London P&I Club, the grounding was caused by the Chief Officer’s failure to make a crucial course alteration.
In 2012 the Chief Officer, Xuegang Wang, was sentenced to 18 months in jail by the Gladstone’s Magistrates Court with 3 months to be served followed by a two-year good behaviour bond.
The ship’s Master, Jichang Wang, was ordered to pay a AUD $25,000 fine. Both men were employed by the independent ship managers.
The ship was refloated on April 12, 2010 and towed to Hervey Bay. There were no injuries and no cargo (coal) was lost.
The grounding created rubble on the shoal. The ship’s hull broke rocks and dislodged algal growth. Contact with the seabed also scraped some paint off of the bottom of the vessel and flakes were left behind.
According to the London P&I Club, EcoStrategic Consultants conducted an independent assessment of the Douglas Shoal and found “abundant healthy marine life on the shoal at levels that were comparable or superior to levels of life at the neighbouring Haberfield Shoal.”
The Club also argued that Commonwealth-appointed scientists had, in 2013, found that contamination of copper, zinc and tributyltin in anti-fouling paint (which, by its very purpose – to kill barnacles growing on the ship’s hull etc – is toxic) was not problematic and did not warrant remediation.
It was then argued by the Club that the consultants in 2016 that levels of tributyltin were largely too low to detect except in one area and, in that area, did not inhibit marine growth.
“The area of the grounding has shown strong natural recovery over the past six years. At this point, the potential benefits of any remediation projects would need to be weighed against the inevitable environmental disruption and set back to natural recovery that would be caused by human intervention,” the Club said.
A spokesperson for the Great Barrier Reef Marine Park Authority declined to respond in detail to the London Club release, citing the fact that there is an ongoing court hearing. However, the GBRMPA released the following general statement:
“The GBRMPA has long been concerned about the ongoing impact of the 2010 grounding of the Shen Neng 1 at Douglas Shoal east of Rockhampton. It caused the largest known direct impact on a coral reef by a ship grounding. The large concentration of toxic anti-fouling paint left on Douglas Shoal as a result of the grounding also continues to represent a significant environmental risk. We have always remained open to settlement negotiations. Trial proceedings will now commence in the Federal Court in Brisbane…”
This article was originally published by ABHR affiliate Lloyd’s List Australia.