Fran O'Sullivan: It's time to make Rena owners responsible

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The Rena is said to be insured for US$1 billion in case of a pollution event. Photo / Supplied
The Rena is said to be insured for US$1 billion in case of a pollution event. Photo / Supplied

The Government must stop pussy-footing around on issue

Transport Minister Gerry Brownlee and Environment Minister Nick Smith may have to blow their megaphones louder - or follow through with concrete legal threats - if they are to have any realistic hope of getting Greek shipowners Costamare to cover the true costs of the Rena disaster.

The Cabinet Ministers are trying to sheet home full financial responsibility for all the environmental damage caused by the Rena's break-up and sinking to Costamare Shipping.

And so they should. After all, it's three months since the Rena went aground.

The Government approach still seems rather pussy-footed.

Smith would say very little when I approached his office: "The Government has opened lines of communication with the owners and insurers and expects to engage with them about the environmental and financial implications of the situation once it is clear what those implications are," was all his press officer was allowed to say.

This bland sort of statement will not worry Costamare one iota.

But going public on nationwide television and saying the Government wants a down-payment now - not later - would have more effect. Particularly, as it would be accompanied by more footage of the Rena's dying days and more environmental spillage on our beaches and waterways.

The Government did manage to squeeze a $1 million donation to the cleanup out of the ship's charterer, Mediterranean Shipping, last year.

So why not tighten the screws on Costamare - which has said Mediterranean Shipping does not bear fault for this disaster - to follow suit to provide some partial protection to its own corporate reputation?

Problem is the wily Greeks are yet to issue any clear undertakings. A carefully worded statement issued this week left out the critical words, "Costamare will write a cheque to cover the full cost of the clean-up ... we don't expect the New Zealand taxpayers to have to go Tailend Charlie for a disaster that was clearly caused by our crew."

Instead, Costamare focused on the plans its appointed salvors were devising to lessen environmental damage.

The plans would be discussed with the Government. The statement also stressed the company and its insurers continued to fund the salvage operation, including the recovery and processing of containers washed overboard.

This is standard public relations101.

But what was surprising was Costamare's decision to publicly thank the Mediterranean Shipping, Company (MSC) which was the time charterer of the Rena, "for the continuous assistance and full support given since the grounding.

"We would like to underline that MSC as time charterer is not a responsible party to this very unfortunate incident."

Costamare did not have to make this comment. It tends to suggest the shipping charterer may have come under some commercial pressure since the Rena's founding. It's also certainly undoubtedly true that MSC does not own the Rena, nor did it employ the crew and was not responsible for the maintenance and operation of the vessel.

But one of the questions that MSC should be pondering is the extent of its own responsibility to ensure that the vessels that it hires are fully seaworthy and manned by reputable, competent seafarers.

This is the sort of question that a commission of inquiry should by now be delving into.

Such an inquiry could also probe how much pressure MSC and other charterers face to become a low-cost operator to win contracts from major NZ exporters such as Fonterra to carry a substantial portion of their exports to market. And whether we are likely to be subject to more maritime disasters through the number of ageing foreign-crewed rust buckets within our coastal shipping lanes.

At the end of the day, there is no way New Zealand taxpayers should be Tailend Charlie for the environmental fallout from the clearly incompetent - and possibly criminal - actions that led to the grounding of the Rena on Astrolabe reef. It would appear that the civil liability to the Rena's insurers is capped at $14 million under the Maritime Act.

But the ship itself is said to be insured for US$1 billion ($1.26 billion) for a pollution event.

The Government can also take action under the Resource Management Act if gross negligence can be proved. It's time that the Government intensified its rhetoric on the Rena disaster.

And that it prepared itself for similar tough action over the liability and compensation for the Pike River coal mine disaster and the failures of particular buildings in the Christchurch earthquake.

- NZ Herald

Fran O'Sullivan

A columnist for the NZ Herald

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

Read more by Fran O'Sullivan

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