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Ships calling in Queensland face 'Swire's Levy'
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Swire's stand may lead to levy on all other shipping companies

Ships calling at ports in the Australian state of Queensland could soon be facing a new tax on top of normal port charges, in the wake of a dispute between the state and Swire Shipping.

State officials have rejected Swire Shipping's offer in a meeting on Wednesday of an undisclosed amount as compensation for causing Queensland's worst oil spill, local reports said.

Queensland Premier Anna Bligh has now renewed threats to impose a levy on all shipping companies to recoup the cost of the Moreton Bay bunker spill, it was reported.

“If Swire does not come to the party and we have to impose a levy (Protection of the Sea Levy) to recover these costs on all ships...frankly I will make sure it is known in the industry as the Swire's Levy,” she was quoted saying.

According to reports, Bligh also threatened to lead an international crusade against Swire, with penalties including bans on all business interests connected with Swire Shipping along with across-the-board levies slapped on all ships.

Prior to Wednesday's meeting with Swire officials, Bligh had urged the company to pay the entire bill for the bunker spill its cargo ship caused.

The incident in March saw one of the containers that fell overboard during a storm puncture the Pacific Adventurer's bunker tank, leading to some 270 metric tonnes (mt) of bunker fuel leaking into coastal waters near Brisbane, resulting in Queensland's worst oil spill.

Queensland state authorities have estimated total clean-up costs at some A$34 million ($27 million).

According to Swire, it has, from the the beginning, promised to meet its full responsibilities “under Australian law” for the accident clean-up.

Swire did add however, that “the company has not stated it would cover all costs. All costs are still unknown and there is a limit to the amount of claims the company and its insurers can accept.”

Australia is a party to the Convention on Limitation of Liability for Maritime Claims (the LLMC Convention) which limits the liability of a shipowner for third party claims.

In the case of the Pacific Adventurer, the Convention reportedly limits this liability to the equivalent of approximately A$14.5 million ($11.4 million).

Swire says its insurer has already provided financial security to the Government by a letter of undertaking for up to A$20 million ($15.8 million), “a level of security accepted by the Government because it understood that the LLMC Convention was applicable.”

Swire explained that if shipowners faced unlimited liability for such spills, the additional cost of insurance would result in a significant increase in freight rates, which would have a negative impact on international trade.

Swire Shipping's stand that it has limited liability for damages has drawn fire from Australian stakeholders affected by the incident.

Queensland may ban its public servants from using any Swire-related services such as Hong Kong-based airliner Cathay Pacific in which Swire is a majority shareholder.

Bligh has also been mulling an audit of all financial interests held by Swire Shipping in order to recoup total clean-up costs.

Swire holds Australian interests in cold storage and transport businesses as well as rural properties in Queensland where it produces cotton, wool, beef and wheat.

The Queensland government last Tuesday passed a resolution which “formally condemned Swire Shipping for the way in which the company has reneged on its obligations to the people of Moreton Bay, its residents and visitors.

“We reject any suggestion (that) the Queensland taxpayer should pick up the tab for the costs associated with the clean-up of the oil spill in Moreton Bay caused by Swire Shipping.”

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