$20.4 million mandatory minimum security for oil pollution in Australia

A recent suspected oil pollution incident resulted in the relevant regulatory authority detaining the ship in question and demanding security of A$20.4 million. The demand was later withdrawn, but leaves the issue open for the next incident. Owners, Charterers (who may be held liable for cross-security under the charterparty) and their P&I Clubs must be prepared to face an identical demand in the event of any future pollution incident in Commonwealth waters.

In 2012, the maximum penalty applicable to a corporation for discharging oil into Commonwealth waters was increased from A$275,000.00 to A$17 million and the penalty applicable to the Master was increased from A$55,000.00 to A$3.4 million. In each case, the offence is one of strict liability, meaning that an offence occurs and is punishable by penalty, regardless of cause or fault. In addition, the Commonwealth and most State/Territory jurisdictions permit the relevant regulatory body to recover clean-up costs