Rena owner and Government reach settlement

MICHAEL DALY
Last updated 14:03 02/10/2012
Fairfax NZ

The Government says its the best possible outcome for the people of New Zealand, despite it leaving a $20m clean-up bill shortfall.

Rena wreck
Supplied Zoom
The Rena wreck.

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The Government would have liked to have seen a higher settlement with the owners of the wrecked cargo ship Rena but says what it got was "very reasonable".

The Rena struck Astrolabe Reef off in the Bay of Plenty and grounded early in the morning of October 5 last year. About 350 tonnes of oil escaped, some washing up along the Bay of Plenty coastline.

Maritime New Zealand (MNZ) this morning confirmed the Crown and Daina Shipping Company had reached a comprehensive financial settlement for matters arising from the ship's grounding.

Daina Shipping Company will pay $27.6 million to settle the claims of the Crown and public bodies including MNZ, Bay of Plenty District Health Board, Environmental Protection Agency, the Minister of Local Government (signing as the territorial authority for Motiti island), and the New Zealand Transport Agency.

This would leave a shortfall of about $20m on the clean-up costs, which were so far around $47m.

If Daina decide to apply for, are granted, and use a resource consent to leave part of the wreck in place, the company would make an additional payment of $10.4 million to the Crown.

The Government would have been restricted to the $11.5m limitation if it had pursued the matter in the courts, Transport Minister Gerry Brownlee said.

As it was, about $9m of the total $27.6m settlement came from the limitation fund, Brownlee said.

The rest of the fund remained for other non-governmental agencies or people to claim from.

The New Zealand Government was unable to make claims on the $27m British limitation fund.

That was largely for cargo losses.

"Ever since the ship went aground the owners have acted very very responsibly and it shouldn't be forgotten that their costs will be $100m-plus with regard to the salvage and all the other exercises they've been going through," Brownlee said.

"All Crown claims or local Government claims are covered by this [settlement]."

The Government will pay the up-to-$20m shortfall out of Crown accounts, some of it would have fallen to the Government regardless of the settlement, he said.

New Zealand was a trading nation and it was important that ships continued to come here.

For that it had to be part of the international convention which included the limitation.

"International shipping is protected by these limitations and as a country that significantly requires shipping into our ports, for our economy to survive, we just have to wear this one."

Legislation to increase the size of the limitation was currently before a select committee.

Brownlee said there were no plans to help local businesses with money from the settlement.

"I'm sorry I can't respond to that, that's not part of this package."

Any decision on leaving the Rena on the seabed would be made by the Bay of Plenty Regional council.

If the Rena's owners save $10.4m on the salvage, the company would give that money to environmental projects.

'WE'VE DONE PRETTY WELL'

Prime Minister John Key said the Government had done a good job of negotiating the best deal it could.

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Legal advice showed court action would take a long time, be expensive and not necessarily be successful, he said.

"We've done pretty well. It's better than $11.3 million and it's cost a lot less than people initially thought. But it's still an impact on New Zealand  ... we have to reflect on that."

Many people supported leaving part of the wreck on the reef to create a diving site, Key said.

"The fish life and marine life would be phenomenal so as a diving attraction it would be a great place to go."

However, Maori on Motiti Island were opposed, he said.

"So people will need to work through that but if they can leave it as a wreck, and as a diving site, it will be below the water but it saves about $10 million in the removal costs.

"That money would then be paid to the Crown."

COMPLEX NEGOTIATION

"This was a very complex negotiation given the range of issues and parties involved, and represents a good outcome for New Zealanders," MNZ director Keith Manch said.

"As with any settlement, it is about finding a solution that both sides can live with, and I would like to acknowledge the constructive approach taken by Daina Shipping Company and their continuing commitment to meet their obligations under New Zealand law."

Konstantinos Zacharatos, on behalf of Daina, said: "We have always sought to work closely with the New Zealand authorities to address all aspects of this serious incident.

"This settlement is a vital step forward in our progressive resolution of all the issues, and I want to thank the New Zealand authorities for all of their work that has gone into achieving this outcome."

Meanwhile, work following the grounding has continued with MNZ reporting that 1003 of the containers that were on board had been recovered so far.

Steel weighing more than 650 tonnes had been removed from the wreck and preparations were underway to start underwater steel cutting.

A clean up of debris from the wreck continued.

The Marine Legislation Bill, which was going through the parliamentary process, would substantially increase the amount of compensation payable by ship owners for incidents such as  the Rena grounding. The legislation was expected to be in place in early 2013.

TIMELINE

- October 4: The Rena leaves Napier, and the captain is in a rush to make it to Tauranga by 3am to make the time window for pilotage.

- October 5: The cargo ship takes shortcuts and crashes into the Astrolabe Reef off the Tauranga coast.
- October 6: Maritime NZ confirms an oil slick stretching 2km can be seen from the air. Four dead birds are found.

- October 8: Fresh oil is spotted leaking from the Rena, which is on an 11-degree list. Specialists from New Zealand and Australia join the oil spill response team.

- October 10: Clumps of oil are found washed up on Mt Maunganui beaches and at the southern end of Matakana Island.

- October 11: Between 200 and 300 tonnes of oil spill into the sea. Seventeen oiled birds are cared for, 53 dead birds are found dead so far.

- October 12: About 70 of the 1368 containers tip off the Rena. A crack appears down the side of the ship.

- October 13: Diamantis Manos, managing director of Costamare Shipping Company S.A., the registered owner of the Rena, makes a public statement.

- October 14: 3000 volunteers register to help clean up the beaches.

- October 18: 1290 dead birds and four dead seal pups are found so far. The Wildlife Centre cares for 207 live birds and three seals.

- December 22: Salvors start removing containers from Rena's stern.

- January 8, 2012: The Rena splits in two, and salvors believe up to 300 containers may have been lost.

- January 10: The stern of the ship begins to sink, and more oil leaks into the water.

- March 8: The Transport Accident Investigation Commission releases its interim report showing the captain took shortcuts during his journey to Tauranga.

- May 25: Rena captain Mauro Balomaga, 44, and navigator Leonil Relon, 37, are sentenced to seven-months in jail for operating a vessel in a manner likely to cause danger, discharging a contaminant and altering ship documents.

- April 4: The front section of the Rena and its bridge are now submerged, and more oil leaks into the water.

- April 5: Debris washes ashore in the Coromandel, and the owners of the Rena are charged under the Resource Management Act.

 - August 10: Rena insurers and owners announce they are conducting a study on different options for dealing with the wreck.

- August 15: Salvors working on reducing the size of the bow begin to remove pre-cut metal with a helicopter and crane.

- August 31: Debris from the ship washes ashore, with tiny polymer beads proving a problem.

- September 5: The captain and navigation officer of the Rena are released from prison and deported back to the Philippines the next day.

- September 10: A 250-tonne piece of the Rena breaks off and falls to the seabed.

- September 18: The owners and insurers of the Rena set a compensation limit for businesses and individuals, covering loss, damage, or delay causing loss, or the infringement of rights.

- October 2: The Government reaches a $27.6 million-settlement with the Rena owners.

- Stuff

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