Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 11 - Evidence - March 22, 2005
OTTAWA, Tuesday, March 22, 2005
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill C- 15, to amend the Migratory Birds Convention Act, 1994, and the Canadian Environmental Protection Act, 1999, met this day at 5:20 p.m. to give consideration to the bill.
Senator Tommy Banks (Chairman) in the chair.
[English]
The Chairman: Honourable senators, we have with us today members of various organizations representing the shipping industry.
I apologize to the witnesses for the lateness of our start, and I want you to understand the reason for it. The Rules of the Senate of Canada do not permit Senate committees to meet while the Senate is in session, and the Senate suspended its sitting just a few minutes ago. The prescribed meeting time for this committee on Tuesday afternoons is when the Senate rises, but in no event before five o'clock.
I have further bad news. The Senate will resume sitting at the call of the chair at approximately seven o'clock, at which time we will be obliged to suspend this meeting in order to do a small piece of business that must, for budgetary reasons, be done in the Senate chamber today. We will then resume this meeting.
I apologize for those inconveniences, but we are precluded by the Rules of the Senate from meeting while the Senate is sitting.
Before we proceed with evidence, there is a matter of order to which Senator Angus wishes to speak.
Senator Angus: Mr. Chairman, I would like to obviate any misunderstanding or confusion that might otherwise arise respecting my involvement in these hearings. I have been a member of le Barreau du Québec, the Canadian Bar Association and the Canadian Maritime Law Association since 1963, that is, for 42 years. I have specialized in maritime law matters for some 40 years, and I served as president of the Canadian Maritime Law Association — CMLA — for three years, from 1989 to 1992. In 1992, I was made an honorary life member of the Canadian Maritime Law Association.
One of my colleagues at Stikeman Elliott in Montreal, Peter J. Cullen, is currently president of the CMLA, which is scheduled to appear before us on approximately April 14. Although I remain a member of Stikeman's Montreal office, I am in a retirement program there. To the best of my knowledge, colleagues, the firm has not been retained to represent any individuals, corporations or parties concerning Bill C-15, and neither have I personally.
I wish to declare for the record that I have no economic or any other untoward interest in the legislation before us. My only interest is to do my duty as a member of the Senate of Canada and of this honourable committee to ensure that the legislation proposed in Bill C-15 receives appropriate sober second thought.
The Chairman: Thank you, Senator Angus.
The first organization we will hear from is the Canadian Shipowners Association, represented by Mr. Donald Morrison, President, and Captain Réjean Lanteigne, Vice-President. They are joined by the Secretary General of International Chamber of Shipping, Mr. Chris Horrocks.
Mr. Donald Morrison, President, Canadian Shipowners Association: Honourable senators, we appreciate the opportunity to meet with you this afternoon to describe our concerns about Bill C-15.
I will provide an overview of our opinion and attitude toward the proposed legislation and will comment on the consultation process that has been held to date on both attempts to pass this proposed legislation. Captain Lanteigne will describe some of the challenges and concerns with regard to the legislation, and Mr. Horrocks will provide us with his European experience with this type of legislation and a description of the international concerns with Bill C-15.
I am sure I speak for all the industry representatives at this table when I ask you to be advised that the CSA and the other members of the industry continue to support the principles required to create and sustain an environmentally friendly industry. Our challenge is not to being environmentally clean; our challenge is to the proposed legislation, Bill C-15.
The Canadian Shipowners Association represents the interests of the Canadian flag vessels that trade on the Great Lakes, the St. Lawrence waterway, the Arctic and eastern seaboard of Canada and the U.S. Our members are primarily involved in the coasting trade, that is, origin and destination within Canada and with cross-lake trade between Canada and the United States. Occasionally, we do trade along the U.S. east coast and regularly trade to Newfoundland and the Canadian Arctic. We have some 70 vessels in our fleet and carry an average of 70 million tonnes per year, generally primary products such as coal, iron ore, limestone, salt, grain, coke, cement and petroleum products as well as general and containerized cargo. We provide Canadian communities and industries with reliable, economic and environmentally sustainable transportation. As an editorial comment, the quietly effective domestic marine transportation industry plays an essential role in Canada's industrial and natural resources economy.
Overall, the mandate of the CSA is to promote an economic and competitive Canadian marine transportation industry by establishing strong working relationships with its marine industry partners, governments and local industries. I will return to this, because even in matters environmental we have tried to establish partnerships with government and local industries.
I will now turn to the consultation process that has or has not been held with regard to formulating this legislation. I will talk about the first bill that came before Parliament and died on the Order Paper when an election was called last year. To my knowledge, no one in the industry had the opportunity, either prior to the creation of the bill or at second reading, to present the industry's needs, requirements and challenges. That became a moot point because the election was called and the bill died. We thought that may have been the end of the proposed legislation because people had made a fuss about the fact that we were not consulted.
However, the consultation process that was held when Parliament resumed in September was, in our opinion, less than successful, and that is because in many, if not all, cases of new legislation or changes to existing legislation affecting the marine industry, the department or departments set up a semi-formal process of consultation whereby industry representatives identify their needs and provide specialized expert input to the intent and wording of the law and regulations.
The most recent example of this was the approach followed by Transport Canada in its recent — and we would say successful — creation of regulations under the Marine Transportation Security Act for the marine industry.
This was not an easy task for them. It was probably one of the most onerous tasks in an operational sense that the department has faced in many years. Yet, they still did not close the door and do it all on their own. They called in industry representatives. We had people at the table. The international industry had people at the table. Through a consultation process, we arrived at regulations that people can live with and, therefore, that people can work with and that can be implemented, and they are working quite well.
This was done neither by bureaucrats nor at the ministerial level, to my knowledge, in the development of the present Bill C-15. Even at the parliamentary committee level this time, we were not granted time as a witnesses. We, as the CSA, were asked to provide a presentation, and we did provide in advance an appropriate number of copies in both languages, and then we were not granted a hearing. This is the first time officially that the CSA has had an opportunity to comment on Bill C-15. I must say that this is the first time in my probably too many years of experience that I have seen this happen. We are pleased to be here this afternoon.
In my opinion, and in the opinion of many people in the industry, the approach that was followed, whereby to a large degree the industry was shut out, has contributed to the description of this proposed legislation within the industry as bad law. There is no other way for our marine constituency to describe a law that wants and has as its aim to criminalize seafarers as no other law does. We would now place seafarers in the position of possibility going to jail for an accidental spill. This law, due to its application by definition, will discriminate against the shipowners' businesses domiciled in Canada, whether these are domestic or international. These companies can be reached here within the country, whereas it is obviously more difficult if not impossible to reach foreign shipowners who are not located here in this country of Canada, especially at the executive level.
If this law is to replace another law and its implementation possibilities are less than the other law, then we must question the reason for the law. Mr. Lanteigne will go into this in more detail, but here we compare the people responsible for the implementation of the enforcement of the law. We are not convinced that the switch from trained pollution officers as required under the Canada Shipping Act to individuals with other responsibilities will improve the enforcement factor, and we would hope that that was one of the goals of the proposed legislation.
As you can see, we have many challenges to meet. Mr. Lanteigne will point out other specific difficulties with this proposed legislation. We thank you for this opportunity to express our concerns, and we will have some final comments after.
Senator Angus: Mr. Chairman, I wanted to ensure that the document that the witness referred to is the one that is dated today and it is entitled “Submission to the Senate Standing Committee on Energy...” and that it will form part of the record of these proceedings.
The Chairman: All papers presented to us form part of the record.
Senator Angus: I just wanted to make that point.
Captain Réjean Lanteigne, Vice-President, Canadian Shipowners Association: Honourable senators, I am pleased to be here to be heard.
The brief we submitted to the Senate that Senator Angus just referred to touches on three aspects of the bill about which this organization wishes to express some concern and problems. The first of these is the conflict with international law. Mr. Horrocks from the International Chamber of Shipping will address that after me. The second item we want to address relates to the impact on the seafarers community. Lastly, and more important, we want to address the enforcement provision of the bill in relation to other bills that we already have on the books in this country that are in force for marine pollution.
On the conflict with international law, our submission is relatively straightforward. Mr. Horrocks will talk to it in a wider context shortly, but let me just say that this country participates with significant influence in the design, drafting and collaboration of international treaties and international convention.
We also have an objective, long maintained, in this country of pursuing international solutions to international problems. We are of the opinion that our failure with this bill to respect these international commitments will seriously undermine our influence and reputation in future undertakings.
The second point is on the seafarers community. A major consequence of this proposed legislation will be the negative impact that criminalization will have on the seafaring community, including Canadian seafarers, particularly for accidental discharge. We read the proceedings of this committee of some weeks ago, and we saw that you are already informed of the Tecam Sea incident in September 2002 where an investigator or game officer employed by the Canadian Wildlife Service arrested and detained the master in Newfoundland. It was widely reported in the media that the master was arrested and jailed without reasonable grounds that he committed an offence. From my recollection, he was of Ukrainian citizenship. He was detained in Newfoundland for in excess of a year. There was no ground for his detention, and he was never charged with anything.
This bill, as Mr. Morrison mentioned, creates an even greater uneven playing field for Canadian shipowners, masters and officers of our ships by subjecting them to criminal sanctions that to some degree are largely unenforceable against non-resident shipowners. Once again, Canadian shipowners are, to some degree, singled out for penalties here.
Furthermore, an argument can be made that, in the event of an accidental or wilful discharge, charges will be made against the master, chief engineer, owner and operator of a vessel under this proposed legislation instead of the existing provision of the Canadian Shipping Act.
The existing provision of the Canada Shipping Act currently governs all matters related to marine pollution, including severe penalties for accidental or wilful discharge.
Bill C-15 duplicates the offence, while setting relatively high minimum fines. It is our view, if this bill passes, that the current shipping act provision will become redundant as a result. In other words, the Migratory Birds Convention Act and the CEPA amendment will become the oil pollution legislation par excellence.
Otherwise, the laying of multiple charges, as was the case in the Tecam Sea incident, under both the shipping act and the proposed legislation for infractions that are largely based on the same factual elements will be counter to the Kienapple principle that was laid out by the Supreme Court many years ago. If I were a game warden, I would lay the charge under the migratory birds legislation, knowing full well that the level of fine is already established at a fairly high minimum level, a level that we have seen is not covered by P&I insurance clubs that insure the ships for these events.
Who pays the impact of this? It will be seafarers, both Canadians and foreign nationals. Is this a position that the Canadian government and public authorities want to pursue? We also want to say, contrary to what individuals from Environment Canada said in testimony, that this is a significant policy change on the part of the government. If so, the criminalization of seafarers in our view takes a whole new meaning.
We have some concern also to express about due process. We would hope that this committee would ask whether criminalization of masters and ship officers represents a fruitful approach towards increasing safety and environmental protection.
The establishment of minimum fines in the bill is a two-edged sword with far-reaching consequences. We certainly recommend to this committee that it study this matter closely and propose an amendment to the bill on this aspect alone.
I should like to refer to an item in The Globe and Mail from March 14. There was an opinion in this country, particularly in Parliament, that the marijuana grow operation owners should have minimum sentences as a result of the outrageous killing of four RCMP officers in Alberta. I shall quote from the article:
Public Safety Minister Anne McLellan's criticisms of the judiciary for imposing lenient sentences for grow-ops, made the day after the deaths of the four officers, has only fuelled the debate.
Mr. Cotler, however, insisted that several studies have concluded minimum sentences do not work.
“They've all come to the conclusion that minimum sentences are neither a deterrent nor are they effective,” Mr. Cotler said.
If this crime of growing marijuana does not deserve a minimum sentence, we are asking ourselves why this so-called crime of accidental or wilful discharge of oil requires a minimum sentence.
The last point is enforcement of pollution law in this country. In their testimony of February 17, officials from Environment Canada indicated that there are 55 conservation officers employed by the Canadian Wildlife Service. Of those, 10 work in Hull, which leaves about 55 game wardens to police this proposed legislation.
I am very familiar with the qualifications of game officers. I was born in a village in New Brunswick, so I know what a game warden is all about. I am somewhat overwhelmed by the extent of the power assigned to that person in relation to the operation of ship seafarers and mariners.
The shipowners would recommend that the enforcement mandate and related powers of the bill be assigned to pollution prevention officers, who are currently duly designated to perform this task under the Canada Shipping Act. Since these individuals are already present across the country — there are 952 pollution prevention officers duly nominated to perform this — we are of the opinion that the enforcement would be meaningful and effective — and more so, as these individuals are trained as steamship inspectors and are heavily involved in the marine business.
It is our opinion that enforcement would be more than problematic under the current bill.
Mr. Chris Horrocks, Secretary General, International Chamber of Shipping: Honourable senators, thank you for having me. Let me disabuse you, this is why I came. I did not have to be press ganged to come, either. This is a concern.
As has been explained, I am the Secretary General of the International Chamber of Shipping, or ICS as it is known. We are the industry's international trade association. Our members are not individual shipping companies, but national shipowner associations in 38 countries across the world from Chile to Norway, Australia to Ireland. In Canada, we have as members both the Canadian Shipowners Association as well as the Chamber of Shipping of British Columbia. Together, we represent more than half of the world's merchant fleets.
I should state at the outset, this may seem self-evident but I think it bears repeating, that we have no quarrel whatever in the international shipping industry with the principle that infringement of pollution regulations should be punished. It is not in the interests of anyone, it is not even in the interests of the industry, that that should be the case, because then everyone is tarred with the same brush. Deliberate infringements of environmental rules should certainly not go unchallenged. We all want to try to weed out the small number of bad actors. That is a collective responsibility that we entirely share.
However, we do have concerns about this bill, and concerns that are shared by partners within the maritime industry with whom we do not always see eye to eye. The written submission that was addressed to the chairman on March 11 was co-signed by me and by my opposite numbers in the International Transport Workers' Federation and an organization called the Oil Companies International Marine Forum — in other words, the shipowners, the international seafarers unions and the tanker charterers, collectively, people who tend to have contrary interests rather than simultaneous interests.
In all the 30 years or so that I have been in the industry, I do not think I have ever found such a willing consensus as the current debate that is going on not just in Canada but in Europe as well about the problem of criminalization of seafarers, which is the essence of our concern about this particular bill.
I will summarize our concerns quite simply without repeating what others have said.
Again, this may seem like a truism but I think it bears repetition. Shipping is an international industry. It has been a basic tenet of the faith not only in the industry but in the whole maritime community among maritime countries in the International Maritime Organization, as our UN agency, for not just decades but centuries that an international industry requires international regulation of shipping. This goes back to the time of Grotius and the early principles of the laws of the sea. Canada has been one of the staunchest and most loyal supporters of that principle, an active participant in IMO, the country of residence of its past secretary general, a country that provides currently the chairman of its legal committee and very much a mainstream player in international maritime discussions.
The bill as drafted, in our assessment, would breach that principle of international agreement in several respects, putting Canada, as we interpret it, in conflict with its international obligations both under the MARPOL Convention, the maritime pollution convention, and also under the United Nations Convention on the Law of the Sea, which I think Canada signed as recently as last year.
In particular, and this is our main focus, the bill appears to make no distinction in law between deliberate infringements and accidents, making a pollution incident an offence regardless of intent on the part of the accused. This is not only contrary to MARPOL, which quite distinctly excludes accidents from infringements of the convention, but is also disturbing not only to us but also to our seafarer colleagues, as well as, and this is worth stating, to the salvage industry — important in this context, because it is the salvors, the salvage tugs, that are the first people that are expected to go to the assistance of a ship in difficulty. Those salvors are saying that they are potentially in a position where they commit some act that, though intended to avoid pollution, in fact, gives rise to a degree of pollution, and they are immediately guilty until they can subsequently prove their innocence under the bill. That from their point of view is a real deterrent. They are constantly arguing that the efforts that they make to take steps to avoid pollution are not sufficiently given regard when salvage awards are made.
This conflict gives an unfortunate signal not only to the industry and its seafarers, but also to those who have historically regarded Canada as a supporter of the rule of international law. Sadly, we witnessed several recent cases of ships masters and crews being locked up for criminal offences after pollution incidents arising from accidents. This has happened in Europe and Venezuela. We have heard of a particular case in Canada. It is happening elsewhere as well.
It was Monday this week when a senior maritime lawyer asked me in the context of both this and what has been happening in Europe, “Would you be happy if your son became a seafarer today knowing that he may be jailed for an accident?” The answer I am afraid is clearly no. That is an answer that we are hearing to that question not just from the stuffed shirts in the maritime legal profession but also from the countries that provide most of the seafarers to the international maritime fleets today.
Let me repeat: We fully and quite unequivocally support rigorous enforcement of pollution regulations because we believe that to be in the interests not only of society, but of the industry that I represent. That said, we would earnestly urge Canada to abide by the international obligations to which we feel it has committed itself, and to think again about legislation that we would argue both conflicts with those obligations and, in the process, appears to criminalize pure accidents.
The Chairman: Thank you for your conciseness, Mr. Horrocks.
Mr. Morrison: If I may make one closing comment.
To sum up what the CSA position would be on recommendations, if the proposed legislation were deemed to be in contradiction of international treaties and conventions that Canada has ratified, we suggest and recommend that it should not apply to vessels. Second, we would recommend that the bill, if it goes through, be modified to delete the minimum fine provisions. Third, as Captain Lanteigne discussed, we further recommend that the enforcement mandate and related powers be assigned to pollution prevention officers duly designated under the Canada Shipping Act.
Those are the three recommendations contained in our submission at the top of page 6. I wanted to re-emphasize those.
The Chairman: Thank you very much, gentlemen. I hope that you will be able to stay and take part in the discussion that will follow this.
Again, I have to admonish you to please speak as concisely as you possibly can. We will hear now from the International Ship-Owners Alliance of Canada and the Coalition of Maritime Groups. First, I believe we will hear from Mr. Robert Ho, who is from Fairmont Shipping (Canada) Limited, then from Mr. Peter Lahay, who is the National Coordinator of the International Transport Workers' Federation, and then Mr. George Heinmiller and Mr. Jack Hsu. I believe Mr. Ho will begin. Please proceed.
[Translation]
Mr. Robert Alexander Ho, Fairmont Shipping (HK) Ltd., International Ship-Owners Alliance of Canada and the Coalition of Maritime Groups: Good evening. I am the President of Fairmont Shipping Global. Today, I am representing my colleagues from the Coalition of Maritime Groups. I would like to apologize but my English is much better than my French. I prefer to continue my presentation in English.
[English]
Members of the Senate, let there be no mistake, we fully support the goals of the bill to protect the environment. We are committed to best practices in environmental protection.
Our coalition is a diverse group of organizations engaged in the maritime sector, representing over 30 organizations and 400 companies that are extremely concerned about certain aspects of Bill C-15. The companies range from port operators to shipowners, managers to unions.
Today, we have a cross-section of members who wish to introduce themselves.
Mr. George Heinmiller, Associate General Counsel, Teekay Shipping (Canada) Ltd., International Ship-Owners Alliance of Canada and the Coalition of Maritime Groups: Mr. Chairman and senators, Teekay Shipping Corporation, through its wholly owned subsidiary Teekay Shipping (Canada) Ltd., has had its operational head office in Vancouver since 1991. The staff in the Vancouver office presently number about 275.
Teekay is a public company, listed on the New York Stock Exchange. It transports more than 10 per cent of the world's seaborne oil and recently has expanded into the liquefied natural gas shipping sector.
With a fleet of over 150 modern tankers, offices in 14 countries and approximately 5,500 seagoing and shore-based employees, Teekay is both an important contributor to the economy of Vancouver and a key provider of marine services to the world's leading oil and gas companies.
Our vessels trade into Canada, and last year there were approximately 90 vessel visit to Canadian ports, mostly on the East Coast. Teekay is committed to Canada and, as a leader in the shipping industry, is committed to protecting the environment.
The safe operation of ships is a primary focus within the company. We believe that Teekay's reputation for safety, quality and innovation has earned us a worldwide reputation as a premiere shipping company. We appreciate the opportunity you have given the coalition to appear before you.
Mr. Jack C.K. Hsu, Executive Vice-President, Oak Maritime (Canada) Inc., International Ship-Owners Alliance of Canada and the Coalition of Maritime Groups: Honourable senators, I realize that the Senate is tasked with a very important job. I recognize also that the Senate plays an important role in our democratic process. Therefore, I appreciate the opportunity to appear before you to speak with you.
Oak Maritime is a family-controlled company involved in ship ownership and management. I am a fourth- generation member of that family business. My great grandfather established this business about 100 years ago in Shanghai. About 11 years ago, we decided to move to Vancouver, to invest and live in Canada, due to its attractive environment.
Our Vancouver office is now our operational headquarters; however, we do have offices in Shanghai, Taipei, Hong Kong and London. We have a fleet of 26 vessels, including new vessels. Globally, we employ about 500 people. We are involved in the global carriage of industrial raw materials, namely, iron ore, coal and grain, as well as crude oil.
Mr. Peter Curtis, Executive Vice-President, Seaspan Ship Management Ltd., International Ship-Owners Alliance of Canada and the Coalition of Maritime Groups: Honourable senators, I am a graduate naval architect and marine engineer. Seaspan Ship Management Ltd. in Vancouver is tasked with the vessel management and operations of the Seaspan Container Lines fleet. We also have a sister company, Seaspan International Ltd., in Vancouver, which is the largest tug and barge operator on the West Coast.
Seaspan Ship Management is involved in primarily liner container ships on regular international trades. We are a relatively young company, of four years, with a strong belief in the Canadian maritime industry and hence our establishment in Vancouver.
In that short period of time, we have grown to operating nine vessels, and we have 15 under construction, at an average value of U.S. $80 million per vessel. This includes currently the world's largest container ships, of 8,500 container capacity, and we are in the middle of the design of yet the next size up, which is 9,600 container capacity.
We are tasked with the operations, the design of vessels, the application of standards, both international as well as higher voluntary standards, and the safety — and this would naturally include anti-pollution measures that we take on board our vessels.
Our offices are in Vancouver, Mumbai and Shanghai, with an international staffing of approximately 280 people ashore and at sea.
Mr. Peter Lahay, National Coordinator, International Transport Workers Federation, International Ship-Owners Alliance of Canada and the Coalition of Maritime Groups: Honourable senators, it is a privilege to appear before this committee on this important matter. Our federation is a global trade union federation that takes into affiliation transport unions. We are in civil aviation, trucks, docks, railroads, carriage of goods by sea, fishing, tourism — anything that moves — trade union affiliates to the International Transport Workers' Federation.
In Canada, our affiliates include the B.C. Ferry & Marine Workers' Union, Seafarers International Union of Canada, the Canadian Auto Workers Union, International Longshore and Warehouse Union — Marine Division — and the Canadian Merchant Service Guild, who I understand will be appearing before this committee at a later date.
Our Canadian affiliates form under an umbrella. We have a Canadian national coordinating committee. We meet twice a year in Ottawa. We meet in conjunction with Transport Canada, the Coast Guard, and Fisheries and Oceans meetings called the Canadian Maritime Advisory Council. Those are in November and May.
We work as stakeholders with the federal government in the promulgation of all kinds of legislation and regulations. We worked very closely with Transport Canada particularly on the formation and the agreement of Canada's very important maritime transport security regulations, and I believe that we have valuable input in these matters.
One of our complaints is that we were not consulted, as has been pointed out. We have a lot of expertise in these matters. We are the people who sail the ships that these gentlemen own and manage around the world. We think that much of the confusion that arises from such bills as these is the result of some high-profile sinkings and some very tragic and terrible events that have happened off the coastlines of Canada. We are fully supportive of cleaning up the maritime industry. It is our people who work on these vessels; it is our people who could potentially go to jail.
As a seafarer since a very young man, until I came ashore to represent foreign workers who visited our shores 12 years ago, people ask me what it is like working on vessels. They think it must be a romantic job. As a bit of an inside joke, we used to say that working on ships is like going to jail with a chance of drowning. We are now in the situation where we go to sea with the chance of drowning and maybe going to jail again, so that is like double jeopardy.
As Mr. Horrocks pointed out — he is our social partner globally. We work with the ICS in many different for a, including the International Maritime Organization and the ILO. We increasingly find ourselves on the same side of the fence, although we have been long-time antagonists. We have 50 or 60 years of history in that regard. However, in almost every instance now with what is going on in the maritime sector we find ourselves having to work together, and actually enjoying it.
Working on a ship is not a pleasant experience any more. It is really difficult with the security environment, the lack of shore leave, and a whole range of other issues. This is going to further denigrate the attraction of going to sea. From a shipowner's perspective, I would be very worried about finding qualified crew. For the last three years, there has been a global shortage of maritime officers, and that was projected for 10 years. Labour is supplied from the developing world, for the most part. Shipowners' groups are scouring the globe for qualified seafarers, and they are tapping into the very last markets for labour.
When I first started this job, there were many Koreans and Norwegians on board ships, as well as many other nationalities. However, because the world is developing at such a pace and the industry is becoming less attractive, the very best people who are needed to operate these vessels are hesitant to go to sea.
China, the Philippines and India had been starting to supply labour, but because their economies are developing so rapidly people now have a choice. It used to be an attractive job to go to sea and make up to U.S. $1,400 per month. Chinese seafarers from the coastal regions are not going to sea any more. The Chinese government and Chinese shipowners are now recruiting searfarers from the deserts of China. You can see that, with people not being attracted to this vocation, our labour is second rate.
The globe needs ships. Ninety-seven per cent of everything we consume has at some stage been carried by a ship. Ships will not go away. I am convinced that Environment Canada has one thing right — that is, that there is a problem off our coasts. There is no doubt that there is a problem off of our coasts, but I do not see how, in any way, shape or form, this bill will fix that problem. I have some ideas on how this problem could be sorted out, and perhaps when we get to the time for questions we could explore that.
I will conclude my comments now, but make no mistake — labour internationally and in our own country is absolutely horrified with these types of bills.
Mr. Ho: Our organization is engaged in shipowning and management world-wide, with Fairmont Canada managing about 30 vessels in Vancouver and employing about 60 people. We have eight offices world-wide engaged in different fields of marine activity, and we employ about 25,000 people.
We urgently formed this coalition after we learned about this bill through Mr. Peter Lahay of the International Transport Workers' Federation in November 2004. At this late stage, our coalition attempted to appear before the House of Commons Environment and Sustainable Development Committee to address our concerns, but without success. We are, therefore, grateful to the Senate for exercising your role as a forum of sober second thought and providing us an opportunity to present our case. As a Canadian, it is wonderful to see democracy at work.
The following are issues of concern on which we seek amendments. The bill contravenes human rights, the Canadian Charter of Rights and Freedoms, article 11 of the Universal Declaration of Human Rights, and article 230 of the United Nations Convention on the Law of the Sea.
The UN Universal Declaration of Human Rights states in article 11:
Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law.
The bill undermines due process, as it reverses presumption of innocence.
Article 230 of the UN's Convention of the Law of the Sea states:
Monetary penalties only may be imposed with respect to violations of national laws and regulations or applicable international rules and standards for the prevention, reduction and control of pollution of the marine environment, committed by foreign vessels beyond the territorial sea.
...except in the case of a wilful and serious act of pollution in the territorial sea.
Because of blanket criminalization, owner's liability insurance becomes prejudiced as well. Similarly, due to criminalization and confusion surrounding insurance, bank financing may be prejudiced. Another area affected in this is rescue and salvage operations, which was mentioned by Mr. Horrocks. Another issue is treating foreign corporations and vessels better than Canadian ones. By this, we mean that under Bill C-15 a game officer can arrest a suspected Canadian-controlled vessel without the consent of the Attorney General, whilst in the case of a foreign vessel they would have to refer to the Attorney General's office for approval. Finally, there is the issue of minimum fines, which the Forest Products Association addressed you on a few weeks ago.
The specific amendments we seek, clause by clause, have been submitted to your office. We would be happy to provide you with additional copies.
With respect to issues of pollution, Environment Canada has acknowledged that overall our industry is clean, and we appreciate this endorsement. That begs the question of what causes marine pollution.
The United Nations Joint Group of Experts on the Scientific Aspects of Marine Pollution says that 88 per cent of ocean pollution comes from non-marine sources. The breakdown of this is as follows: 44 per cent from land discharge, 33 per cent from atmospheric fallout, 1 per cent from offshore exploration, 10 per cent from illegal dumping from offshore outside the marine industry. Honourable senators, these figures are from the UN experts and not from industry. This leaves 12 per cent from marine sources. Industry statistics show that 68 per cent comes from small craft. That leaves one third of the 12 per cent of marine-source pollution from ships.
No matter what the figures are, we are absolutely committed to preventing pollution. Internationally, our industry is highly regulated and is always working hard with many institutions, such as national and international associations, classification societies for ship design and safety, environmental groups, government bodies, including port states, to prevent spillage of oil into our seas, and unions as well. We are also improving international best practices through training and upgrading for our staff. Some of the other measures undertaken in conformity with the IMO are programs that enhance training and certification of seafarers and management surrounding pollution. We also suggest that oily water receptors and waste collection facilities be made readily available to all vessels big and small to help deal with vessels that lack capacity to treat and properly dispose of bilge water.
Senators, Canadian public policy practice has been to make industry an active partner in solutions. Blanket criminalization will not achieve that objective. We are proud citizens of Canada who wish to participate in the building of our country. That is why some of our member coalition established in 2004 the International Ship-Owners Alliance of Canada to do that exactly. Specifically, this venture seeks to assist the Government of Canada to create a new international fleet initiative through the creation of a Canadian international shipping registry that will not engage in domestic trade but compete internationally. This model has been successful in Ireland, other parts of Europe and Hong Kong. In Hamburg alone, it has created 50,000 direct and indirect jobs. Bill C-15 now, in its present format, casts a climate of uncertainty for this initiative.
We believe Canada must take a lead in world maritime affairs and the environment in and through multilateral frameworks. We are eager to work with your committee, the Canadian government and Environment Canada to improve the bill with amendments and achieve clean seas not only in Canada but globally.
On behalf of the members of the coalition, thank you once again for the opportunity to appear before you today.
The Chairman: Thank you all for being concise as asked. I have been informed that the bell will ring, senators, at exactly 6:45 p.m. and the sitting will commence at exactly 7 p.m. For our guests, that means we will probably have to suspend this sitting for, I am guessing, about 40 minutes, while we take care of some business that must urgently be taken care of today, and we will then resume this conversation.
Let us all take it that we are all on the side of the angels and as a statement of admitted facts that no one here would ever pollute anything and wishes to see an end to pollution, so we do not have to go there any more.
Senator Milne: Absolutely, but I do have to admit to a pre-existing bias here, and I will tell you why.
First, Mr. Morrison, this is the largest group we have ever had appear before this committee or any other committee that I have ever been involved in. I must tell you that the chairman is most obliging to let everybody speak. Normally, we have one or two people speak from each group that is appearing before us. When you began, Mr. Morrison, I must say you made me feel as though I was sitting in church listening to the minister giving me a hard time because more people were not sitting in church in front of him. We are here, and we have offered to hear you, hopefully with an open mind, but I have to go on and tell you why perhaps my mind is not too open.
For the last number of weeks, Mr. Ho, your organization has been lobbying committee members quite aggressively on this bill. That is fair game. You are making claims that it violates international treaties and may violate your industry's rights to due process. You correctly point out that this bill creates strict liability offences, but you go on to say that this somehow contravenes your rights.
My office spent a lot of time discussing these issues with your organization, and your representatives were told that I believe that because of the 1978 Supreme Court decision in R. v. Sault Ste. Marie (City), the bill is entirely constitutional and appropriate. Your representatives were asked to disprove that, to provide me with some legal basis for not believing that.
Honourable senators, I have to inform you, and I regret that I do, that the response that was provided to me through my office was without a doubt the laziest and sloppiest piece of work that has ever been presented to me as a senator. I chaired the Legal and Constitutional Affairs Committee in the Senate for five years. Their entire submission consisted of a list of quotes from the Supreme Court case that were either taken out of context or were entirely irrelevant. There was no analysis and no attempt to address the concerns that my office raised. I have copies of the submission, if anyone wants to see it. It is in English, of course.
I have to say, gentlemen, that because of the sloppy way this issue was handled, I cannot put much stock in these arguments that you are making here today.
The Chairman: Before the conversation begins, you should make a point of letting us have that response.
Senator Milne: Absolutely.
You have told us that this violates international accords. I can only assume that, in saying that, you had better legal advice than you have had, because if I go by what was told us about the ruling in Sault Ste. Marie — and I also have a copy of that ruling — there has been no rigor whatsoever into that analysis. As a result, I will not be putting a whole lot of weight in what you say.
However, I can go on to say that, if we do not, if the chairman does not, I am sure Senator Angus will raise some of the points that you have raised when the minister appears before us, which he has not yet done.
The Chairman: And when others appear before us. We have a fairly long list of others who are appearing before us, longer than we anticipated. It is important that we hear all sides.
Would anyone care to respond, before I go to the next questioner, to what Senator Milne has just said?
Mr. Morrison: I would simply comment on the senator's comments about my delivery. If it was not delivered in the manner it should have been, that may be a function of the fact that this is the first time I have been allowed to publicly discuss this bill, and I think I may have been quite excited about the opportunity. I do appreciate very much the hearing, and we mean that.
The Chairman: I do not think Senator Milne was referring to what you said here today.
Senator Milne: We were being preached to.
The Chairman: The response to which you were specifically critical was a response you received in answer to questions about legal issues.
Senator Milne: I would ask that you introduce this gentleman who has come up to the microphone.
Mr. Ho: This is Lew Lederman, who has been advising us on a lot of this.
Mr. Lew Lederman, Q.C., Director and Corporate Secretary, International Ship-Owners Alliance of Canada and the Coalition of Maritime Groups, : I prepared the note. The note was intended to be a backgrounder for staff. It was not intended to be a comprehensive legal opinion.
However, we believe the case speaks for itself, and we are asking the Senate to use its own judgment on the words that Mr. Justice Dickson used. We believe that the case stands for the propositions we set out. Treat it as a backgrounder; it was not intended to be a Supreme Court factum.
Senator Milne: A further backgrounder is being distributed then.
The Chairman: We have that also. You should all know that we are in the process of obtaining independent and expert legal advice from admiralty lawyers about all of these questions, because we are hearing, as you will appreciate, from both ends of the stick. The truth sometimes lies somewhere in the middle, but we are going to obtain independent legal advice for ourselves to advise us in respect of all of the testimony that we hear from all sides.
Senator Angus: As a preface, given the restrictions you put on these gentlemen — and they are not all from the same association. For example, Mr. Morrison's group is a totally different group than Mr. Ho's. I thought they did very well to put out what they did in such a short time frame. The only thing I took offence to — and I might say that with my usual tongue in both cheeks — was Mr. Horrocks' suggestion that the Marine law community is comprised of stuffed shirts. I was looking at my current weight loss regime, and I took offence at that.
Mr. Horrocks, I have a couple of quick questions, sir. Thank you for coming over from the U.K. There are two points I should like to question you on. The first one, in Europe, I have heard — I think it has been in the media — the European community has, like the Canadian government and perhaps the U.S, been very concerned about pollution along the pristine coasts of countries like Spain and Portugal, and they have introduced criminal-type laws like this. Is that not a fact, Mr. Horrocks? Could you edify us as to what the status is on that?
Mr. Horrocks: I will try, but it is an incredibly torturous and complex situation. There is a draft directive that has now been through all the processes in both the European Parliament, and, subject to final endorsement, what they call the Council of Ministers, which does have some of the same effect. I have to say, as a non-lawyer — and I apologize for that characterization; I was thinking of the London lawyers at the time, you understand.
Senator Angus: Thank you for that distinction, but even them.
Mr. Horrocks: They are big and ugly enough to speak for themselves, I think. Even though this long and torturous path has more or less come to the end of the road now, there remains I have to say very considerable confusion in Europe with the Brussels lawyers saying that, in their judgment, there is no conflict with the obligations of signatories to MARPOL under international law and most of the maritime lawyers taking a directly contrary view. The position of the industry at the moment is one of total confusion and uncertainty. The lawyers are basically saying that we now have to wait and see what national legislation does in incorporating this European directive into national law, and probably we then have to see what the courts do in applying whatever it is that has been decided. We clearly have civil servants worried that they will have to give conflicting advice to their ministers, because some civil servants are clearly seeing that they have their own national legislation that is potentially in conflict with their obligations under MARPOL and others taking a contrary view. As a non-lawyer, I am afraid it leaves me and most of my colleagues in a state of extreme confusion.
At the risk of going on for too long, the underlying answer to your question is of course that since two major incidents that probably hit the headlines more in Europe than they have in the rest of the world — the loss of the Erica off the coast of France in 1999, and then the Prestige, which got more in the way of headlines, three years later. There has been a major concern that I see being mirrored now in general public attitudes in Canada for slightly different reasons that has — and I think I can say this in all honesty — that has given rise to a certain number of political decisions being taken that have caused a great deal of difficulty on the part of the legislature.
Yes, we are going through some of the same difficulties with some of the same reactions with very much the same concern from very much the same partners, our union colleagues, seafarer colleagues, as well as, the owners, and, of course, a view very much shared by those responsible for the international law-making regime in the International Maritime Organization, who are extremely worried that what Europe has done has cut across the bows of the international agreement.
The Chairman: I do not want to interrupt, but would you permit a supplementary question on that subject from Senator Spivak?
Senator Spivak: You know what Shakespeare said, “First let us kill the lawyers.”
Senator Angus: He also said, “The law is an ass,” I think.
Senator Spivak: No one has really spoken of the American regime and the ships we were told come up north to dump bilge waters. How does the American system deal with this?
Senator Angus: I do not see how this is supplementary. I never even got an answer to my question.
The Chairman: Senator Spivak, I am going to treat that as a separate question. You are next on the list.
Senator Angus: All I wanted to know, Mr. Horrocks, simply yes or no, has the European community enacted legislation or not that is similar to this type of draft legislation that is before us? I understood that they tabled or tried to introduce legislation but that it has not passed, and that there is great opposition to it. Am I right or wrong? We just need to know that.
Mr. Horrocks: I cannot just give you a simple yes or no. The position is that this draft directive has been through all the formal processes, short of endorsement approval, whatever the correct term is, by the Council of Ministers of the 25 member states, a process that is due to be completed in May or June.
The Chairman: Will that supranational approval, assuming it takes place, put the thing into effect?
Mr. Horrocks: It will then take effect on an agreed date — I think I am right in saying — that has to be a minimum of 18 months after that decision. However, at the risk of complicating it further, there is also a sort of parallel debate going on among what they call the justice ministers dealing with the question of criminalization. Therefore, whether the justice ministers can introduce some change that will make a criminal offence less heinous if mitigating circumstances exist or if care is being taken to reduce the impact of an act that is regarded as negligent, this sort of detail, this fine tuning, has still to be further debated, but basically we are at the end of the road despite the opposition.
Senator Angus: Perhaps it would be helpful if we could ask Mr. Horrocks to send us a copy of that directive. I should to understand what the deal is over there, but I understand there is no such law at the moment.
Mr. Horrocks: I could leave a copy with someone. It is a thick document.
Senator Angus: You talked about the salvors. For the benefit of the senators here, what do you mean by a salvor? Are these people who are in the business of being hired when there is a spill and who are called into the scene?
Mr. Horrocks: There are a number of specialist companies in the world. The Netherlands has had a particular strength in this for many years, generations. The sole purpose of these specialist companies is to deal with major lifts with wreck removal and also with going to the assistance of a ship in distress. Sometimes we refer to them rather rudely as maritime vultures. They are sitting waiting for something to happen. Historically, they were paid on the basis of the value of the ship and cargo.
Senator Angus: What was your point?
Mr. Horrocks: The point is that these people are saying that if there is a criminal act committed simply by causing pollution, whether accidentally or otherwise, then we as salvors always have to take risks in these cases, it is the nature of the job we do, and causing some pollution is by the nature of our task a not infrequent consequence. We may be saving more pollution from being caused, but in the process we are probably causing some.
They have had an incident recently where the salvage master was put into prison for two months in Karachi. In this case, the Pakistani authorities saw them as contributing to rather than preventing a worse accident.
Senator Angus: Are you saying that there would be a deterrent for them to help to clean up?
Mr. Horrocks: They are saying that they are seriously concerned about going to the assistance of any ship that is within the jurisdiction of a state where the offence is automatically criminalized until proven to the contrary.
Senator Angus: To you, sir, how many seagoing individuals do you represent?
Mr. Lahay: In total, about 600,000.
Senator Angus: Mr. Curtis, I think you said you had X number of ships and that the value was $80 million a copy.
Mr. Curtis: That is correct; average value.
Senator Angus: The gentleman from Teekay Shipping, what would be the average valuation of your vessels?
Mr. Heinmiller: It depends on the type of vessel, but for a modern double-hulled tanker, it is probably $60 or $70 million. For a liquefied natural gas carrier — which is more complex — it is in excess of U.S. $100 million to U.S. $150 million per copy.
Senator Angus: When these vessels are detained, for whatever reason, an accident or being arrested for a cargo claim or some other detention as may be contemplated under this act, what is the per diem or even hourly cost? Can you give us just a general idea, to get a sense of the order of magnitude if your ships are tied up?
Mr. Curtis: To give you a short answer, it depends on where you are in the food change. For instance, we are different than Teekay. Teekay owns the vessel, they find the cargo and they contract to move the cargo from point A to point B. If the rates are high that day, they get a good return; if they are low, they are low.
Our business is slightly different. We own vessels and we charter them to a mainline operator like APL.
Senator Angus: American President Line?
Mr. Curtis: Yes. We have a 10-year contract, and it is so much per day for the vessel, say, $20,000 for the smaller ships.
Senator Angus: For the smaller ships, a day.
Mr. Curtis: Yes.
Senator Angus: That would be the cost.
Mr. Curtis: That is our return.
Senator Angus: These hugely expensive capital assets are the vessels, so obviously it is in your interest to put competent masters and engineers on board to run them and preserve them, I take it. Have you got any comment in that regard?
Mr. Curtis: That is why we are here, senator. What we are really coming to you for is the actual essence of the bill, where rather than treat everybody as a ruffian and a no-good to take into account what happens if there is an accident. For instance, without trying to blow our trumpet, we put more capital cost into our vessels to have higher standards than are actually internationally required. On top of that, we put a lot of stock in the training of our sea staff and indeed even the recruitment of the sea staff — even to the point of taking young guys and offering them a cadet-to- command career path, as opposed to finding somebody out of who knows where and putting him on our ship. That individual would not be familiar with our systems, the internationally required safety management system on board. The list goes on and on.
Senator Angus: My last question, Mr. Lanteigne, you were making a point about pollution control officers. You referred to a number, I think 600 or something, compared to game wardens. What was your point there, so I can understand it?
Mr. Lanteigne: The point was raised during previous testimony of the issue of enforcement of this legislation. The point was made that enforcement was the major problem with the so-called critical events of ocean dumping of oil on the East and West Coasts. The point we want to make is, first, we do not think these game officers possess the necessary training, education or knowledge of the marine business to do an efficient and effective job of enforcing whatever piece of legislation will ultimately come out. What we are suggesting is there is currently a law called the shipping act conclusion, criminal and civil sanction —
Senator Angus: In Canada?
Mr. Lanteigne: In Canada — which mirrors the international regime. This law is in force effectively against polluters in this country by officers duly appointed to enforce it. These officers are called pollution prevention officers. They are mostly marine surveyors employed by Transport Canada, Marine Safety, or the Canadian Coast Guard. They number 950 across the country, from St. John's, Newfoundland, to Prince Rupert to the High Arctic. If enforcement is an issue, we would suggest to you that those public officials, already nominated, educated, trained and with the ability to perform this, be nominated to apply whatever legislation emanates from Parliament.
Senator Spivak: Coming back to my previous question, what about the American system? How does it compare and why are ships coming North because they think it is easier to get away with dumping oil up here than off American waters?
Mr. Lanteigne: I can answer from the point of view of American ships on the East Coast and also to some degree on the West Coast. The shortest routes between Northern Europe and to some degree the Mediterranean to the Eastern seaboard is via Great Circle going south of Greenland, and in the process they cross our waters, beyond our territorial seas but certainly within the EEZ. It is the same thing on the West Coast. The trade between Asia, China, they take the northern route, Great Circle, as you do in an aircraft flying across the two ponds, the shortest route. They will cross during the transit within our EEZ waters.
It was raised in this committee by previous testimony that these are the ships that apparently — over flight of aircraft have witnessed that these ships were dumping oil in Canadian waters, although not destined for Canadian ports.
Senator Spivak: You have not answered my question about the American regime, the American system, the American legislation — how does it compare? Why is it presumed to be tougher than ours?
Mr. Lanteigne: I am not a lawyer, but I will answer to the best of my ability.
As with everything else in the United States — we saw it in the recent Martha Stewart case — they always want to catch the individual and put them in jail. The U.S., on oil pollution, also has a regime that personalizes pollution. It is the individual that they will catch and sanction and jail, if need be. There were very bad recent experiences with foreign crews in the United States that were jailed for a lengthy period of time, not only the master and officers, but the whole bunch of them.
It is a highly personalized event in the United States. As a matter of fact, the pollution — the ship or the events — is deemed to be the scene of a crime by the FBI and others — which has been a deterrent to salvage operations. The U.S. is highly personalized. It is a criminal offence within the U.S. territorial waters, not beyond it.
Mr. Ho: I am not a lawyer. I have worked in this business now for 30 years. I would like to see if I can help you, in trying to explain this.
The first thing we have to understand is that the United States has always acted unilaterally, unlike Canada. Canada has been so great to embrace the world in terms of certain objectives when it comes to MARPOL and all of the conventions. The U.S. decided, as with many of their cases, to act unilaterally. They tend to just do what they want. That is one of the reasons the regimes appear very different from the European regimes and the regimes of Canada, Australia and Asia.
Having said that, the one thing that is so important in this aspect of criminalization is that, even in the United States, despite the OPA regime, the individual is still innocent until proven guilty. What disturbed me personally, as a Canadian, is the introduction of the reversing of this rule in the case of the criminal sanctions.
In Europe, even though the debate is ongoing and they are still defining what is criminal, right now, what is an accident is serious negligence. It is not just any accident; it is still being defined as a serious accident. In the Canada Shipping Act, it is gross negligence; in Europe, it is being defined as serious negligence, but the presumption of innocence is maintained.
What is so erroneous in this bill is removing the presumption of innocence. As Canadians who go to China constantly, advising our Chinese colleagues on their behaviour on human rights, will we be adopting this kind of thing here? That is what really is disturbing to me.
We are here to work with the environment. We are here to try to make Canada great. In our proposals, we have suggestions that we would like to make to Environment Canada, how possibly industry, who knows the operational problems, can stop deliberate dumpers in the world. It is not through criminalization in this fashion that will stop the situation, necessarily.
Senator Spivak: We would have to see the comparisons specifically on the issues that have been raised here between the European and American systems. Since there is no one here legally who can do that, we have to await that.
The Chairman: And we will.
Mr. Horrocks has undertaken that he will send us a copy of whatever exists with that supranational directive, so we will have that, at least, to deal with.
Captain, we will check, too, but could you please let the clerk know, when it is convenient, the source of the 950 number that you came up with? It came from a number of places, the Canadian Coast Guard and other places. Even though they might work for different agencies of government, you inferred that they are all trained to do this kind of work. If you would help us out with a sketch in the next few days to our clerk as to where that information came from, we will be doing the same thing.
Senator Hubley: I will be speaking to the 5 per cent who are not here tonight. They are the ones who are probably the reason behind Bill C-15.
I was concerned that you did not feel that you were engaged in the issue as it went forward to a bill. I am sure you knew about the problem. Did you realize the number of seabirds that were being killed annually off the coast?
The Migratory Birds Convention Act, 1994, has been in place since 1917. The prohibitions that describe the discharge of harmful subjects, particularly oil, have been in place since 1948. Taking the Migratory Birds Convention Act and the Canadian Environmental Protection Act, Bill C-15 is simply giving government the ability to enforce, especially in the EEZ.
I would like to get your reply on this. These are the things that we have been looking at. We have been focusing on the issues from the shipping industry — just so that you will know that this is something that we really are working very hard on.
The purpose of the bill, as we see Bill C-15, is to increase government's powers to enforce. That is simply it. We do not wish to criminalize and it is not our intent to criminalize. It is difficult when —
Senator Milne: Due diligence.
Senator Hubley: I am coming to that. She is getting ahead of me.
When an oil spill is detected, either from surveillance or from other means, we have ways and means of attaching that to a certain vessel. At that point in time — I have trouble saying that the presumption of innocence will last very long — that vessel would be charged with that oil spill. Immediately coming back, you have what is called due diligence, which is a really important feature. I am not talking about your organizations and the efforts you have made to respect a resource that belongs to everybody in the world, the seas of the world, but for those who do not.
I am quite sure that each one of you can go through your regimes of how you protect it, that you use the onshore, that you have the facility within your vessel to separate, holding tanks or whatever you need. Therefore, due diligence would set in. That, then, is your defence. From then on, if that is accepted — and it is in the courts — then you are not guilty. We are looking at the 5 per cent whose actions account for 300,000 marine birds per year that are oiled.
Just to keep it on a positive note, because you have the answers and we have the questions, you mentioned criminalization, where there is no way that that is a directive of this bill. This bill has been scrutinized by both environmental lawyers and marine lawyers, it has gone through the other place. Then when it died on the Order Paper, it was again scrutinized by the legal people, because that is a very important part. The thrust behind the bill is to enable government to put in force a regime to put a halt to this. We are only talking about a small portion of the industry that is doing this. I am sure you have spoken to the departments, as well.
Is there a solution here? You will say one thing, and I will probably say that that is not what the bill is saying, so there is some misunderstanding here, as I see it. If there were a number of things and we could allay those and reassure you that that is not in fact the case, would you suggest that this is a good bill? Could you suggest that this is a good bill?
Mr. Ho: Again, I am not an expert lawyer. First of all, however, we were not consulted. We were not ever engaged — not that we need consultation — but as we met with some of the people in this committee, we are an industry that is always trying to search for solutions on how to make things better. Introduction of ships with double skins have been finally introduced. Constantly, we are finding ways — and a lot of it I have to say is thanks to environment committees for bringing out these requirements or suggestions — and industry does finds ways of how to do it.
As I explained in the paper, it is a fact that most overseas ships have facilities on the ship to deal with bilge water. We have the oily-water separators. We can explain how it works. We would be happy to do that. Mr. Lahay has some other materials that he can present to you on how these issues can be dealt with.
As I explained in the paper, there is still a large portion of fleets around the world that consist of small boats; these are fishing boats and leisure craft. This is not to say that big commercial ships do not violate the regulations. There are some that do; there is no question about it. We have a proposal that we are planning to give to Mr. Horrocks to take to IMO and so forth. We would love to work with Environment Canada on how we can introduce this type of measure.
The first point is that fishing boats, military boats and leisure craft do not have oily water separators. Where do they put their bilge water? We are suggesting that, as in many European ports, there should be receptors and that the government should maybe encourage private enterprise to get involved in that type of cleaning. Otherwise, we are passing a bill that will hit potentially many innocent fishermen who do not even know that this is on the way. Suddenly, they are being criminalized. We have to take it in steps.
The other proposal, which I took last week to the Philippines to talk to the unions there and the schools, is that the issues of MARPOL be removed from STCW and become a separate program requiring renewed education for all crews around the world, and that passing an examination be a condition of those crew getting the licence. This is crews from Greece, Norway, Philippines, whatever country. They have to understand that when they have agreed to serve on a ship, there is this convention called MARPOL. They should be examined as to what they do if suddenly the equipment on the ship fails. There are many procedures in all our firms as to what they should do. If this is imposed by IMO, I am certain this practice will stop. Right now, there is no link to educating people with them getting their licence. It is like driving your car. Everybody must have this education, including the fishermen, including the military people, because I know they are very big dumpers in the oceans. They have to respect the objective of your committee. We must stop this, and it can be stopped. It can be stopped through implementation of education and licensing procedures, as we do for cars. You are not supposed to drink when you drive or you lose your licence.
This can be achieved with Canada at the forefront of introducing a lot of conventions. There is no reason why Environment Canada, Transport Canada, cannot go together and put pressure on the International Chamber of Shipping. We will put pressure on the International Chamber of Shipping. We will put pressure on the crewing nations like the Philippines to get this done. It is just not acceptable.
Mr. Lahay: I have been struggling with this bill for quite some time in trying to see some positives in it. As I said in my opening remarks, I acknowledge that there is a problem in a segment of the shipping industry. In the 12 years I have been doing my job representing some of the most marginalized and isolated workers in the world, seafarers, we have seen some horrific ships come to Canada, tragic cases and stories.
One of the things that I have learned, having visited many of these vessels, is we have the ability to communicate with the crew. They talk to us, they trust us. There is not a shipowner or seafarer alive who does not know about our organization and the work it does. We have earned a certain amount of respect in the shipping community.
When I started this job, there were a lot of substandard ships coming into my home port, the Port of Vancouver. Canada finally ratified a couple of protocols and conventions, including something called ILO 147. ILO 147 is the only International Labour Organization instrument that is enforceable by Transport Canada. It deals with ships' living and working conditions, the sanitary aspects of the vessel and those kinds of things. Transport Canada also regulates life- saving appliances and batteries, so that your radios work when you lose power. Canada then ratified something called the Paris Memorandum of Understanding on Port State Control, and we have since ratified that protocol for what is called the Tokyo Memorandum of Understanding on Port State Control. Once Canada did that, they were obligated to inspect 25 per cent, at minimum, of foreign-flagged vessels coming into Canadian ports.
It took a while, but we have seen a marked improvement in the quality of tonnage coming into Canadian ports generally. I can tell you specifically, in my port where I have the greatest experience, there were many years when I would go out and do my work and set a million dollars as my goal in trying to collect back wages for cheated seafarers. I cannot even come close to that now because the quality of the vessels that are coming into our ports is such that that opportunity is not there any more. As Mr. Lanteigne explained from time to time there are vessels going on that great circle route. Some of these are substandard ships. The people that do these sorts of things are operating at the margins of the market. I would suggest probably just about every shipowner's organization around this table wants them out of business because they are direct competitors. The OECD did a study in 1997 that said substandard ship operators can save a minimum of $100,000 on the average bulk carrier by cheating its crew, not adhering to maintenance regimes, not feeding its crew properly, denying them medical attention, keeping them on board longer than the required contract levels say, those kinds of things. They might get caught from time to time, but it pays for them to do that.
When the Prestige sank, then Environment Minister Anderson came out publicly as saying in the newspapers that Canada should ban flag of convenience vessels. That was probably a rash statement, and he later modified it and said that Canada would work in international forums to eradicate the worst aspects of substandard shipping from creeping onto Canadian shores. I think Minister Anderson had it absolutely correctly. I think he was absolutely right in that assertion that Canada should work in international maritime forums, because this is the way the shipping industry gets better.
A report came out of Australia, loosely called the “ships of shame study,” and it is officially titled “Safer Ships and Greener Seas.” This is a landmark report from Australia. There are a lot of answers in these kinds of studies from that level of expertise, from the critics of the industry, and we are one of them. We have been severe critics of the shipping industry for a long time, but we have tried as a workers' organization to distinguish between those who are crooks and those who are trying to make an honest buck. Our organization has come to grips with that now and we are like a police force out there. We know what is going on. I would encourage the senators to try to look at this in a holistic way rather than just as a sliver of a pie, and that is what this bill is, basically, a sliver. You need to look at the holistic solutions to the root causes of these problems.
I think, personally, that Mr. Ho is right. He is making some promises here at this table tonight. It is the responsible shipowners who will eventually be able to drive these kinds of players out of the market through international regulations that apply equally to all nations, all flags. Seafarers will actually know. If there is a ship sailing off the Atlantic coast tonight crewed by Ukrainians, they will not know about this proposed legislation. This bill will not prevent a dump of oil tonight. They will not know about it.
Mr. Horrocks: I will say this with some difficulty, because I am not quite sure to what extent I am qualified to or find it appropriate to talk about domestic legislation, but the question was, could this bill be turned into a good bill. That was the essence of your question, senator. The objective underlying the bill is quite clearly a sound one. That point was made right at beginning and no one can dispute that. Why should anyone dispute that? The problem is that the lawyers can have their own discussions about whether it is or whether it is not, but certainly the impression given by the way this bill is drafted is that Canada is going it alone. The rationale for that may be clear from your opening comments as to why Canada is approaching it in this way. I have to say, having been in this industry for a long time, I very much subscribe to what Peter Lahay has just said. The only way we will tackle this continuing, although diminishing, problem of substandard ships — and this is something that the industry, not only the intergovernmental organizations are talking about constantly, it is a sort of mantra — is by having a coordinated and continuing campaign against it. That can only be done if everyone is pulling in the same direction and not in slightly different directions. This has been part of the difficulty.
To return to a question that Senator Spivak asked about the United States, the difficulty is that one never knows, in this game, whether the United States is part of the same endeavour or simply interested in its own specific domestic objectives. This has been a constant source of concern on the part of the international community that has tried to rally round the principle of international agreement, in contra distinction to what has happened in the United States. This is why there is so much concern at the moment about these developments in Europe. Europe appears to be doing its own thing regionally in an area of the world that, historically, has been very supportive of the concept of the international regime. The pendulum tends to swing in accordance with political responses to events. We know that is true not just in this industry, but in everything else. The pendulum swung very far in one direction in the United States after the Exxon Valdez incident. The general attitude within the maritime community in the United States at the moment is to try to bring the United States back into the international fold. There is still an element, of course, that is directly contrary to that view, but the pendulum has certainly swung back a long way and the United States is trying to play its full part in international discussions these days.
The converse has happened in Europe in the last four or five years. I am sure that will start to swing back again in due course. However, the underlying thesis that runs through all these debates is — even if it is only a lip service comment — of course we have to support the international regime. If this bill could be brought clearly into line with the international regime, it would have a great deal of collective support.
Senator Hubley: I would like to respond to Mr. Ho. You had mentioned the fishermen, recreational and military shipping. When the amendment was introduced in the other place, because we were looking at where the biggest problem was they did not want to engage the fishermen, even though they were responsible for small spills. They were not responsible for the great amount of oil spills in our Canadian waters, although I am not saying that they are not a part of it. That is where that 5000-tonne dead weight came in as far as a vessel is concerned. That is the area that they were planning to target, but they were not intending to bring it in. This is probably a good first step, but that is where that came in, Mr. Ho. I just wanted to mention that.
I would have to compliment you, Mr. Lahay, on your vision of what the shipping industry should be doing, because I could not agree with you more. Where does it start? You are all responsible shippers around the table here, yet we are looking at a monstrous problem here in Canada for our marine wildlife. Part of the reason for this bill is that the changes were not coming. We still had the problem. It has been year after year — and the bill has been examined. It is in compliance with both UNCLOS and MARPOL. That has been established. I have heard that a couple of times tonight. I can await an argument, but I agree with you. We are looking at the thin end of the wedge in a huge industry, but that thin end is what we hope we are targeting. That 5 per cent of the industry is what we really want to address as a country.
The Chairman: Can I ask you to move to a question, please?
Senator Hubley: Yes, I will go right ahead to that. I do not think Canada is going it alone by any stretch of the imagination. I just have to mention that there is a similar bill awaiting approval at the council of ministers in Europe, so we are not really going it alone. The other question I would like you to respond to is that on the U.S. coast, only 2.5 per cent of the birds that come ashore are oiled birds. In Canadian waters, 60 per cent of the birds that come ashore are oiled. Obviously, it is a major problem for us.
The Chairman: Oh, they are dead.
Senator Hubley: An oiled bird is a dead bird. I do not see that we are doing this on our own. I think you will be a player. You have to be a player.
The Chairman: Is that a question?
Senator Hubley: I think so. Perhaps you could comment on that. I just want to give you an assurance that some of the issues in your presentation are not at all the way we see the bill.
Mr. Morrison: Senator, if we could have come here tonight and set out some simple solutions to our challenges, we would have.
If Senator Angus were not here, I would make the comment that when I hear that all of the public service lawyers are in agreement on this, I have even more concerns; but we will leave that for the time being.
If I could quickly go to the nub of what causes us to tear our hair out, and our owners to be really concerned about the bill and say “under no circumstances.” We just need to read the definition of “deposit,” which means “any discharging, spraying, releasing, spilling, leaking, seeping, pouring, emitting, emptying, throwing, dumping or placing.” Go to subclause 13(1.7): “In a prosecution of an offence under section 5.4” — and that has to do with depositing of substances — “it is sufficient proof of the offence to establish that a substance was deposited by the vessel contrary to section 5.1.” That is sufficient proof, if it was deposited — any spilling, leaking seeping, pouring, et cetera. There are three or four of them that give us cause.
“In a prosecution of a corporation for an offence under this Act, other than an offence under paragraph...” such and such, “it is sufficient proof of the offence to establish that it was committed by an employee, agent or mandatary of the accused, whether or not the employee, agent or mandatary is identified or prosecuted for the offence.” We cannot accept that as an industry — and I am sorry, Senator Milne, I may be sounding as if I am preaching again, but we really have problems with this.
We have problems with the wording about prosecution; we have problems with wording that says “A person or vessel that establishes that they exercised due diligence to prevent the commission of an offence under this Act, other than an offence under paragraph...” such and such, “shall not be found guilty of the offence.” It talks of a person or vessels, but does not talk about the prosecution of the corporation. For some reason, the corporation cannot establish itself as being correct even if it does show due diligence, because there is no place for that in the bill as it is written.
We look at it, go through it and it is scrambled. I am sorry to use that term, but we cannot come to grips with “take a little care here and you can do due diligence, but the corporation does not have the right to due diligence; and if you do any depositing, that is enough for a prosecution, and we will have it enforced by game wardens.” We really have a problem with that.
I do not mean to be overly dramatic about it, but this is the crux of the problem for anyone who owns a ship, operates a ship, has a ship-owning company, whether it is chartering or building their own, carrying their own cargos or someone else's. We use the term “draconian.” I do not think we put it in our final submission, but we do find it very strong and we would love to help make this bill work.
I cannot agree more with our friends who have talked about the 5 per cent, about getting the poorly managed ships out of the system. We like to think we do not have any such ships within our system now. Anyway, it is very frustrating; we would love to come forward with a solution.
Senator Milne: Are you aware that under the Interpretation Act, a person is the same as a corporation and a corporation is the same as a person?
Mr. Morrison: Under the Corporations Act, yes. Then why would this —
Senator Milne: Under the Interpretation Act.
Mr. Morrison: Why would this bill then make the distinction? This is what confuses us.
Senator Milne: When it says “person” in the bill, it covers —
Mr. Morrison: No, excuse me, senator; it has a clause on a prosecution of a corporation that is separate from that for a vessel or for a person. People are saying to us, “Well, find out.” We cannot find out.
The Chairman: We will find that out.
Senator Buchanan: First, I want to thank you for being here tonight. Never in my more than 40 years in political life have I seen such a diverse group of people representing so many aspects of an industry. It is incredible that this happens. I want to congratulate you on your presentations, which were short, concise and to the point.
Having said that, I do not think there is a person around this table who does not agree with the principle of this bill. We all do. You do. The support for the principle of the bill is there, particularly for those of us who live on the coasts of Canada, the West Coast, the East Coast or the North Coast. We agree with the principle behind this bill. My concern is that I found it extraordinary that the union representative is here with the group, the same way as I find it extraordinary that an affiliate of his union is the ILA, the International Longshoremen's Association — the checkers' union. Just two weeks ago, I met with them in Halifax to talk about security matters, but they did get around to mentioning this bill.
Their concern is not because they are seafarers; they do not go to sea. Their concern is the Port of Halifax, the Port of St. John, the Port of Charlottetown, St. John's, where we have big container traffic in and out all the time. Over 700 to 800 of these men derive their living from bulk carriers and container carriers coming into Halifax. There is a concern as to the possible effect of this bill, if it passes without any amendment, on their future as longshoremen and checkers.
We are in a fight all the time on the Atlantic coast to keep what we have. There are other ports — Philadelphia, Boston, New York, et cetera — that would love to get more of the container business out of Halifax, and they have done it, too. Therefore, their concern is “Hey, please do not do anything that will take any more business out of Halifax. We want new business.”
The concern I have on their behalf, and on behalf of Nova Scotia, New Brunswick, P.E.I. and Newfoundland, is what effect the passage of this bill may have on our economies in the Atlantic provinces. Do you believe it has any effect — negligible, none at all or some?
Mr. Curtis: I think many of these cases are tested, in the first instance, after the bill is passed and the law is there, and finally, the RCMP walk up the gangway and arrest whoever is involved on board. I think that will be the real proof of the pudding. After that, the perception of what is happening in Canada will become very real.
I think one has to look at the Prestige case, a vessel that was under stress and wanted to seek refuge. They were told to stay outside and the ship sank, so the captain goes to jail. If he came in and the ship sank, under our interpretation of this, he would still go to jail. Therein lies the kernel of our concern.
I am really concerned about the concept of going it alone versus being a cohesive force within the international community. I met Mr. Horrocks a number of years ago. We were members of what was called the International Ship Managers' Association at that time. I was living in Cyprus and I was technical director of what was the world's second- biggest ship manager. We had in excess of 140 ships under management, ranging from cruise ships to bulk carriers, et cetera.
The ISMA organization was set up by members of the community prior to the passing of the ISM Code, which is the International Safety Management Code. That is proof that there are good guys out there. They wanted to set standards that were higher than the norm of the industry.
ISM came along. It forced all of the players to at least put into place safety management systems that are audited by a third party. This particular document here is put out by De Norska Veritas, one of the largest classification societies in the world. They are accredited by Transport Canada to do inspections of ships because they know what they are looking at. This is the second fear we have, with all due respect to the fisheries inspectors — will they know what they are looking at?
Further to the international aspect — and honourable senators have seen a wide variety of players here — the reason we are here is it is an international business and all of the participants, whether they be the employers or employees, are international by nature.
If legislation is passed through the IMO and it becomes a specific code that is ratified and put into place, a ship going into any port anywhere in the world — and she could be flying a South African flag, a Canadian flag, or other — can be inspected by the port state to ensure they are complying with the IMO requirements. That does not occur when you go it alone in bringing in some legislation — albeit this is more punitive than regulatory — because you put yourself outside of that worldwide protective system, which is the mechanism by which this industry goes through the iterations of improving what it does.
If you look at the loss of bulk carriers in the last 20 years, ships just disappeared in the middle of the night. That is not happening any more because there has been international cooperation. They have had a look at the design and the aging of the ships and changed many of the parameters, which are internationally recognized and put into place.
We have all heard about the double-hulled tankers. That is so if the primary shell is holed, you do not have oil flowing out. There is now a white paper on container ships. Our large container ships carry 11,000 or 12,000 tons of fuel oil. That is about the same size as a World War II tanker. There is now a white paper in IMO suggesting that fuel tanks exceeding a certain size should be double hulled.
Where does that leave companies like Seaspan or Teekay, who are getting involved in the design of new ships to at least international minimum standards? I would say we are all going for significantly higher standards. A ship comes here and, for instance, there is a freak wave and there is a hole in the side of the ship. Bang, out goes 3,000 tons of oil. The way we read this bill, we are in for the high jump; everybody from the directors of the company to the ship's cat. Therein lies the problem. That is an accident. It is a perilous industry out there — perils of the sea. That describes my view.
Senator Spivak: I want to know how many of those tankers in the world are double hulled right now, and how many are still on the old system, because this story has been around for a long time.
Mr. Curtis: It has been a while since I operated tankers, but it will actually be in this document. These are the IMO regulations. In here you will have the grandfathered clauses and when certain measures must be in place, whether it is a new ship, a 10-year-old ship or a 20-year-old ship. It is all there and has been regulated and ratified.
Say, for instance, a single-hulled tanker came into Canada now — I believe the date has passed and she would not be coming here anyway.
Senator Spivak: What is the answer?
The Chairman: Senators, and gentlemen, I will insist from here on in, because of time, that we make the questions more focused and that the answers respond directly to the questions. Did that give you an answer to your question, Senator Spivak?
Senator Spivak: No. I do not have an answer.
Mr. Lanteigne: Senator Spivak, according to the most recent data from the International Association of Tanker Owners, representing 90 per cent of the worldwide tanker fleet, close to 80 per cent of the medium-sized and large-sized tanker fleet is now double hulled. The balance, of 20 per cent, has to be double hulled between 2005 and, at the latest, 2015. All of the Canadian tankers operating in our coastal trade are now double hulled.
The Chairman: I think Mr. Curtis was referring to strict numbers rather than the regime to which they must conform, is that right?
Mr. Curtis: Correct.
Senator Spivak: Yes.
The Chairman: Mr. Hsu, do you have a response to a previous question?
Mr. Hsu: Senator Buchanan, to answer your question, I must say I am not knowledgeable enough to say what impact it will have on Nova Scotia, but coming from B.C., I can tell you what I have gone through and what have I seen.
My company was set up in 1994 as a direct result of IMC, the International Maritime Centre, of which I spoke earlier.
To my knowledge, about 20 to 25 companies moved to Vancouver as a result of this IMC initiative. These companies are primarily trading internationally, and occasionally they touch upon Canada. Nevertheless, my point is that there is a thriving international ship management business in Vancouver. We are constantly growing.
I can say the company my colleague here represents, Teekay, has grown by the hundred per cents, by leaps and bounds. For ourselves, we have grown about 60 to 70 per cent in 10 years. We are constantly on the look out for management, white collar management, locally in order to sustain this growth.
Returning to what Mr. Lahay mentioned, I believe this bill, if passed, will have a detrimental effect on the future stock of young people coming into the industry. Somebody mentioned earlier a lawyer's child who asked his father whether he should get into the industry, and the reply was no. Why do you want to put yourself in danger of being criminalized for an accidental incident?
I am saying that we are contributors to the domestic economy in B.C. If this proposed legislation is passed, it will definitely affect our businesses.
On the other hand, I know of a ferry company in B.C. They are the lifeblood of the islands of B.C. That company will suffer tremendously as a result of this bill, on the same basis. They are constantly looking for replacements for their seafarers, for their management staff. I think it will really undermine the growth of our industry.
Senator Buchanan: One comment, and then I have another question.
My concern is that if it can happen on the West Coast, then it can happen on the East Coast of Canada, at the Port of Halifax, Port of Saint John, Port of St. John's. We depend on our ports for economic growth. The international fleet initiative has created a lot of jobs.
We could miss out on something like that here in Canada on the East Coast, which is the area with which I am familiar. The economic impact is significant.
As a parliamentarian of many years, and a lawyer, I was one of those who fought hard and continue to fight hard to retain the presumption of innocence in our country. I signed the Charter of Rights, which preserves the presumption of innocence in our country, in 1982. Every year, we celebrated in Nova Scotia the United Nations Declaration of Human Rights, which protects the presumption of innocence.
Yet here we are shifting the onus. I know that people say we are not. I can assure you we are shifting the onus. If that thin edge of the wedge drives it home, and it will, you will have Charter challenges all over the place in this country. Why are we allowing ourselves to do this when some simple amendments will correct the situation?
The Chairman: The question of the witness is?
Senator Buchanan: The question is: Am I right?
Mr. Curtis: Yes, we believe you are 100 per cent right.
Mr. Ho: I am very concerned about the birds. It is news to me. When we heard about this bill in November, we really did not know what was going on. Since when has this been happening?
Senator Hubley: A long time.
Senator Adams: I wish to thank the witnesses for coming.
This bill will affect us in the community in regard to the cost of living in the Arctic.
In 1970, Greenpeace came on the scene in the Arctic, banning leg-hold traps. Since that time, the economy has gone down. A fox in 1970 was worth about $70 per pelt. It has gone down to five bucks. You have to support your family, living off the land. There is no difference with a company; if you have too many restrictions, you cannot afford to continue shipping. If anything happens to damage the environment and you are fined, you will have to declare bankruptcy.
Since 1950, when the RCMP came to the community to look after the people, accidents have happened. A couple of times, kids were killed by Husky dogs, so the dogs were shot. For the people, the Husky dogs were transportation for hunting; therefore, people cannot go hunting any more. That is a simple comparison with what is happening today. You own the company, you have people working, and you have to pay their salary.
Greenpeace came with their initiatives on banning the leg-hold traps, and now we are not allowed to kill seals any more. People say you can go to Hudson's Bay and buy groceries and go on welfare. People are not living off the land as much. Today we have a problem with suicides. Today we have television, and the government is providing more housing. It is difficult. At that time, we were independent, until the government stepped in. Today, there is so much regulation, and that affects our culture. It is really difficult in Nunavut, especially now.
We have 26 communities in Nunavut where everything is supplied by ship — over 80 per cent. The supplies come every summer. In some places, airlines supply the goods in the community, up to, say, Resolute. The expense is $66 a kilo for any order of goods in the community.
My family lives off the land. We are environmental people. We make sure we do not over-kill. Anything we need for supplies in the family, we kill.
We are living in the 26 communities; one community is living on the mainland in Baker Lake, the other 25 are right along the coast. We have not seen one dead mammal in the community, or bird from the sea. We have eider ducks living up there 12 months a year, in the Arctic. I do not know whether it is 300,000 birds that are killed by oil spills every year in the sea. Is that true? That is according to the bill. The birds are domestic. We are not eating them; they are in the sea. We do not kill them or anything like that. I understand people are concerned about mammals. Perhaps this is not all from oil spills.
We do not have a highway. Some places get all their supplies from the south. 100 years from today, if we have 26 communities, we will not have an access road in the community. We have more regulations, and now we are talking about more development in the community, and mining. A couple of years ago, a diamond mine was built near Yellowknife. Over 6,000 trucks from Edmonton brought supplies to build that mine.
The Chairman: Senator Adams, do you have a question of the gentlemen?
Senator Adams: I just wanted to explain what will happen if this bill passes. There will be no more people or mining companies because they will be too restricted with regulations. We do not have to build roads any more, the winter roads. Right now, we will reduce the need for roads with the oil tankers and access to the community. Prices will go up because of higher insurance due to the ice and everything.
We live in the Arctic; it is not like down south. We live off the land. I was out on the land the day before yesterday. I was out there on the land and there was a whiteout. I do not have GPS, but I got back home. You cannot see anything, but I got back.
I do understand you guys. We try to do our best, yet accidents happen. It is not because of the captain or anybody, sometimes the sea is rough and icing or something like that; not necessarily a human reason. Now the government says if something happens, an accident, there will be big penalties. That is the kind of thing we are doing for the people of Canada. We are a little different from other countries. I am not really supportive of Bill C-15 because I think it will cost more money to live in the Arctic.
It will hurt more people in the communities in the North because companies sometimes — like you people — do not want to take a chance. If your tanker goes through the ice it will cost $1 million in fines to the government.
Mr. Hsu: Senator Adams, thank you for your comments. I just wanted to add a little from my knowledge. I have been involved with the building of a coalition that, as you may have heard earlier, consists of a few hundred members. In the process, I have been communicating with a company called NTCL, which is, I believe, the company on the North Coast providing the transportation to those 23 coastal communities. In my communication with them they told me that they were not consulted on Bill C-15. I just wanted to add that comment.
Mr. Lanteigne: We are the marine carriers of choice for petroleum products and consumer commodities to the Eastern and Central Arctic every summer. We carry over 4.5 million tonnes to supply the communities and industrial sites, principally mining sites and bases, and so on.
Senator Angus: Do you mean members of your association?
Mr. Lanteigne: Canadian flagship members of the association. We have a fleet of ice-class tankers, all double hulled. We are equipped with a fleet of general cargo carriers, most of which are ice class and most of which have double- hulled fuel tanks. I can assure you that in the last 10 years, we have never spilled a drop of oil in the Arctic.
The Arctic north of 60 benefits from some of the most stringent anti-pollution legislation in the world. It was introduced by Prime Minister Trudeau in the late 1960s, following the attempted passage through the Northwest Passage by the Manhattan, the U.S. tanker owned and operated by Exxon. It was the model that was used by the international community to draft the current MARPOL convention. It calls for zero discharge. There is no notion of bypassing separators whereby you are allowed to dump 5 parts per million.
The Chairman: At that time, it was groundbreaking legislation and light years ahead of everyone else, correct?
Mr. Lanteigne: Correct, and it works.
Senator Angus: It is not criminal legislation.
Mr. Lanteigne: It is not.
It was the precursor to the international regime, and we ought to be proud of that.
You heard us tonight here. Very few of us in this room are proud of the approach that is being adopted under this bill. I think we ought to be proud of our history and try to use that history to make our anti-pollution measures to protect the 300,000 birds a lot more efficient than it was in previous years.
It was the case in the Arctic. As Senator Adams has said, in the last 30 years of the existence of this legislation, there were absolutely no adverse effects on the Arctic environment from marine transportation that supplied the Eastern, Central or Western Arctic.
Mr. Curtis: Mr. Chairman, in support of what has just been said, and also the point that Mr. Lahay mentioned earlier, let us not forget where this fits in comparison with the whole concept of pollution at sea.
Just by way of example, I would like to read out some of the audits that we submit our vessels to, both by law, in some cases, and voluntarily in other cases. These are: nitrogen oxides going up the funnel; our refrigeration systems, (a), not having ozone-depleting substances, and (b), that they are not leaking — you have to demonstrate that — the firefighting systems, again, not using halons, which are ozone depleting-substances; oil pollution prevention for bunkers, and sludge systems and waste oils. This is where the focus has been here on the cargo side. However, you can go further than what is required by MARPOL in the design of your ship's systems and have, for instance, water condensates going one way, oil and water mixtures going another way, so you do not have to deal with that amount of water.
Not all of us want to throw the stuff over the side. In fact, it is a valuable commodity for us in our particular trade because we go to China and we can sell it over there. We actually make money from our sludge, so we do not want it going over the side because that would be throwing money away. There is a big message for the Western world there.
Garbage management: plastic, papers, et cetera, et cetera; sewage treatment, how you handle your sewage, whether you discharge or not. Actually, you have to get rid of it at some stage, but it has been processed and you can use voluntarily much higher levels of treatment than are required.
Hull anti-fouling — again, through MARPOL, we are not allowed to have tin-based anti-fouling systems. There are even more technologically advanced systems coming into place.
The ballast water: We have all heard about importation of various organisms from one area to another. There are certain treatments that one can use and that technology is starting to take off as well.
The grey waters — the waters coming from other places, like the accommodation, et cetera, how they handle that; protection of oil tanks, and we have spoken about the double hulls; vapour emission. You have all this fuel oil. We cannot inject it into the engine until it has passed 120 degrees Centigrade because it is just too thick. It is oil that is one level above what is on the road outside, so have you have to heat it up, and you get emissions coming out of that that you have to capture.
These are just examples of the total regime of pollution control that this industry is looking at, not just a little oil in the water that will kill some birds. It is the fish. It is the air. It is contaminants going up, say, the Fraser River, et cetera. It needs a broader view.
Senator Adams: Mr. Lanteigne, perhaps you are familiar with the Mackenzie Delta. They are hauling a lot of fuel through there and you can see what will happen if one of those tankers had an accidental spill there. Do you have any idea how much you are able to be fined if this bill were passed? The NTCL has been hauling through there from the Hay River up to Nunavut, all the way up to Tuktoyaktuk and Cambridge Bay. What will happen after the bill is passed if millions of litres from one of those barges end up spilled in the river?
Mr. Lanteigne: What will happen if this bill gets passed?
Senator Adams: If the bill is passed, those guys will end up with how many million dollars of fines?
Mr. Lanteigne: I personally think if this bill is passed, NTCL will be confronted with a challenge, although they are less than 4,500 tonnes. They are still subject to fines. The 4,500-tonne dead weight is not excluded in the bill. They are now subject to the minimum fine. The fishermen, the small traders on the coast and the pleasure craft are being caught by this bill.
The Chairman: Is NTCL a member of your organization?
Mr. Lanteigne: NTCL are not members of ours. NTCL for negligence would be subject to a $500,000 fine. I think that would be a severe blow to the financial operation of NTCL.
Mr. Ho: Just to remind everyone, I am surprised that there is a distinction in saying that anything in excess of a 5,000-tonne ship will be fined and that all the ships under that will not be fined.
The Chairman: It does not say that; it is a minimum fine.
Mr. Ho: Yes. However, most 5,000-tonne ships have oily-water separators — and then the small ships that have no equipment. I remember a witness from Environment Canada who said his concern was the continuous small spills going out into the sea. This is a puzzle, in a way. We should all be preventing whatever ship — whether it is a small outboard motor, a small craft — from small spills. All this must stop. As industry, we are here to help.
It is not consistent to focus on the big ships while the small ones continue to dump bilge water. This is just not consistent. We are here to stop this practice. Ports have to give small ships access to get their dirty water out. As Mr. Lahay said, perhaps private businesses can make something out of it. If they can do it in China, why cannot we do it here?
The Chairman: That is a good point, one of the strongest that has been made tonight. However, this bill is aimed at every vessel. A vessel of 500 tonnes could be fined $500,000.
Mr. Ho: Right.
The Chairman: I want to put out a thought to you, gentlemen, to which I do not suggest you respond now, unless you wish to, that I would like you to consider and get back to us on. You have raised a few times the matter of what we refer to as strict liability, the onus of proof. I would ask you to ask your legal counsel to consider a couple of things.
First, the legal landscape in which we operate in this country is one in which the Supreme Court of Canada has determined that strict liability offences such as have existed in environmental law for a very long time in this country are appropriate and are not ultra vires the Constitution. That is the landscape in which we now operate.
Second, when you respond to us, consider the fact that the onus on the Crown is to prove beyond a reasonable doubt that an event occurred and then that the strict liability turns the onus around and requires that the person who has been charged or the vessel that has been charged or the corporation that has been charged is obliged to prove on the balance of probability — a quite different level of proof, a much lower level of proof, a much less demanding level of proof — that they have in fact practised due diligence.
Ask your legal folks to get back to us with your responses, based upon that understanding. The first thing I mentioned is the landscape in which we are, like it or not, operating. That is the law in this country. The onus that you refer to as being introduced here is not being introduced here. The lack of mens rea requirement for proof of criminal offences in environmental law exists in many other environmental laws in this country. We need to hear your responses based upon that fact. Secondly, there is the question of the different balance.
Given that, I am now going to go to the second round.
Senator Milne: Mr. Chair, you have led nicely with your reference to the Supreme Court into what I was going to say. I found, quite frankly, what your lawyer said a little earlier personally offensive. When my staff ask for an opinion, they are asking for me, not for themselves. This is not a background staff briefing. They report to me, and of course the Senate is not the Supreme Court of Canada, but Parliament itself, the Houses of Parliament, are the second court in Canada. The laws are made here and they are interpreted by the Supreme Court. That being said, I at least expect a certain modicum of respect and careful answers when I ask something.
Second, I must say that you gentlemen have rehabilitated yourselves in my mind because you have come up with some positive suggestions. I have not seen the amendments that you are suggesting but I look forward to looking at them.
For 30 years, Canadian environmental law for all industries has operated on the principle of strict liability. Why does this proposed regime make you think you should be treated any different?
The Chairman: Maybe that is part of your answer to the earlier question that might come up.
Mr. Heinmiller: We have heard the chairman, and we will be getting a more fulsome opinion. I apologize that you took the background paper in the manner that you did; it was not intended to be a slight in any way.
I suppose the concern is that the bill sweeps up the accidental with the intentional. Therein lies the concern. If there is an intentional dumping or reckless activity, then of course the full weight of the criminal law should be brought to bear. However, if it is accidental, I would suggest that the protections afforded by the Charter of Rights and Freedom of the presumption of innocence should still maintain, particularly when you are looking at something beyond a corporate liability in reaching down to an individual liability.
The Chairman: However, the Supreme Court does not agree with you, sir.
Senator Milne: Accidental is a defence.
The Chairman: That is part of the response I have suggested you might want to consider. In the case of a farmer having ploughed up the back 40 without having known that he was destroying the habitat of a burrowing owl, or a ship having discharged something, the difficulty, if I can put it that way, of proving intent in those instances is insurmountable. It is not possible to prove intent in those circumstances, which is why, as I understand it, the concept of strict liability has been seen by the Supreme Court in the tests that have been given it so far to be appropriate in respect specifically of environmental law.
I will suggest that we leave that question now, because I have suggested to you some things that may be a different wrinkle than you have heard and ask that you ask your legal beagles. Several of our members are lawyers, but I think you might want to come back to that in a different way.
Mr. Hsu: Since we are all here, and given that it is so rare that we are all able to be here together, because we are shipowners not lawyers, we deferred our opinion to some of our more legally minded folks. In that regard, I believe Mr. Lederman has been in contact, so I would like to provide the floor to him to perhaps just comment on this issue.
Mr. Lederman: To explain the context, I saw Senator Milne's executive assistant to discuss our concerns some time ago. He said that in order for us to be able to respond we would have to understand and react to the Sault Ste. Marie case. I told him that I was not an environmental lawyer, although I have practised law for 30 years and I have been a federal Queen's Counsel since 1990. I read the Sault Ste. Marie case and sent him a note saying, “These are my reactions.” It was never characterized as an opinion; I was never asked for an opinion, period. That is the context.
We have tried sincerely and in good faith to put our concerns forward, and we will give you the notes you have requested.
The Chairman: We all understand that. I was not implying the slightest criticism when I asked for the different wrinkle. It is just that it has not been addressed and for our deliberations we need to hear your reaction to those facts.
Mr. Lederman: I agree, Mr. Chairman, and I appreciate that, but I am frustrated, because when my honour is impugned I take it personally.
Senator Milne: Mr. Lederman, so do I.
The Chairman: We will not take that any further. I do not think there was an intent to impugn your honour, Mr. Lederman. None of us has taken it as having the slightest effect on your honour.
Senator Adams: I feel bad about this. I do not think those people understand what is going on. I do not think we should make any accusations because Senator Milne's staff did not agree with what the lawyer was saying to him. We are here to try to help these people. I do not think we should argue with the witnesses.
Senator Milne: Senator Adams, I was trying to get some information that would help this cause. Unfortunately, it did not.
The Chairman: We now understand why. We have now asked a different question and time will be taken to get the response.
Senator Angus: To reiterate what I said earlier, I think you have all come here very well prepared. It is very helpful to the legislative process to hear from people like you.
I am sorry that Senator Spivak is gone, because I wanted to follow up on the American example. She was trying to share with you the fact that our friends to the south have a similar strict liability statute.
Under that American statute, are there game wardens and others of that ilk involved, or is there another type of employee involved in dealing with the maritime community? In other words, is it exactly the same as Bill C-15, or are there significant differences that you would like to share with us?
Mr. Lanteigne: I have only a partial response to your question. I have been tracking this very closely for the last 10 years because our tankers trade to the United States almost all the time. The focus of the American legislation is not birds, fish or beach; the focus is that spilling oil is a criminal offence. The ship becomes the scene of a crime. The United States Coast Guard is involved for the investigation and the FBI is involved for the laying of criminal charges. There is no focus on any particular mammals, birds or anything else in their legislation. If you spill oil, you are fined and you pay dearly. The coast guard is also involved in the cleanup.
I will investigate this further and provide a response.
Mr. Horrocks: I will have to dissent from my colleagues. I think I am correct in saying that the U.S. Oil Pollution Act makes a spill a civil and not a criminal offence, which is a significant difference. You are strictly liable for spilling oil, but it is a civil offence.
In answer to the second part of your question, the equivalent to the game warden, if I am using that term correctly in the context of Bill C-15, is very distinctly the United States Coast Guard.
Senator Angus: The people who understand ships and understand what they are dealing with.
Mr. Horrocks: That is right. That is the agency with which the shipping industry interfaces both in good times and when there is an incident.
Mr. Morrison: As pointed out earlier, the American legislation deals with oil spills, and not only with marine. It is more encompassing legislation. The coast guard enforces all marine legislation and all things marine in the United States, and that is why they are involved. They are the ones to start the process.
Mr. Lahay: I am not an expert on the American legislation, but I can tell you that there was a very high-profile case there recently, that being the case of the Katrina. The American legislation includes a system for whistle-blowing and this has caused a problem for some shipowners because the person who blows the whistle gets a significant portion of the fine that is levied. There have been a few cases of this sort and the Katrina was a very significant one. The story is in my submission.
Essentially, three seafarers were arrested — the captain, who was a Greek national, and two Filipinos, who were the chief engineer and the second engineer. They eventually pled guilty, but in the meantime 13 crew members were kept as witnesses by the government. They were actually physically shackled for a period of time.
The shipowner abandoned the crew and left them without wages or accommodation. The United States did not pick up the cost of the accommodation for those seafarers. They languished in the United States for many months. Finally, a seafarers' welfare organization came to their aid and obligingly gave them the floor of their facility to sleep on for months and months.
That is what you are talking about when you start talking about prosecution. I have come across many different criminal matters that have occurred on vessels, and I have talked to policing agencies in this country and immigration authorities when there has been people smuggling and those kinds of things. There has never been a federal will to hold all of these people in Canada, because you are not just holding the accused, you also have to hold the witnesses, because they are from another jurisdiction. Will you extradite witnesses from another country and so forth? That is another unworkable part of this bill, as I see it, in terms of its practicality in trying to deal with these problems.
I know you are like me and probably have far too many things to read, but I urge senators to try to take a few moments to read the paper that I wrote. It tries to deal with the culture that is shipping and a certain element of that shipping. I think that there are better ways to do this.
The Chairman: All senators have that letter with all the examples that you gave, Mr. Lahay.
Senator Angus: A number of you have made oblique reference to the matter of insurance. What would be the implications from an insurance point of view if this bill were to pass as drafted?
Mr. Ho: I think Mr. Horrocks can also elaborate.
Senator Angus: We have received something from an organization that is like a P&I club for fishing fleets.
Mr. Ho: It would be for smaller boats. I can speak, perhaps, with respect to what we call the “protection and indemnity clubs.” I sit as a vice-chairman with the London Club. Those are mutual insurance companies. Basically, the whole mutuality covers insurance for that which is uninsurable. If you buy a car, you buy your insurance to protect the car. The P&I clubs cover that which is uninsurable in the commercial markets, and that took place.
Senator Angus: It is self-insurance. It is mutual insurance. They insure themselves. They all put in money.
Mr. Ho: Yes. For instance, when the first immigrants came to North America, there was no insurance. Lloyds would not insure the passage. The shipowners said they would insure the passage, the liability of the people, the loss of cargo and things like that. There is so much high risk. The tradition still continues to this day. Roughly 90 to 95 per cent of all ships insure themselves.
Senator Angus: That is with respect to their third party liability.
Mr. Ho: Third party liability — not the assets, but injury to crew, crew deaths, stevedores, loss of cargo, whatever.
When I saw this bill, what alarmed me was the aspect of criminalization, because provisions in many of the rules of the P&I cover that, namely, if there is blanket criminalization, then it puts it into question.
Senator Angus: It invalidates the insurance.
Mr. Ho: It does not quite invalidate it for certain things. For instance, for the oil spills, we will be there regardless. Say it is a big accident, like the Prestige; the whole industry is there. Per incident, we can cover $4 billion. The whole industry is behind this. It is very complex, but we all insure that.
The problem here is what happens if, for instance, as Mr. Lahay suggested, there was a puncture because of bad weather and oil leaked into the water. That is why we suggest that there really be a distinction made between accidents, reckless intent, gross negligence and deliberate dumping. Once there is a blanket criminalization that includes accidents in such a case as Mr. Lahay suggested or described, the cover is not there because of the criminal nature of the incident. Only when the owner has been proved innocent will the fines and so forth then have to be paid by the club.
We want to stop those grossly negligent people and deliberate dumpers, but we cannot mix the accident into the framework.
The Chairman: I want to ensure I understand what you just said, that the mutual coverage that you have precludes the payment of benefits in the event that a criminal act has occurred.
Mr. Ho: Right. That is why, in the case of OPA, the presumption of innocence remains. The government will prove that that individual was guilty. The whole mechanism starts to work. We are out there trying to make the system work, but once you put in this blanket criminalization, it causes a lot of confusion. The rules require that that incident or that story must go to the committee, and the committee meets four times a year. In the meantime, how do we deal with these incidents?
That is why I would volunteer to help. I have a lot of things to do, but it is so important to get this right. I am very happy to explain the issues. With respect to these birds, I would love to know since when they have been dying. Have they been dying for 30 years, 20 years or 10 years? If it has been going on for 30 years, why has it not been dealt with? These are the issues. Why is it suddenly now, and with such severe proposed legislation that does not take into consideration a lot of these issues? We are here to see if we can help in those areas and stop this from happening. We suggest that insurance and rescue have to remain intact because of this blanket criminalization that is being introduced.
Senator Angus: Is it the professional salvage industry that you meant by rescuers?
Mr. Ho: Yes, it is the rescue and salvage organizations.
Senator Angus: You used the expression “OPA” as you were answering. I just point out that I think you meant the U.S. Oil Pollution Act of 1990.
Mr. Ho: That is right. Even under OPA and the European suggestion right now, they are defining the type of accidents, and it is basically accidents that are caused by serious negligence. In Canada, gross negligence accidents are deemed to be strict liability.
However, accidents, as Mr. Lahay suggested, have to be separated out. I think this is critical. This insurance mechanism has been in place for 200 years, and we have to keep that intact.
Mr. Curtis: In addition to the effect that it would have on how we operate, initiatives like the Pacific initiative, where many companies came from Hong Kong to Vancouver, and the second flag initiative that is ongoing at the moment — forgive the pun — would be dead ducks, I think.
Senator Buchanan: I have already commented on what you call blanket criminalization, and I agree with you. I have already commented on the universal charter rights of the UN.
I wish to return to one item that one of you mentioned at the beginning; that is LNG terminals. We have for years, going back to the late 1980s, been attempting to get a new LNG terminal in Bear Head in Cape Breton. As long as we are in competition with New Brunswick, that is okay. However, the other competition is coming from the State of Maine, and it is building. Governor Baldacci told me they are determined to build an LNG terminal. I was asked to bring up this question, from Halifax. If this bill passes, with the blanket criminalization that you mentioned, and the other aspects that we talked about, the United States, and the State of Maine particularly, would be probably be more in the running for the LNG terminal than Bear Head, Cape Breton. That is a thought that came to me from some people in Halifax when they knew you people would appear before the committee.
Mr. Ho: If I may respond, that would be true. The liabilities are just so uncertain. Part of the initiative to try to get the second registry going in Canada was to help all our organizations to target what we think are the ideal ships in which Canadians can invest. These are the liquified natural gas carriers. These ships cost $150 million. The level of captain's training that is required to run these ships is very high.
We are also thinking that cruise ships can be run out of Vancouver and/or Montreal, as was done 50 years ago. There were the CP ships and so forth. They are all being run out of L.A. These are vessels that cost half a billion dollars, serving the tourist trades all the way to Alaska. That was really the impetus for why we were thinking these are opportunities that Canada can engage in. It is not for our company, because these assets are very expensive, but it will put in legislation that will give those companies that can do it the opportunity, and set the standards for the rest of the community so that the companies would be more transparent. You do not need to have this kind of criminalization. The standards will be set by Canadians. Why can we not do this and bring safety to these areas? This is very important. That is the reason for our initiative.
Mr. Curtis: I could defer to our lady banker at the back here, but I think if we are looking at a Canadian-based operation like that, and potentially Canadian owners with assets like LNG carriers — and we are looking at those, too — I would be interested to know what the bankers' point of view would be before they financed us. One day, that asset could be taken by somebody else.
The Chairman: That would be true whether it was criminal or civil liability. In civil liability, you can impound a ship.
Mr. Ho: The presumption of innocence is critical in terms of an accident.
The Chairman: Gentlemen, we may very well write to you or contact you otherwise with more questions. I hope that you will take the liberty of doing the same, if items occur to you, as they will to us, when this part of the meeting is over.
It remains for me only to apologize for my rudeness in asking that you leave as quickly as you can so that we can get on with the rest of our business, and to thank you very much for the time you have spent with us.
Mr. Ho: Mr. Chairman, it is we who must thank this committee for giving us this chance to present our case. Thank you very much.
The committee continued in camera.