Digest No. 1693
Background
The Liability Annex deals with liability for environmental emergencies occurring in Antarctica. It was adopted in 2005 by the 28th Antarctic Treaty Consultative Meeting but has not yet entered into force.
"The Bill requires operators (those organising or conducting Antarctic activities) to take prompt, effective response action when environmental emergencies arise from their activities. New Zealand operators must notify the Ministry of Foreign Affairs and Trade if they cause or discover an environmental emergency. If an operator fails to take prompt, effective response action, a Party to the Liability Annex (an Annex Party) may do so, and the defaulting operator must reimburse the Annex Party’s costs.
"Where no Annex Party takes response action to an environmental emergency caused by a New Zealand operator, the High Court may order the operator to pay an amount representing the costs that would have been incurred had prompt and effective response action been taken. This amount will be paid into an Environmental Protection Fund administered by the Antarctic Treaty Secretariat.
"The Bill also sets out the situations in which an operator is exempt from liability, and imposes a financial limit on liability (expressed in International Monetary Fund special drawing rights, equivalent to a minimum of US$1.5 million for environmental emergencies involving a ship, and US$4.5 million for other environmental emergencies)"
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"The Liability Annex does not define “State operator”. Instead, each Annex Party must decide which of its operators are State operators. New Zealand will accept another Annex Party's decision, because State operators are not exempt from liability. Each Annex Party will be responsible for the actions of its State operators under international law. For this reason, the Bill does not cover the State operators of other Annex Parties, which will instead be covered by the relevant Annex Party's domestic legislation.
"The Liability Annex will enter into force once it has been approved by all 28 Antarctic Treaty Consultative Parties, including New Zealand. Enactment of this Bill will enable New Zealand to approve the Liability Annex. The Bill will be brought into force by Order in Council once the Liability Annex itself enters into force"
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Main Provisions
Commencement
The Bill provides that it will come into force on a date to be appointed by Order in Council (Clause 2).
Comment
"The Order in Council will be made when it is known when the Liability Annex will enter into force, which will be when it has been approved by all the Antarctic Treaty Consultative Parties. The Act should come into force on the same day that the Liability Annex enters into force"
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Consent of Attorney-General not required for certain proceedings
The Bill provides that the consent of the Attorney-General is not required before any proceedings under the Act are instituted against certain people by excluding civil proceedings commenced under New Sections 37E and 37F (see below) (Clause 4, amending Section 6).
Comment
"The Bill removes the requirement for the Attorney-General to consent to civil proceedings against operators, since the Bill aims to facilitate such actions and requiring the Attorney-General's approval could be seen as a barrier"
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Liability for environmental emergencies
The Bill inserts a new Part into the Act to make provision for the implementation of the Liability Annex. The provisions of the New Part 5A are as follows.
Purpose
The purpose of New Part 5 is to implement New Zealand's obligations under the Liability Annex (Clause 5, inserting New Part 5A into the Act, New Section 37A ).
Responding to environmental emergencies
The Bill requires "New Zealand operators" whose activities give rise to an "environmental emergency" to notify the Ministry of Foreign Affairs and Trade (the Ministry) and makes it an offence not to do so (Clause 5, inserting New Part 5A into the Act, New Section 37C ).
What is a "New Zealand operator"?
The Bill defines the term "operator" as " ... a person who organises an expedition to Antarctica, but does not include either of the following:
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" ... in the case of a State operator (as identified by an Annex Party [i.e. a contracting party for which Annex VI is in effect], a contractor or subcontractor (other than a natural person) acting on behalf of the State operator;
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" ... in any other case, an employee, contractor, subcontractor, agent, or other person in the service of the person organising the expedition.
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The term "New Zealand operator" means an operator who organises, in New Zealand, an expedition to Antarctica where one of the following applies:
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" ... the operator is a New Zealand resident operator; or
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" ... the expedition proceeds from New Zealand as its final point of departure for Antarctica; or
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" ... the expedition uses a New Zealand ship or aircraft.
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A "New Zealand resident operator" is an operator that is a New Zealand citizen or is ordinarily resident in New Zealand (within the meaning of [S]ection 7(2) [of the Act])
(Clause 5, inserting New Part 5A into the Act, New Section 37B, definitions of "Annex Party", "Operator", "New Zealand Operator" and New Zealand Resident Operator ).
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Comment
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"The Liability Annex does not define 'State Operator'. Instead, each Annex party must decide which of its operators are State operators. New Zealand will accept another Annex Party's decision, because State operators are not exempt from liability. Each Annex Party will be responsible for the actions of its State operators under international law. For this reason, the Bill does not cover the State operators of other Annex Parties, which will instead be covered by the relevant Annex Party's domestic legislation"
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What is an "environmental emergency"?
The Bill defines the term "environmental emergency" as " ... an accidental event that ... results in, or imminently threatens to result in, a significant and harmful impact on the Antarctic environment" and which occurs after the commencement of this New Part 5A of the Act (Clause 5, inserting New Part 5A into the Act, New Section 37B, definition of "environmental emergency" ).
Civil liability for failure to take response action
The Bill provides that if a New Zealand operator or a New Zealand resident operator whose activities give rise to an environmental emergency fails to take "prompt and effective response action", then the operator is liable to pay the costs incurred by any Annex Party that does take response action. An application for an order requiring a non-State operator to pay the costs must be made to the High Court. The application may be made only by the Minister, if the Ministry took the action, or by another Annex Party that took the action. Article 7(4) to (6) of Annex VI deals with what happens when the operator is a State operator. The Bill imposes a strict liability so that an operator is liable whether or not it knew of the environmental emergency. The Bill provides definitions of the terms "preventative measures", "prompt and effective response action", "response action" and "reasonable measures" (Clause 5, inserting New Part 5A into the Act, New Section 37E; Schedule to the Bill (adding Annex VI to Schedule 2 of the Act), Article 7(4) to (6) (in relation to the activities of a State operator); New Section 37B, definitions of "preventative measures", "prompt and effective response action", "response action" and "reasonable measures").
Order to pay money where no response action taken
The Bill provides for the situation where no Annex Party has taken response action following an environmental emergency caused by a New Zealand operator or a New Zealand resident operator. In that situation, the operator whose activities gave rise to the environmental emergency is liable to pay the costs of the response action that should have been taken. An application for an order requiring a non-State operator to pay the costs of the response action that should have been taken may be made to the High Court. The application may be made only by the Minister, or by a person authorised by an Annex Party to apply on its behalf. Money paid following an order under this section is paid into the Environmental Protection Fund (Clause 5, inserting New Part 5A into the Act, New Section 37F; Schedule to the Bill (adding Annex VI to Schedule 2 of the Act), Article 7(4) to (6) (in relation to the activities of a State operator)).
Exemptions from liability, limitations on amount of liability, and joint and several liability
The Bill sets out some limits on the civil liability imposed by New Sections 37E and 37F (described above). Operators are exempted from liability for environmental emergencies caused by acts necessary to protect human life or safety, exceptional natural disasters, acts of terrorism, or acts of belligerency against the operator. The Bill also places limits on the amount of liability under New Sections 37E and 37F. These are determined by reference to the Liability Annex. Regulations made under Section 55(2) of the Act may update the text of the Annex to reflect agreed changes to these limits. The Bill provides that if an environmental emergency arises from the activities of 2 or more operators, liability is joint and several. (Clause 5, inserting New Part 5A into the Act, New Sections 37G, 37H and 37I).
Liability Annex incorporated into Act
The Bill adds the text of the Liability Annex, set out in the Schedule, to the Protocol on Environmental Protection to the Antarctic Treaty, which is set out in Schedule 2 of the Antarctica (Environmental Protection) Act 1994 (Clause 5, inserting New Part 5A into the Act, New Section 37I(2); Schedule to the Bill (adding Annex VI to Schedule 2 of the Act)).
