Rena wreck owners offer compensation

The shipping company behind the Rena wreck has manned-up with a $38 million compensation package – a whopping $27 million more than the law required, but there’s a hook – they want to leave the wreck in place.

Transport Minister Gerry Brownlee says the maximum exposure to the company under New Zealand law was only $11 million, so the much larger agreement is a bonus to taxpayers and residents of the Bay of Plenty.

Under the agreements Daina Shipping will pay compensation of $27.6 million to the Crown for costs incurred in clean-up after the ship grounded off Tauranga last October.  A further $10.4 million will be paid if Daina Shipping and The Swedish Club (the Rena’s insurers) decide to apply for, are granted, and use a resource consent to leave part of the wreck in place, reflecting their reduced salvage costs.

“I want to stress that the consenting process is completely independent,” Mr Brownlee says.

“These agreements are the result of careful negotiations over several months and I am satisfied they represent the best possible outcome for the people of New Zealand.

“Throughout this process Daina Shipping has negotiated constructively, and as a result we now have agreements that avoid costly and time-consuming court action with no guarantee of the outcome.

“Under maritime law when the Rena went aground Daina Shipping was only obliged to pay a maximum of approximately $11.3 million compensation for losses caused by its grounding,” Mr Brownlee says.

To date the cost to the Crown of the Rena grounding is approximately $47 million.

“These agreements allow both New Zealand as a whole, and the Bay of Plenty region, to move on from what was, from an environmental standpoint, the worst maritime disaster in our history,” Mr Brownlee says.

“I am confident Daina Shipping will continue to take a positive approach to all elements of the wreck removal process and their legal obligations.”

The Marine Legislation Bill, currently going through the parliamentary process, will substantially increase the amount of compensation payable by ship owners for incidents like the Rena grounding.  Legislation is expected to be in place in early 2013.