Australian Government secures $39m payout for coal carrier reef incident

The Australian Government has reached a $39.3 million dollar out of court settlement with the Chinese company responsible for the grounding of the Shen Neng 1 coal carrier off North Queensland.

The incident happened in April 2010, when the 225m ship hit Douglas Shoal off the Rockhampton coast and ran aground on the Great Barrier Reef, spilling more than three tonnes of oil.

It damaged an area spanning half a square kilometre, causing the largest known direct impact on the Great Barrier Reef to date.

The Commonwealth will receive $35 million, paid to the Australian Maritime Safety Authority for the cost of removing the debris, while $4.3 million will be given to the Great Barrier Reef Marine Park Authority for costs incurred immediately after the incident.

Although the Federal Court trial into the incident began on September 6, it was adjourned yesterday to settle out of court.

Environment and energy minister Josh Frydenberg said the parent company Shenzhen Energy Transport and its insurer had been refusing to accept responsibility for more than six years.

“Our ongoing actions to pursue funds to clean-up the pollution sends an unambiguous signal that damage to the Great Barrier Reef World Heritage Area is unacceptable, and that we will use every available means to pursue ship owners who are negligent in causing damage to the Reef,” he said.

The funds will aid the clean up efforts, helping the Marine Park Authority to remove toxic anti-fouling paint – which contains the now banned substance tributyltin (TBT) – and debris from the reef.

Maritime insurer The London P&I Club welcomed the payout, saying both parties agreed that it was a sufficient amount for remediation.

The insurer said they “expressed regret” over the incident, saying it “was the result of an error by the chief officer of the vessel”.

“The vessel was under management by another company at the time, as were all crew,” they said.

Frydenberg added that logistical planning for the cleanup had already commenced, and will begin next year.