Rena’s owners to pay $27.6m to settle claims for costs of last year’s shipwreck

News from Maritime New Zealand
The New Zealand Government and Daina Shipping Company (owner of the MV Rena) have reached a comprehensive financial settlement in respect of matters arising from the ship’s grounding on 5 October 2011.

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

“This was a very complex negotiation given the range of issues and parties involved, and represents a good outcome for New Zealanders,” said Mr Manch. “As with any settlement, it is about finding a solution that both sides can live with, and I would like to acknowledge the constructive approach taken by Daina Shipping Company and their continuing commitment to meet their obligations under New Zealand law.”

The settlement also recognises that Daina Shipping Company and The Swedish Club (the Rena’s insurers) are currently investigating the environmental, social, cultural and economic impacts of different options for dealing with the wreck. In the event that they decide to apply for, are granted, and use a resource consent to leave part of the wreck in place, Daina Shipping Company will make an additional payment of $10.4 million to the Crown, reflecting their reduced salvage costs.

Konstantinos Zacharatos, on behalf of Daina Shipping Company, said: “We have always sought to work closely with the New Zealand authorities to address all aspects of this serious incident. This settlement is a vital step forward in our progressive resolution of all the issues, and I want to thank the New Zealand authorities for all of their work that has gone into achieving this outcome.”

Statement from NZ Government
Transport Minister Gerry Brownlee says compensation agreements worth up to $38 million have been signed between the owners of the Rena and the Crown.

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.