Public Petitions Committee

Meeting date: Thursday, March 16, 2017

Official Report 574KB pdf

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New Petition

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Ship-to-ship Oil Transfers (PE1637)

Agenda item 2 is consideration of a new petition: PE1637, on ship-to-ship oil transfers and trust port accountability. I welcome Kate Forbes and John Finnie to the meeting.

The petition has been lodged by Greg Fullarton on behalf of Cromarty Rising. This is the first time that we have considered the petition. We will take evidence from the petitioner, who is joined by Duncan Bowers and Loreine Thomson.

I invite Mr Fullarton to make a brief opening statement of up to five minutes, after which members will have an opportunity to ask questions.

Thank you very much for inviting me here today.

The petition reflects our experience of a recent proposal to undertake ship-to-ship transfers of crude oil in the inner Moray Firth and comes a decade after a similar proposal was rejected on the basis of the environmental impacts in the Firth of Forth. The question is, why has the issue not been resolved in the intervening years?

North Sea ports and infrastructure are in need of support, but the proposed transfers at sea anchorages would bring no new jobs and would threaten existing ones. There would be no benefit for the areas affected, and businesses and communities depending on the natural environment need clarity to be able to make investment decisions for the future.

Lord Donaldson’s landmark “Safer Ships, Cleaner Seas” report, which followed a catalogue of oil spills around the United Kingdom coast, recommended that such transfers take place at only two UK locations: Southwold and Lyme Bay. No sites in Scotland were mentioned. Ship-to-ship transfers of crude oil in Scottish waters should be subject to both a strategic environmental assessment and a sustainability appraisal that would also consider economic impact. Why have those strategic assessments not been undertaken in Scotland?

Twenty-seven Highland and Moray community councils and several high-profile non-governmental organisations are in opposition to the recent Cromarty Firth Port Authority application, and more than 100,000 people have signed a petition opposing the plans. Three councils representing more than 900,000 people opposed the application in the case of the Firth of Forth, and the issue was raised in the Scottish Parliament. How can the Scottish Parliament use its powers to reflect the will of the people in protecting our environment and the businesses that depend on it? Although ship-to-ship oil transfers are not a devolved matter, environmental protection certainly is, and, in our view, that leads to significant process anomalies. However, we are not here to argue for the devolution of ship-to-ship transfers; we are simply calling on the Parliament to use its powers to protect our environment.

How can Marine Scotland, Scottish Natural Heritage and the Scottish Environment Protection Agency protect our environment, our designated areas and our wildlife when they are no more than consultees in, or advisers to, the process? Moreover, how can we ensure that our environment is protected if our environmental agencies disagree with the awarding body, the Maritime and Coastguard Agency?

Implementation of the habitats regulations in relation to ship-to-ship oil transfers requires authority in the discipline area by those qualified in each subject matter. Currently, the Maritime and Coastguard Agency, which has the expertise of mariners, is the competent authority and can overrule our environmental experts. What legislative levers are available in Scotland to enable the Scottish Government to contest decisions that are made by bodies external to Scotland that might have significant detrimental impacts on the Scottish environment?

The recent inner Moray Firth application process highlighted a number of inadequacies and uncertainties with regard to environmental impact. That would not be limited to the impact of an oil spill, which would be a catastrophe for marine life and businesses alike; there are also significant operational concerns about ballast water treatment, acoustic disturbance underwater and the discharge of carcinogenic volatile organic compounds into the atmosphere. For example, in the case of an oil spill, the modelling is based on a worst-case scenario of the discharge of 1 tonne of crude oil even though the tankers that are involved in the transfers can carry up to 180,000 tonnes. As a result, the environmental impact is grossly underestimated. One of the most shocking elements of an oil spill is the potential for euthanasia of whales and dolphins following their live stranding.

I should say that, in order to simplify the petition, we have made a technical submission to SEPA on ballast water hazards, and we ask the committee to obtain SEPA’s response to that as guidance. One question is, how can the Scottish Government enforce its own code of practice on non-native species when the decision to allow ballast water discharge is taken by a body external to Scotland that is acting contrary to SEPA’s advice? Another question is whether the planned euthanasia of a European protected species is lawful or, indeed, ethical when it could be avoided completely.

In the case of the Moray Firth application, there is not enough certainty in the process to say beyond all reasonable scientific doubt that there would be no impact on the integrity of the Moray Firth special area of conservation. Such certainty is a fundamental requirement, and the situation is not unique to that case. With such process uncertainty, how can we allow another Scottish trust port to make such an application?

The other part of our petition deals with the accountability of ports. Cromarty Rising—which the three of us here represent—has written to individual board members of the Cromarty Firth Port Authority as well as to the chairman of the board and the chief executive about its recent application. However, there has been no meaningful engagement. Transport Scotland has stated that it is up to each trust port to ensure that it complies with its own legislation. Is the committee comfortable with the idea that an unelected, self-appointed organisation that is looking after a public asset should be able to police itself?

Transport Scotland has no remit in disputes and, if stakeholders feel aggrieved, their only further recourse is to take legal action, which is both costly and time consuming. That is wrong. Trust ports manage valuable assets that belong to the people of Scotland. They are managed on behalf of the people and, ultimately, they should be responsible to the people and not to themselves. At the very least, there must be independent oversight. Trust ports are responsible to their stakeholders—they can receive indirect public funding via the Scottish Enterprise network and should reinvest all profits in the ports. Their ability to do that should not be diluted by private sector joint ventures or by their using penetration pricing strategies to the direct detriment of local stakeholder competitors and other Scottish ports.

Is it desirable or in the spirit of the Harbours (Scotland) Act 2015 that Scottish trust ports should deliberately set themselves up in direct competition with their local stakeholder businesses? Does the committee agree that there is a need for oversight of our trust ports?

Thank you very much for that opening statement. I will start with a question about existing ship-to-ship oil transfer licences in Scotland. We understand that licences exist for transfers at Scapa Flow, Nigg and Sullom Voe. Our background information indicates that there have been no major incidents at Scapa Flow since 1980 and that 86 transfers took place at the Nigg terminal between 2009 and 2014 without any incidents. We also understand that, in 2009, there were two minor spills at Sullom Voe, although investigations confirmed that there were no adverse effects on or damage to the environment. Are you opposed to all ship-to-ship oil transfers, or do you think that there are specific locations and/or infrastructure that provide appropriate facilities for the activity?

That is the crucial part of it—such transfers need the infrastructure if they are to be undertaken safely. We have absolutely no issue whatever with ship-to-ship transfers taking place at Nigg. As you say, transfers have been undertaken safely there for the past 30 years. The ships are tied up at a jetty and the supporting infrastructure is there. Wood Group employs 40 people to support the process of ship-to-ship transfers and the previous operations of the Nigg oil terminal.

However, if the transfers are moved out to sea, they will be undertaken in an open-sea situation. The Cromarty Firth Port Authority has no intention of using the shore support. It will, therefore, be able to offer the service at around a third of the cost of anywhere else in the UK, which brings me back to my point about penetration pricing strategies: the authority will make it so cheap that it will attract the business. Also, the transfers will take place within a couple of kilometres of a very rocky shoreline and, if anything goes wrong, there will be no emergency tug on hand, although there will be harbour tugs on hand. As far as we are concerned, it is a disaster waiting to happen.

The other issue with the current application that has brought us here is that there will be an 800 per cent increase in the quantity of oil that is transferred. That is what the application is for.

Part of your concern is about the need for infrastructure and an appropriate site.

Exactly.

Are you also concerned about the activity being carried out in sensitive environments? If so, what specific characteristics of the environments are you concerned about?

10:30  

The whole issue probably comes down to the fact that a strategic environmental assessment should have been carried out. If we are going to undertake the process in Scottish waters, we should have thought about it before we started doing it willy-nilly. It should have been done on a UK basis as well.

The Cromarty Firth is in the middle of a special area of conservation for bottlenose dolphins and birds, and we think that it is wholly inappropriate that the process should be undertaken in that location when it could be undertaken very safely at the alternative location of Nigg. If strategic thought were given to where we want to allow the transfers to take place, that would give the general public and the ports clarity about where that may be acceptable.

Just as an idiot’s guide, can you confirm that such a strategic environmental assessment is within the domain of the Scottish Government?

We believe so.

It is possible to have a UK-wide policy within which devolved powers could be used to address other sets of considerations. We have examples of that with nuclear power and so on. Is this another area in which a strategic environmental assessment could be acted on to address the matter?

We believe so.

That is helpful. Thanks very much.

I declare an interest in that, as a councillor on Falkirk Council, in 2006-07 I was actively opposed to the proposal by Forth Ports for ship-to-ship oil transfers in the Firth of Forth. I am on record as opposing those plans at the time.

The petition considers the issue from the perspective of using environmental legislation to prevent ship-to-ship oil transfers. We understand that, although some of the areas where ship-to-ship transfers may be proposed are protected by existing legislation for environmental protection, the licences for such transfers are a matter for the UK Government. You have said that that is your understanding of the matter. The Scottish Government has regularly called for devolution of those licensing powers. Do you agree that it would be a lot easier for the Scottish Government if it did not have to rely on the environmental regulatory powers that it has but had full powers over the licensing? Would that not help to expedite the whole situation?

I agree fully with that. It would be much easier if it was a devolved matter. However, it is not a devolved matter, and we believe that the Scottish environment would be put at risk if a licence was granted for transfers in the Cromarty Firth. In addition, the application for a licence for transfers in the Firth of Forth could come back, and the Maritime and Coastguard Agency would make the decision on that. The point is that the Scottish Parliament has powers over the environment—it is one of your responsibilities—and we have to look to whatever levers or legislation are available to ensure that our valuable environment and wildlife are protected.

Good morning. Turning to another aspect of the petition, I note that you are also calling for reform of trust ports. It would be helpful if you could provide some information about the current status of those ports. The information that we have says that they are independent statutory bodies that are run by independent boards for the benefit of stakeholders. Is that your understanding? If so, do you know who the stakeholders in question are?

It is up to each individual trust port to name its stakeholders. In the case of the Cromarty Firth, those are businesses that use the port, customers of the port, communities that surround the port and—specifically in the Cromarty Firth—the environment. Obviously, the environment cannot speak for itself, but the communities surrounding the port can speak for themselves and, as we have stated, 27 community councils in the Cromarty Firth Port Authority area are directly opposed to the proposals, with one in favour. There is something of a democratic deficit when the port authority ploughs on with its plans in the face of massive public opposition.

As you have rightly said, Mr Whittle, the trust ports are independent statutory bodies. However, the Harbours (Scotland) Act 2015 repealed sections 10 and 12 of the Ports Act 1991, with the effect that Scottish trust ports are no longer under any pressure from Scottish ministers to be the commercial ventures that they were required to be under the 1991 act.

Basically, a trust port that was set up for the benefit of its stakeholders has now set up a private company with private investors, with 50 per cent of the profits returning to those private stakeholders, rather than all the profits being invested back in the port. Our contention is that, although the trust ports operate in a commercial environment and have no direct public funding, they receive indirect funding from Highlands and Islands Enterprise and so on. Our main concern is that the trust board is supposed to represent the stakeholders and the community, but it has set up a private company with two private stakeholders, with the result that there is a 50:50 division of the profits, with 50 per cent of the profits going elsewhere. We would like the Scottish Government to clarify how a Scottish trust port that is set up for the stakeholders and which is supposed to be independently managed can set up a private company operating in direct competition with the local businesses that sit on the trust board.

You have answered the first question that I was going to ask, which was quite a naive one about why the proposal had been made. You have said that the reasons are financial—in other words, the issue is to do with money.

Absolutely, yes.

I also want to ask about accountability. You have said that there has been no meaningful engagement with the trust port board. Given that we are where we are, what do you suggest can be done to overcome that? You have said that independent oversight might be needed, but what independent oversight might be appropriate?

There has to be some governance to ensure that ministers clearly see that, whatever the considerations around the profits for commercial companies, which operate in a commercial environment, there is no asset stripping. The trust ports were set up for the benefit of the community and the stakeholders, but if a trust port sets itself up in direct competition with, for example, a local company that is providing stevedore services, it hardly looks as if it is acting in the community’s best interests. At some point, Scottish ministers have to ask whether that sort of direct competition is appropriate, and that is particularly the case in relation to trust ports.

The other thing that we would like is financial clarity. We are talking about a public asset here. Trust ports are not private companies, but are set up by acts of Parliament to look after a public asset. There needs to be complete financial transparency, which is not there at the moment. When something goes wrong—we are just one of several stakeholder groups that are in dispute with our local trust port—there is no recourse and no one to turn to. Transport Scotland cannot intervene, the Parliament cannot intervene and there is no ombudsman or other independent body that can look at such an issue and take a balanced view.

So, in that respect, you are in no-man’s-land.

Yes. Our only option is to take legal action.

Bearing in mind what you have said in response to my two colleagues, if you were given a blank piece of paper and a blue-sky objective, what changes to trust port boards would you want to be effected? What interests would you want to be represented on those boards?

We would like board members to be appointed through the public appointments process, as any other public figure would be. At the moment, the ports appoint their own boards, with no transparency or public scrutiny whatever. We would like stakeholder groups to be better represented. I think that five of the eight members of the Cromarty Firth Port Authority board—it is certainly more than half—are from an oil industry background. There is no one on the board to represent communities, no one to represent competing businesses and no one to represent the environment.

You are basically saying that there should be a representative of each of those sectors on the board.

There should be better representation, and there should be more public transparency with regard to how people are appointed.

I thank the convener for allowing Kate Forbes and me to come to the meeting. I do not know whether the committee is aware of this, but I understand that there is a case about trust ports that is still live at Tain sheriff court. However, it should not intrude on the committee’s deliberations.

I do not want to presume that members do not understand the fact that the geographic area that the proposal covers extends more widely than the ports of Cromarty, Invergordon and Nigg, but I ask the witnesses to expand on that.

Invergordon sits at the head of the Cromarty Firth, at the western extent. It is proposed that ship-to-ship transfers will be undertaken at the mouth of the Cromarty Firth, pretty much opposite the village of Cromarty, and—on the other side—opposite Nairn. Therefore, it is not just the villages of the Cromarty Firth but the whole Moray coastline that could be affected. The proposed location of the ship-to-ship transfers sits bang in the middle of that geographic area.

As a layperson, I would call it the sea. Is that reasonable?

Yes.

What is your understanding of the initial engagement by the Cromarty Firth Port Authority? That engagement was not with the communities around the area of the proposal, was it?

No. The first that the communities knew about the proposal came from a statutory advert in The Inverness Courier in the week before Christmas that was seen completely accidentally. The community council was not consulted in any way, shape or form until the issue was raised internally, in the village of Cromarty. Our community council had to contact the port authority.

On several occasions, the port authority has refused to come along to an open public meeting to discuss the issue openly. It has come to a closed meeting of the community council, which had to be unminuted—the committee can take from that what it wants. All the way along, we have written to the chairman and each individual member of the board, and to the chief executive, and we have never had a reply to any of our questions.

10:45  

To reinforce the question that the convener asked at the outset, does Cromarty Rising have—or has it ever had—concerns about the relative safety of the procedure being undertaken at Nigg harbour?

No—absolutely not. That can carry on all day long.

My next question is most likely for Duncan Bowers. I do not understand the mechanics of all this, but we have heard that the modelling for any spillage is based on approximately 1 tonne, and we have heard about the tonnages involved. For the committee’s benefit, can you say something—as I have heard you say at other meetings—about the number of seconds that it would take to close down valves and what the implications of that would be?

There are a couple of points to make about spills. To come back to a point that we raised earlier, we looked back at the Orkney isles licence application from 2014. A risk assessment was done by an oil spill service provider, which estimated that the entire shipload could be lost from a ship-to-ship transfer there. It put the figure for a worst-case scenario at 300,000 tonnes. That assessment was signed for and accepted by SEPA and SNH officers in June 2014. Six months later, the regulator changed the maximum spill volume to 1 tonne. There is an enormous difference between what the Scottish agencies think and what the regulator thinks.

What is the speed of transfer? It is all open sea, and the ships are anchored side by side.

There are no clear figures in the application, but, given the volume and the time involved, it works out at about 2 tonnes per second being pumped between the ships.

I remind the committee that we are dealing with the general issues that arise from specific applications. We are getting some information, but I reiterate that we are not investigating an individual port authority—we are learning lessons with regard to what the Scottish Government might do.

Yes—I understand that, convener.

Fairly recently, a committee in which I am involved deliberated on, and approved, the decision of Aberdeen Harbour trust on a very sensitive environmental issue. Are the witnesses aware of that at all?

No.

The petition calls on the Scottish Government to look at how environmental legislation could be strengthened. Given your experience of the process, which devolved powers would you want to see exercised more fully?

The national marine plan would be the beginning point for everything. Loreine Thomson might want to say something on that.

The Marine (Scotland) Act 2010 (Consequential Provisions) Order 2010 empowers Scottish ministers—as was agreed in 2015—and says that public authorities must deal with any reserved matters in the same way as they would deal with devolved matters. In other words, we have the Marine (Scotland) Act 2010 and the subsequent regulations, and at present we cannot look at a reserved matter. However, under the 2010 act, there are regulations to ensure that public authorities conform with what is contained in our national marine plan, whether the matter that they are dealing with is reserved or not. That is Scotland’s way of ensuring that, when the various bodies consider the application that we are discussing, for example, they must take cognisance of our marine plan. Our marine plan says that we must protect species and the environment. We do not want invasive species coming from ships through ballast water, and the public authorities must take such things into account.

Even though this is a reserved matter, the order means that UK Government agencies must apply the same scrutiny that Scottish Government organisations apply. However, that intention is so diluted that it is lost in the legislation. We need to get to the point where it is highlighted. We have a competent authority in England that is making a decision about Scottish marine protected areas, but the Scottish Government is the body that issues the protected species licence. We have two competent authorities: one is saying, “Yes, we will agree to that,” but the Scottish Government could say, “No. We are not going to issue a licence.”

There is provision in regulations under the 2010 act for co-ordination where there are two competent authorities. The area of co-ordination needs to be explored and developed until we get a fully devolved version of the powers.

If the matter was fully devolved, you might find that there was conflict within Government, although that might be easier to manage.

Do you have any other questions, Kate?

What were the views of SEPA and SNH?

SEPA objected, and SNH felt that it could not object, because it operates in an advisory capacity only. However, SNH made a very lengthy, eight-page response to the application that raised significant concerns. Marine Scotland put in no response whatsoever.

We have come to the end of our questions, so I thank the witnesses for their evidence, which has been very useful.

There are clearly areas that the committee will want to explore. I suggest that, as a starting point, we write to the Scottish Government and relevant stakeholders, including the Maritime and Coastguard Agency, Scottish Natural Heritage and the UK Harbour Masters Association, to ask for views on the action that the petition calls for. I think that Greg Fullarton also made a point about SEPA.

And Marine Scotland.

Would members like to suggest any other actions?

I would like to understand whether the Scottish Government has the authority, under environmental legislation, to prevent ship-to-ship oil transfers.

I am thinking of the parallel of nuclear power stations. Establishing a nuclear power station is a matter for the UK Government, but the Scottish Government made it quite clear that it would use planning legislation to block the building of a nuclear power station here. Is there an equivalent relationship regarding ship-to-ship oil transfers? The Scottish Government could say that the environmental damage would be such that it simply will not let that happen.

There is also a series of questions around the harbour authorities that we might want to explore further with the Scottish Government.

Do members agree to write to the Scottish Government and the agencies and organisations that have been identified to ask for their views?

Members indicated agreement.

The Public Petitions Committee will come back to the petition. I thank the witnesses for their attendance.

10:53 Meeting suspended.  

10:55 On resuming—