China ship owners pay up for Australia reef disaster

The owners of a Chinese ship that ran aground on the Great Barrier Reef in 2010 agreed to pay Australia Aus$39.3 million (US$29.6 million) on Monday, in a settlement dismissed by conservationists as "woefully inadequate".

The fully-laden coal carrier Shen Neng 1 hit a shoal in April 2010, leaking tonnes of heavy fuel oil and threatening an ecological disaster.

While a catastrophe was avoided, the huge ship gouged a three-kilometre (1.8-mile) scar in the coral and was stranded for nine days before salvage workers refloated it.

The ship's owner, Shenzhen Energy Transport Co Ltd, and its insurer refused for six years to accept responsibility to make restitution before striking Monday's out-of-court settlement.

"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," said Environment Minister Josh Frydenberg.

He added that the settlement showed Australia would "use every available means to pursue ship owners who are negligent in causing damage to the reef".

But Greenpeace Australia slammed the deal, calling it "woefully inadequate".

"The government has said the full clean-up will cost more than Aus$140m so to settle for such a small figure is disappointing," said Greenpeace's Pacific reef campaigner Shani Tager.

"While we welcome the end of this six-year saga, it has to serve as a reminder that accidents happen. It's clear that coal and the reef don't mix and the government needs to do more to protect this precious place."

The funds will allow the Great Barrier Reef Marine Park Authority to remove toxic anti-fouling paint and rubble, which will allow the reef to be restored, the government said.

But it will be a long haul, with the anti-fouling paint containing a highly toxic component which is now banned from use.

"Impacts to marine life on the seafloor could potentially last for many decades if the toxic anti-fouling paint remains in place," Frydenberg said.

The ship's owner had argued the reef was self-healing and the company should not have to pay the bill.

An Australian investigation in 2011 blamed a tired chief mate for the accident.

It also found the ship's safety management system did not contain procedures or guidance in relation to the proper use of passage plans, including electronic route plans.

Conservationists said the incident highlighted the environmental risks to the Great Barrier Reef, particularly from shipping Australian exports to China.