CHAPTER 2

Key provisions of the Bill and issues raised

2.1        The Bill contains one schedule, consisting of a single item providing for the repeal of the Migration Amendment (Offshore Resources Activity) Act 2013 (ORA Act).

Key provisions of the Migration Amendment (Offshore Resources Activity) Act 2013

2.2        The ORA Act contains one schedule comprised of two parts. The operative provisions of the Act are set out in Part 1 of Schedule 1, while Part 2 deals with the application of the amendments.

2.3        As set out in this committee's report of June 2013 on the ORA Bill, section 9A of the ORA Act creates:

a new framework to provide that persons in an area who participate in, or support, an 'offshore resources activity' are taken to be in the migration zone... The intended effect of proposed new section 9A is to bring persons participating in, or supporting, an 'offshore resources activity' within the ambit of the Migration Act, thereby requiring these persons to hold visas.[1]

2.4        Subsections 9A(1) and (3) set out the circumstances in which a person is deemed to be in the migration zone. Subsection 9A(4) defines 'offshore resources activity', and subsection 9A(6) provides for the minister to make determinations in relation to this definition. New subsections 41(2B) and 41(2C) provide that a person must hold either a permanent or prescribed visa to lawfully participate in, or support an offshore resources activity.

2.5        While the Explanatory Memorandum for the ORA Bill made reference to a 'new visa product' for this purpose to be prescribed in the Migration Regulations 1994, the committee understands that this new visa has not been developed.[2] As set out in the commencement table, Schedule 1 of the Act is scheduled to commence 12 months after Royal Assent, in June 2014. The Explanatory Memorandum noted that this was to allow:

adequate time for the Department to develop a specifically tailored visa pathway for offshore resource workers in consultation with key stakeholders which would commence on the same day as the operative provisions of this Bill.[3]

Issues raised during the inquiry

2.6        Issues raised by stakeholders focused on the Bill's potential impact on jobs and security, as well as the impact of technological advances in the offshore resources sector.

Employment conditions

2.7        The Australian Institute of Marine Power Engineers (AIMPE), the Australian Maritime Officers Union (AMOU) and the Maritime Union of Australia (MUA) were concerned that repealing the ORA Act would enable employers to bypass Australian wages and conditions when employing foreign workers, which would 'jeopardise the employment opportunities for Australian seafarers working in the offshore oil and gas industry.'[4]

2.8        The MUA argued that foreign workers should only be brought into the offshore resources industry through a visa program 'to protect Australian employment and training opportunities and to ensure fair rates of pay and conditions for overseas workers',[5] and that:

Without amending legislation enacted by the Parliament there [is] a real risk overseas workers in the exploration of Australia's natural resources, who therefore form part of the Australian employment sector, would be working under conditions and receiving wages below Australian standards.[6]

2.9        Concerns were raised around the loss of training opportunities,[7] and ensuring that foreign workers involved in extracting Australian resources would pay tax in Australia.[8] There was also concern that a lack of regulation of non-citizen workers on offshore resources installations would lead to increased health and security risks, as the checks that are usually performed when granting a visa would not apply.[9]

2.10      The Australian Mines & Metals Association (AMMA), however, disputed the Bill's negative impact employment opportunities:

It is not accurate to say the jobs being affected are Australian jobs...The fact is that local companies and projects often need to engage international contractors or source vessels from within their international fleets for short periods to perform critical work associated with major resource projects. This is internationally unique work requiring vessel-specific skills.[10]

2.11      The Department of Industry also argued that:

The sector has a strong international focus and relies on a highly mobile and often specialised workforce. Specialised technical skills and industry experience will be in greater demand as the sector moves from construction to an operational phase. In order to not exacerbate skills shortages and to maintain project efficiencies and global competitiveness of the sector, the Department supports flexibility and timeliness in terms of visa processing and pre approval.[11]

2.12      The committee was also informed by industry and the government that the number of non-citizens working in the offshore resources industry who are not currently required to hold visas is relatively small. The Department of Immigration and Border Protection (DIBP) and the Australian Customs and Border Protection Service (Customs) noted that:

While the precise number of non-citizens working in the industry who are not currently required to hold visas is unknown, indications are that it is relatively small. One estimate has put the total at approximately 2000 per year (by comparison 68 000 subclass 457 visas were granted in 2012-13), while others have put the number at considerably less than this. The prevalence of fly-in fly-out arrangements mean that overseas workers generally remain in Australia for relatively short periods of time, meaning that only a proportion of the estimated 2000 would actually be in the migration zone at any given time.[12]

2.13      Government and industry submissions argued that current arrangements in the sector provide sufficient protections for workers and immigration controls. DIPB and Customs noted:

Terms and conditions of employment will continue to be protected and enforced under domestic laws or under international convention through the International Labour Organisation’s Maritime Labour Convention. As the workplace relations and migration systems are subject to separate legislative frameworks, non-citizens’ terms and conditions of employment are subject to regulation domestically or under international law regardless of whether they are prescribed in sponsorship obligations or visa criteria.

Non-citizens working on resource installations, or who come to the Australian mainland to work, are already required to hold work visas. Non-citizens must also hold valid visas to be immigration cleared when they transit through an Australian port on their way to and from resource installations and vessels – hence they are still subject to immigration controls, even if they are not required to hold a visa for the activity they are undertaking on the resource installation or vessel.[13]

2.14      The continuing lack of certainty around the operation of the ORA Act was also raised by stakeholders. The Department of Industry, the Business Council of Australia (BCA) and AMMA highlighted the broad discretion granted to the minister to make determinations under the Act as an area of particular concern.[14]

2.15      DIBP and Customs considered that repealing the ORA Act would lead to greater certainty for industry, and noted that the Act did not fully address the 'complexity of operations in the offshore environment', stating 'on an operational level, the ORA Act will not regulate the employment conditions of the range of occupations of workers on offshore resources vessels'.[15]

Technological advances

2.16      Stakeholders who did not support the Bill argued that the amendments introducing the original offshore resources provisions had not been drafted to accommodate advances in technology, leading to a perceived gap in the Migration Act's visa regime.[16] In particular, they argued that some newer vessels no longer need to be 'attached to the seabed', and therefore fall outside the operation of the Migration Act.[17] AIMPE argued that regulation of workers involved in exploiting Australian resources should no longer be limited by this concept, as it is outdated.[18] The AMOU argued that:

At the time of the amending of the original Migration Act 1958, in the early 1970s, the concept of exploring natural resources without being attached to the seabed would not have even been contemplated by industry, let alone the legislators.[19]

2.17      The AMOU also noted that one of the two vessels that were the subject of dispute in Allseas Construction S.A. v Minister for Immigration and Citizenship[20] (Allseas), the Lorelay, used this new technology.

The Lorelay for example was the world’s first pipelay vessel to operate on full dynamic positioning (DP), this represented a new generation of offshore pipelaying vessels.[21]

2.18      The MUA identified Floating Liquid Natural Gas (FLNG) projects as a recent development in the area, and wanted to ensure that employment opportunities on these projects should benefit Australian workers:

FLNG technology offloads LNG to large LNG ships and removes the need for long pipelines to land-based LNG processing plants...

Employment on FLNG operations...must in the first instance go to Australian workers and a strict regulatory system must be in place to ensure that overseas workers are only brought in under very strict safeguards.[22]

2.19      In its submission on the previous Bill, however, AMMA argued that the amendments to the Migration Act in 1982 'made express provision for resource installations and vessels'[23] and pointed to the examination of the provisions by McKerracher J in Allseas:

...there does not appear to have been anything in any of [the extrinsic materials to the 1982 amending bill] to suggest that the provisions in the Act relating to "resources installations" were intended to apply to pipe lay vessels. The Second Reading Speeches suggest that the provisions in the Act relating to "resources installations" were intended to apply to drilling platforms and rigs and that Parliament did not contemplate that the provisions would apply to pipe lay vessels. It is arguable that the inclusion in the Bill of the exception which is now s 5(13) of the Act suggests that Parliament was mindful to ensure that the new provisions would not apply to such vessels.[24]

2.20      The committee understands that the perceived gap in the Migration Act, as identified in the Allseas case, remains quite narrow, despite technological developments in the area. Until the ORA Act comes into force on 30 June 2014, it appears that the exemption from visa requirements is confined to vessels 'used wholly or principally in transporting persons or goods to or from a resources installation, manoeuvring a resources installation, or in operations relating to the attachment of a resources installation to the Australian seabed' as provided for in section 5(13) of the Migration Act. Non-citizens working on 'resources installations' which do not fall under the exemption, appear to remain subject to visa requirements. Therefore, if the Bill is passed the exemption from visa requirements will remain confined to the vessels that come under the exemptions in section 5(13) of the Migration Act.

Committee view

2.21      The committee notes the value of the offshore oil and gas industry to the Australian economy, and the importance of continued investment in the sector.[25] The committee recognises that the industry operates in an international environment, and that the vessels that currently fall under the exemption in the Migration Act require flexibility to retain crew members with the appropriate skills as they move from project to project around the world. The minister noted this in his second reading speech to the Bill:

This means that our migration arrangements must be relatively flexible, and not impose an undue administrative burden on industry, or create unnecessary barriers for overseas workers when they are genuinely needed, especially when their skills are unavailable in Australia.[26]   

2.22      The committee considers that, rather than falling through a loophole, non-citizen workers on these vessels are adequately covered by existing immigration controls under the Migration Act 1958, while international conventions and foreign domestic laws operate to protect workers' wages and conditions. As such, and given the committee understands that the number of workers in this space is relatively small, the committee does not consider that further regulation is warranted.

2.23      As mentioned at paragraph 2.5 of this report, there was reference in the EM to the ORA Bill to a new visa product. The committee sought advice from DIBP about whether a specific visa had been developed by the department, and raised the question of whether a specific visa pathway would be ready to be implemented if the Bill failed to pass before the commencement of the ORA Act. The department advised that the government has no plans to develop a new visa specifically for the offshore resources industry but, in the circumstance that the Bill does not pass prior to commencement of the ORA Act, the department will implement a visa pathway. DIBP also advised that it has developed a communications strategy to raise awareness of the visa arrangements in the relevant industry, should the Bill fail to pass prior to the commencement of the ORA Act.[27]

2.24      Finally, the committee notes that the ORA Act not only increases the regulatory burden for industry, it's administration will also demand significant Commonwealth resources, as described by Customs:

While the ORA Act addresses visa requirements, it does not cover obligations regarding notification that those visa holders will be in the offshore environment. Because the current pre-arrival requirements are linked to a vessel arriving in a port, there is currently no provision that can be used to require a vessel to report when it arrives into an offshore installation not attached to the seabed. Accordingly, the opportunity exists for enhanced legislative alignment through repeal of the ORA Act.

Administration of the ORA Act would have a significant impact on the ACBPS’ border management resources and systems, given the ACBPS administers immigration clearance on behalf of the Department of Immigration and Border Protection. Managing border clearance on vessels that travel to remote offshore infrastructure would be resource intensive and expensive.[28]

2.25      For these reasons, the committee recommends that the Bill be passed.

Recommendation 1

2.26      The committee recommends that the Bill be passed.

Senator the Hon Ian Macdonald
Chair

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