Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017

Bills Digest no. 60, 2017–18

PDF version [495KB]

Sophie Power
Science, Technology, Environment and Resources Section
21 December 2017

Contents

Purpose of the Bill

Structure of the Bill

Background

Coastal trade in Australia
Figure 1: coastal freight carried on the top ten routes, 2014–15 (million tonnes)
Coastal trade regulation
Current state of coastal trade in Australia
Shipping Legislation Amendment Bill 2015
Discussion Paper

Committee consideration

Rural and Regional Affairs and Transport Committee
Senate Standing Committee for the Scrutiny of Bills

Policy position of non-government parties/independents

Position of major interest groups

Industry groups
Unions and professional organisations

Financial implications

Statement of Compatibility with Human Rights

Parliamentary Joint Committee on Human Rights

Key issues and provisions

Foreign access to coastal shipping
Application of the Fair Work Act
Temporary licences
Five voyage minimum requirement
Abolition of specific emergency licences
Approval timeframes for temporary licences
Energy security situation
Tolerance provisions
Extending the coastal trading regime
Voyages involving offshore facilities
Related consequential amendments
Stakeholders comments on extension to offshore facilities
Voyages beginning and ending at the same port
Definition of ‘port’
Dry docking
Temporary licence variation process
Consultation and notification requirements
Consultation on temporary licence applications
Voyage notification requirements

Other provisions

IMO numbers
Consequential amendments

Concluding comments

 

Date introduced:  13 September 2017
House:  House of Representatives
Portfolio:  Infrastructure and Regional Development
Commencement: A day to be fixed by Proclamation, or six months after Royal Assent, whichever occurs first.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at December 2017.

Purpose of the Bill

The purpose of the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 (the Bill) is to amend the Coastal Trading (Revitalising Australian Shipping) Act 2012 (the Coastal Trading Act) to streamline the regulation of coastal trading, including by:

  • removing the five-voyage minimum requirement for temporary licences
  • simplifying licence variation, consultation and notification processes
  • amending the tolerance provisions for temporary licence voyages
  • abolishing the separate category of emergency licences and
  • extending the regime to cover, for example, voyages involving offshore petroleum facilities.

Structure of the Bill

The Bill contains two Schedules. Schedule 1 contains the substantive amendments to the Coastal Trading Act. Schedule 2 contains consequential amendments to the Occupational Health and Safety (Maritime Industry) Act 1993 and the Seafarers Rehabilitation and Compensation Act 1992.

Background

Coastal trade in Australia

Coastal trading is the movement of cargo or passengers on ships between ports in different states and territories in Australia in connection with a commercial activity.[1] In 2014–15, Australian ports handled, in total, 101.3 million tonnes of coastal freight.[2] Figure 1 below shows the top ten routes for coastal freight in 2014–15.

Figure 1: coastal freight carried on the top ten routes, 2014–15 (million tonnes)


Source: Bureau of Infrastructure, Transport and Regional Economics (BITRE), Australian sea freight 2014–15, DIRD, Canberra, 2017, p. 30.

Coastal trade regulation

On 1 July 2012, the Coastal Trading Act created a new licensing regime to regulate access to coastal trade which replaced the previous permit system established under Part VI of the Navigation Act 1912.[3] The aim of the Coastal Trading Act is to:

...promote a viable Australian shipping industry, facilitate the long term growth of the Australian shipping industry and enhance its efficiency and reliability as part of the national transport system by regulating Australian and foreign ships through a licensing regime.[4]

To achieve this, the Coastal Trading Act regulates coastal trade by granting licences to authorise vessels to carry passengers or cargo between ports in Australia. The licensing system established under the Act currently sets out three licence types:

  • general licences, which permit vessels on the Australian General Shipping Register unrestricted access to engage in coastal trading in Australian waters for five years
  • temporary licences which allow foreign-flagged vessels to engage in coastal trading in Australian waters for a 12 month period, limited to the voyages authorised under the licence and
  • emergency licences which may be granted for up to 30 days and provide access to engage in coastal trading in Australian waters in identified emergency situations.[5]

Licences are issued for interstate voyages. However, vessel owners can ‘opt-in’ to apply the Coastal Trading Act to intrastate voyages by making an application to the Minister for a ‘section 12 declaration’.[6]

The intent of this regime regulating coastal trading is:

...to strike a balance between the interests of users of shipping services with the interests of the Australian flagged fleet. The regime allows Australian flagged vessels unrestricted access to the coast and gives them the opportunity to contest voyages applied for by foreign ships, thereby providing them with an advantage. The framework therefore had the intent of generally permitting the use of foreign ships where suitable Australian ships are not available to carry cargo or passengers.[7]

Current state of coastal trade in Australia

The total tonnage carried under coastal trading licences in 2014–15 was 32.7 million tonnes, which represented 65.0 per cent of all loaded coastal freight. The remaining 17.6 million tonnes of coastal freight was intrastate cargo not carried under licence.[8] Of the cargo carried under licences:

  • 15.3 million tonnes of cargo was carried under temporary licences
  • 10.3 million tonnes was carried by Australian-Flagged vessels under general licences and
  • 7.1 million tonnes was carried by vessels with transitional general licences.[9]

The freight task performed under temporary licences was 40.8 billion tonne-kilometres, accounting for 38.8 per cent of the coastal freight task (which includes cargo not carried under licence). General licences and transitional general licences[10] accounted for 6.0 per cent and 17.7 per cent of the overall coastal freight task, respectively.[11]

The Regulatory Impact Statement prepared for the Bill states that, since the current coastal trading regime was implemented in 2012, ‘the decline in the number of Australian flagged vessels has continued’:

The fleet of major Australian registered vessels with coastal licences has declined from 30 vessels in 2006-07 to 14 in 2015-16, and many ageing Australian registered vessels are not being replaced... The coastal shipping freight task fell by 8 percent between 2004-2005 and 2014-2015, while the total domestic freight task grew by 55 percent. As a result, coastal shipping moved around 15 percent of Australia’s domestic freight in 2014-15, down from 25 percent in 2004-05. No ships have been registered on the Australian International Shipping Register since its establishment in 2012.[12]

Shipping Legislation Amendment Bill 2015

The decline in Australian vessels engaged in coastal trading, as outlined above, led to attempted reforms to the current coastal shipping regime in 2015. In particular, the Coalition Government attempted to pass significant amendments to the Coastal Trading Act during the last parliament via the Shipping Legislation Amendment Bill 2015[13] (the 2015 Shipping Bill).

Notably, the 2015 Shipping Bill proposed more wide‑reaching reforms which would have opened the Australian coastal shipping market to increased foreign competition and also extended the regime to large cruise ships. In particular, the 2015 Shipping Bill proposed to:

  • replace the existing system of three levels of licences for coastal shipping with a single permit for both Australian and foreign vessels
  • allow vessels to be registered on the Australian International Shipping Register (AISR) if they undertake 90 days international trading a year (instead of the current requirement to be ‘predominantly engaged’ in international trade) and
  • alter the workplace relations environment so that:
    • only seafarers on vessels engaged in coastal shipping for six months or more are covered by the Fair Work Act 2009 and
    • making a collective agreement with workers is no longer a condition for being registered on the AISR.[14]

The 2015 Shipping Bill was rejected by the Senate in November 2015,[15] after it was opposed by the ALP, the Greens, and others including Senators Xenophon and Lambie.[16] Further information on the 2015 Shipping Bill is contained in the relevant Parliamentary Library Bills Digest.[17]

The Government has acknowledged that given the defeat of the 2015 Shipping Bill, ‘pursuing a complete overhaul of the framework is not viable’, despite ‘extensive consultation with industry that highlighted the failings with the current system’.[18]

Discussion Paper

On 21 March 2017, the Government released a discussion paper, Coastal Shipping Reforms, to seek the views of stakeholders on proposed amendments to the coastal trading regulatory regime.[19] The discussion paper states that:

Operators and agents of both Australian and foreign flagged ships have raised a number of concerns about the operation of the current regime that regulates coastal shipping in Australia, specifically with regards to the administrative burden that it imposes.[20]

The discussion paper therefore canvassed a number of possible amendments to the Coastal Trading Act, which are now contained in the current Bill, including:

  • removing the five voyage minimum requirement for a temporary licence
  • streamlining the licencing process where no general licence vessels are available
  • streamlining the temporary licence variation process
  • amending the voyage notification requirements and tolerance provisions
  • abolishing the emergency licence category and
  • extending the geographical reach of the Act, including to cover voyages to and from offshore installations in Australian territory and vessels that are docked for servicing.[21]

Most of the 67 submissions received in response to the discussion paper have been published on the Department of Infrastructure and Regional Development website. Some of these submissions are discussed where relevant in the ‘position of major interest groups’ and ‘key issues and provisions’ sections of this Digest.

Committee consideration

Rural and Regional Affairs and Transport Committee

The Bill was referred to the Senate Standing Committee on Rural and Regional Affairs and Transport for inquiry and report by 4 December 2017. The Committee received 19 submissions and did not hold a public hearing. Details of the inquiry are on the inquiry homepage.

The majority report of the Committee recommended that the Bill be passed. The report noted that the Bill ‘does not propose substantial changes to the current coastal trading regime’, but would ‘reduce red tape and simplify the administration of the coastal trading regime’.[22] Liberal Senator for Tasmania, Eric Abetz, made additional comments suggesting that the Bill does not go far enough and that the Government should progress wider coastal shipping reform modelled on those contained in the Shipping Legislation Amendment Bill 2015.[23]

Labor Senators dissented, suggesting that the Bill be opposed in its entirety because it will only accelerate the decline of the Australian shipping industry.[24] Labor Senators pointed to two aspects of the Bill they considered to be ‘particularly problematic’: the changes to acceptable tolerance limits and the proposed ‘streamlining’ of the temporary licence variation process.[25] These are discussed further in the ‘key issues and provisions’ section of this Digest.

The Australian Greens also dissented, recommending that the Senate reject the Bill. The Australian Greens expressed particular concern about the Bill’s proposed changes to the tolerance provisions.[26]

Senate Standing Committee for the Scrutiny of Bills

The Senate Scrutiny of Bills Committee had no comment on the Bill.[27]

Policy position of non-government parties/independents

The ALP opposes the Bill. As noted above, Labor Senators opposed the Bill in their dissenting report to the Senate Standing Committee on Rural and Regional Affairs and Transport inquiry. When the Bill was introduced, Anthony Albanese, ALP Shadow Minister for Infrastructure, Transport, Cities and Regional Development, also expressed concern the legislation had been introduced ‘without consultation with the Opposition and, more importantly, the maritime sector’.[28] He accused the Government of resurrecting the ‘WorkChoices on Water’ legislation, a reference to the 2015 Shipping Bill, which was rejected by the Senate (as discussed above).[29] He further suggested that the changes proposed by the Bill ‘would make it easier for overseas-crewed vessels to obtain temporary licences which allow them to operate in Australian waters on temporary jobs where no Australian vessels are available’.[30] He argued that, rather than revitalising Australian shipping, this meant it would be ‘easier for shipping companies to sack Australian crews and replace them with overseas mariners earning third world wages’.[31]

ALP Senator Glenn Sterle further suggested during Senate Supplementary Estimates in October 2017 that the Bill:

... purports by name and in the subtle wording used in the explanatory memorandum and the regulation impact statement to give an impression that it will revitalise Australian shipping when, in fact, at best it will increase foreign shipping in Australian sea freight at the expense of Australian shipping.[32]

The Australian Greens also oppose the Bill, as noted above in the discussion of the Senate Standing Committee on Rural and Regional Affairs and Transport inquiry.

At the time of writing, other non-government parties and independents do not appear to have commented directly on this Bill.

Position of major interest groups

Most major interest groups made submissions to the Senate Rural and Regional Affairs and Transport Committee’s inquiry into the Bill. These are available on the Committee’s website and are discussed in further detail in the Committee report. In addition, many groups had already made similar submissions in response to the Department’s discussion paper on coastal shipping reforms (as discussed in the Background section of this Digest). General comments made by major interest groups in submissions to the Committee inquiry and/or the discussion paper are outlined below. Some of the more detailed comments in relation to particular aspects of the proposed reforms are discussed in further detail in the ‘key issues and provisions’ of this Digest.

Industry groups

Industry groups generally supported the Bill in their submissions. For example, the Australian Industry Group supported the Bill, submitting that the current coastal shipping regime has led to ‘significant increases in shipping costs to Australian companies and a greater reliance on road transport and rail’. The Group considered that the Bill will provide ‘much needed repair and flexibility to the current coastal trading regulatory regime’, including ‘increased access of Australian businesses to the services of foreign ships capable of transporting domestic cargo’.[33]

Shipping Australia, in its submission to the discussion paper, described the regime under the Coastal Trading Act as ‘inefficient and burdensome on shippers and the shipping industry, restricting access to the Australian market and resulting in the limitation of access of local businesses to efficient and cost‑effective shipping services’.[34] Shipping Australia supported most of the amendments proposed in the discussion paper.[35] In its submission to the Senate Committee inquiry, Shipping Australia also emphasised the importance of ‘regulatory stability’ and a ‘bi-partisan approach to making changes to coastal shipping regulation’.[36]

Maritime Industry Australia Ltd (MIAL) supported the retention of the core structure of the Coastal Trading Act, describing many of the changes proposed by the discussion paper as ‘sensible’ changes.[37] However, MIAL did raise some issues, including in relation to the changes to the tolerance provisions and the extension of the regime,[38] as discussed further in the ‘key issues and provisions’ section of this Digest.

Ports Australia considered that the Coastal Trading Act has ‘failed to deliver some of its key goals including to “contribute to the broader Australian economy” and to “promote competition in coastal trading”’.[39] In particular, Ports Australia submitted that the:

...effect of current legislation is that the movement of coastal freight is uncompetitive with the movement of international freight. The high cost of coastal shipping has resulted in disadvantaging Australian producers and manufacturers attempting to sell domestically because many imports are cheaper than moving freight between domestic ports.[40]

Ports Australia therefore supported the proposed amendments as ‘potentially’ bringing about efficiencies, reducing regulatory burden and improving the current framework.[41] However, Ports Australia suggested that the Government should ‘in the near future’ look at ‘further, more meaningful reforms to coastal shipping’.[42]

The Australian Institute of Petroleum (AIP) broadly supported the changes proposed by the Bill, and generally expressed support for amendments that reduce the cost and complexity of coastal shipping and provide greater flexibility.[43] The AIP was particularly supportive of amendments to extend the reach of the regime to offshore facilities, suggesting that this would ‘more readily provide for the supply of Australian crude oils to some Australian refineries’.[44] However, in its submission to the discussion paper, Woodside did not support the extension of the regime to cover offshore facilities.[45] This is discussed further in the ‘key issues and provisions’ section of this Digest.

The Minerals Council of Australia broadly supported the amendments proposed in the discussion paper, but suggested that ‘consideration should also be given to removing the restrictions that protect Australian-flagged ships from competition by foreign-flagged vessels’.[46] However, the Minerals Council had some reservations about the proposed amendments to the definition of ‘coastal trading’ (these are discussed in further detail later in this Digest).[47]

The Bulk Liquids Industry Association (an industry advocacy organisation representing companies involved with bulk liquid cargoes other than petroleum) generally supported the proposed changes which it considered ‘reflect common sense’ and would remove ‘some of the administrative burden’.[48]

The Business Council of Australia supported the Bill, which it considered contains ‘sensible changes’ that will ‘provide business with greater flexibility in its use of freight services, help to alleviate high regulatory and shipping costs under the current regulations...’.[49]

The National Farmers’ Federation (NFF) welcomed the amendments proposed in the discussion paper, commenting that they will ‘make coastal shipping arrangements much more flexible, remove layers of red tape and increase access to additional operators around the Australian coast’.[50] At the same time, the NFF called for further reforms, including removing the extension of Australian workplace laws to foreign ships.[51] The NFF also referred to a 2016 Productivity Commission report on the Regulation of Australian Agriculture which recommended that coastal shipping laws be amended ‘as a matter of priority... to substantially reduce barriers to entry for foreign vessels, to improve competition in coastal shipping services’.[52]

Similarly, the Australian Food and Grocery Council generally supported the amendments proposed in the discussion paper, but suggested that ‘the reform process could go further’.[53]

Superyacht Australia supported the Bill, particularly amendments to the five voyage minimum requirement, and the changes to the definition of voyage (as discussed further below).[54]

Unions and professional organisations

The Maritime Union of Australia (MUA) does not support the Bill[55] and has described it as resurrecting ‘WorkChoices on Water’,[56] a reference to the 2015 Shipping Bill. The MUA claims that, since the defeat of that Bill, ‘the Government has been abusing the temporary licence system, issuing licences in circumstances where the work was not temporary and in which Australian vessels were available’.[57] The MUA has expressed particular concern that the Bill ‘waters down the cabotage rules surrounding foreign ships gaining temporary licences to operate between Australian ports’ which would ‘make it more difficult for Australian ships with Australian crew to compete in the coastal trade’.[58] Some of the MUA’s more detailed comments on the specific provisions of the Bill are discussed further in the ‘key issues and provisions’ section of this Digest.

The Australian Maritime Officers Union (AMOU) is opposed to the Bill,[59] and considers that the proposed amendments to the Coastal Trading Act ‘will do little to maximise the use of Australian ships on our coast or provide additional jobs for Australian mariners in our local industry’.[60] The AMOU submitted that the Bill ‘represents a piecemeal approach to fixing a bigger problem’.[61]

The Australian Institute of Marine and Power Engineers (AIMPE) is similarly opposed to the Bill, suggesting that it ‘streamlines and accelerates’ the pattern of foreign shipping displacing Australian shipping.[62]

The Australasian Marine Pilots Institute (AMPI) similarly stated in its submission to the departmental discussion paper that it ‘is not convinced that this initiative will have the significant flow on benefits for other sectors of our economy, as we are lead to believe’.[63] In particular, AMPI suggested that the proposed reforms:

...will enable off shore shipping companies to operate foreign flag vessels on the Australian coast more freely and improve their profitability. However it does little to address Australia’s capacity to grow its own viable shipping industry and maintain the associated workforce that is critical for the safety and efficiency of all vessels trading through Australian ports.[64]

Financial implications

According to the Explanatory Memorandum, there will be no impact on Commonwealth expenditure.[65]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[66]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights considers that the Bill does not raise human rights concerns.[67]

Key issues and provisions

Foreign access to coastal shipping

Before discussing the provisions of this Bill in detail, it is worth noting that there are some overarching issues in relation to the regulation of coastal shipping. This includes both the level of access of foreign vessels to Australian coastal trading as well as the application of Australian employment conditions to workers on foreign vessels engaging in coastal trading. A related concern was whether the Bill will assist in achieving the Act’s stated aim of ‘revitalising’ the Australian shipping industry. These issues are each discussed briefly below, followed by a more detailed discussion of the specific provisions of this Bill.

As noted earlier in this Digest, one of the most controversial aspects of the 2015 Shipping Bill related to opening the Australian coastal shipping market to increased foreign competition.[68] This Bill does not propose the same wide-reaching reforms as the 2015 Shipping Bill. However, some stakeholders, such as the Maritime Union of Australia, are nonetheless concerned that the Bill may increase foreign access to coastal trading by ‘watering down’ the rules relating to temporary licencing.[69] In contrast, and as noted above, some industry stakeholders are continuing to call for the full removal of restrictions that ‘protect Australian-flagged ships from competition by foreign-flagged vessels’.[70]

Application of the Fair Work Act

A related concern, and one of the more controversial aspects of the 2015 Shipping Bill, is the extent to which Australian employment conditions under the Fair Work Act should apply to foreign vessels engaging in coastal trading.[71]

Currently, the Fair Work Regulations 2009 provide for the application of the Fair Work Act to ships engaged in coastal trading, including foreign-flagged ships. This includes ships operating under a general, transitional or emergency licence under the Coastal Trading Act. In the case of a ship operating under a temporary licence, the ship must have made at least two other voyages under a temporary licence in the last 12 months.[72]

Unlike the 2015 Shipping Bill, this Bill does not make changes in relation to application of the Fair Work Act to vessels operating under the coastal trading regime. However, Parliament may wish to consider whether the changes relating to temporary licences made by the Bill have implications for the application of the Fair Work Act.

The majority report of the Senate Rural and Regional Committee’s recent inquiry into Flag of Convenience shipping[73] also noted claims of ‘loopholes’ being exploited in the Coastal Trading Act, whereby ‘foreign vessels with foreign crew were loading freight onto vessels in Australian ports, leaving Australian waters and then returning after visiting another country’.[74] The Committee recommended in an interim report that the temporary licensing scheme be immediately tightened for Flag of Convenience vessels that undertake permanent coastal freight routes, and should therefore be paying crew Australian award wages.[75] In its response, the Government did not support this recommendation, stating that the temporary licence scheme provided 'an appropriate level of assurance' and changes were unwarranted.[76] Nevertheless, in its final report the Committee encouraged the government to ‘ensure that, if any amendments are made to temporary licensing, appropriate safeguards are provided to ensure the ongoing viability of the Australian‑flagged shipping industry and its employees’.[77] Government Senators O'Sullivan, Back and Bushby issued a dissenting report, which noted evidence that the Coastal Trading Act does ‘not work as intended’, particularly in relation to the five voyage minimum required for a temporary licence, which they considered as ‘resulting in costly and unintended consequences’.[78]

Parliament may nevertheless wish to consider whether the Bill contains appropriate safeguards as suggested in the majority report of the Senate Rural and Regional Affairs Committee.

Temporary licences

Five voyage minimum requirement

Currently, section 28 of the Coastal Trading Act requires an application for a new temporary licence to specify the number of voyages to be authorised by the licence, and that there must be five or more voyages. A voyage is defined to mean the movement of a vessel from one port to another port in different states and territories in Australia where passengers or cargo are loaded and unloaded in connection with a commercial activity.[79]

Under the current regime, a temporary licence cannot be obtained for a single voyage, and applicants must know in advance the details of at least five voyages. This makes the system impractical for some operators, for example international shipping companies, which might otherwise conduct coastal trade at the end of an international voyage to Australia before departing.[80]

The Regulation Impact Statement notes that the minimum voyage requirement also means that ‘shippers may be compelled to use other modes of transportation instead of shipping, which may not be as cost effective’.[81]

Item 22 in Schedule 1 to the Bill proposes to amend paragraph 28(2)(a) to remove this five-voyage minimum requirement to apply for a temporary licence. This means that an application for a temporary licence can be made for a single voyage.

Many industry stakeholders supported this amendment as providing greater flexibility.[82] However, the Maritime Union of Australia (MUA) and the AIMPE opposed the removal of the five voyage minimum requirement, with the MUA suggesting that its removal ‘is likely to increase the number of TLs [temporary licences] granted, when such work could be done by Australian crewed ships, operating under a GL [general licence]’.[83]

A Departmental official confirmed at the recent Senate Supplementary Estimates that removing the five voyage minimum requirement means ‘there is greater flexibility for Australian manufacturers to move their goods on international ships’.[84]

Abolition of specific emergency licences

As noted earlier, the Coastal Trading Act currently provides for a category of emergency licences, which may be granted for up to 30 days and provide access to engage in coastal trading in Australian waters in identified emergency situations (which includes cyclones, flooding, bushfires and other natural disasters).[85] The provisions for emergency licences are currently contained in Division 3 of Part 4 of the Act.

Item 54 of Schedule 1 to the Bill proposes to repeal that Division in its entirety.

Instead of emergency licences, the Bill proposes to amend the provisions for temporary licences to enable temporary licences to be issued in emergency situations. Applications for temporary licences are currently made under section 28 of the Coastal Trading Act. Item 21 of Schedule 1 inserts a proposed subsection 28(1A), which provides that certain persons (owners, charterers, masters or agents of vessels, or shippers) may apply for a temporary licence to enable coastal trading in an emergency situation, as prescribed by the regulations. Unlike other temporary licences, which are valid for 12 months, this licence will be valid for 65 days to allow sufficient time to respond to the relevant emergency (see item 32).

Other items in Schedule 1 contain consequential amendments as a result of the repeal of emergency licences. This includes, for example, item 8 which repeals the definition of ‘emergency licence’ in subsection 6(1) of the Act and item 25 which amends the requirements for applications for temporary licences in emergency situations to include information in relation to the relevant emergency situation.

As outlined earlier in this Digest, the proposal to abolish the emergency licence category was canvassed in the coastal reforms discussion paper, which noted that emergency licences have never been granted under the regime.[86] Many stakeholders supported this amendment. Shipping Australia, although supporting this amendment, noted that ‘the detail and the criteria relating to what constitutes an emergency will need to be carefully considered’.[87] However, the MUA did not support this amendment, noting that there have been no applications for emergency licences in the past five years of operation of the Coastal Trading Act, and that the retention of the emergency licence provisions would ‘prevent the creation of unnecessary additional loopholes open to exploitation by shipping companies’ operating on temporary licences.[88]

Approval timeframes for temporary licences

The Bill will also reduce the timeframes for deciding on temporary licences. Currently, under subsection 34(4), the Minister must decide whether to grant or refuse an application for a temporary licence within 15 business days after receiving the application. Item 31 proposes to amend this subsection to provide that the Minister must decide on applications for temporary licences within 10 business days, or in the case of applications for temporary licences in emergency situations, within three business days.

The Explanatory Memorandum states that this will:

...allow for the expedited consideration of applications in certain emergency circumstances. It is intended that this amendment will make it easier for the Minister to respond promptly to emergency situations including where the emergency relates to energy security.[89]

Energy security situation

The Coastal Trading Act also currently provides for temporary licences to be varied in an ‘energy security situation’, which is defined in subsection 6(1A) of the Coastal Trading Act as a situation where:

  • a vessel is used to undertake a voyage authorised by a temporary licence
  • the vessel is carrying a liquid fuel product and
  • there are special circumstances, of a kind prescribed by the regulations, requiring the vessel to load or unload a liquid fuel product at a port that is not authorised by the licence.

The special circumstances currently prescribed in the regulations include where there is a shortfall in supply of liquid fuels from overseas, shutdowns of refineries, failure of energy supply to a refinery, unsuitable fuel, or a severe weather event.[90] When such an energy security situation exists, the holder of a temporary licence may apply for a variation of the licence (under subsection 43(3)) and that application will be decided within 24 hours (subsection 46(4)(a)).

However, as the Explanatory Memorandum notes, the current provisions in the Act and regulations relating to ‘energy security situations’ are ‘overly restrictive’ and ‘not sufficiently flexible’. In particular, subsection 6(1A) only applies to vessels that are already on a voyage authorised by a temporary licence and already carrying liquid fuel, and thus the current provisions preclude ‘the rapid authorisation of a vessel to engage in coastal trading in genuine energy security situations’.[91]

Items 9, 16, 39, 40, 43 and 44 of Schedule 1 propose to remove all relevant provisions relating to ‘energy security situations’. The Explanatory Memorandum indicates that is it intended that the new mechanism for granting temporary licences in emergencies will instead provide the Minister with the ‘flexibility to respond quickly to energy security situations’.[92]

These specific amendments do not appear to have been directly foreshadowed in the Government’s discussion paper, although stakeholders, such as the Australian Institute of Petroleum, did suggest that an additional amendment to allow variations to load port or discharge port on approved voyages in order to ‘further assist in responding to energy security issues’.[93]

Tolerance provisions

Under section 37 of the Coastal Trading Act, temporary licences must specify a number of matters, including the loading dates, the number of passengers (if any) authorised to be carried under the licence, and the kinds and volume of cargo (if any) authorised to be carried under the licence. These matters are all subject to ‘acceptable tolerance limits’: if there are changes within these tolerance limits, then no variation to the temporary licence is needed. However, if changes occur that are outside those limits, then an application must be made to the Minister under the Act for a variation of that matter authorised by the temporary licence.[94]

‘Acceptable tolerance limits’ are currently defined in subsection 6(1) of the Coastal Trading Act to mean:

  • in the case of cargo: not more than 20% more, or less, of the volume of cargo authorised to be carried under a temporary licence
  • in the case of passengers: not more than 20% more, or less, of the number of passengers authorised to be carried under a temporary licence or
  • in relation to a loading date—five days before or after the loading date.

So, under these current provisions, if a temporary licence authorises a voyage to carry 100 containers on 20 May 2017, a vessel can load 80 to 120 containers between 15 and 25 May 2017 without breaching a condition of the licence.[95] The Regulation Impact Statement in the Explanatory Memorandum states:

These tolerance limits were intended to allow for industry to adapt to unforeseen or unplanned changes to cargo or vessel movements, but have been the most regular cause of breaches of the legislation as they do not reflect industry’s operating model. Complying with these tolerance limits can have significant costs to industry, for example when unable to carry additional cargo to avoid breaching the legislation. Tolerance limits also impose an indirect cost on industry, as licence holders are forced to apply for and wait for variation applications to be granted to prevent tolerance breaches.[96]

Items 5 and 6 of Schedule 1 propose to amend the definition of ‘acceptable tolerance limits’ in subsection 6(1) to increase the acceptable tolerance limits as follows:

  • in relation to cargo—not more than 200% more, or 100% less, of the volume of cargo authorised to be carried under a temporary licence
  • in relation to passengers—not more than 200% more, or 100% less, of the number of passengers authorised to be carried under the licence
  • in relation to the loading date—30 days before or after the loading date.

The Explanatory Memorandum suggests that these amendments will ‘better reflect industry practice’ and gives an example to illustrate ‘how these tolerance limits will operation in practice’:

A temporary licence is approved for the agent of vessel A to transport four shipping containers from Newcastle to Melbourne for a customer. If the order is changed, and the customer wants to send five shipping containers instead of four, the previous tolerance limits meant that the agent of vessel A would have to apply for a variation to their temporary licence to allow the carriage of the additional container. The amended tolerance limits in Item 5 would negate the need for an application to vary the temporary licence for vessel A’s voyage, because vessel A could take up to 12 containers without needing to apply for a variation.[97]

The Coastal Shipping Reforms discussion paper proposed to amend the tolerance limit for loading dates to 30 days, from the current five day limit.[98]  However, the Bill differs from the discussion paper in that the paper proposed to remove volume tolerances altogether.[99]

Industry groups, including Shipping Australia and Ports Australia, supported proposed amendments to the tolerance provisions.[100] However, MIAL expressed concern that the proposed amendments to the tolerance provisions could undermine the licensing regime and may not ‘operate to the benefit of the shipper as it is intended’.[101]

Other stakeholders opposed this amendment.[102] In particular, the Maritime Union of Australia was ‘strongly opposed’ to the amendments to tolerance provisions arguing that:

Such open-ended tolerance provisions would totally undermine accepted commercial arrangements and make it impossible for a GL [general licence] holder to contest a cargo, as the GL holder would not know what they are contesting. The ability to position a ship when the loading date could vary by up to 30 days would be commercially untenable for a GL holder, as would be the unknown nature of the cargo volume.[103]

Extending the coastal trading regime

The Bill also proposes a number of changes relating to the definition of ‘coastal trading’, which in turn will extend the operation of the regime. Currently, ‘coastal trading’ is defined in section 7 of the Coastal Trading Act to generally cover vessels that carry passengers or cargo (for or in connection with a commercial activity) from one port to another port either in another state or territory, or, under certain conditions, within the same state or territory.

Notably, section 112 of the Coastal Trading Act currently provides an exemption from the Customs Act 1901. Under section 112, vessels used to carry passengers or cargo under a temporary licence are not considered to be imported into Australia for the purposes of the Customs Act, meaning there is no import duty on those vessels.

However, as currently drafted, the definition of coastal trading does not cover:

Vessel operators on voyages from the mainland to, or between, places outside the coastal waters of a State or Territory such as some offshore installations, floating production, storage and offloading (FPSO) vessels and roadsteads (places less enclosed than a harbour where ships may ride at anchor) are not within the coverage of the Coastal Trading Act and cannot apply for a TL [temporary licence].[104]

This means that those activities cannot benefit from the exemption from the Customs Act in section 112 of the Coastal Trading Act. For example, the Regulation Impact Statement states that the current lack of coverage in the Coastal Trading Act of the carriage of petroleum products from offshore facilities means that ‘petroleum companies are discouraged from bringing petroleum products to Australia refiners and instead ship these products to refineries overseas’, because they do not have the ‘shield from Customs Importation that a TL [temporary licence] provides’.[105]

Voyages involving offshore facilities

Item 18 amends the definition of coastal trading in section 7 to extend the definition to add a new paragraph 7(1)(d) which will include vessels that transport liquid fuel product from offshore facilities to ports in states or territories where some or all of the fuel product is unloaded. Item 12 inserts a definition of ‘offshore facility’ into subsection 6(1) the Act, which will provide that it has the same meaning as in the Maritime Transport and Offshore Facilities Security Act 2003. Section 17A of that Act defines an ‘offshore facility’ as a facility, located in an offshore area, ‘used in the extraction of petroleum from the seabed or its subsoil with equipment on, or forming part of, the facility’, including any structure or vessel, located in the offshore area, used in operations or activities associated with, or incidental to, activities of that kind.[106]  ‘Offshore area’ is then defined in subsection 17A(7) of the Maritime Transport and Offshore Facilities Security Act as an area in Australia waters, the exclusive economic zone of Australia (including its external Territories) or the sea over the continental shelf of Australia (including its external Territories).

The Explanatory Memorandum states that extending the application of the coastal trading regime to offshore facilities will ‘support the use of Australian refineries’:

The lack of coverage of coastal trading licences for these movements has resulted in shipments of crude oil being sent to international refineries instead of Australian refineries for processing.[107]

The Regulation Impact Statement further suggests this amendment:

...will not only benefit the operators of these vessels, but also Australian refineries which may be uncompetitive internationally. By allowing vessels to be shielded from importation when transporting liquid fuel from offshore facilities to ports in Australia, this option will make the use of Australian refineries more viable as operators may be able to minimise tax and other administrative costs related to importation.[108]

Related consequential amendments

A number of other items in the Bill then contain consequential amendments related to the extension of the coastal trading regime to offshore facilities.[109] Notably, section 10 of the Coastal Trading Act provides that the Act does not apply to certain vessels, including, under paragraph 10(e), an ‘offshore industry vessel’. In turn, ‘offshore industry vessel’ is defined in subsection 6(1) as a vessel that is used wholly or primarily in, or in any operations or activities associated with or incidental to, exploring or exploiting the mineral and other non‑living resources of the seabed and its subsoil. Item 13 amends this definition of ‘offshore industry vessel’ to exclude vessels that are engaging in coastal trade under the new paragraph 7(1)(d) (as inserted by item 18, outlined above). This will ensure that offshore industry vessels engaged in coastal trading are covered by the Coastal Trading Act.

Stakeholders comments on extension to offshore facilities

Some industry stakeholders, such as Shipping Australia, supported this proposed amendment.[110] In particular, the Australian Institute of Petroleum supported amendments to extend the reach of the regime to offshore facilities, suggesting that this would ‘more readily provide for the supply of Australian crude oils to some Australian refineries’.[111] In its submission, the Institute noted that ‘there are no Australian registered petroleum tankers available to contest proposed coastal trading voyages’.[112] The Institute therefore suggested that foreign vessels used to pick up petroleum products from offshore facilities in Australian waters and then deliver that cargo to an Australia port should be exempted from the ‘importation’ provisions of customs legislation.[113]

However, the Minerals Council had some reservations about this proposed amendment, suggesting that it requires ‘further consideration to understand better the full implications’.[114] Others suggested that, if the reason for the amendment is to remove the risks that foreign vessels are considered to be ‘imported’ for customs purposes, then it would be better to resolve this issue via amendments to the Customs Act or determinations.[115] In particular, Woodside (an Australia gas and oil company with offshore facilities), in its submission to the discussion paper, did not support amendments to extend the coastal trading regime to offshore facilities. Woodside noted that the current regulatory regime has created administrative issues which discourage Australian oil producers from supplying Australian refineries. However, Woodside did not ‘consider that the solution to these issues to lie in extending the geographic reach of the CTA [Coastal Trading Act] to offshore installations’.[116] Woodside explained that, if the issue related to the interaction of the Coastal Trading Act with the Customs Act, simply extending the ambit of the Coastal Trading Act as proposed would ‘introduce new and additional regulatory requirements’ for its offshore facilities. Woodside suggested that it would be more appropriate for the ‘opt-in’ provisions in section 12 of the Coastal Trading Act (as discussed elsewhere in this Digest) to be extended to voyages involving offshore facilities.[117]

Voyages beginning and ending at the same port

Subsection 6(1) of the Coastal Trading Act currently defines ‘voyage’ as the movement of a vessel from one port to another port in a way that would satisfy the definition of ‘coastal trading’ in subsection 7(1) of the Coastal Trading Act (as outlined above). Item 15 amends this definition to remove the reference to movement ‘from one port to another port’, effectively extending the definition of a ‘voyage’ to include voyages that start and finish at the same port.[118] The Explanatory Memorandum suggests that the purposes of this amendment is to:

...open the coastal trading regime to chartered recreational vessels that typically embark and disembark at the same port, and wish to apply to the Minister for a declaration under section 12 of the Coastal Trading Act. A declaration under section 12 of the Coastal Trading Act allows vessels engaged in intrastate voyages to be covered by coastal trading licences, thereby being afforded protection from importation by section 112 of the Act.[119]

Notably, this amendment does not appear to have been canvassed in the discussion paper on coastal shipping reforms released by the Department for consultation. However, Superyacht Australia proposed such an amendment in its submission to the discussion paper to remove the restriction on foreign flagged superyachts chartering in Australia.[120] In its submission to the Senate inquiry, Superyacht Australia strongly supported this amendment (along with the proposed removal of the five voyage minimum).[121]

The Minister for Trade, Tourism and Investment, Steve Ciobo, has suggested that the Bill (through these amendments and the removal of the five voyage minimum requirement) would ‘increase superyacht charters in Australian waters’:

Superyachts are highly lucrative within the tourism sector. It is estimated they currently generate around $1.96 billion annually and with these proposed reforms the industry estimates it could contribute an additional $1.12 billion to the Australian economy by 2021...

Recently, the Turnbull Government announced 21 new anchorage points with the Great Barrier Reef and a new vessel boarding station on the Gold Coast to facilitate growth in this important tourism sector.[122]

However, the MUA is strongly opposed to this proposed amendment, suggesting that it has ‘wide ranging implications’ for other types of vessel operations on intra-state voyages:

... such as bunkering, transhipment operations and the domestic small cruise/marine tourism sector, that would be considered ‘voyages’ under the CT Act. Operators of such vessels could therefore automatically apply for a TL [temporary licence] and commence using foreign crew.[123]

Definition of ‘port’

Item 17 further extends the coastal trading regime by adding a new subsection 6(3) to provide that ‘a port is taken to be in a State or Territory if the port is connected with a port that is in a State or Territory’. A note referring to this new subsection is also added to the definition of ‘port’ in subsection 6(3) of the Act by item 14.

As the Explanatory Memorandum states, these amendments aim to clarify that roadsteads, ‘which are often connected with a State or Territory but not strictly within its waters, can be considered to be “in” a State or Territory’ for the purposes of the Coastal Trading Act.[124] As noted earlier, a roadstead is a body of sheltered water, less enclosed than a harbour, where ships may ride at anchor.[125]

Dry docking

As noted earlier, section 112 of the Coastal Trading Act currently provides an exemption from the Customs Act 1901 for vessels used to carry passengers or cargo under a temporary licence or an emergency licence, which are not considered to be imported into Australia for the purposes of the Customs Act. Item 64 amends section 112 to extend this exemption to also include vessels that are docked for service while a temporary licence is in force that enables the vessel to engage in coastal trading.[126]

Item 7 then inserts a new definition of ‘docked for service’ into the definitions in section 6 of the Act, which will include when a vessel is in dry dock; or the vessel is docked for maintenance, repairs, cleaning or painting  and is not undertaking a voyage.

The Regulation Impact Statement notes that the current regime:

... discourages vessels from docking for service in Australia to undertake repairs, cleaning or painting as they would need to be imported by Customs if they choose to dock for service. As a result, foreign vessels are not bringing business to the Australian dry-docking industry. The current coastal trading regime is one barrier to Australian dry‑dock facilities reaching their potential; an amendment to the legislation will allow these businesses to grow.[127]

Superyacht Australia strongly supported this amendment.[128] In contrast, Cruise Lines International Association (CLIA) Australasia suggested that ‘the Bill will not have the desired effect of increasing the use of Australian dry-dock facilities by large cruise ships’.[129] CLIA noted that large passenger ships are currently exempt from the licensing regime under the Coastal Trading Act and that the Bill would only provide ‘protection against importation for licensed ships’:

We agree with the intention in the Bill to remove the significant financial disincentive that customs importation represents to dry-docking in Australia. The Bill proposes a ‘fix’ for this issue by the insertion of dry-docking in section 112 of the Act. However, this solution will not apply to exempted cruise ships which still face the importation issue. Without a solution, CLIA considers it likely that large cruise ship operators will continue to choose to dry-dock outside Australia.[130]

CLIA suggested that ‘the problem, which has been unresolved for over 5 years now, should be resolved through amendment of the Customs Act 1901’.[131]

The MUA submitted that it was ‘not necessarily opposed to this provision’, but suggested that ‘it must be carefully defined to prevent abuse’.[132]

Temporary licence variation process

The Bill also amends the process in the Act for making changes to temporary licences. Currently, the Coastal Trading Act provides two processes for amending temporary licences.[133] Applications may be made under section 43 in Subdivision C of Division 2 of Part 4 to vary matters authorised by a temporary licence (‘authorised matters variations’). The Minister generally has two business days to decide on such an application.[134] If a matter is not already authorised by the licence, the application is made under section 51 in Subdivision D of Division 2 of Part 4 of the Act (new matters variation) and the Minister generally has seven business days to decide on the application.[135]

Item 45 repeals Subdivision D of Division 2 of Part 4, which currently provides for the process for applications to be made to vary a temporary licence to include new matters. Instead, all applications to vary licences will be dealt with under the existing section 43 of the Act, which is amended by items 36 to 39 to reflect a new, single temporary licence variation process.[136] The Minister will have two business days to decide on applications under this process (under subsection 46(4) as amended by item 43). The consultation requirements for variations to temporary licences are also amended by item 41, as discussed further below.

Consultation and notification requirements

Consultation on temporary licence applications

Section 30 of the Coastal Trading Act currently provides that, when the Minister receives an application for a temporary licence, the Minister must, within two business days, publish details of the application on the Department’s website and notify general licence holders and other organisations that the Minister considers would be directly affected, or whose members would be directly affected, if the application were granted.

Items 28 and 29 propose to amend section 30 to provide the Minister the power to determine, by legislative instrument, certain kinds of cargoes and passengers. Publication and notification will only be required when applications are made for temporary licences relating to those kinds of cargoes and passengers determined by the Minister. The Explanatory Memorandum states that ‘this is intended to promote efficiency in the coastal trading regime and remove the need for unnecessary consultation where there are no relevant general licensed ships’.[137] In particular, it notes that:

At present, there are no Australian ships operating across a number of sectors in Australian waters, such as oil or gas tankers. It is therefore inefficient and unnecessary to consult all general licence holders for every temporary licence application that is received. This amendment allows the Minister to designate cargo and passenger types where consultation must take place, thereby limiting consultation to those sectors where Australian vessels can provide competition to foreign flagged vessels. This reduces the impost and uncertainty caused to industry due to unnecessary consultation and allows for the more efficient consideration of licence applications.[138]

However, the MUA strongly opposed this amendment, suggesting ‘it will deny meaningful consultation with affected stakeholders and reduce transparency’.[139]

Item 41 makes a similar amendment to section 45 of the Act, in relation to consultation requirements for variations to temporary licence, meaning that notification will only be required for variations of temporary licences relating to those kinds of cargoes and passengers determined by the Minister.

Voyage notification requirements

Under section 61 of the Coastal Trading Act, temporary licence holders are required to provide notification of voyages to the Minister in writing at least two business days before the actual loading date for the voyage. That notice must include details of the vessel to be used; the date of the voyage; the number of passengers to be carried during the voyage (if any); the kinds and volume of cargo to be carried during the voyage (if any); the ports at which the passengers or cargo will be taken on board; and the ports at which the passengers will disembark or the cargo will be unloaded. This information is already required in an application for temporary licence under section 28. However, notification is still required under section 61 even if no details have changed since that original application.

Item 49 proposes to insert a new subsection 61(2) to exempt temporary licence holders from the notification requirement in section 61 when the information has already been given as part of a licence application under section 28 or for a licence variation application under section 43. In other words, notification will only be required when voyage details have changed from that approved on the licence.

Other provisions

IMO numbers

The Bill also proposes to insert a new requirement to provide a vessel’s International Maritime Organization (IMO) number[140] when:

  • applying for a temporary licence under section 28 of the Coastal Trading Act (item 23)
  • a temporary licence holder is notifying the Minister of voyage details under section 61 (item 47) and
  • in all voyage reports made by temporary licence holders under section 62 after the end of a voyage (item 50).

The Explanatory Memorandum states that these requirements will add ‘no burden to industry’ and that the IMO number is a ‘key identifier’ that will assist with the easy identification of vessels and could be useful to the Department and other Commonwealth agencies undertaking compliance activities.[141]

Consequential amendments

Schedule 2 contains minor consequential amendments to the Occupational Health and Safety (Maritime Industry) Act 1993 and the Seafarers Rehabilitation and Compensation Act 1992 as a result of the removal of emergency licences by the amendments in Schedule 1.

Concluding comments

This Bill aims to simplify the current coastal trading regulatory regime and reduce administrative burden, although it would also expand the coverage of the regime, for example, to offshore facilities. The Bill does not extend as far as the previous Shipping Legislation Amendment Bill 2015, which was rejected by the Senate. The Bill is nevertheless likely to be controversial, with key stakeholders divided over aspects of the Bill.

 


[1].         Department of Infrastructure and Regional Development (DIRD), ‘Coastal trading frequently asked questions’, DIRD website, last updated 29 September 2017.

[2].         Bureau of Infrastructure, Transport and Regional Economics (BITRE), Australian sea freight 2014–15, DIRD, Canberra, 2017, p. v.

[3].         For further information on the previous regime and its reform, see L Nielson and M Brennan, Coastal Trading (Revitalising Australian Shipping) Bill 2012 [and] Coastal Trading (Revitalising Australian Shipping) (Consequential Amendments and Transitional Provisions) Bill 2012, Bills digest, 151, 2011–12, Parliamentary Library, Canberra, 2012.

[4].         Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Bill 2012, p. 4; see also Coastal Trading Act, section 3.

[5].         DIRD, ‘Coastal trading’, DIRD website, last updated 24 August 2017; DIRD, ‘Coastal trading frequently asked questions’, op. cit.

[6].         Coastal Trading Act, section 12. See also section 6 for the definition of ‘owner’.

[7].         DIRD, Regulation impact statement: Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, September 2017, p. 6 (as contained in the Explanatory Memorandum to the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017).

[8].         BITRE, Australian sea freight 2014–15, op. cit., p. v.

[9].         Transitional general licences are held under transitional arrangements for owners of foreign vessels that held a licence issued under Part VI of the Navigation Act 1912 at 30 June 2012.

[10].      BITRE, Australian sea freight 2014–15, op. cit., p. vi.

[11].      Ibid.

[12].      DIRD, Regulation impact statement, op. cit., p. 6.

[13].      Parliament of Australia, ‘Shipping Legislation Amendment Bill 2015 homepage’, Australian Parliament website.

[14].      See further A Holmes and J Murphy, Shipping Legislation Amendment Bill 2015, Bills digest, 53, 2015–16, Parliamentary Library, Canberra, 2015.

[15].      Parliament of Australia, ‘Shipping Legislation Amendment Bill 2015 homepage’, op. cit.

[16].      Australian Greens, Dissenting report, Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Shipping Legislation Amendment Bill 2015 [Provisions], The Senate, Canberra, 12 October 2015; Australian Labor Party, ‘Shipping Legislation Amendment Bill 2015’, Opposition Dissenting report, Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Shipping Legislation Amendment Bill 2015 [Provisions], The Senate, Canberra, 12 October 2015. See also N Xenophon, ‘Second reading speech: Shipping Legislation Amendment Bill 2015’ and J Lambie, ‘Second reading speech: Shipping Legislation Amendment Bill 2015’, Senate, Debates, 25 November 2016, pp. 9035–7, 9040.

[17].      Holmes and Murphy, Shipping Legislation Amendment Bill 2015, op. cit.

[18].      DIRD, Regulation impact statement, op. cit., p. 6.

[19].      DIRD, Coastal shipping reforms: discussion paper, DIRD website, March 2017.

[20].      DIRD, ‘Coastal shipping reform’, DIRD website, last updated 24 October 2017.

[21].      DIRD, Coastal shipping reforms: discussion paper, op. cit., pp. 5–6.

[22].      Senate Standing Committee on Rural and Regional Affairs and Transport, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], The Senate, Canberra, 4 December 2017, p. 31.

[23].      Senator Abetz, Additional Comments, Senate Standing Committee on Rural and Regional Affairs and Transport, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], The Senate, Canberra, 4 December 2017, pp. 33–5.

[24].      Labor Senators, Dissenting report, Senate Standing Committee on Rural and Regional Affairs and Transport, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], The Senate, Canberra, 4 December 2017, p. 43.

[25].      Ibid., pp. 40–2.

[26].      Australian Greens, Dissenting report, Senate Standing Committee on Rural and Regional Affairs and Transport, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], The Senate, Canberra, 4 December 2017, p. 45.

[27].      Senate Scrutiny of Bills Committee, Scrutiny digest, 12, 2017, The Senate, 18 October 2017, p. 5.

[28].      A Albanese (Shadow Minister for Infrastructure, Transport, Cities and Regional Development), Government resurrects WorkChoices on water, media release, 13 September 2017.

[29].      Ibid.

[30].      Ibid.

[31].      Ibid.

[32].      Senate Rural and Regional Affairs and Transport Legislation Committee, Official committee Hansard, 23 October 2017, p. 185.

[33].      Australian Industry Group, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 15 November 2017, p. 1.

[34].      Shipping Australia, Submission to coastal shipping reforms discussion paper, 12 May 2017, p. 1.

[35].      Ibid., p. 3; see also Shipping Australia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, pp. 11–12.

[36].      Shipping Australia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, p. 11.

[37].      Maritime Industry Australia Ltd (MIAL), Submission to coastal shipping reforms discussion paper, 12 May 2017, pp. 4, 8; MIAL, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, pp. 3, 6.

[38].      MIAL, Submission to coastal shipping reforms discussion paper, 12 May 2017, pp. 4–6; MIAL, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, pp. 4, 5–6.

[39].      Ports Australia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, p. 1.

[40].      Ibid.

[41].      Ibid., p. 2.

[42].      Ibid.

[43].      Australian Institute of Petroleum (AIP), Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], November 2017, p. 4.

[44].      Ibid., p. 6; see also AIP, Submission to coastal shipping reforms discussion paper, 16 May 2017, p. 6.

[45].      Woodside, Submission to coastal shipping reforms discussion paper, April 2017, p. 2.

[46].      Minerals Council of Australia, Submission to coastal shipping reforms discussion paper, May 2017, p. 1.

[47].      Ibid., p. 5.

[48].      Bulk Liquids Industry Association, Submission to coastal shipping reforms discussion paper, n.d., p. 1.

[49].      Business Council of Australia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], November 2017, p. 1; see also Business Council of Australia, Submission to coastal shipping reforms discussion paper, April 2017, p. 2.

[50].      National Farmers’ Federation, Submission to coastal shipping reforms discussion paper, 12 May 2017, p. 8.

[51].      Ibid., p. 12.

[52].      Ibid., p. 8; see also Productivity Commission, Regulation of Australian Agriculture, Inquiry report, 79, Canberra, 15 November 2016, p. 394 (recommendation 9.5).

[53].      Australian Food and Grocery Council, Submission to coastal shipping reforms discussion paper, April 2017, p. 4.

[54].      Australian International Marine Export Group (Superyacht Australia), Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 11 November 2017, p. 6.

[55].      MUA, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 20 November 2017, pp. 7, 13.

[56].      MUA, Government resurrects WorkChoices on water, media release, 13 September 2017.

[57].      Ibid.

[58].      MUA, Turnbull wants to kill off another vital Australian industry and must be stopped, media release, 13 September 2017.

[59].      Australian Maritime Officers Union, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, p. 2.

[60].      Australian Maritime Officers Union, Submission to coastal shipping reforms discussion paper, 12 May 2017, p. 2.

[61].      Australian Maritime Officers Union, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, p. 5.

[62].      Australian Institute of Marine and Power Engineers (AIMPE), Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, n.d., p. 3; see also AIMPE, Submission to coastal shipping reforms discussion paper, n.d., p. 2.

[63].      Australasian Marine Pilots Institute (AMPI), Submission to coastal shipping reforms discussion paper, n.d., p. 1.

[64].      Ibid.

[65].      Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, p. 1.

[66].      The Statement of Compatibility with Human Rights can be found at page 2 of the Explanatory Memorandum to the Bill.

[67].      Parliamentary Joint Committee on Human Rights, Report, 11, 207, 17 October 2017, p. 60.

[68].      Regulation which limits the use of domestic trade routes by foreign companies is known as ‘cabotage’: for international comparisons and further discussion of this issue, see Holmes and Murphy, Shipping Legislation Amendment Bill 2015, op. cit., especially pp. 5–7 and Appendix A.

[69].      MUA, Turnbull wants to kill off another vital Australian industry and must be stopped, op. cit.

[70].      Minerals Council of Australia, Submission to coastal shipping reforms discussion paper, op. cit., p. 5.

[71].      Holmes and Murphy, Shipping Legislation Amendment Bill 2015, op. cit., especially pp. 16, 19–20, 33–4.

[72].      See especially regulations 1.15E and 1.15B; see also Fair Work Ombudsman, ‘Maritime industry—workplace rights and entitlements’, Fair Work Ombudsman website. Note that there are certain provisions relating to voyage permits under now-repealed provisions of the Navigation Act.

[73].      Flag of convenience (FOC) shipping refers to ‘those vessels that travel internationally, but are not registered to the state it is most closely associated with’: Senate Rural and Regional Affairs and Transport References Committee, Increasing use of so-called Flag of Convenience shipping in Australia, July 2017, p. 2.

[74].      Senate Rural and Regional Affairs and Transport References Committee, Increasing use of so-called Flag of Convenience shipping in Australia, op. cit., pp. 23 and see also p. 24.

[75].      Ibid., p. 26.

[76].      Ibid.

[77].      Ibid., p. 28.

[78].      Ibid., p. 70.

[79].      See subsection 6(1) and section 7; see also DIRD, ‘Coastal trading frequently asked questions’, op. cit.

[80].      Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, op. cit., p. 8.

[81].      DIRD, Regulation impact statement, op. cit., p. 10.

[82].      See, for example, Australian Industry Group, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 15 November 2017, p. 5; Shipping Australia, Submission to coastal shipping reforms discussion paper, op. cit., p. 2; AIP, Submission to coastal shipping reforms discussion paper, op. cit., p. 4.

[83].      MUA, Submission to Senate Rural and Regional Affairs and Transport, op. cit., p. 9; see also AIMPE, Submission to coastal shipping reforms discussion paper, op. cit., p. 4.

[84].      Senate Rural and Regional Affairs and Transport Legislation Committee, Official committee Hansard, 23 October 2017, p. 188.

[85].      Emergency situations are prescribed in regulations made under subparagraph 64(2)(b)(i) of the Act: Regulation 4.3.1 of the Coastal Trading (Revitalising Australian Shipping) Regulation 2012 currently prescribes various kinds of emergencies for the purposes of that subparagraph.

[86].      DIRD, Coastal shipping reforms: discussion paper, op. cit., p. 6.

[87].      Shipping Australia, Submission to coastal shipping reforms discussion paper, op. cit., p. 3.

[88].      MUA, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, op. cit., p. 9.

[89].      Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, p. 8.

[90].      See regulation 1.1.4 of the Coastal Trading (Revitalising Australian Shipping) Regulation 2012.

[91].      Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, p. 6.

[92].      Ibid., p. 7.

[93].      AIP, Submission to coastal shipping reforms discussion paper, op. cit., p. 6.

[94].      The provisions for varying temporary licences are discussed further later in this Digest. See also DIRD, ‘Coastal trading frequently asked questions’, op. cit.; DIRD, ‘Shipping business unit industry bulletin 1’, DIRD website, last updated 8 July 2016.

[95].      DIRD, Regulation impact statement, op. cit., p. 11.

[96].      Ibid.

[97].      Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, pp. 1, 4.

[98].      DIRD, Coastal shipping reforms: discussion paper, op. cit., p. 5.

[99].      Ibid.

[100].   Shipping Australia, Submission to coastal shipping reforms discussion paper, op. cit., p. 2; Ports Australia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, p. 2; see also Ports Australia, Submission to coastal shipping reforms discussion paper, op. cit., p. 2.

[101].   MIAL, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, p. 4; see also MIAL, Submission to coastal shipping reforms discussion paper, op. cit., p. 5.

[102].   See for example, AIMPE, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], n. d., p. 10.

[103].   MUA, Submission to coastal shipping reforms discussion paper, op. cit., p. 4; MUA, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 20 November 2017, p. 11.

[104].   DIRD, Coastal shipping reforms: discussion paper, op. cit., p. 6.

[105].   DIRD, Regulation impact statement, op. cit., p. 12.

[106].   Subsections 17A(2) and (3) also specifically provide that offshore facilities include a Floating Product, Storage and Offtake and Floating Storage Unit in an offshore area (and these terms are defined further in section 10 of the Maritime Transport and Offshore Facilities Security Act).

[107].   Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, p. 7; see also DIRD, Coastal shipping reforms: discussion paper, op. cit., p. 6.

[108].   DIRD, Regulation impact statement, op. cit., p. 20.

[109].   See items 19, 20, 24, 33, 35, 48, 51 and 52.

[110].   Shipping Australia, Submission to coastal shipping reforms discussion paper, op. cit., p. 3.

[111].   AIP, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, op. cit., p. 6.

[112].   Ibid., p. 4.

[113].   Ibid.

[114].   Minerals Council of Australia, Submission to coastal shipping reforms discussion paper, May 2017, p. 5.

[115].   See, for example, Woodside, Submission to coastal shipping reforms discussion paper, April 2017, p. 2; MIAL, Submission to coastal shipping reforms discussion paper, op. cit., p. 5.

[116].   Woodside, Submission to coastal shipping reforms discussion paper, op. cit., p. 2.

[117].   Ibid., p. 3.

[118].   Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, p. 6.

[119].   Ibid.

[120].   Australian International Marine Export Group, Submission to coastal shipping reforms discussion paper, April 2017, pp. 1–2; see also S Robert, ‘Adjournment: Superyacht industry’, House of Representatives, Debates, 24 May 2017, p. 5042.

[121].   Superyacht Australia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 11 November 2017, p. 6.

[122].   S Ciobo (Minister for Trade, Tourism and Investment), Superyachts to bring super gains for Australian tourism and marine industries, media release, 13 September 2017; see also L Allen, ‘Superyachts sailing our way’, The Australian, 14 September 2017, p. 19; L Allen, ‘GST slug deters superyachts’, The Australian, 24 April 2017, p. 19.

[123].   MUA, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, op. cit., p. 10.

[124].   Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, p. 7.

[125].   DIRD, Coastal shipping reforms: discussion paper, op. cit., p. 6.

[126].   Note that item 64 also removes the reference in section 112 to emergency licences as a consequence of the removal of that licence category.

[127].   DIRD, Regulation impact statement, op. cit., p. 12.

[128].   Superyacht Australia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 11 November 2017, p. 6.

[129].   Cruise Lines International Association (CLIA) Australasia, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, Inquiry into the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 [Provisions], 13 November 2017, p. 2.

[130].   Ibid., p. 6.

[131].   Ibid., p. 2.

[132].   MUA, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, op. cit., p. 12.

[133].   See further DIRD, ‘Coastal trading frequently asked questions’, op. cit.; DIRD, ‘Shipping business unit industry bulletin 1’, op. cit.; CSL Australia Pty Ltd v Minister for Infrastructure and Transport (2014) 227 FCR 333, [2014] FCA 1160.

[134].   Coastal Trading Act, subsection 46(4).

[135].   Coastal Trading Act, subsection 54(1).

[136].   These items also clarify that applications for a variation to a temporary licence must be made by the temporary licence holder rather than ‘a person’.

[137].   Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, p. 9.

[138].   Ibid.

[139].   MUA, Submission to Senate Rural and Regional Affairs and Transport Legislation Committee, op. cit., p. 9.

[140].   Item 10 then inserts a definition of IMO number.

[141].   Explanatory Memorandum, Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017, pp. 1, 5.

 

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