DISSENTING REPORT BY COALITION SENATORS

DISSENTING REPORT BY COALITION SENATORS

The Migration Amendment (Offshore Resources Activity) Bill

Introduction

1.1        The Migration Amendment (Offshore Resources Activity) Bill 2013 (the Bill) amends the Migration Act 1958 (the Act) to provide that persons who participate in, or support, an offshore resources activity are taken to be in the migration zone as defined by section 5 of the Act.

1.2        The Bill also proposes to insert a new section 9A of the Act which creates a new framework that provides that persons in an area participating in, or supporting, an offshore resources activity are taken to be in the migration zone (the deeming provision).

1.3        New section 9A further clarifies how this new framework operates by deeming when persons are taken to be in Australia, taken to travel to Australia, taken to enter Australia and or taken to leave Australia.

1.4        The Bill was introduced by the Government to override the decision of the Federal Court in Allseas Construction S.A. v Minister for Immigration and Citizenship [2012] FCA 529 in which McKerracher J inter alia held that section 5(13)(b) of the Act excludes vessels that are wholly or principally engaged in operations relating to the installation of offshore pipelines.

1.5        Paragraph 5(13)(b) of the Act excludes a vessel that is used or is to be used wholly or principally in operations or activities associated with, or incidental to, activities of manoeuvring a resources installation, or in operations relating to the attachment of a resources installation to the Australian seabed.

1.6        The Federal Court decision has the effect of excluding foreign workers aboard exempted vessels from the visa requirements applicable to vessels entering the "migration zone" as defined in the Act.

The purpose of the Bill

1.7       The purpose of the Bill is to regulate foreign workers participating in offshore resources activities by bringing those persons into the migration zone and thereby requiring them to hold a visa under the Act.[1]

1.8       In the Second Reading Speech the Minister claims the Bill will overcome a "loophole" identified in the Allseas case which needed to be closed.

1.9       Coalition Senators consider that an objective reading of the Allseas case indicates that no loophole was opened by Allseas, and that the decision of the Federal Court provided clarity and allowed the industry to proceed consistent with previous Australian and international practice.

1.10    The Allseas litigation was initiated to confirm a standing interpretation of Australian law, which was consistent with international law. 

1.11    Contrary to the claims of the Minister there was no loophole that needed to be closed.

1.12    Coalition Senators are concerned that the Bill is not being introduced as a measure of considered public policy, but rather it is being introduced for ideological purposes, at the urging of the Maritime Workers Union (MWU) who have been significant donors to the Labor Party over many years, to override the decision of the Federal Court in Allseas Construction S.A. v Minister for Immigration and Citizenship [2012] FCA 529.

The value of the offshore oil and gas industry

1.13    Coalition Senators acknowledge the value of the offshore oil and gas industry to the national economy and are concerned that the additional regulatory burden and associated costs the Bill introduces may discourage further investment in this productive sector.

1.14    The Minister in the Explanatory Memorandum (EM) tabled with the Bill acknowledges the economic value of exploration and exploitation of the natural resources in the offshore maritime zones:

The exploration and exploitation of the natural resources in Australia's offshore maritime zones contributes significantly to the Australian economy and employs thousands of Australian workers.[2]

1.15    The Australian Mines and Metals Association (AMMA) in their oral evidence to the inquiry stated:

Annually, Australia's oil and gas industry contributes 2½ per cent of our GDP, generates $28 billion in revenue and yields almost $9 billion in direct tax payments. Offshore oil and gas meets 58 per cent of Australia's primary energy needs and is critical to our current and future energy security.

Australian jobs and our overall economic success relies on a confident, growing offshore oil and gas industry able to do business consistent with international laws and practices on, for example, specialist access to infrastructure and services. With this much at stake, it is vital that sectional interests do not come before the national interest and that parliament delivers sustainable, proportionate and balanced regulation affecting offshore operations.[3]

Uncertainty of the actual offshore area subject to the Bill

1.16    Coalition Senators are concerned that the specific offshore area subject to the Bill is not defined.

1.17    Coalition Senators do not consider the Senate should agree to legislation which is to apply to an "unknown or uncertain" offshore area.

1.18    Coalition Senators note that the uncertainty of the area, the subject of the Bill, was raised in the written submission of the Australian Institute of Marine and Power Engineers (AIMPE).

1.19    The AIMPE expressed its concern in the following terms:

It is submitted that the way to avoid the enforcement nightmare and ensure comprehensive application of Australia’s migration laws to personnel on vessels engaged in offshore resources activity is the delete the references to "in an area" and replace them with the concept of the Exclusive Economic Zone.[4]

1.20    Mr Scott Barklamb, Executive Director, AMMA, in his oral evidence to the inquiry also expressed his concern at the uncertainty of the extent of the area to be subject to the provisions of the Bill in the following terms:

We say that it is also important to understand the significance of what is being proposed. The exclusive economic zone is larger than our entire landmass. This Bill would expand Australia's legal territory for the purposes of migration by 10 million square kilometres.

The proposal to extend our federal laws, including the Fair Work Act, to this vast area does not amount to a mere tweaking or closing a loophole. It is a radical change that would more than double the reach of our Australian laws, and would do so in a manner unknown and inconsistent with our international legal obligations. Whether this is reach or overreach is a live point, and it is considerably enlivened, we say, by both the legal and regulatory concerns we raised.[5] 

Uncertainty of the number of foreign workers in the offshore maritime zone

1.21    Coalition Senators are concerned that the Government is unable to quantify the number of foreign workers in the offshore maritime zone which appears to be related to the inadequate consultative process with industry and other parties.

1.22    The inability of the Government or the Minister to quantify, or even estimate, the potential number of foreign workers in the offshore maritime zone casts doubt on the veracity of other statements contained in the Second Reading Speech and associated documents tabled in the Senate:

Under the current legislative framework, the Government has an incomplete picture of the number of foreign workers in the offshore maritime zone.[6]

Uncertainty of the cost to industry

1.23    Should the Bill be passed by the Parliament in its current form it will give greater control of employment of foreign workers on vessels within the migration zone to the MWU.

1.24    Coalition Senators are concerned that the MWU will seek to use the additional power this Bill will bestow on the union to impose outrageous wage demands on employers who are required to rely on union labour.

1.25    The recent demands of the MWU in seeking to have cooks on offshore
north-west gas projects paid $230,000.00 annually is evidence of the tactics employed by the MWU.[7] 

1.26    Coalition Senators are concerned that the Regulation Impact Statement (RIS), tabled by the Minister with the Bill, is unable to quantify the potential cost impact on employers and the number of people who are likely to be affected by the provisions of the Bill.

1.27    This uncertainty is reflected in the RIS which indicates that:

...according to Western Australian Government figures, somewhere between 6000 and 8000 workers are currently employed in the offshore resources sector, but it is unclear how many of these workers are non-citizens.[8]

1.28    Whist the Government is unable to quantify the number of foreign workers caught by the provisions of the Bill, the RIS makes it clear that additional fees will be payable by operators for visas required by the foreign workers.

1.29    Whilst the quantum of the relevant fees is not yet settled, Coalition Senators note that 457 visas will increase from $455.00 to $900.00 on July 1st 2013.

1.30    At the committee's public hearing on 21 June 2013, Senator Cash sought further comment from the AMMA on the statement, in their written submission to the inquiry, relating to cost pressures on the resource industry in which they stated:

Enactment of the Bill would place untenable cost pressures on the resource industry. The cost pressures would be both direct and indirect, in terms of compliance and administration costs.[9]

1.31    Mr Scott Barklamb, AMMA, stated:

The particular piece of infrastructure work at hand is highly specialised international vessels that sail global waters and assist with the laying of pipes, the moving of infrastructure and the assembly of infrastructure in international waters. If we either delay or complicate or render more costly those inputs to our built offshore infrastructure we complicate, delay and add costs to either the repair and maintenance or the bringing on line of new offshore resource projects. What does that do? That makes them slower to come on line and create jobs in this country and it makes them more costly, and those costs are weighed by international investors.

Australia is not the only place in the world with offshore oil and gas resources. International investors are all too aware of and are in the business of evaluating competing resource destinations.[10]

Constitutional uncertainty of the proposed amendments

1.32    Coalition Senators believe that the scope of the Bill is extremely wide and may breach Australia’s obligations in respect to the United Nations Convention on the Law of the Sea 1982 (UNCLOS), which Australia ratified in 1992.

1.33    Coalition Senators acknowledge that Australia has, at international law, a sovereign right to explore and exploit the natural resources occurring in the exclusive economic zone (EEZ) and the extended continental shelf (ECS).

1.34    Australia is limited by the provisions of the UNCLOS convention which does not empower Australia to dictate the employment conditions of maritime personnel in the EEZ or the ECS, as these responsibilities are matters for the flag State of the vessel.

1.35    As a signatory to UNCLOS, Australia agreed to be bound by the provisions of the convention agreement and is required to act within the terms of the agreement.

1.36    Coalition Senators are concerned at the inconsistent advice given to the inquiry by the Department of Immigration and Citizenship (DIAC) and various submitters on the constitutional validity of the proposed amendments.

1.37    Coalition Senators are concerned that the Minister has not provided the Senate with compelling evidence that the scope of the Bill and its specific provisions do not breach Australia’s international obligations.

1.38    The failure of the Minister to adequately demonstrate that the Government has adequately considered the totality of the complex issues relating to the law of the sea and Australia’s international obligations may render the provisions of the Bill invalid.

1.39    Coalition Senators are concerned by the failure of the Minister to distinguish a range of activities that occur as a consequence of vessels at sea. These include where a vessel is transiting through the migration zone, entering an Australian port, or is doing specific work in international waters and not entering the Australian regulatory sphere for employment and migration law. 

1.40    Many of the preceding concerns were raised by the AMMA in both their written submission and oral evidence to the inquiry.

1.41    At paragraphs 53-57 of their written submission, AMMA expressed their concerns in the following terms:

Proposed section 9A would deem an offshore resource worker to be within the migration zone, and within Australia, even if he or she were a non-citizen on a foreign-flagged vessel transiting through the EEZ or the waters above the ECS.

Proposed section 9A(6) would allow the Minister to declare an activity in or out of Australia.

The proposed extension of the application of the Migration Act in this way would be:

a. An inappropriate delegation of legislative power.

b. Incompatible with human rights principles.

c. Inconsistent with Australia’s international obligations.

d. Inconsistent with Australia’s constitutional arrangements.

e. Inconsistent with the Offshore Constitutional Settlement 1973

f. Inconsistent with industry practices and impractical

g. Damaging to the Australian economy and Australian jobs

 Information about these matters has not been provided to the Parliament by the Minister.  Unless the Parliament is able to give due consideration to these matters, the legislation should not be passed.[11] 

Submission to the inquiry by the Maritime Union of Australia (MUA)

1.42    Coalition Senators note that the MUA has made representations to the Government for the Act to be amended following the decision of the Federal Court in Allseas Construction S.A. v Minister for Immigration and Citizenship [2012] FCA 529.

1.43    The MWU in its submission to the inquiry indicated its support for the Bill and made a number of points in favour of its carriage. The MWU stated that the Bill:

- Closes an unintended gap in the Migration Act 1958.

- Provides certainty for the workforce, resource owners, operators, and contractors.

- Creates a level playing field so that all workers irrespective of origin can have their migration status and employment standards regulated.

- Ends exploitation of temporary guest workers in the offshore oil and gas industry and will ensure that employment, safety and training and occupational licensing requirements can be bought up to Australian legal and industrial standards.

- Will provide the Government with the capacity to monitor non-nationals working on critical resource projects.[12]

1.44    In response to the specific issues raised by the MWU, Coalition Senators note that:

(a)       A close reading of the parliamentary debates relating to the Migration Act 1958 and subsequent amendments, indicate that there is no unintended gap and that the Parliament intended that certain foreign workers would be excluded in the visa requirements related to the migration zone whilst they were manning a vessel that is used or is to be used wholly or principally in operations or activities associated with, or incidental to, activities of manoeuvring a resources installation, or in operations relating to the attachment of a resources installation to the Australian seabed.

(b)       Far from providing certainty for the workforce, resource owners, operators, and contractors, the Bill raises constitutional issues and is likely to be in breach of Australia’s international obligations.

(c)       Imposing Australian regulations on the employment conditions of foreign workers on vessels excluded by paragraph 5(13)(b) of the Act would be void.

(d)       The submission of the MWU provides no evidence of exploitation of temporary guest workers in the offshore oil and gas industry.

(e)       Project costs would increase substantially if foreign workers employed on vessels excluded by paragraph 5(13)(b) of the Act, particularly on short term contracts, are subject to Australian employment, safety and training and occupational licensing requirements.

(f)        Foreign workers employed on vessels excluded by paragraph 5(13)(b) of the Act are already subject to severe restrictions whilst working offshore in the migration zone and are not entitled to be onshore without an appropriate visa.

Lack of consultation

1.45    The provisions of the original Migration Act 1958 and subsequent amendments have, in the past, been the subject of lengthy and detailed consultation with interested parties given its international application and its impact on international and domestic obligations.

1.46    Coalition Senators are concerned that the passage of the Bill is being progressed by the Government with indecent haste and without appropriate consultation with affected parties.

1.47    Given the scope of the proposed amendments and the impact of the Bill on Australia’s international and domestic obligations, Coalition Senators consider the manner in which the Government is attempting to progress and its inability to clarify with certainty the impact of the Bill on affected parties is both cavalier and arrogant.

1.48    Coalition Senators note that in his Second Reading Speech on the Bill, the Minister for Immigration and Citizenship claimed there had been extensive stakeholder consultation on the Bill with the offshore resources industry, unions and other Commonwealth agencies.

1.49    The Minister’s statement on consultation is inconsistent with evidence given to the inquiry by various submitters:

The more our industry knows about this bill and how the minister intends to proceed, the less certain it becomes. We have absolutely no certainty. We do not believe that we will gain any certainty from the passage of this bill. It will open up myriad areas of uncertainty, as our submission makes clear. Through the committee, we can communicate back to the minister that we believe that the rush and the fundamentally wrong-directed thinking behind this bill will cause some difficulties.

I might also add that, on the consultation arrangements we were talking about earlier—and I am indebted to my colleagues for raising it with me—a DIAC task force exercise was undertaken. We have not seen the task force report from DIAC.[13]

1.50    Coalition Senators believe that consultation referred to by the Minister was not on the legislation that is before the Senate, but relates to more amorphous concepts and principles that preceded the drafting of the Bill.

1.51    In his claims about consultation the Minister fails to identify any organisation that was invited to comment on the Bill as drafted.

Conclusion

1.52    Coalition Senators do not support the Bill in its current form for the following reasons:

(a)       The Minister has failed to provide documentation to show that the Bill meets Australia’s international obligations as they apply to the laws of the sea.

(b)       On the evidence available to Coalition Senators, the Bill is not being introduced as a measure of considered public policy, but rather it is being introduced for ideological purposes, at the urging of the MWU who have been significant donors to the Labor Party over many years, to override the decision of the Federal Court in Allseas Construction S.A. v Minister for Immigration and Citizenship [2012] FCA 529.

(c)       The Minister fails to recognise the value of the offshore oil and gas industry to the national economy and the extent of the negative impact the Bill will have on affected parties.

(d)       The Minister fails to understand the impact of the additional regulatory burden and associated costs the Bill will create.

(e)       The Minister fails to understand that additional burdensome regulation may discourage further investment in this productive sector.

(f)        The Minister has failed to adequately define the extent of the area to be subject to the Bill and seeks to avoid identifying the specific area by indicating that this detail will be fleshed out at a later date.

(g)       If the Minister cannot define the extent of the area to be subject to the Bill how can he provide certainty that Australia is not in violation of its international obligations.

(h)       The Minister has failed to quantify the potential cost impact on employers and number of people who are likely to be affected by the provisions of the Bill.

(i)        The Minister has failed to provide certainty that the MWU will not seek to use the additional power this Bill will bestow on the union to impose outrageous wage demands on employers who are required to rely on union labour.

(j)        The scope of the Bill is extremely wide. Given the lack of certainty in the advice provided by the Minister, the Bill may breach Australia’s obligations in respect to the United Nations Convention on the Law of the Sea, 1982 (UNCLOS) which Australia ratified in 1992.

(k)       The failure of the Minister to adequately demonstrate that the Government has adequately considered the totality of the complex issues relating to the law of the sea and Australia’s international obligations may render the provisions of the Bill invalid.

(l)        It is clear from the evidence of a number of affected parties that the Minister has failed to adequately consult with industry and that the limited consultation that the Minister claims occurred was limited to amorphous concepts and principles that preceded the drafting of the Bill.

Recommendation 1

1.7        Coalition Senators recommend that the Bill not be passed.

 

Senator Gary Humphries
Deputy Chair
Senator Sue Boyce
   
Senator Michaelia Cash  

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