Chapter 2 - Implementation
Introduction
2.1
The provisions of the Maritime Transport Security Amendment Act 2005 (MTSA Act) and the
associated regulatory framework
represents a further plank in the roll out of security measures designed to
protect Australia's transport system and critical infrastructure from terrorist
threat. The MTSA Act extends the Maritime
Transport Security Act 2003 (the principal Act) to Australia's
offshore oil and gas facilities. It is a formalised approach to enhance
security arrangements on fixed and floating offshore facilities and port
facilities.
2.2
During the inquiry, there was general support for the
aim of the legislation and the measures it establishes, including the MSIC. The
unions noted that it is their membership who are likely to be the human victims
of any terrorist attacks on wharves or off shore facilities.[17] However, within the committee's terms
of reference there were of number of concerns raised by those involved in the
development and implementation process. These concerns addressed the level of
consultation undertaken with industry participants in relation to the MSIC; privacy
issues and also means of cost recovery for the card.
Consultation
2.3
During the inquiry, considerable comment was made
relating to the adequacy of the consultation process.
2.4
The committee learnt that the consultation process
commenced in September 2004 with the Department of Transport and Regional
Services (DOTARS) holding a seminar to discuss the MSIC with maritime industry
participants. This seminar was followed in the next month with the formation of
a smaller working group, with DOTARS as chair. This working group met regularly
after its formation.[18]
2.5
Other dates of significance in the consultation process
include:
-
February 2005, ‘List of disqualifying and
exclusion crimes relating to the MSIC’ given to the working group.[19]
-
April 2005, maritime industry meeting where further
industry participants were invited to become part of the working group.
-
10-12 May 2005, DOTARS
officers visited offshore oil and gas operators and the Australian Petroleum
Production and Exploration Association (AAPEA) to consult on the MSIC regime.
-
Early June 2005, the first set of draft
regulations were issued to the working group.
-
Late June 2005, face-to-face meetings with working
group members. Members of the working group were
advised that the next set of draft regulations to be circulated would be
presented to the Executive Council on 21 July 2005.
-
27 June, a set of revised regulations were made
available to the working group participants.[20]
-
8 July
2005, the third draft regulations were released and consultation was
officially drawn to a close via email notification.
2.6
Witnesses who appeared before the committee generally commented
on the consultation process and commended the department on their efforts in
the early part of the process. The Association of Australian Ports and Marine
Authorities (AAPMA) indicated that:
The working group have accomplished a significant amount of work
and we are a very flexible group; we respond to the unfortunate events that
occur from time to time. ... As we have all noted this morning, it has provided a
tremendous level of trust and communication amongst all the parties in the
maritime environment.[21]
2.7
However, not all participants were satisfied with the
process. The Rail, Tram and Bus Union (RTBU) believe it had been involved too
late in the process[22] and the
Australian Manufacturing Workers Union (AMWU) commented:
DOTARS has been incapable of appreciating the value of Union
consultation as there were none involved in other important parts of the
government's initiatives. Specifically, when the draft legislative amendments
to the MTSA to include the offshore industry were presented, Unions and
industry alike were taken aback by the lack of any consultation.[23]
2.8
Of greater concern was the lack of consultation with
industry and unions for the release of the third draft regulations (8 July
regulations). The third draft regulations were distributed at close of business
on 8 July 2005, which was one
working day prior to the committee's hearing. The committee was informed that
this action impeded the ability of witnesses to effectively prepare for the
hearing.[24]
2.9
During the hearing, the committee also was informed that
the e-mail providing the regulations stated:
Attached for your information is a copy of the final MSIC
regulations. In order for these regulations to be made at the meeting of the
Executive Council on 21 July, we will not able to accept any more amendments to
this version.[25]
2.10
This e-mail gave rise to concerns about the efficacy of
the committee's inquiry. Given the committee is due to report to the Senate on 9 August 2005, the Maritime Union of
Australia, the Rail, Tram and Bus Union and the Australian Manufacturing
Workers Union's joint submission voiced concern that the department had no
intention of taking the committee's inquiry into consideration when finalising
the regulations:
We are however very concerned that the Government has indicated
an intention to finalise the regulations and present them to the Executive
Council on July 21 – well before the reporting date of this inquiry. It is the
view of these three unions that this undermines the role of the committee, and
limits our ability to engage in the policy process of the Australian
Parliament.[26]
2.11
Further voice was given to these concerns at the
hearing by the TWU representative:
The instruction that no change will be made post 21 or 22 July
sends a pretty clear message about what that department and its officers think
of the deliberations of this committee. It pre-empts all the submissions, all
the evidence and your own deliberations, so I think scant regard will be paid
to this process, if Friday’s email is any indication.[27]
2.12
The department responded that this was not their
intention:
CHAIR—I take it that we should not see this [the email] as
flying in the face of this process here today?
Mr Tongue—Absolutely
not. All we were trying to do was round up a quite extensive process of
consultation that we are trying to get done and get comments in from industry
so that we can meet some pretty tough deadlines.[28]
2.13
The committee is not reassured by these comments. While
it is well aware that regulations can be amended if required at a later date,
it does not believe that the department's e-mail can be seen as anything other
than a total disregard of the committee's, and indeed the Parliament's process.
It has also been an unnecessarily abrupt conclusion to what the committee
assesses to have been a productive consultation process and has created
confusion amongst participants that may have ramifications for the
implementation of the MSIC.
2.14
One impact is the confusion arising out of changes made
between the second and third draft of the draft regulations to the meaning of 'maritime
security relevant offence.' Draft regulation 6.07 includes a table indicating
the kind of offence that would be considered in issuing a MSIC (see appendix 3
for the draft regulations considered by the committee).
Maritime Security Relevant Offences: deciding the level of criminality
2.15
The committee heard from various witnesses that table
6.07C in the 8 July draft regulations did not concur with the working group's
agreement on the level of criminality that would constitute the
disqualification of an MSIC application.
2.16
In February of 2005 the working group was provided with
a copy of a table entitled ‘List of disqualifying and exclusion crimes relating
to the MSIC’. This document indicates the level of criminality that would
constitute disqualification from obtaining a MSIC. In the earlier drafts of the
regulations, item 3 of the table referred to section 15HB of the Crimes Act 1914 (Crimes Act). The 8 July
regulations refer instead to offences 'mentioned in Part II of the Crimes Act 1914'.[29]
2.17
A representative of the Transport Workers Union (TWU)
expressed concern that Part IIA of the Crimes Act could fall within the meaning
of Part II contained in table 6.07C. Section 30J of Part II of the Crimes Act
includes crimes specifically related to industrial disturbances, lock outs and
strikes.[30]
2.18
The TWU argued that the draft regulations:
potentially completely changes one of the most fundamental
issues that the working group has considered—that is, the background checking.
There are 30 more crimes against which people’s backgrounds will be checked.
One of those is interfering with political activity. That alone throws up all
sorts of concerns for my organisation. There is an argument to be made, I
think, over whether or not part 2A is included in part 2—I do not think that is
clear at all. And of course, if we get to that stage, that then picks up
industrial disturbances, lockouts and strikes, something that, I can assure
you, has never been the subject of deliberations in the working group.[31]
2.19
The hearing provided the opportunity to clarify that Part
IIA of the Crimes Act was not intended to be included in the table of maritime
security relevant offences:
Senator O’BRIEN—You have already said this, but I just want to
be clear, and I think your view equates with mine—that is, reference to part II
of the Crimes Act does not automatically include part IIA of the Crimes Act.
Ms Liubesic—That
is exactly right.
Senator O’BRIEN—And
you have taken advice on that?
Ms Liubesic—Yes.
In fact, it has never been a point of discussion with any member of the working
group whether that part was in or out. It was always part II, not part IIA.
Senator O’BRIEN—So
you have been talking about part II of the Crimes Act rather than all of it,
but certainly none of part IIA?
Ms Liubesic—That
is exactly right.[32]
2.20
However, the issues arising from the change from
section 15HB of the Crimes Act to Part II remain.
2.21
The AAPMA echoed the unions' concerns that table 6.07C
did not reflect the department's working group discussions with industry and
the unions:
I note the committee’s interest in the table attached under
regulation 6.07C and I also note our interest in item 3 of that—offences
mentioned in part II of the Crimes Act 1914. This is completely different from
earlier drafts of the regulations and there was no consultation with the
working group on that, which I think is regrettable.[33]
2.22
During the hearing, the department's response to the
concerns about item 3 fluctuated from indications that it was a drafting error[34] to an admission that it was a change.
While indicating that discussions of the working group had been taken into
consideration when forming the draft regulations, officers confirmed that it
was a Government decision to amend parts of the regulations so that working
group consensus was not reflected, particularly in relation to the maritime security
relevant offences:
It is a change. It reflects some decisions that were taken by
the government in the context of background checking in the aviation and
maritime sector. Whilst we could have talked about it for longer with the
industry, my judgment is that it was not going to affect the government’s
consideration of where it wanted to go with that change.[35]
2.23
In answers to questions taken on notice at the hearing,
the department commented that the drafting correction (to omit the reference to
section 15HB of the Crimes Act and replace it with Part II) were made in the
second draft of the regulations provided to the working group on 27 June 2005.
The department continued by indicating that it did not know why 'some members
of the working group failed to note the inclusion'.[36]
2.24
The committee notes the department's confusion over the
inclusion of Part II in the draft regulations and the fact that clarification
only came with time to review its response. It again considers it indicative of
the haste in which the final stages of the consultation were undertaken. The
committee considers this to be regrettable and to cast doubt over the adequacy
of the consultation process.
Operation of Security Checks
2.25
During the committee's hearing consideration of table
6.07C in the draft regulations revealed further matters of concern to the
committee. These matters arise from the categorisation of disqualifying
offences and exclusionary offences.
Disqualifying or Exclusion?
2.26
Table 6.07C in the draft regulations includes eight items
relating to maritime security relevant offences. Of these, items one and two
are considered to be offences that would constitute a disqualifying offence for
a MSIC applicant. Applicants having either of these offences on their
background check would be automatically ineligible for an MSIC. The items are
as follows:
1. An offence mentioned in Chapter 5 of the Criminal Code.
Note Offences for this
item include treason, espionage and harming Australians
2. An offence involving the supply of weapons of mass
destruction as mentioned in the Weapons
of Mass Destruction (Prevention of Proliferation) Act 1995. [37]
2.27
The other 6 items are considered exclusionary offences.
These will trigger 'amber lights' in assessment of an applicant. These
'exclusion' offences would require further assessment, not automatic
disqualification from receiving an MSIC. DOTARS stated:
Exclusion gives us the ability to have a look at the
circumstances surrounding the crime. For example, in identity crimes we might
pick up somebody who has been caught producing drivers licences and things like
that or we might pick up somebody who has committed a more serious identity
theft, and we would have the ability to look into the circumstances of that
particular crime.[38]
2.28
The committee notes the flexibility to examine the
severity of the crime sought under the exclusionary categories. However, exclusionary
offences include the crimes that involve 'interference with aviation or
maritime transport infrastructure including hijacking of an aircraft or a ship'.[39]
2.29
During the hearing the committee examined the proposal.
CHAIR—So if I were convicted of treachery, sabotage or
hijacking an aircraft there would still be a chance that there would be a
reason why I hijacked the aircraft that allowed me to go back and work on the
wharves—is that the case?
Ms Liubesic—We would look fairly closely at the
circumstances of that particular offence.
CHAIR—But why would you look that? Are you serious about
that?
Mr Tongue—It includes unlawful drilling, unlawful
associations—
CHAIR—Yes, but I would have thought that if I hijacked a
ship or aircraft I would be automatically disqualified as a suitable person who
would not be considered to be a security risk.
Mr Tongue—The list is trying to break a large mass of
people into ‘green lights’, ‘red lights’ or ‘automatically disqualified’.
CHAIR—I understand all that. But it is a pretty generous
set of lights you have.
Ms Liubesic—This
is a consensus list.
CHAIR—I am sure it is, and I beg to differ with the mob
that put it together. I would have thought that if I hijacked a ship under no
circumstances would I be a suitable person to go and work on a bloody wharf or
rig somewhere.
Ms Liubesic—There
are also circumstances where perhaps somebody was under the influence of drugs
or alcohol and tried to attempt to hijack a ship or aeroplane. The intent
behind listing that particular group of offences as exclusionary is that we
wanted to be able to look into their circumstances.
CHAIR—Have you got to be convicted of these crimes?
Ms Liubesic—Yes.[40]
2.30
In its submission recieved after the hearing, the
department indicated that:
Some members of the Senate Committee strongly indicated that
some additional crimes on the proposed MSIC list of crimes should be
reclassified as disqualifying (no card issued under any circumstances) rather
than exclusionary. The Department of
Transport and Regional Services (DOTARS) has taken this advice into
account. DOTARS is proposing to modify
the list of maritime security relevant offences in the regulations to include
the hijacking of a ship or aircraft as an automatic disqualifying offence. DOTARS is considering reclassifying some
additional serious crimes on the existing list to also become disqualifying.[41]
2.31
The committee notes the 8 July regulations which do not
disqualify people who have been criminally convicted of destroying or hijacking
an aircraft or ship from being considered for an MSIC are fundamentally flawed.
It accepts the department's undertaking to review the classifications.
Consistency in IB assessments
2.32
The flexibility provided under the disqualification and
exclusionary categories also raised concerns about how the discretion will be
used and the basis for those judgements.
2.33
During the inquiry calls were made for a greater
transparency in how assessments of exclusionary offences would be undertaken.
The Transport Workers Union stated in their submission:
DOTARS officials have advised us that where an amber light is
given discretion may be used to determine whether a demonstrable link can be
made between the convictions recorded and potential terrorist activity.
However, the regulations do not prescribe the manner in which discretion may be
applied nor the factors that may be taken into account.[42]
2.34
This issue was of particular concern for those looking
forward to the post roll-out period when it is possible that DOTARS will not be
involved in the determination. Adsteam Marine Limited expressed concern as to
how Issuing Bodies (IBs) (see para 2.41) would make assessments on criminal
background checks:
There is potential for employers acting as issuing bodies to
impose their own character test through the vetting process.[43]
2.35
This concern as to how the vetting process will be
undertaken once the roll out period is completed was also commented on by AAPMA:
It is the unanimous view of all of the members of the working
group that an independent government assessor should carry out the
determination role for those who have an orange flag raised against them as
part of the background-checking process. Any delegation of that determination
role to issuing bodies will give rise to inconsistency in the application of
policy relating to accepting or disqualifying the orange-flagged applicants. It
will also give rise to forum shopping by applicants for MSICs, and delegating
this role to an issuing body would surely involve a transfer of risk that is
unacceptable to the government.[44]
2.36
The Australian Shipowners Association (ASA) also argued
that the regulation providing IBs to assess background checks post 1 July 2006 will seriously compromise
the MSIC regime. The ASA argued that ongoing Office of Transport Security (OTS)
involvement in this function will bring:
Consistency of application of the criteria for issuing an MSIC
with a centralised application process – there are real concerns that
unsuccessful MSIC applicants may seek to 'forum shop' around the country
otherwise.
2.37
The ASA further commented that a central and consistent
approach would create a greater confidence in the validity of MSICs. Further,
that employers as IBs would not be placed in compromising positions whereby
they need to assess employees' criminal backgrounds.[45] (The problems that may result from
such access are explored in the following section – Privacy and Security Checks).
2.38
The committee shares the concerns that the discretion
given to the criminal background assessments may result in different
assessments being made. Without clear guidelines to make assessments, after the
roll-out phase it will be extremely difficult to ensure consistent judgements
across the range of IBs. Further, without guidelines it is difficult to ensure
that there is an open and transparent approach which will stand scrutiny to
these assessments.
Privacy and Security Checks
2.39
The background checks for applicants of the MSIC
require an ASIO and AFP check, and in some cases a DIMIA background check.
Within federal privacy laws, background checks of this nature must be required
by legislation. The MTSA Act specifically enables regulations to be made
authorising the use or disclosure of personal information as defined by the Privacy Act 1988. Information Privacy
Principles 10 and 11 pertain to limiting the use and disclosure of personal
information. Section 1(c) of Principle 10 states that:
A record-keeper who has possession or control of a record that
contains personal information that was obtained for a particular purpose shall
not use the information for any other purpose unless use of the information for
that other purpose is required or authorised by or under law.
Similarly, Section 1(d) of Principle 11 states that:
A record-keeper who has possession or control of a record that
contains personal information shall not disclose the information to a person,
body or agency (other than the individual concerned) unless the disclosure is
required or authorised by or under law.
2.40
As the background
checks are a key element of the proposed system, in the absence of Government
regulation privacy laws would prevent access to important information on the
employees applying for MSICs. Consequently, the MSIC scheme and regulations authorise
the legal disclosure of personal information of a sensitive nature to and by
Commonwealth agencies to facilitate MSIC background checks. DOTARS states that:
Under the MSIC Scheme applicants will
be protected by the Privacy Act 1988... The Privacy Act states that
the information collected must only be used for the purpose it was collected.
As personal information will only be collected for the purpose of issuing an
MSIC it would be illegal for an organisation to use this information for any
other purpose.[46]
2.41
The roll out phase of MSICs begins on 1 October 2005. During this phase the
MSICs will be processed by the IBs, while the background checks will be
assessed by the OTS. The 8 July draft regulations indicated that Issuing Bodies
can be:
- a maritime industry participant;
- a body representing participants;
- a body representing employees of participants;
- a Commonwealth authority.
2.42
A participant may also engage an agent to issue MSICs,
and that agent may apply to become an IB.[47]
2.43
The OTS assessments of the background checks will
determine whether an applicant is eligible for a card. When 'roll out phase'
ceases on 30 June 2006 there
is some suggestion the IBs will make assessments of background checks.
2.44
During the inquiry, speculation as to who, after the
initial 'roll out period', would be required to have access to information
obtained during background checks gave rise to concerns about the protection of
applicants' privacy. Another issue touched on was the storage of the personal
information of MSIC applicants.
Issuing Bodies' access to personal information
2.45
The uncertainty over what arrangements to assess the
background checks will be put in place after the roll out period and the
consequent access to applicants' background checks was a concern expressed by
both those who are likely to be IBs and those representing applicants.
2.46
In its submission, the ASA noted that after the roll
out period the majority of employers will retain the Issuing Body function. In
the case where they do not, the consultants engaged as IBs have publicly
indicated they will not be making MSIC application determinations. They have
stated that determinations would remain with employers. The ASA further
outlined:
From the outset, employers have steadfastly reiterated the privacy
and other difficulties that they will face receiving the criminal backgrounds
of their employees from the Federal Police. There may even be conflicting
corporate disclosure obligations to share holders in some situations if an
employer is in possession of this information. If DOTARS (or another central
government agency) cease to continue as the repository of these reports, there
will be no other option but for employers to receive this information.[48]
2.47
In evidence to the committee, the Association of Australian
Ports and Marine Authorities (AAPMA) stated:
For reasons of privacy, issuing bodies do not want to know any
of the details of the crimes listed on an applicant’s MSIC consent form. A
number of maritime industry participants—ports, stevedores and towage companies
alike—have foreshadowed a willingness to take on the role of an issuing body.
But, if they are exposed to the knowledge of an applicant’s criminal past,
after the roll-out period I think that a number of those issuing bodies will
withdraw from the process.[49]
2.48
In its submission the Transport Workers Union (TWU)
comments mirrored the comments of the employers.
The TWU objects to this post roll out process due to the
inevitable encroachment on privacy.[50]
2.49
The committee heard that the OTS revealed in working
group discussions that the reason behind the arrangements after 1 July 2006 was budgeting constraints:
John Kilner
was very specific at our last working group meeting. He said that he only had a
budget of $300,000 and did not have enough money in his budget to accommodate
those very specific safeguards that the entire maritime industry wanted to
build into this. They were picked up for the nine-month roll-out period, from 1
October to 1 July 2006.
After July 2006, the Office of Transport Security relinquishes its role of
having that information on the results of background checks of up to 200,000
Australian workers and gives that back to the employers, who absolutely do not
want it. They can speak for themselves. They will then have the responsibility
of knowing the criminal background. The Federal Police have said that they
cannot just pick out which bits; they will have an entire test of your entire
criminal background and give it to your employer. The employers know that that
will mean that any decisions that they make on the employment of their workers
could be construed as being based on their criminal backgrounds, even if it is
innocently made for other reasons. We support the employers on that.[51]
2.50
The department did not
comment specifically on funding arrangements in relation to the post
implementation phase. In their submission however, they made the following
comments:
In regard to the introduction of the
MSIC Scheme, DOTARS will incur administrative costs for the regulation of the
MSIC Scheme. Funding of $1.9 million was allocated by Government in 2003-2004
over four years to introduce the MSIC Scheme for the implementation of the MSIC
Scheme and to provide ongoing policy advice to the maritime industry.[52]
2.51
During the hearing, DOTARS indicated that the roll out
phase will be used to assess the effectiveness of the regime:
The commitment
that the department has given to the working group is that the department will
review its position with regard to background checking during the
implementation phase. So no decision has been made yet as to whether all of
that information will revert back to the employers as the issuing body.[53]
2.52
The committee notes that maritime industry participants
would prefer the OTS to continue assessing criminal background checks post
implementation of the regime. It acknowledges the reasons provided constitute
serious considerations. It has concerns that the department's wait and evaluate
position could be merely inaction and that after the roll out period the time
lines required will be such that some options will be excluded. It is of the
view that DOTARS should commence planning for the post roll out period now.
Data storage
2.53
An issue associated with devolving the responsibility
of making the assessment of the background check is the securing and protecting
of the data collected during the check. Regulation 6.07Q provides for the
storage of data by IBs under the MSIC plan:
An MSIC plan sets out procedures to be followed for the
following purposes: ...
(d) the security of records in relation to applicants for MSICs.[54]
2.54
During the inquiry, concern that employers may access
this background information and use it for purposes other than for which it was
intended was expressed. Some information on record may not constitute a
disqualification from an MSIC, but may tarnish the reputation of an employee
amongst colleagues. The Australian Manufacturing Workers Union (AMWU) argued in
the committee's hearing:
I do not think any employer should have access to personal
details of a person’s past—for example, if he had been involved in some
misdemeanour when he was young. I have personal experience with people,
particularly on the waterfront, that have been through the correctional system,
come out of that system, rehabilitated themselves and gone on to make a good
life for themselves and their families. That can be affected if there is a
scrutiny. That sort of information by some employers could be used unfairly and
discriminatorily. We are very concerned about that.[55]
2.55
The TWU also expressed concerns that employment
decisions could be influenced by information held by government agencies.[56]
2.56
The department informed the committee that discussions
with government are currently underway to explore the possibility of having a
central storage place for personal information of a sensitive nature.
2.57
The committee explored the possibility that IBs or
employers could contact the agency storing information to gain access to
details about an employee's former convictions, particularly those of long ago.
DOTARS responded to this concern, by outlining first of all that should a
central database agency be contacted for information, a simple yes or no answer
will be given to relay whether a person holds a valid MSIC or is eligible for
one:
Mr Tongue—In advance of government decisions—and I will qualify
that—it is not envisaged that it would be passing information back to
employers; it would be passing a decision back, either to us as the agency
responsible or—
Senator FERRIS—So
the raw data would remain secure in a government agency—is that what you are
saying?
Mr Tongue—That
is certainly one of the models that is being looked at. It is a bit hard for me
because it is an issue that is still being considered.[57]
2.58
Secondly, the OTS offered that they will not have
access to convictions of long ago under the spent convictions scheme. The
scheme comes under Part VIIC of the Crimes
Act 1914 (Cth). It 'allows a person to disregard some old criminal
convictions after ten years (or five years in the case of juvenile offenders)
and provides protection against unauthorised use and disclosure of this
information.'[58] The number of years
varies according to each jurisdiction as each jurisdiction has a different
spent convictions scheme.
Senator FERRIS—If
somebody has had a childhood conviction recorded against them some years ago,
presumably they would have to disclose that as part of the checking mechanism.
You are confirming for me that that information, which may not have been
disclosed by that person in their employment, which may already be in a
maritime environment, would then not be passed on to the employer; it would be
held as raw data in a secure agency.
Mr Tongue—If
it was a childhood offence or an offence early in a person’s life, it could
well be that such a conviction is spent. That means that nobody sees it; we do
not get access to it.[59]
2.59
The department does
note in their submission however, that they have:
Applied for and received agreement
from the Privacy Commissioner and Attorney General's Department for an
exclusion from the Spent Convictions Scheme for all
maritime-security-relevant-offences.[60]
2.60
The committee is of the view that securing and
protecting any information collected during background checks is paramount if
future litigation is to be avoided. There needs to be a secure and apparent
firewall between the checking and assessing body and the employer. DOTARS needs
to address this perception that the information will not be secure and
quarantined from other decisions.
Cost Recovery
2.61
During the inquiry the committee explored the issue of
cost recovery. The issue drew a number of concerns – not just in terms of who
will meet the initial costs but also in relation to duplication of identity
cards between the aviation and maritime industries and the validity of the
costs for infrequent users.
2.62
The draft regulations set out in subdivision 6.1A.8, Regulation
6.09A provide means of cost recovery for the MSIC:
An issuing body may recover the reasonable costs of the issue of
an MSIC from the person who asks the body to issue the MSIC.[61]
2.63
The Explanatory Memorandum outlines the cost of issuing
an MSIC as approximately $130 with a validity of 5 years. Costs are expected to
vary between IBs based on the number of MSICs that they produce and individual
IBs' cost recovery arrangements.[62]
This cost comprises a security check in the vicinity of $50, and administration
and production costs.
2.64
The Australian Institute
of Marine and Power Engineers
(AIMPE) states in its submission:
AIMPE does not believe that this cost burden should fall on the
workers being required to obtain the MSIC... The effect of the cost recovery
clause appears to be to make seafarers and others pay the price of improving
maritime security.[63]
2.65
During the hearing the committee heard from the AAPMA
that employers are expecting to absorb the cost of the MSICs as part of the
cost of doing business. The Australia Shipowners Association (ASA) however,
outlined that some employers would recover MSIC costs from employees:
There are some employers who are openly acknowledging that this
is part of the overall maritime security regime. They pay for everything else.
They pay for medicals and so on and so forth, so it is consistent with their
operations to also pay for the application cost of an MSIC. At the other end of
the spectrum, there are other employers who are looking at the recurring costs
of MSICs over a period of time, which in some operations is not inconsiderable.
They are exploring options for how they may or may not seek to recover that
from employees.[64]
2.66
Unions are against the proposition that MSIC card
holders should pay for the cards. It is argued 'that the cost of applying for
and obtaining an MSIC must not in any circumstances be passed on to individual
employees... in our view these costs must be recovered from employers, not
individuals.'[65]
2.67
The department stated in relation to cost recovery:
Mr Tongue—The
government’s position on critical infrastructure protection is that the costs
of security are a cost of doing business. The only area where we have gone
beyond that principle is in the area of small regional airports, where funding
has been provided for a range of protective activity...there is no thought at the
moment that any assistance would be provided.
Senator FERRIS—So
it is accepted that either the employee pays or the employer pays?
Mr Tongue—That
is correct.[66]
2.68
The committee acknowledges the department's
clarification of the government's position. It notes that it is in accordance
with the practice elsewhere in the transport industry and that industry
participants can work within the framework provided and assess who will meet
the costs.
Card Use
2.69
Another point of concern raised by the TWU was the
potential for some truck drivers to have the need to own both a MSIC and an
Aviation Security Identification Card (ASIC):
Ms Whyte—The point we make about that is that it is a real
possibility that our drivers—or their employers, the prime contractors,
whoever—might have to apply and pay for a number of cards to enter a number of
maritime security zones... unlike the MUA workers who are employed by P&O and
go to work there every day, our drivers might go to P&O in Brisbane and
then go to Patrick’s in Melbourne.
Senator WEBBER—So they would have to have a different card each
time?
Senator STERLE—And
not only that, would they have to have an aviation card as well?
Ms Whyte—Potentially.
Senator STERLE—So
the double-up in the cost could be quite astronomical for the ordinary truck
driver.[67]
2.70
The issue of escalating costs for those holding ASIC
and MSIC cards was addressed in the draft regulations under 6.08E:
An issuing body may issue an MSIC to a person without verifying
that the person has satisfied the criteria set out in subregulation 6.08C(1) if
the person: (a) holds an ASIC issued under the Aviation Transport Security
Regulations 2005; and (b) has an operational need for an MSIC.[68]
2.71
The regulations further elaborate that the MSIC should
expire on the same day as the ASIC. The criteria set out in subregulation
6.08(1) provides for cost saving measures for the application process and
background checks of an MSIC applicant who holds an ASIC. However, presumably
there will still be costs associated with the production of the card.
2.72
The Committee notes the cost effectiveness of this
regulation. However, while solving the problems arising from cost implications,
it raises a number of additional problems.
2.73
The regime for background checks provided for applicants
of an ASIC is different to that provided under the draft regulations relating
the MSIC. There are no disqualifying or exclusionary provisions relating to the
ASIC. Further on the committee's reading, the threshold for offences is
substantially different. The ASIC regulations do not list offences that involve
counterfeiting or falsification of identity documents, whereas the MSIC
regulations stipulate these as exclusionary offences. The committee assumes
that these thresholds differ for a reason such as different assessed risks in
the two zones. Therefore, if its inclusion is based on cost considerations, the
Committee has reservations about this regulation. The committee will request DOTARS
to review the two systems of background checks, and if there is any difference
between the two, to reconsider this regulation prior to finalising the
regulations.
Infrequent users of the MSIC
2.74
Another cost concern highlighted during the inquiry was
the cost to workers who may only require access to a secure maritime area once
a year.
2.75
The regulations provide for a worker who may access a
secure maritime area only once a year to obtain a MSIC. The draft regulations
state in Division 6.1A, Regulation 6.07F:
For this Division, a person has an operational need to hold an
MSIC if his or her occupation or business interests require, or will require,
him or her to have unmonitored access to a maritime security zone at least once
a year.[69]
2.76
However, the AAPMA commented:
...if I take up Senator Sterle’s
point, during earlier evidence, about the truck driver who comes in from the
farm once a year to deliver a truckload of grain: he or she will not have an
MSIC; they do not have a requirement for an MSIC. But they must be allowed to
enter that maritime security zone to deliver the grain to the waiting ship.
These provisions allow that person to be either escorted or continuously
monitored by the use of CCTV so that business is not hampered and so that our
exports can continue. There will be a range of visitors like that who will come
to the port and who will not need an MSIC but who can be escorted.[70]
2.77
The committee welcomes the flexibility indicated by
AAPMA in assisting infrequent users to the ports. However, it believes that
this flexibility should be incorporated in the legislation to reflect the
secure environment. The committee acknowledges the department's advice
subsequent to the hearing that those monitoring the CCTVs will be required to
have MSICs.[71] The committee is also of
the view that those entering the maritime security zone (MSZ) under those provisions
should be required to 'sign in' by signing a log book and displaying a form of
photographic identification. Further, the 'escort' via CCTV should be
undertaken on a one on one basis. The committee requests DOTARS review the regulations
to accommodate these points.
Competition between Issuing Bodies
2.78
MSICs will be issued by Issuing Bodies and those bodies
will have discretion as to the charge applied to the provision of the card. Charges
between IBs may be cheaper as a result of a number of factors.[72] This creates a possibility for MSIC
applicants to shop around for a cheaper card. Shipping Australia Limited
commented:
We believe that the proposed cost recovery model is reasonable
in its general approach in that issuing bodies for MSICs, for example, can do
it themselves or those involved can request others to do it for them and for
those that outsource those requirements, presumably, there will be competing
issuing bodies that would meet their requirements and therefore we believe that
cost should be kept to a minimum.[73]
2.79
The committee notes the view that competition between
issuing bodies will keep costs to a minimum.
Redundancy
2.80
The inquiry revealed a 'hidden' cost issue in the roll
out of the MSIC regime. That issue is the cost associated with those who are
currently working in an MSZ and will not meet the requirements to be issued
with an MSIC. Apart from the human cost, if an employer cannot find suitable
alternative employment, there is the potential for disqualified applicants of
the MSIC to pursue redundancy benefits and unfair dismissal claims. These
claims would be based on the argument that holding the MSIC was not a condition
of employment. In these cases ineligible MSIC applicants could appeal to the
Industrial Relations Commission or take up claims of discrimination with the
Equal Opportunity Commission.
2.81
The unions argued that if an ineligible MSIC applicant
has no other work available to them they should be compensated:
we would initially be seeking compensation from the employer
because the member cannot come to work anymore—it is something that is imposed
on them in the middle of their working life... If the companies were able to
get that compensation from the government because the government made these
imposts and not the companies, that would be the companies’ decision... These are
unprecedented redundancies. This has not happened to anybody before, so we
would be looking to what that person may have earned in the future, probably
coupled with how long they had been employed.[74]
2.82
The department did not foresee the need for
compensation. It argued an ineligible MSIC applicant can be granted work
somewhere else within the maritime facility they are employed in.
Ms Liubesic—If workers are ineligible to have an MSIC the onus
will be on the employer to ensure that the person does not have access to a
maritime security zone—so, in effect, a redeployment away from the maritime
security zone.
Senator O’BRIEN—And
if there is no other position with that employer?
Ms Liubesic—Our
position is that it is a redeployment issue for the employer.[75]
2.83
The ASA noted that it would be difficult to re-deploy
those workers who could not obtain an MSIC:
For ship operators in almost all circumstances, holding a valid
MSIC will constitute a condition of employment. Where an existing employee
fails to obtain an MSIC, all attempts will be made to find alternative duties.
This is not a redundancy per se. However, it must be said that, for a seafarer
who no longer holds the requisite certification for employment, the MSIC—as
opposed to being redundant to operations—it may in a great many circumstances
be very difficult to find suitable alternative duties.[76]
2.84
The Customs Brokers and Forwarders Council relayed that
there would be scope for members of their organisation to find work in clerical
areas where an MSIC would not be required.[77]
The AAPMA made similar indications:
Let me say that none of us is looking forward to the day when
one of our employees is prevented from holding an MSIC. That is going to be a
frightening and terrible occasion for everybody involved. In the port
environment, it may be possible in some areas to redeploy that person to a less
security-sensitive area. However, we do not really operate with spare capacity
any longer on the ports. I know that the port authorities will employ every
means of structural adjustment possible to try and retrain that person and find
them an alternative position within the maritime environment... I would like to
see some government assistance, certainly, given to retrain those people that
cannot hold MSICs because it is of no fault of their own... However, if that is
not forthcoming then, yes, the employers—the port authorities—will be providing
compensation, as Mr Summers
called it.[78]
2.85
The committee notes the divergence of views on this
matter and is of the view that further work on a co-operative basis needs to be
done if litigation is to be avoided. It
appreciates the difficulties posed for employer organisations in making any
decisions about any possible redeployment or payouts until more information is
available on the how many workers will be affected, and in which areas of
industry.
2.86
The committee also questions whether moving an
ineligible MSIC applicant to an administrative area would not also pose a
security threat. There was the argument that a potential terrorist could do
damage in administrative areas as well.[79]
2.87
In this context, the committee notes the AAPMA could see
the benefit of continuing the consultation process, noting the achievements of
the working group. 'I urge DOTARS to consider extending the life of the working
group.'[80]
2.88
Although the committee notes the department's view that
redeployment is a matter for the industry participants, it believes that the
questions of redundancies and redeployment are matters that could usefully be
explored in the working group. The committee asks DOTARS to extend the life of
the working group to include the MSIC roll out period so that some assessment
can be made of the employment ramifications of the regime.
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