Jun 5, 2009

Address to Natship 2009 Conference

ADDRESS TO NATSHIP 2009 CONFERENCE

The Hilton, Sydney

5 June 2009

The Hon Anthony Albanese MP

Minister for Infrastructure, Transport,

Regional Development and Local Government,

Leader of the House,

Federal Member for Grayndler

 

Three months ago, on 11 March, the Hong Kong registered general cargo ship, Pacific Adventurer, steamed north from Newcastle to Brisbane. It ran into the tail end of tropical cyclone Hamish and lost 31 containers of Ammonium Nitrate overboard.

Some of those containers punctured the hull of the vessel and holed two bunker oil tanks. Over the course of the next couple of days the extent and impact of the 270 tonne oil spill became evident.

30 kilometres of pristine southern Queensland beaches suffered the consequences.

The nation was transfixed as nightly news bulletins showed images of the damaged vessel and the clean-up operation that was underway.

Just as it was in 2007, when the Pasha Bulker ran aground on Nobby’s Beach, Newcastle. At times such as these many Australians may have momentarily considered aspects of the nature of shipping.

They may have briefly considered the size and scale of modern ships, the hazards faced at sea and of course on this occasion the consequences of something going wrong.

The skills needed to command a ship, navigate it into port, to safely load it with containers.

They may have considered the role of Government environment and safety regulators.

Those with a deeper knowledge of the industry, either in business or Government, who perhaps live near a port or who have flown above our coast, are more aware of the tremendous significance of the shipping industry to this country.

The 3,700 ships that annually carry goods to and from this island nation.

Our reliance on shipping for our international imports and exports- representing nearly 10 percent of world seaborne trade by mass- the 5th largest shipping task in the world.

It’s potential for our coastal trade- with about a quarter of our domestic freight task carried on a tonne-kilometre basis.

Now we know that major incidents like this are rare, and Australia strives to keep safety standards in this industry high, in no small part due to efforts of regulators like the Australian Maritime Safety Authority, but I raise them to make a point that you only know too well, and it is this: Shipping often only becomes news when something goes wrong.

Like many of those industries that we rely on to keep our economy moving, shipping is a quiet achiever, moving vast quantities of goods with little fuss or fanfare.

Related to that is the unfortunate reality that the shipping industry is neglected as a transport mode in the contemporary economic debate.

This neglect is reflected in the lack of consistent and modern maritime regulatory settings by the Australian and state and territory governments.

Delegates, let me assure you the Rudd Government is well aware of the positive contribution of the shipping industry to the transport task of this nation and is making plans for its future.

The Government does not believe that shipping should be the forgotten transport mode, ignored in the policy debate, but a valuable and equal part of the freight transport industry.

A transport task that will double by 2020, in a world increasingly conscious of the impact of climate change and the need for cleaner and more efficient technology.

Australia is the largest island nation in the world, with its population in coastal cities and resources accessed at ports dispersed right around our thirty-six thousand kilometre coastline.

Over 99 percent of Australia’s international exports and imports are carried by sea.

And with our many beautiful pristine coastal and inland waterways, world heritage sites such as the Great Barrier Reef, we understand that recreational and commercial maritime activities are an essential part of our way of life.

Today I will update you on our key initiatives to support shipping and discuss the direction we will take over the coming months.

Regulatory Reform

A constant theme in the meetings I’ve had with the maritime industry over the last 18 months has been the need to modernise maritime regulation in this country.

The existing safety and pollution regulatory regime based on the Navigation Act 1912 needs a thorough overhaul.

Indeed there are provisions in the current Navigation Act that come straight from the 19th Century British Merchant Shipping Acts of 1854 and 1894.

It has been amended more than 70 times, with at least one amendment required to correct a deficiency revealed from a failed prosecution for offences under the Act. It’s another area of reform that was at the bottom of our predecessor’s “too hard” basket.

An independent review of the Act found it is archaic and overdue for review. Let me give you an example.

There is a section of the Act that allows AMSA to use force to suppress any “plundering, disorder or obstruction” when a ship is wrecked, stranded or in distress.

Now, according to the Act, if any person is killed, maimed or hurt when resisting an AMSA officer doing his or her job in relation to this ship, AMSA is not liable for any punishment or to pay any damages.

It seems it’s not only James Bond which has a licence to kill. So it seems do AMSA officers!

I can assure you however that one of the chief advocates for legislative reform is AMSA.

So I announce today that we will rewrite the Navigation Act. That rewrite will be done in consultation with industry.

I want the Act to be drafted in plain language, to reflect contemporary conditions and practices, to do away with unnecessary and out-dated provisions, and provide much-needed confidence and certainty for industry.

I also want the Act to be flexible to allow for movement when and where necessary, particularly when Australia needs to adopt international treaties.

And it will not compromise safety.

Modernising Australia’s maritime laws will bring a new level of confidence and certainty to the sector.

Single Maritime Jurisdiction

Two weeks ago Transport Ministers at the Australian Transport Council made a significant decision to streamline the regulatory frameworks covering maritime safety.

There are currently eight different regulatory systems governing the operation of commercial vessels through more than 50 Acts of Parliament and subordinate legislative instruments.

The current process is inefficient, inconsistent and flies in the face of the Government’s vision of a 21st Century national economy underpinned by national rules and regulations.

Transport Ministers have been working since last year to streamline the current system.

We achieved a major milestone when Ministers agreed to recommend to the Council of Australian Governments the implementation of a national system that would see AMSA as the sole national regulator for all commercial vessels operating in Australian waters.

AMSA would also be responsible for the development of national safety standards.

I expect COAG will consider this significant reform proposal next month, with a view to implementing a national system consistent with the modernisation of the Navigation Act.

Australian Shipping

It’s fair to say that the past decade has not been good to the Australian shipping industry.

Our number of Australian registered large trading vessels has declined from 55 to 38 in a little over ten years.

Meanwhile, the amount of domestic freight being moved between our ports is on the rise. The share of domestic shipping freight carried by permit vessels increased from 6 percent in the mid 1990s to 30 percent last year.

And yet for the largest island nation with one of the largest shipping tasks, our presence in the international industry is negligible.

The challenges facing government, the maritime unions and shipowners when it comes to internationally-flagged ships working our shores are significant.

Add to this the domestic impact of the financial assistance provided by many foreign countries to their own shipowners and crews.

Challenges such as skills and labour shortages.

Like the shipping industry internationally, our domestic industry is experiencing significant skill and labour shortages and finding it difficult to train new entrants.

These shortages, if not addressed threaten our capacity to provide the skilled labour to service our key maritime roles in our ports and in our maritime regulators in the future.

This is an international problem recognised by governments throughout the world. Last week the US Transportation Secretary Ray LaHood spoke about it at the International Transport Forum meeting I attended last week in Leipzig Germany.

Not only is the workforce ageing, but so too are our ships, which are now older than the world industry average.

At the heart of these difficulties are the regulatory policy settings inherited by the Rudd Government 18 months ago.

The mantra of our predecessor was that “Australia is a shipper, not a shipping nation.”

It’s a fundamentally flawed approach that divides Australia into competing sectional interests.

It pits shipowner and against ship user.

It implies that Australia’s long term economic interests are best served by limiting its economic activity to that of a farm and a quarry.

It incorrectly assumes that resource companies have no interest in controlling their own supply chains.

It mistakenly assumes we can purchase our masters, navigating officers, chief engineers, marine surveyors, harbour masters, and maritime safety regulators off the international labour market despite international shortages and the lack of local experience.

It exposes our economy to fluctuations in global shipping markets, and fails to take into account the need to integrate shipping into national and international logistic chains.

In developing our policy response we will have appropriate regard to policies adopted by our developed nation counterparts.

Let’s look at some of the significant benefits of a well regulated Australian maritime transport sector.

It improves the efficiency of our national transport system particularly when it comes to moving high volume goods over long distances.

It delivers significant carbon and energy efficiency benefits.

It means our exporters are less susceptible to fluctuations in global shipping markets, which is paramount during this unpredictable international financial climate.

It offers our country greater control over the safety of ships operating in Australian waters, protecting our fragile marine environment.

It strengthens our capacity to manage our own security needs.

It supports the development of the maritime skilled labour base needed to sustain our future landside maritime needs, and international shipping, the lifeblood of our trade.

As other developed nations have recognised, it strengthens the nation’s naval defence force by providing direct logistics support and maritime skills needed to sustain our future defence needs as outlined in the recently released Defence White paper.

It reduces demand for costly land based transport infrastructure.

And finally, it leads to efficiency gains from a more integrated transport logistics chain, both internationally and domestically.

You would all be aware the Australian Government committed to reviewing Australia’s coastal shipping policy prior to the last election.

We made this commitment with a view to ensuring a strong and viable Australian coastal shipping industry in a competitive domestic transport sector.

The Review has been completed and handed to Government.

The Parliamentary Standing Committee’s report makes 14 recommendations to reform the current fiscal, regulatory and policy environment.

Since the Committee’s report was tabled, the Government has been developing its response to the recommendations. I have established a Shipping Policy Advisory Group to provide an industry perspective on the report’s recommendations and to make sure the reform agenda taken forward by the Government meets the industry’s long term priorities and needs.

The process has also been a catalyst for discussions on the appropriate contributions that the Government, the shipowners and the maritime unions can make to resolve the difficulties confronting the industry.

I am determined that we get shipping reform right in the coming months in order to provide a robust base for the future of the industry in Australia.

Piracy

I wish to thank the Secretary General of the International Maritime Organization, Admiral Mitropoulos, for his key note address yesterday, particularly his reference to the growing international problem of piracy, particularly off the African coast.

According to the International Maritime Bureau more than 100 ships were attacked and 42 hijacked in the Gulf of Aden and the Somalia region in 2008, with some 300 reported cases of piracy.

I recently asked Australia’s Inspector of Transport Security, Mr Mick Palmer, a former head of the Australian Federal Police, to undertake a comprehensive inquiry into maritime piracy and armed robbery at sea as it affects Australia.

Mr Palmer is investigating the impact, and potential impact, of piracy and armed robbery at sea on Australian registered and international trading ships and on Australian maritime trade more generally and will report to me.

The Australian Government wants to make sure we have an appropriate security framework to deal with these threats.

This inquiry is one of several initiatives to combat the serious problem of piracy and armed robbery at sea.

Last week my colleague the former Defence Minister announced the Government will flexibly task Defence assets such as our Navy Anzac-class frigate HMAS Warramunga and RAAF AP-3C Orion patrol aircraft currently based in the Middle East to anti-piracy operations around the Horn of Africa.

Australian participation in the anti-piracy work demonstrates our commitment to the international maritime community.

Environment

Today is World Environment Day. The Rudd Government has already progressed several important maritime environment measures.

Last year we took part in an important IMO initiative that assesses how effectively countries are implementing the IMO’s mandatory instruments, including environmental protection standards.

As part of their Voluntary Member State Audit Scheme, three independent auditors visited Australia and looked into our maritime administration.

I am pleased to announce today the release of the IMO audit report for Australia, which complements the effective way Australia administers and implements the IMO’s ship safety and environment protection standards.

This positive assessment by the IMO reflects Australia’s long-term commitment to meet the challenge of achieving high standards in ship safety and environment protection.

Australia supports this voluntary scheme becoming mandatory, as we recognise the benefits that can flow from greater transparency and compliance in relation to the IMO’s standards.

The Rudd Government has also put in place tougher measures to protect our maritime environment.

Last year the Government legislated to implement the International Convention on Civil Liability for Bunker Oil Pollution Damage.

It makes it quicker and easier for claimants to make claims against a ship’s insurer.

It also means that shipowners will be strictly liable to pay compensation for any damage from an oil spill, up to a figure determined by the gross tonnage of ship.

The convention comes into force in Australia in 11 days on 16 June.

The Rudd Government supports the principle that the polluter should pay for pollution clean-up costs.

If it is found that the international compensation regime proves to be deficient in delivering that, then Australia will move at the IMO to improve it.

The Rudd Government also legislated last year to bring Australia into line with a separate international protocol on oil pollution damage.

This will mean the existing liability for oil spills from oil tankers will rise from about $400 million to about $1.4 billion.

Ports

The final area I would like to briefly touch on is port development.

The Government’s recent budget provided the first significant federal investment in ports- for two major projects aimed at improving our export capacity.

$339 million for the proposed new deep water port at Oakajee in Western Australia, and $50 million to expand Darwin Port.

Both proposals have the potential to be major economic projects for the nation that support exporters, generate jobs and maximise the potential of Australia’s north and west.

They reflect the Government’s commitment to work with the states and the private sector to provide more efficient international gateways.

Until now the vital task of planning, regulation and investment in port infrastructure has been left to state governments and the private sector alone, with little national co-ordination.

It’s a position which has ignored the critical importance of ports and landside infrastructure to our national export performance.

I’m pleased to say the Rudd Government is moving beyond this hands-off approach.

Infrastructure Australia will work with the National Transport Commission to develop a National Ports Strategy.

This was one of the recommendations of the Inquiry into coastal shipping.

The strategy will identify the most effective regulatory and governance frameworks, assess ways to improve land planning and critique the future infrastructure requirements of Australia’s ports.

The strategy is a collaborative effort involving the ports themselves, industry and the states and territory governments aimed at improving the productive capacity of our port infrastructure. It will report through the Australian Transport Council to the Council of Australian Governments.

Conclusion

Today I have outlined some of the initiatives the Rudd Government has put in place for maritime reform in Australia.

Those initiatives are aimed at modernising shipping regulation in Australia, giving us a greater consistency to maritime regulation across the country, and giving us a contemporary approach to shipping policy.

It’s a plan focussed on ensuring that shipping is placed on an equal footing with other transport modes in the freight transport market, delivering on its strengths to the Australian nation.

I look forward to working with you to progress this agenda, and to reach our shared destination which is a stronger and more sustainable Australian shipping industry.

Thank you.