Mar 19, 2015

Limitation of Liability for Maritime Claims Amendment Bill 2015 – Second Reading

Mr ALBANESE (Grayndler) (11:16): On 11 March 2009, as Cyclone Hamish bore down upon south-eastern Queensland, a freight vessel called the Pacific Adventurer began losing the first of 30 shipping containers containing ammonium nitrate. At least one of those containers, when it went overboard, damaged the ship as it tumbled into the water. The result was a 60-kilometre-long oil slick that hit the beaches of the Sunshine Coast and the northern part of Moreton Bay. The cost of cleaning up that spill reached about $34 million. The bill before us today, the Liability for Maritime Claims Amendment Bill 2015, is partly a result of that dreadful incident. In 2009, the maximum liability applying to the Pacific Adventurer’s owners was $17.5 million. That is not good enough. In an island nation like Australia, a nation endowed with fantastic coastal assets—of course including the splendour of the Great Barrier Reef—we must do everything that we can to prevent such accidents. But, when accidents do happen, either through misfortune or through negligence, we must ensure that those responsible pay to clean up the damage. After the Pacific Adventurer accident, the former Labor government brought forward a proposal to increase the liability limit under the 1996 Convention on Limitation of Liability for Maritime Claims.

I represented the government as the transport minister and minister responsible for shipping at the annual conference of the International Maritime Organization, which was held in London on 2 December 2009. I was the first Australian minister to attend that organisation, which is an arm of the United Nations, for many decades. Of course, at such a conference there is a ministerial session, and Australia as an island continent, I believe, should be represented at such an international forum. In my speech to the organisation, I explained the damage that had been done to the Australian coast in that particular accident but in others as well and I praised the work of Australian authorities to clean up that mess.

The Australian Maritime Safety Authority is an organisation of which we as parliamentarians can all be proud. AMSA is recognised globally, in what is a global industry by definition, as being one of the best, if not the best, organisations of its type in the world. Having that as a basis to go forward, Australia at that same conference was re-elected to the executive leadership body that we have historically played such an important role in. We were able to secure international support for a change that needs to happen on that international level. I pointed out in my speech to the IMO that the liability levels were inadequate and that that was impacting on Australia but would impact on other nations as well. The international maritime community there agreed. At the time, the leader of the IMO, Mr Mitropoulos, was a great friend of Australia and I acknowledge the work that he did as the leader of the IMO.

The change in the legislation that is before us today is a direct result of that advocacy by Australia—leading the world, going to international forums, putting our position and bringing the world with us. As a result, domestic legislation throughout the world is being amended by the jurisdictions in a similar way to which this legislation before us provides. I thank the Deputy Prime Minister and Minister for Infrastructure and Regional Development for his acknowledgement of that background in his second reading speech.

The bill amends Australian law to reflect the increased international limits. It increases the liability for a medium-sized vessel, defined as 50,000 gross tonnes, by about $33.6 million in respect of claims relating to loss of life or personal injury. The limit with respect to what is defined as ‘any other claims’ will increase by $16.8 million—a 50 per cent increase. It will allow for fair compensation for accidents without lifting the limit so high that shipowners will be unable to obtain insurance cover. This legislation has the balance right and the opposition will be supporting it.

Australia moves about 99 per cent of the volume of its exports by sea. This is worth about 75 per cent of our export income, so an effective maritime sector is absolutely central to the health of our economy. Moving goods by sea in an efficient manner supports jobs, not only in the maritime sector but also in our vast resources and food production industries. At the same time, the health of our coastal areas is also critical to our economy. For example, the Great Barrier Reef is the No. 1 drawcard for tourists, particularly in the booming Chinese market. Tourism related to the reef earns this nation $5.7 billion every year. It support 65,000 jobs. The reef, of course, is about the size of Italy, so it supports those regional cities and towns along the Queensland coast, be it Cairns, Townsville or right down to Gladstone, where Heron Island is such an important part of the tourist industry in that Central Queensland region.

On 3 April 2010, just a year after the Pacific Adventurer incident, the Chinese bulk carrier Shen Neng 1was heading out from the coast of Central Queensland. It ran aground on the Great Barrier Reef east of Rockhampton. The vessel was 10 kilometres away from normal shipping lanes. It gouged a hole in the reef that was three kilometres long and 250 metres wide—the equivalent of about 58 football fields. It created an oil slick more than three kilometres long. There was no Australian pilot on board. The sort of ridiculous anti-Australian rhetoric that we just heard from the member for Bass, being critical of the presence of Australian seafarers and experts—he should consider consequences; consequences that are real, not theoretical; consequences that have happened and have caused economic damage to this country as well as environmental consequences for the pristine Great Barrier Reef.

When that incident occurred, I had the opportunity to fly over the site on an AMSA plane. You could see from the air where the channel was that the ship was supposed to pass through. What occurred in that incident was that the ship just forgot to turn—literally forgot to turn—because the bloke who was in charge of the ship had had so little sleep because of some of the industrial conditions that are placed on these foreign vessels, whereby you do not have the sort of protections, which are in the national interest, that occur on Australian vessels. The seaman in charge at that time on that ship was later sentenced to 18 months in jail for his negligence. This is the kind of incident that underlines the importance of ensuring the protection of our coastal waterways.

Just after that, I travelled to New Zealand. The main port on the North Island, just east of Auckland, was also subject to an incident off that coast. I flew over that site with the New Zealand transport minister in John Key’s government, and you could see the oil slick and the debris going onto the coastline for tens of kilometres. It essentially caused the export sector to shut down while that incident was dealt with. More than 100 people who had expertise came from Australia, from AMSA and other organisations, to assist with that clean-up as the ship broke up in the water, with consequences for that pristine area of coastline in New Zealand.

What did all of these ships have in common? They did not have a flag on the back with the southern stars, or the New Zealand equivalent, and the Union Jack in the corner. They had the flag of countries that simply do not have the same regulatory regimes that we have here in Australia. They do not have seafarers with the same skills that we have here in Australia. Their workers are not given the same breaks, fatigue laws and wages that apply here in Australia. And the consequences! Do you want to talk about the economic consequences of incidents such as that? The differential between paying the Australian wage and paying a Filipino seafarer the wages that are made in the Philippines and other countries on these foreign-flagged ships pales into insignificance.

So when we talk about the economic costs, let’s talk about the full costs of what occurs when there are incidents such as the incident that led to this legislation coming before this parliament. The stakes are very high indeed. Imagine the sinking feeling if you had been a tourism business operator on the Sunshine Coast, in March 2009, as you watched the oil slick from the Pacific Adventurer encroaching on the beaches of that beautiful coastal strip. Imagine wondering about the viability of your business as the media reported the growing cost of the spill, not just here, but internationally. Imagine the cost to tourism and to the national economy. Imagine the cost to our national economy in terms of the resources sector if there is a serious incident on the Great Barrier Reef. The consequences of that, not just for the tourism sector, but for our export sector, would be dire indeed. That is why we need a precautionary approach to these issues, which is why we cannot afford to dismiss the presence of the Australian flag on the back of Australian ships with Australian seafarers as just benefiting the MUA. The bogy is that there are workers, seafarers, who happen to be members of the Maritime Union of Australia. The carry-on that we hear from those opposite really is narrow ideology and nonsense.

The bill before us today is not just about preserving the tourism industry today; it is about making sure, in terms of protections and compensation, that future generations also have access to the Great Barrier Reef, the Sunshine Coast and the coastal wonders right around this country. That is why Labor is so pleased to be supporting this bill, which, as I have said, is a result of advocacy and common sense of the former government. I acknowledge the current government’s good sense in carrying forward this legislation. The health of our environment and the safety of our shipping lanes should not be a political issue on a party level.

While the opposition is pleased to support this bill, I do question the government’s sincerity in its broader approach to maritime issues, as we just saw in the absurd contribution from the member for Bass. On several occasions since the change of government the Minister for Infrastructure and Regional Development has foreshadowed his intentions to wind back Labor reforms to coastal shipping arrangements. These arrangements were worked out, not with the union sitting in a room with the Labor government, but with Rio Tinto; with Shipping Australia; with the Australian Shipowners Association; with BHP Billiton; with committees chaired by the departments of Treasury and Finance; with the Australian Maritime Safety Authority; with bodies from industry and from training; and with the Navy, which relies upon our merchant fleet to give people skills and upon the interrelationship between the naval fleet and the merchant fleet. The arrangements were worked out over an extensive period of time with consultative groups; with a House of Representatives unanimous committee, with the deputy chair, the former member for Hinkler, making recommendations consistent with the processes that are now in place. We worked it through, we had exposure drafts, and we had the most extensive period of consultation possible to get a regime to take us forward into the future.

Do you know what I inherited as minister? The Navigation Act 1912. It had been around for 100 years. There were provisions in that act that related to the ability of a ship’s captain to shoot someone, and be free from prosecution, if they deemed them to be a lunatic. That was in the legislation. Of course, we changed and modernised the legislation with the most extensive program. Yet, what we have from those opposite is even the absurdity of just not knowing the facts. The previous contribution said that these measures were introduced over the last two years of this government. Now, here is the big hint for new people who have just got into this place: when an act is named ‘2012’, that is the year it was introduced. That is the big hint. The election was in 2013, so it should not be too hard to work out that it did not come into practice until 1 July 2013 in terms of most of the provisions, which were in place only for a period of weeks when we were in office. Yet, we have absurd propositions from those opposite with the logic that there are MUA members on ships that have Australian flags on the back of them, therefore, we should not have ships with the Australian flag on the back, and we should abandon the shipping industry. Indeed, the minister stated that pretty clearly. It was an extraordinary speech that he gave. He said:

To put it bluntly, there is no point in artificially propping up our coastal shipping industry if it is unable to compete—it will have an impact on the broader economy.

So, the logic is, if you are paid Australian wages—and under our regime, yes, people are paid Australian-level wages—you cannot compete with Filipino level wages which might be $20 or $30 a day, which is what some of the ships with flags of convenience on the back of them pay, therefore, in a simplistic way, that should happen.

Taken to its logical conclusion, in terms of modal neutrality, should truck drivers also be paid the same wage as truck drivers are paid in Third World countries in the region? I do not think so. I think there are probably consequences for safety, in terms of road safety. There are consequences because they will not be as well trained. There are consequences in terms of safety of others on the road. There are also consequences—that is what this bill is about—for safety and ships that do not operate properly and securely, and we know that a free-for-all on the coast would do just that. What those opposite argue is that if you are taking a ship from Sydney to Melbourne you should not have to pay Australian wages and you should not have to comply with the Australian conditions. Taken to its logical conclusion, why not have this for trucks as well? Why not have trucks that run aground and create all sorts of issues and consequences?

I would be interested in what the difference is in terms of modal neutrality because I spoke at the Australian Logistics Council last week and one of the things that they are concerned about is modal neutrality. Asciano pointed out last week that the increases in costs are about port charges. That is what is going on here. In New South Wales and in Melbourne there have been massive increases in port charges. I met with Bell Bay Aluminium in Tasmania some months ago. I have asked them to provide the information that says there is considerable increase in costs. What they said to us was that that is an assessment based upon what a first bid was in terms of a contract from a particular Australian company.

It was not surprising that normal economic transactions, in terms of the contract, often start up high—you start off at a level of $10, and someone says, ‘I’ll do it for $5’—and you negotiate your way through. That is what happens in terms of economic transactions. But these sorts of grand statements that are being made are just absurd when you look at what the difference is in terms of costs of labour. The number of seafarers operating a modern ship is very few because of the nature of modern ships, and the difference in wages between one and the other is not substantial when you look at the overall costs of the ship, and there has been a substantial reduction in prices, including of oil, in recent times compared with where it was a few years ago.

I am concerned at an example of where the government’s attitude is going. It was shown with the Cairns based tourism venture Coral Princess Cruises. Tony Briggs was the owner of that company. He is not a member of the MUA; he is a businessman operating a business out of Cairns. Coral Princess Cruises has been sold to foreign interests because he could not compete with a Bermuda flagged vessel that began operating in competition. Tony Briggs said that this government’s cabotage changes would make matters worse and damage Australian businesses. Mr Briggs’s assessment of the government’s reform plans was pretty simple. He described them as ‘stupid’. That is what Mr Briggs said. He got straight to the point.

“There will never be another passenger ship built in Australia if there is no certainty on how we can operate,” Mr Briggs said.

“It’s exporting jobs.”

That was what he had to say. Mr Briggs noted that foreign flagged vessels were at a huge advantage because they did not have to comply with Australian regulations, including those of the Australian Maritime Safety Authority. Neither were they bound by Australian rules on wages, occupational health and safety or industrial relations. Mr Briggs also noted:

… and the main thing is they don’t have to pay tax.

That will help the Australian economy! Get rid of that Australian flag—we do not want businesses that pay tax here! It is much better for them to be not paying tax in the Panama or Bermuda, which is why they have those flags on the back of those ships! It is an extraordinary proposition. The Abbott government is happy to sacrifice Australian jobs and businesses to its ideological preoccupations. The national interest seems to be way down its list of priorities. The principle at play here is not the Minister for Infrastructure and Regional Development’s ideological obsessions. It is the principle that a government should do everything in its power to encourage job creation here in Australia. It is the principle that governments should not be making decisions that destroy businesses and jobs and send them overseas.

I make this point: not one of the major shipping accidents that have occurred around our coast in recent times involved Australian flagged vessels that were crewed by Australian mariners. That is because local mariners and ships captains have years of experience working our coastal waterways. Unlike the crew of the Shen Neng 1, for example, they are familiar with the use of the proper sea lanes when it comes to ship movements around the Great Barrier Reef. They understand the environmental sensitivity of the Great Barrier Reef.

When it comes to this debate, those opposite often speak about the free market and, from time to time, they quote the United States as the model for the free market. I say this to them: there is no advanced country in the world that has a free-for-all around its coast like they want. In the United States, if you want to take domestic freight from one port to another by coastal shipping, you have to have the US flag on the back of your ship—100 per cent. Not just that, but the ship has to be built in the United States. That has bipartisan support in the United States. They recognise that there is a bit of a relationship in terms of defence industries and in terms of the capacity as a sovereign nation to have a shipping fleet. Yet this mob want to get rid of it completely; that is essentially what they are advocating. They are saying there should be no regulatory distinction between an Australian ship and a foreign ship in terms of coastal shipping, that whoever can do it cheapest should do it. We in this country have very much a non-protectionist stance—those are the reforms we put in place. We did not say no to foreign ships; indeed, under the act, foreign ships continued to operate around coast. But we do say that where an Australian vessel is available, and can do it on a competitive basis, it should not be excluded from that—which is what would occur if those opposite got their way. I commend this legislation to the House. It is consistent with an approach that recognises the importance of the maritime sector.