Nov 25, 2015

Maritime Legislation Amendment Bill 2015, Second Reading

Mr ALBANESE (Grayndler) (09:13): Few things are more important than ensuring that the legislative framework for protecting our environment is as effective as it can be. This is especially so in the area of shipping. When accidents occur on the high seas they can have devastating consequences. For instance, in June 2007 the Pasha Bulker ran aground off Nobbys Beach at Newcastle during a storm. This required a dramatic helicopter rescue of the crew, made up of Korean and Filipino mariners. The subsequent investigation raised concern about the failure of the ship’s master to take on ballast, or to weigh anchor and move offshore before the winds associated with the storm reached gale force. In March 2009, the Pacific Adventurer lost 30 containers overboard in heavy seas, with one or more piercing the hull as they tumbled overboard. The result was a 60 kilometre long oil slick that hit the beaches of the Sunshine Coast and the northern part of Moreton Island. The clean-up bill reached $34 million and led the then Labor government to successfully seek to increase the liability limit under the 1996 Convention on Limitation of Liability for Maritime Claims.

A year after that accident, the Chinese bulk carrier, Shen Neng 1, ran aground on the Great Barrier Reef east of Rockhampton. The vessel was 10 kilometres away from normal shipping lanes. I flew over that incident on one of the AMSA Dornier aircraft and could see for myself where the channel was and where the ship simply forgot to turn and kept going in a straight line to hit that reef with catastrophic damage. It tore a hole in the reef that was three kilometres long and 250 metres wide—the equivalent of about 58 football fields. Not long after that, the Liberian flagged vessel Rena hit the Astrolabe Reef off Tauranga in North Island, spilling 350 tonnes of oil into the Bay of Plenty. The accident shut down New Zealand’s export sector. The captain and the navigator of the vessel were later jailed for seven months for incompetence. At that time, I, along with the New Zealand minister, flew over the site while it was there off the coast of New Zealand’s most significant export port and there Australian safety experts from AMSA and other organisations provided vital assistance to our Kiwi neighbours at a time of extraordinary stress.

In an island nation like Australia, which relies very heavily on tourism to generate income, on the beauty of our pristine natural environment, we need to ensure that the strictest possible controls are placed by this parliament. We are coastal people. We love water. So do the more than 6.6 million tourists who visit our nation each year supporting an industry that employs more than one million people. But it is not just the waters around the Australian coast that we should be concerned about. Consider the consequences if there was a major shipping accident in Antarctica, one of the few pristine environments left on the globe. It hardly bears imagining and that is why Labor will support the bill that is before the parliament today. As much as we value and want to encourage the maintenance of a vibrant shipping industry, we regard environmental protection as a key role of government. We will always take a conservative view when it comes to balancing economic activity and the environment.

This bill seeks to amend Australian maritime legislation to better align it with our obligations under the new International Maritime Organisation conventions. It also amends the definition of ‘dangerous goods’ in the Navigation Act. The bill changes four acts. Critically, it closes a loophole that potentially allows heavy grade oil to be used as ballast in Antarctic waters and it ensures that the Australian Maritime Safety Authority can take appropriate enforcement action against vessel operators who do not carry appropriate insurance certificates. It is completely appropriate that the parliament support these changes. More than 25,000 international vessels visit our waters each year. More than 99 per cent of our exports are moved by sea. The potential for accidents is real and it must never be underestimated so we must always take the precautionary approach. That is why at every turn we should ensure our legislative protections are as strong as they can be and are kept up to date. While accidents will always happen, there is nothing accidental about making sure our legislative regime is up-to-date and fully in accordance with international conventions. Labor will support this legislation because it is in the national interest. But I note that other proposals before this parliament relating to shipping run against the national interest and are counter to the principles and philosophy which supports this legislation.

I speak specifically of the Shipping Legislation Amendment Bill 2015, which passed through the House of Representatives on 14 October and which the government seems very reluctant to bring on to a vote in the Senate. This is ideologically driven legislation which should be rejected by the Senate because it is completely at odds with the legislation that is before us today. That is because it increases the risk of shipping accidents. It does this by opening the way for foreign flagged vessels paying Third World wages to undercut Australian flagged vessels. The government is engaged in this extraordinary proposition because it wants to destroy the Australian shipping industry. It sees no preference in the regulation and legislation being provided for and indeed removes the very definition of what an Australian ship’s. Why does it do that? It does that because the legislation provides for no preference at all between an Australian ship and a foreign flagged ship. So, if there is no distinction drawn, there is no need to define what an Australian ship is. It removes any reference to there being a national interest in revitalising Australian shipping. It is bad legislation. Indeed, the legislation itself explicitly says that it will result in a loss of Australian jobs. It says this in the explanatory memorandum itself. I quote:

Many of the operators currently operating under the Australian General Register would likely re-flag their vessels in order to compete with the foreign operators who enjoy the benefit of comparatively lower wage rates. Australian seafarer jobs would be adversely affected as Australian operators re-flag from the Australian General Register.

Ship operators are likely to replace Australian seafarers (paid under EA rates) with foreign seafarers (paid under ITF rates).

There it is. An extraordinary thing has happened. Before this parliament legislation is brought forward that says very explicitly, in the explanatory memorandum that a majority of the House of Representatives members voted for, that this will result in a reflagging—that is, the Australian flag taken off the back of ships and replaced by the flag of Liberia or the flag of Panama or another flag of convenience. It says it there in the legislation. It also says that Australian seafarers will be replaced by foreign seafarers being paid foreign wage rates. Extraordinary. The regulatory impact statement that is also a part of the legislation says this, and I quote again:

… Australian reliance on foreign shipping services is likely to grow in the coming years as ships continue to leave the Australian fleet due to retirement or reflagging overseas to pursue more favourable taxation and employment environments.

It continues, and I again quote directly:

Should a less regulated coastal shipping regulatory system be implemented, it is likely that some operators of Australian ships will seek to move to the lower cost model and flag their ships overseas. This would allow operators to offer all workers on the now foreign flagged ships internationally competitive wages and conditions.

At the moment, if you have a foreign ship being used around the Australia coast on the domestic freight task it has to pay Australian wages, just like if you are a foreign company in Australia involved in trucking or involved in the rail sector or involved in any other task you have to pay Australian-level wages. That is what we do as a nation because if you do not do that of course the Australian based industry cannot compete, and that is what the legislation says very explicitly. Therefore, the Australia based industry will be replaced by a foreign based industry paying foreign wages. There is nothing clearer, no clearer example, than a race to the bottom—in this case, a race to the bottom of our seas. That is what this legislation represents. This is Work Choices on water. This is unilateral economic disarmament, because there is no other advanced nation in the world that allows for a free- for-all with regard to domestic shipping tasks.

Indeed, in the United States under the Jones Act, in the land of the free market, not only does every ship that is engaged in coastal trade around the US coast have to have a US flag and US seafarers on it but it has to be built in the United States as well. Because the United States has understood for decades, since the First World War when the Jones Act was a response to that war, the very real national security connection between its merchant fleet and its naval fleet, the skills transfer and the practical benefit of having the presence of its national flag around its coastline. Yet here in this chamber, the majority of members voted to remove the Australian flag and replace it with a foreign flag around our coast. Indeed, while the government has advanced this legislation as an attack on red tape, the regulatory impact statement states very clearly that 88 per cent of the perceived benefit of the legislation is attributable directly to the difference between Australian wages and foreign wages—that is, almost all—and that is the very purpose of this legislation.

In the section of the regulatory impact statement discussing non-bulk trade across Bass Strait, the advice could not be clearer. It says, ‘We assume four vessels will register under a foreign register to reduce operating costs’—that is, four out of six ships that are engaged in that activity. So there can be no doubt the legislation will put people out of work because it is designed to put people out of work. Already Alcoa, which made a submission to the Senate committee that examined this legislation supporting it, has made a pre-emptive decision to replace its ship that undertakes trade movement, the MV Portland, from Victoria round to Western Australia and return journeys. The department, in a clear breach of its own legislation and its responsibilities to implement the legislation that is in place today, has granted temporary licences for an activity that is anything but temporary, that is a part of the very operation that Alcoa undertakes between Western Australia and Victoria. And those loyal employees of Alcoa have been asked to staff that ship, take it to Singapore where it will be sold and they will be made redundant. That is a decision which flies in the face of the legislation that the department and the government have a responsibility to actually follow.

Attempts by the minister for transport to deny what the effect of the legislation would be have collapsed at the first hurdle, at the Senate Standing Committee on Rural and Regional Affairs and Transport. Perth businessman Bill Milby of North Star Cruises told the committee’s hearings last month that on 20 May he attended the minister’s formal announcement of the shipping reforms. During the question-and-answer session following the minister’s speech, Mr Milby asked the minister whether he was aware that these changes would damage his coastal cruising business. The minister asked Mr Milby to speak to the department. Indeed he did speak to the department official Judith Zielke and asked what he could do to prevent the changes putting him out of business. According to Mr Milby, Ms Zielke told him he should deregister his vessel, reflag it, sack his Australian crew, re-register the vessel overseas and hire a cheap foreign crew. On June 16, Mr Milby came to Canberra to speak to Ms Zielke and Mr Michael Sutton, where received identical advice. The department in the evidence confirmed that this was given. They said they did not tell him that he should do that. Of course they did not; they gave him options—the option was reflag your vessel or go out of business. They were the options, and they are the options that are there. I do not blame the department on this occasion for that advice, because that advice is consistent with what the legislation says very clearly and very explicitly. The intent of the act is to put Australians out of work. If this legislation becomes law it will lead to an increase in foreign flagged vessels working our domestic trade routes in defiance of Australia’s economic and national security interests.

The proposals also defy our environmental interests. What do the Pacific Adventurer, the Pasha Bulker, the Shen Nengand, in New Zealand, theRenaall have in common? None of them had the Australian flag, or in the Rena’s case the New Zealand flag, on the back of those vessels. All of them were foreign flagged ships. All of them resulted in considerable damage being caused to the Australian environment, something that this legislation before us today quite rightly seeks to avoid.

Logic tells you that Australian mariners will be far more familiar with our coasts than will the crews of foreign vessels. Australian vessels also observe our shipping laws with regard to workplace health and safety. You do not have circumstances, as occurred under the Shen Neng, where the captain says he has not slept for more than a day. You do not have those circumstances. The cost of that flouting of occupational health and safety rules and regulations was washed up when that incident occurred on the Great Barrier Reef. We can have less confidence if we have a system whereby it is just a free-for-all around our coasts—let alone the national security interest whereby Australian mariners are subject to the maritime security identification card and to very strict security protocols and checks. The truth is that foreign seafarers do not have MSIC cards and are not subject to those same checks. At a time of international insecurity it is extraordinary that we would say that there is no distinction at all there. At the beginning of the speech, those four incidents were all there.

I spoke last night to the Maritime Industry Australian Ltd dinner, along with assistant minister McCormack, representing the government. Industry is on the same page as the workforce, as anyone who examines this other legislation. I again reiterate to the government our preparedness to look at changes to existing legislation that will boost productivity and that will make a difference without ensuring that the Australian flag is removed from around our coasts. We want to reduce business costs. We also want to employ Australians. It should not be beyond the wit of the government to support that also. Industry supports that. It was a very successful function last night. The Norwegian ambassador gave an articulate and extraordinarily detailed contribution about the importance that the maritime sector plays in the Norwegian economy. Norway is a maritime nation that has a very small portion of the world population but represents five per cent of the global shipping industry. It has a high-wage economy and has worked on innovation, on maritime clusters and with its workforce in a cooperative way, with the support of the government, to achieve good outcomes for Norway. That is the way forward for Australia—not a low-wage race to the bottom but using our innovation, our skills and our capacity to grow our maritime sector.

We will be supporting this legislation because we believe that protection of our marine environment is absolutely critical, but we will also be consistent about it and will support propositions across the maritime legislative framework that also seek to protect our environment. I commend this bill to the House.