Ship to Shore 2014 Conference

Speech

WTS029/2014

12 November 2014

‘Building Safer and Stronger Martime Links’
Crown Melbourne Hotel

Thank you very much, Mick [Kinley, CEO, AMSA].

Good morning ladies and gentlemen, it is a pleasure to be with you. I would first like to particularly thank:

Our chair today, Professor Neil Bose;

The Secretary-General of the International Maritime Organization, Mr Koji Sekimizu and Leo Zussimo, Chairman of the Australian Maritime Safety Authority [AMSA].

Congratulations are certainly in order to Leo and AMSA for the inaugural Ship to Shore conference.

While I'm at it, I'd like to thank Leo, who is retiring, for his service as Chair of AMSA and announce that Stuart Richey has been appointed as his successor and will take up the post at the end of this fmonth.

The Coalition Government came to office last year acutely aware that Australia's economic and social wellbeing depends on our ability to compete in global markets.

A viable shipping industry is essential to Australia's ability to stay ahead in this global game—our exporters fundamentally depend on safe, reliable and cost effective shipping services.

And shipping must carry a larger share of our domestic freight task—we need to capitalise further on the natural highway that the ocean provides.

So, I want to emphasise today that the Coalition Government is committed to work with maritime industries to ensure that we correct the regulatory balance so it fosters strong and safe growth.

We certainly appreciate that Australia's maritime sector constantly deals with a range of safety and environmental pressures.

These are dynamic issues that require all parties—industry, governments and regulators—to remain on top of our game.

AMSA's own role is pivotal, extending across some major ,and sometimes, daunting areas.

As part of its routine work—and I use the word ‘routine’ cautiously—AMSA conducted over 7,800 inspections covering ship and cargo safety in 2013–14, and registered more than 43,000 distress beacons.

These figures reflect the scale of Australia's maritime interests and the effort needed to protect them.

But much of AMSA's work is by definition non-routine—including the Authority's early lead role in the search for MH370.

My thanks to everyone at AMSA for responding so well to the pressures of a demanding year… and doing so not only professionally, but with sensitivity.

Reform

Australia's maritime sectors will remain crucial to the nation's prosperity and progress—and managing their regulatory frameworks requires balancing two principles.

First, our sea-links must be safe and we must avoid damaging the marine environment.

We need a robust, effective regulatory framework to provide this protection—and there are aspects of this framework that must be non-negotiable.

Safety at sea can never be compromised.

Secondly, we also need to guard against regulations that go beyond a useful purpose and impose excessive burdens on industry and the community.

Existing coastal trading shipping laws are out of kilter, which I will come to shortly.

However, the Navigation Act 2012 provides a modern regulatory framework for dealing with maritime safety and pollution.

It is also only prudent that the Act has extended safety regulation to foreign-flagged vessels operating in Australian waters.

The National System for Domestic Commercial Vessel Safety has also been largely successful since it was introduced last year with bipartisan support.

Australian vessels have already benefited from the consistent application of rules—irrespective of their areas of operation around the country.

These maritime safety and environmental reforms are good achievements—but they only begin the journey in domestic commercial maritime reform.

As you know, the Government's red tape reduction target is to cut $1 billion in red tape each year. We've already exceeded that, slashing $2.1 billion in red tape costs so far.

And I have no doubt maritime regulatory can be simplified and costs reduced without compromising safety or the marine environment.

AMSA has already delivered cost reductions to industry through updated standards for vessel accommodation and simplifying requirements for rescue boats.

At the direction of state and federal transport ministers, AMSA is undertaking a cooperative process to streamline Australia's maritime safety regulatory instruments and processes for the domestic commercial vessel sector.

I was pleased to open the consultation process for this effort in May.

AMSA and the maritime sector have considered 13 concepts for streamlining regulatory arrangements, based on matching regulations with need, and reducing costs.

Industry provided very positive feedback to the proposals—and additional ideas.

AMSA has developed a report on the outcome of the consultations and is already moving to implement them.

Only last week AMSA approved on the spot permits or exemptions to allow vessels to immediately operate once survey has been completed.

Work and consultation will continue in other areas.

These and further changes significantly reduce the burden of red tape on businesses.

Coastal Trading Reform

The Government is pressing ahead with reforms to foster a healthy coastal shipping industry.

In July we returned the Protection of the Sea Levy back to its original level of 11.25 cents per net registered tonne—saving the industry more than $9 million a year.

We have also abolished the carbon tax on the fuel used in domestic shipping—saving the industry millions more.

There is, however, much more to do to turn around our predecessor's ideological assault on Australia's coastal trading sector.

The recent trend for coastal trade between Australian ports is deeply worrying.

Between 2000 and 2012, coastal shipping's share of the national freight task fell from around 27 per cent to just under 17 per cent of the total—while the volume of Australian freight actually grew by 57 per cent.

The national interest demands that shipping carries a much greater share of the freight load, not a declining one—and not least to reduce pressure on our road and rail links.

Shippers tell me that container rates from Melbourne to Brisbane are almost twice the cost of those from Singapore to Melbourne.

And that transporting sugar from Thailand is cheaper than shipping it from Queensland.

And while some aspects of the Australian shipping environment are outside our control, frankly, the more immediate causes of the decline in its freight share are not.

They can and must be tackled head-on—particularly the defective legislation that governs coastal trading.

The Coastal Trading Act which Labor inflicted on the statute books in 2012 had an immediate impact on the shipping industry—and a very detrimental one.

The number of major Australian registered ships with coastal licences fell from 30 in 2006–07 to just 13 by 2012–13.

In recent speeches I have highlighted different examples of how the Coastal Trading Act is failing industry—from cement, aluminium, mineral sands and other members of the resources industry, as well as the petroleum industry.

In fact, under the Coastal Trading Act requirements, the liquid fuel industry pays approximately $6.5 million per ship per year—a cost that impacts directly on refining in Australia.

As a consequence of the additional costs imposed, it is no longer cost-effective to carry offshore oil in Australian waters to an Australian refinery for processing.

This is an opportunity lost to the Australian industry of $3.5 million per year which places additional pressure on the cost of refining in Australia.

And as I hear time and time again from other industries which use coastal shipping services, it is now cheaper to import petroleum products from overseas than refine in Australia and transport that product around the coast.

The Coastal Trading Act did not save Australian jobs on the water and has cost jobs on land—and has the potential to cost many more into the future.

By stimulating the coastal shipping industry in this country, shore-based jobs in associated industries can only benefit by increasing shipping activity in Australia and reforms to the Act are the only way to increase this activity.

The Coastal Trading Act is also a classic example of regulatory ‘over-kill’.

The Act's regulations oblige a ship that needs to load a different amount of cargo to that covered by its licence to wait 24 hours before a licence can be amended and loading can commence.

This can generate costs of around $10,000 a day for ships operating under a temporary licence.

This does not help our national cause.

For our part, the Coalition Government is working to help build a more competitive shipping industry.

We recognise the great potential of a coastal trading sector unconstrained by needless red tape and distorted labour arrangements.

We are committed to reforming it.

International

I would now like to turn to some international issues, for maritime safety fundamentally depends on international efforts.

Australia has engaged very actively in these efforts over the past year.

In late 2013 Australia was re-elected to the International Maritime Organization Council—the IMO.

We have since developed a proposal to establish a network of four new two-way routes and a precautionary area at Jomard Entrance, Papua New Guinea, to reduce the risk of collisions and groundings in this crucial area.

And approval of two-way ship routeing measures covering the entire Great Barrier Reef and Torres Strait region comes into effect next month.

Australia has also focussed on progressing the global implementation of the Ballast Water Convention, which the IMO adopted in 2004.

The discharge of ballast water is a significant biosecurity risk and has spread invasive marine species and pathogens around the world.

The Biosecurity Bill—to be introduced into Parliament soon—will implement the Ballast Water Convention requirements.

This will greatly strengthen Australia's defences against invasive marine species.

MH370

The importance of the international dimension to aviation and marine safety is underlined by the challenges Australia and other regional nations face in undertaking search and rescue efforts.

Our own search and rescue region spans a tenth of the earth's surface—and a very remote and difficult 10 per cent much of it is.

These challenges have helped drive Australia's efforts to improve international search and rescue arrangements.

As you would all be aware, in March this year Malaysia Airlines flight MH 370 departed Kuala Lumpur for what should have been a routine six hour flight to Beijing, but disappeared soon after take-off.

Australia continues to lead the search effort for MH 370, working closely with our Malaysian and Chinese colleagues.

This difficult work highlights the importance of international cooperation in search and rescue missions and the need to enhance arrangements with our regional neighbours.

Last month, the Indian Ocean Rim Association member nations signed a Memorandum of Understanding on Search and Rescue Cooperation—to strengthen our regional arrangements, and ultimately save more lives.

Australia has also initiated a new project to build the capacity of Mauritius, Sri Lanka and the Maldives, to conduct search and rescue operations.

This builds on AMSA's extensive experience working with its international counterparts—and clearly shows the common interest in effective search and rescue.

Marine Environment Protection

I would like to conclude with developments in marine environmental protection—a critical area for Australia in both economic and environmental terms.

The growth and increasing complexity of shipping operations creates significant challenges for protecting our marine environmental assets like the Great Barrier Reef.

Earlier this year the National Plan for Maritime Environmental Emergencies was endorsed by the Australian, State and Northern Territory governments providing a single, national and integrated response to minimise the impacts of marine pollution from vessel casualties and spills from offshore petroleum facilities.

Most importantly, the Plan combines pollution response with the management of maritime casualties for the first time in 40 years—and anti-pollution equipment stockpiles across Australia have been boosted to draw on when needed.

The recent release of the North East Shipping Management Plan complements the broad-scale efforts of the National Plan.

This Plan will ensure shipping within the Great Barrier Reef, Torres Strait and Coral Sea continues to be conducted to the highest standards—and identifies potential measures to manage shipping growth into the future.

These include high quality electronic navigation charts and aids; and vessel traffic services that intervene if shipping moves beyond designated shipping areas.

The Plan shows how experience, technology and planning can be combined to produce good outcomes for the maritime sector—and Australia's marine environment.

Conclusion

To sum up, Australia's trade and other maritime links have been fundamental to every aspect of the nation's growth and these links will remain fundamental to the nation's future.

There will also be a continuing challenge to ensure that our regulatory arrangements continue to remain fit for their purposes.

The maritime regulatory reform that the government is progressing is economically significant. It will help make the domestic commercial vessel sector safer and more competitive.

It will also make the work of individuals and companies less complicated and costly—and these benefits will combine to produce major public interest gains.

And I think that future reform efforts can use the constructive relationship that operates between AMSA and the shipping industry as a model.

I am very pleased to have taken part today in the dialogue we must maintain to keep the nation's maritime links safe and strong—and wish you all the best with your most vital professional endeavours.

Thank you all very much.