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Thursday, 9 October 2003
Page: 16002

Senator MINCHIN (Minister for Finance and Administration) (10:28 AM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

The Maritime Transport Security Bill 2003 (MTSB) is of vital importance to Australia's national interests. It is crucial to the protection of Australian citizens, trade by sea and maritime transport infrastructure.

Devastating world events and terrorist acts continue to shape the global security environment. Industry, consumers and governments are being forced to reconsider the ways in which they do business.

Internationally, there are increasing concerns that the shipping sector is an attractive target for terrorist action. The disabling of the French oil tanker, the Limberg, off the coast of Yemen in 2002 confirms that terrorists are increasingly focusing on shipping as a potential target.

Disruption and destabilisation of sea borne trade would have serious economic consequences for the international economy and Australia is particularly vulnerable. Australia has just over 12% of the world's shipping task, and the value of Australia's export trade carried by sea is around $100 billion per annum. A recent report from the OECD on the economic impact of potential incidents emphasises that any major breakdown in the maritime transport sector would fundamentally cripple the world economy.

Commercial shipping, by its very nature, is an international industry. A ship could be owned by a company in one country, flagged to another country, crewed by another country, carrying cargoes from any number of countries, traversing through the territorial waters of any maritime nation in the world. With 80% of the world's trade transported by sea, the maritime sector must incorporate preventive security into its day to day business thinking. However, nation states can not deal with maritime security in isolation from the rest of the world.

The International Maritime Organisation (IMO) moved quickly in the wake of the September 11, 2001 terrorist attacks in the United States to establish an international preventive security regime for the maritime transport sector.

In December 2002 at the IMO Diplomatic Conference, 104 Contracting Governments, including Australia's major trading partners, agreed to amendments to the Safety of Life at Sea Convention, or SOLAS, to which Australia is a signatory. Amendments were made to Chapter XI and a new Chapter XI-2 was developed and adopted.

The new Chapter sets out the International Ship and Port Facility Security Code and Contracting Governments, such as Australia, will need to be compliant with its provisions by 1 July 2004. The Code sets out a robust framework for the establishment of an effective preventive security scheme for the international maritime sector.

The Code places clear obligations on Contracting Governments to implement preventive security arrangements and the consequences arising from non-compliance are significant. Key trading partners, most notably the United States, have clearly indicated that they will be adopting a zero tolerance approach to international ships which do not comply with maritime security requirements. The implications for our international trade from any non-compliance would be significant.

At the Australian Transport Council meeting in May 2003, Transport Ministers agreed to the establishment of a nationally consistent preventive security framework consistent with the ISPS Code and expressed a clear commitment to meeting the international deadline of 1 July 2004.

In recognition of the importance of a national approach to reducing the vulnerability of our maritime transport sector to terrorist attacks, it was also acknowledged that the Commonwealth Department of Transport and Regional Services should assume the role of maritime security regulator. The Australian Government has allocated additional funding to the Department to fulfil this regulatory responsibility.

The Australian Government would like to commend the States and the Northern Territory governments, and industry for their cooperation in moving forward on this important preventive security regime.

The Maritime Transport Security Bill 2003 provides the legislative basis for the implementation of the ISPS Code into Australia. It establishes an outcomes-based preventive security framework that enables the maritime industry to develop individual security plans that are relevant to their particular circumstances and the specific risks that they face.

The Bill also sets out a nationally consistent enforcement regime, supported by appropriate penalties. It is imperative that certain offences carry significant penalties in light of our reliance upon the maritime industry for our trade and the public harm that could result from an incident. The enforcement regime will enable government and industry to effectively control the new security arrangements and will help ensure broad compliance with the new measures.

Significant decision making power—and fiscal control—is given to port, port facility and ship operators to develop security measures that are commensurate with the risks they face. This flexibility will be balanced in some areas by the need for more prescriptive standards to ensure national consistency, for example, in the area of passenger screening.

Individual security plans for Australian ports, port facilities and Australian regulated trading ships on interstate and international voyages will need to be approved by the Department of Transport and Regional Services to ensure that desired national maritime security outcomes, including adherence to certain minimum requirements, are achieved. Effective audit and compliance arrangements will be in place to ensure that industry is complying with their approved plans.

The Bill takes account of the complex jurisdictional responsibilities for maritime operations across the country and it has the flexibility to deal with the wide variety of different structural and operating arrangements that exist in the industry. The operational detail of the preventive security scheme will be outlined in regulations and these will be drafted in consultation with the States, Territories and industry stakeholders.

The Department of Transport and Regional Services will be responsible for the verification of compliance by foreign flagged ships with the international security arrangements when they are in Australian waters. Foreign flagged ships that ply the Australian coast will have to hold a valid International Ship Security Certificate issued by their Flag State and provide important pre-arrival security information before being allowed to enter Australian ports.

In the event that foreign ships are found to be non-compliant, or if we have reasonable grounds to suspect they are non-compliant, the Bill allows control measures to be imposed on these ships, including potential expulsion from Australian waters. We have a reputation of being tough on foreign ships that don't comply with international safety and environmental rules, and it will be the same with security.

The preventive maritime security regime embodied in the Bill will complement and strengthen existing border protection legislation. It is preventive in nature and will complement existing Commonwealth, State and Territory Government response mechanisms to unlawful incidents, including those embodied in the national counter-terrorism arrangements.

In Australia the new arrangements will affect around 300 port facilities in about 70 ports and 70 Australian flagged ships involved in international and interstate trade. Consistent with the existing arrangements for protection of our critical infrastructure generally, the maritime industry will be responsible for funding the security measures identified in their security plans. While the Australian Government recognises that the cost to the maritime industry will be significant, security costs are now part of the normal cost of doing business in the changing global environment.

Overall, the Bill strikes the right balance between prescription and flexibility while enabling our national security objectives to be met. It will ensure that our reputation as a safe and secure trading nation is maintained.

Ordered that further consideration of this bill be adjourned to the first day of the next period of sittings, in accordance with standing order 111.