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Joint Standing Committee on Treaties - 06/02/2012 - Treaties tabled on 2, 22 and 24 November 2011

NELSON, Mr Paul, Manager, Marine Environment Standards, Marine Environment Division, Australian Maritime Safety Authority

TAN, Ms Poh Aye, Section Head, Maritime Policy Section, Maritime Policy Reform Branch, Surface Transport Policy Division, Department of Infrastructure and Transport

[10:34]

International Convention for the Prevention of Pollution from Ships

CHAIR: Welcome. The committee will now take evidence on the proposed amendments to MARPOL Annex VI on Regulations for the Prevention of Air Pollution from Ships by Inclusion of New Regulations on Energy Efficiency for Ships—Resolution MEPC.203(62)—and on Revised MARPOL Annex V: Regulations for the Prevention of Pollution by Garbage from Ships—Resolution MEPC.201(62). These treaties were tabled on parliament on 22 November and 2 November 2011.

Although the committee does not require you to give evidence under oath I should advise you that this hearing is a legal proceeding of the parliament and warrants the same respect as proceedings of the House and the Senate. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. If you nominate to take any questions on notice could you please ensure that your written response to questions reaches the committee secretariat within seven working days of your receipt of the transcript of today's proceedings. I invite you to make introductory remarks.

Ms Tan : Today we are discussing amendments to Annex V and VI of the International Convention for the Prevention of Pollution from Ships, known as MARPOL. MARPOL has six annexes. Annex V is concerned with pollution of the sea by garbage from ships. Annex VI is concerned with air pollution from ships.

On 15 July 2011 the Marine Environment Protection Committee of the International Maritime Organisation adopted a revised Annex V, which will place additional restrictions on the discharge of garbage from ships at sea. On the same day the committee adopted amendments to Annex VI of MARPOL to introduce mandatory carbon dioxide emissions standards, or a required Energy Efficiency Design Index, for ships to be built after 1 January 2013.

Revised Annex V will prohibit the discharge of all garbage waste at sea, except in limited circumstances that will only apply while the ship is enroute, as far as practicable from the nearest land. The discharges permitted in certain circumstances include food waste, cargo residues and animal carcasses. A major change will be that ships will no longer be able to discharge garbage such as paper, cardboard, wood and metal.

Annex V applies to all ships, except as expressly provided otherwise. Every ship of 12 metres or more in length and fixed or floating platforms will be required to display placards notifying passengers and crew of the discharge requirements. The current requirement for every ship of 400 gross tonnes and above and every ship certified to carry 15 persons or more to have garbage management plans has been extended to apply to every ship of 100 gross tonnes and above and to fixed and floating platforms.

Revised Annex V is expected to have minimal cost impact on Australia as many Australian ship owners and operators already follow a policy of not discharging waste at sea, other than food waste in some circumstances. This is fully consistent with revised Annex V. The expansion of the requirements for placards and garbage management plans to fixed and floating platforms is expected to have minimal administrative impact. Australia already has mandatory requirements for livestock management in shipment, including requirements for the disposal of animal carcasses.

With the new regulation, it is expected that demand for waste reception facilities in ports may increase. As waste removal services for ships in Australian ports are almost exclusively provided by private waste removal contractors, any increase in demand is expected to be made through commercial arrangements. Revised Annex V will be implemented by amendments to the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 and Marine Orders Part 95. The proposed amendments to Annex VI represent the first mandatory greenhouse gas emissions reduction measures for an international industry sector. It will help to close a gap in the existing international climate change framework, which currently excludes the shipping sector from emissions reduction targets. Adoption of the proposed amendments is expected to drive uptake of energy efficient technologies by international shipping.

The Energy Efficiency Design Index, or EEDI, is a non-prescriptive, performance based mechanism that sets the emissions target for each new ship. The choice of technologies to use in a specific ship design to meet the emissions target is left with industry. The regulations would apply to all ships of 400 gross tonnes and above, excluding ships solely engaged in voyages within waters subject to the jurisdiction of the flag state.

The Ship Energy Efficiency Management Plan, or SEEMP, establishes a mechanism that requires operators to improve the energy efficiency of ship steering operations. Each international ship of 400 gross tonnes and above would be required to keep on board a ship energy efficiency plan developed in accordance with IMO guidelines. Adoption of the measures by the international shipping sector is expected to remove between 45 and 50 million tonnes of carbon dioxide from the atmosphere annually by 2020 compared with business as usual, depending upon the growth in world trade. This reduction is expected to be between 180 and 240 million tonnes annually by 2030. Australia's adoption of the proposed amendments would assist in ensuring broad international acceptance and would demonstrate our support for global efforts to reduce emissions from the transport sector.

The EEDI requirements would apply to new bulk carriers, gas carriers, tankers, container ships, general cargo vessels, refrigerated ships and combination carriers. Other ship types, such as passenger vessels and vehicle carriers are not included to date as further analysis of data on these vessels is in progress. The required EEDI would be reduced over three phases, 2015, 2020 and 2025, with the amount of reduction varying according to ship type. The amendments to Annex VI will be implemented by amending the Navigation Act 1912, the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 and Marine Orders Part 97. The proposed amendments would incur little or no cost to Australia as the EEDI regulations would only apply to prescribed ships built after 1 January 2013 for international trade. These regulations will not apply to Australian ships that are currently in operation. However, existing Australian international ships that are over 400 gross tonnage would be required to carry on board a SEMP, which is an operational document. This can be achieved at a minimum cost. Administration and enforcement will be largely through AMSA's port state control inspections.

The amendments to Annex V and VI of MARPOL will enter into force automatically. They will be deemed to have been accepted on 1 July 2012 unless prior to that date no less than one-third of the parties to the relevant annex or parties the combined fleets of which constitute not less than 50 per cent of the gross tonnage of the world's merchant fleet have communicated IMO their objection to the amendments. There may be some objections to the annex VI amendments in the IMO from a small number of developing countries, but these are unlikely to be sufficient to prevent the amendments from being accepted. If as expected the amendments are accepted, they will enter into force generally and for Australia on 1 January 2013.

CHAIR: Thank you for your comments. Can I ask you about annex VI? Our notes tell us that marine debris is one of the major threats to the marine environment, estimated to kill more than one million seabirds and 100,000 marine animals each year either by eating them or becoming entangled in them. I can imagine that this question of monitoring the extent of marine pollution and garbage in the sea is a seriously major enterprise. Who does that? Who monitors it and how effect is it at telling us about the extent of marine pollution—whether it is getting worse or getting better or remaining the same?

Mr Nelson : It is a difficult one. With garbage on the beach it is sometimes difficult to establish whether it has come from a ship at sea—which is obviously the area we are concerned about—or some other land based source. We have arrangements with a lot of organisations in Australia—nongovernment organisations and government—so that whenever they do things like beach surveys and beach clean-up activities, they let us know and we try to give them advice on how to tell the difference between something that may have come from a ship at sea and something that may not have. For example, a package that might be in a foreign language or something that has some sort of barnacle or sea crustacean on it indicates that it has been at sea for a while.

It is a challenge in working out what is ship sourced and what is not but we have some data. We do not have a lot of data in Australia but there is a lot of international data that has indicated that the problem is getting worse. We do what we can in Australia but there are certain challenges to interpreting the data.

CHAIR: Does MARPOL, the International Convention for the Prevention of Pollution from Ships, have a framework or a structure for trying to get this data in to measure and monitor the extent of marine pollution that is going on?

Mr Nelson : No, the convention itself does not. That is up to the member states working through the International Maritime Organisation. They have a committee called the Marine Environment Protection Committee. Any member states that have data on the marine debris problem that indicates that it is getting worse or getting better or which is relevant brings it to that committee meeting and the committee members determine whether any amendment might be necessary to the convention. So the convention does not have anything explicit in it in terms of monitoring and data. It is up to the member states, working through the International Maritime Organisation.

CHAIR: There was reference in the introductory comments about amendments being needed to legislation, such as the Protection of the Sea (Prevention of Pollution from Ships) Act. What are our current legislative requirements for the disposal of garbage at sea?

Mr Nelson : The current legislative requirements reflect the current version of annex V of MARPOL. That current version says that ships are able to discharge certain types of garbage at sea. For example, if a ship is more than 12 miles from the nearest land, at the moment they are able to dispose of some types of waste, such as bottles, paper, cardboard and so on under certain circumstances. These amendments are essentially tightening that existing requirements. From 1 January 2013, ships will no longer be able to dispose of those types of waste more than 12 miles from sea. It is essentially a tightening of the whole regime.

Ms BIRD: I am just trying to understand how this works. Does it apply a requirement on signatories to ensure there is an on-land capacity to deal with the garbage? I note that you say the commercial sector can take it up, but what happens if they cannot? Is there an obligation on us? Do we have to do an assessment of the capacity of the private sector to manage it? I am just trying to get my head around how that works.

Mr Nelson : There is an obligation on all parties to the convention to ensure that facilities are available in ports to receive garbage from ships. In Australia that issue tends to be up to the states and I am aware that Queensland and New South Wales have specific legislation that applies. Other states, for example, might have the requirement as part of the licensing requirements for ports. So states look after it in a different way, but there is an obligation on parties. From the perspective of the Australian Maritime Safety Authority, we have a program in place where we go and audit ports, not a lot but we aim to do two or three ports every year. We will go and look at the facilities that are available in the port and test them against the International Maritime Organisation guidelines. They have audit guidelines that we follow. Sometimes there are communication problems and so on, but most of the issues we have tend to be in some of the bulk ports, the major ports up in the north-west of Western Australia and in Queensland—it is very difficult to drive a waste removal truck up next to a ship if a ship is berthed one or two nautical miles offshore on a narrow jetty. So some of those infrastructure issues can be a problem in some of the bulk ports, but otherwise the system seems to work okay. As it says, if there is a need to dispose of waste and the ship agents will pay money to do it then the waste removal contractors tend to be available.

Ms BIRD: Is there consultation with the states on capacity when we go into an arrangement like this, which we presume will increase the demand?

Mr Nelson : Yes. When these amendments were adopted last year we certainly wrote to all of the ports and people like the Australian Customs Service, because it is relevant to them as well as there will be more waste coming ashore that will quarantinable. There are a lot of stakeholders involved in the issue of providing facilities, so we have been in touch with states, ports, customs, and quarantine.

Dr STONE: One of the amendments is to do with fishing gear. We all know about the problems of ghost fishing. One of the major hazards for marine life is lost overboard or deliberately abandoned fishing nets off ships. I understand the idea is that now when someone has lost some fishing gear they are to report this to the ship's flag state. Then the coastal state will take over. What incentive is there for the ship to report the loss of the fishing gear overboard, the nets and so on? Are there any sanctions? I can understand a ship and its company would be very regretful if that happens. It is a big cost to them. I am wondering what changes, other than saying, 'Will you please now report this.' Are there any sanctions, inspections, efforts to identify the found fish net with the source and so on?

Mr Nelson : One of the additional stakeholders we have consulted with that I did not mention before is the Australian Fisheries Management Authority. We have certainly contacted them about these amendments and we propose to discuss more with them about how to roll these requirements out for the fishing industry in Australia in terms of whether that requirement to report can be made part of a licensing obligation. Whether they intend putting sanctions in their legislation at this stage I am not sure. You are right: with ships at sea sometimes sanctions can be difficult. We tend to rely on inspecting the ships when the ships come into port and making sure their record keeping is accurate and making sure that, as far as the inspection goes, the ships seems to be meeting all the requirements of the convention. What they do out at sea can sometimes be difficult to monitor.

Dr STONE: So if we found a substantial amount of netting that we could identify with a particular type of fishing and maybe there is some identifier whereby we can actually locate its source, under this new agreement, what happens?

Mr Nelson : Potentially they could be subject to prosecution.

Dr STONE: Who would prosecute them?

Mr Nelson : We will have to talk about that with the Australian Fisheries Management Authority because it is essentially their legislation that would be amended. But under our legislation if the vessel contravenes MARPOL they are subject to penalties and it is up to the Director of Public Prosecutions to mount a case based on evidence.

Dr STONE: So it is still a work in progress, basically?

Mr Nelson : For the fisheries side of it, yes.

Dr STONE: It would seem that a suggestion that people notify when they have lost their gear overboard does not hold many teeth.

Senator THISTLETHWAITE: You mentioned earlier the audits that are undertaken by the department of the port facilities throughout the country. Have those audits uncovered any possible redevelopment of ports that will need to be undertaken to ensure compliance with the convention, and will there be any costs associated with that and who will bear those costs?

Mr Nelson : Certainly one of the things we do as part of the audits is try to look at what new port developments are happening in the next few years. There are a lot of Australian ports that are growing, particularly the bulk ports. So essentially we try to ensure in the planning stages of any new facilities, if it is a wharf or jetty, that they take into account the need to accommodate some sort of waste removal process, whether it be access for trucks alongside the wharf or access for a barge that can come alongside the ship and take the waste. These audits are not subject to any legislation at all; it is purely voluntary at this stage. So our advice to the ports is to ensure that they put into their planning and licensing requirements the need for berths for ships.

Senator THISTLETHWAITE: Are there any current port facilities that will pose a problem?

Mr Nelson : We did an audit in Dampier in 2010. There is obviously a lot of development going on up there. Again, we passed on the information that any new berths for a ship needs to take into account the need to remove waste from that ship. In terms of potential problems, we would have to go back and have a look at how that plan is coming along. I think we are doing another audit in Townsville sometime this year. Again, I think that is a port that is growing as well, so we will be looking at that with some interest.

Senator THISTLETHWAITE: So there should be no costs to the government for implementation?

Mr Nelson : No. Again, any costs would be on the company installing the new facility just to ensure there is access to the ships to remove waste.

Senator FAWCETT: From garbage to the energy efficiency side of MARPOL, how many ships in the Australian flagged fleet are in that category of being more than 400 gross tonnes?

Mr Nelson : I will have to take on notice the exact number, but I think there are fewer than 100 ships over 400 gross tonnes.

Senator FAWCETT: You will probably have to take this notice as well then, but do you have any feeling for the age of the fleet? The purpose of the question is that I note the requirements apply to new builds after 2013 or to major refits. So obviously if a sizeable portion of that fleet is old that will then impose on the owners either a decision to scrap and build new, to run an existing ship without the upgrade, which will have a higher cost, or to do the refit to meet the new standard. Any of those outcomes is a higher cost for the owners, so I am just interested to know what that impact is on Australian industry.

Secondly, it talks about the flag nation government or their delegate essentially carrying out the surveys and certification to check that these things are in place and are working. Is AMSA going to be the body that does that in Australia?

Mr Nelson : No. We authorise what we call classification societies in Australia, such as Lloyds Register of Shipping, Det Norske Veritas and the American Bureau of Shipping. I think there are six or seven authorised in Australia to do this. We call them recognised organisations. We have formal arrangements in place with those organisations to do that work for us.

Senator FAWCETT: So they would wear the cost of upskilling and putting their own procedures in place for people to do that sort of certification?

Mr Nelson : Yes.

Senator FAWCETT: Lastly, it says ships in the existing fleet that are over that 400 gross tonnes have to have the energy efficiency management plan. Whatever their baseline energy use is, is there a target that that plan is supposed to achieve or is this largely a rubber-stamping exercise—'I have a plan; it does not do anything, but I have a plan and therefore I can trade'?

Mr Nelson : No, there is a target. They call it the energy efficiency operational index, I think—I can provide that. There is an IMO guideline on the target for the shipboard energy management plan.

Senator FAWCETT: Has there been consultation with Australian industry as to whether they believe that those targets are reasonable and do not impose undue costs on the operation of their legacy ships?

Mr Nelson : Yes. We have consulted with the Australian industry over several years during its development at the International Maritime Organisation. Every time we have a delegation going to that meeting we consult with the Australian shipping industry. In fact, occasionally the shipping industry send delegates as part of the Australian delegation. We have been consulting on this all the way along. There were initially some concerns about passenger vessels, but the passenger vessels' EEDI has not yet been developed because there are some problems with calculating the efficiency design index when you are not carrying cargo but are carrying passengers. That is ongoing work at the IMO, the International Maritime Organisation. But on the other types of ships, the Australian industry has not expressed any concerns about that index.

Mr FORREST: In the opening remarks and again in the national interest assessment it is said that there will be minimal cost impacts to shippers. In the interests of my exporters, I want you to assure me that some sort of comprehensive assessment has been done that justifies that statement, or is it a throwaway line? What sort of economic assessment has been done that can justify the statement that there would be minimal costs?

Mr Nelson : Are you talking about the Annex VI amendments, the EEDI?

Mr FORREST: All of it. The comment seems to apply to both Annex V and VI. Perhaps you could clarify that. Have you done a comprehensive economic analysis that justifies that statement?

Mr Nelson : Probably the short answer is no. However, as I said, we have consulted with all the stakeholders right through this exercise. For something like the energy efficiency design index the only cost in terms of an existing ship is ships will have to have a plan on board. The only additional cost for a new ship will be that when a new ship is built it will be built to certain design criteria. The new ship may end up costing more, but for existing ships the only cost will be that they will have to have a shipboard energy management plan on board. Those plans generally, if the ship follows them, would reduce costs. Ships would use less fuel and cost less to run, so there is an incentive for all operators to follow those plans. On the garbage issue, it is a matter that ships simply cannot dispose of as much garbage at sea, so they will have to bring it back to port. The additional cost would be unloading the garbage in port and additional costs in reception facilities in port.

Dr STONE: Sorry to interrupt your line of thinking, but that is the worry I have. If you are now going to be charged for having your garbage collected in port, that would be a major incentive to dump it out at sea, wouldn't it?

Mr Nelson : Yes. This is the arrangement that has been in place for many years and is currently in place. We are saying that these amendments will likely increase the demand for facilities in port. If you are a ship coming into port, instead of unloading maybe four or five tonnes of waste you might be unloading 10 tonnes of waste. Yes, there will be an additional cost and I do not disagree in some ports—very few in Australia—a flat fee would be charged for waste removal as part of the port fees. That would mean no extra money would be paid by the ship for disposal of waste; it would be paid regardless of whether they use it or not. That removes that incentive. That is an issue, I agree, and internationally it is recognised. I think some ports in Australia—Geelong is one example—apply a flat fee, but most ports have a fee-for-service arrangement. You are right, that can be a disincentive.

Dr STONE: Not to mention the additional landfill and potentially noxious waste sites that we will need to have near ports in Australia.

Mr Nelson : I guess the other thing is that one of the reasons with these amendments that we have been able to do this or the industry has been able to do this is that the technology on-board ships is improved a lot. They now have much better shipboard incineration, much better compacting of the waste, whereas previously those sorts of facilities were not generally available. So the technology on-board ships for dealing with waste has also improved. That is another reason that this could happen.

Mr FORREST: I gather you do not stand by the statement that there will be minimum cost impacts to my exporters.

Mr Nelson : We do, yes.

Mr FORREST: You do.

Senator BIRMINGHAM: Thank you both for your evidence today. The NIA for the amendments to annex 6, at para 24, says that AMSA will carry out investigations and prosecutions of alleged breaches where it has jurisdiction. What are the limits on jurisdiction for such prosecutions of ships using ports in Australia?

Mr Nelson : For MARPOL Annex VI or all MARPOL legislation generally, the arrangement is that if a state has its own legislation implementing those requirements they will have the jurisdiction for any enforcement action. If the Commonwealth has the legislation and the state does not then it would be the Australian Maritime Safety Authority with the jurisdiction. Under Annex VI of MARPOL no state currently has legislation that gives effect to these requirements, so if there is any breach of this legislation in an Australian port it would be within the jurisdiction of the Australian Maritime Safety Authority.

Senator BIRMINGHAM: So there is no restriction to jurisdiction that relates to the flag of the vessel in question or anything like that.

Mr Nelson : No.

Senator BIRMINGHAM: You indicated, Ms Tan, in the opening statement that there were some countries likely to reject the amendments to Annex VI. Are you able to tell us whether any countries have already done so?

Ms Tan : In terms of adopting the amendments to Annex VI, we will have to take that on notice because, as we mentioned, the amendments were adopted last year and I think many countries would be undertaking a similar process of assessing whether their government would want to adopt. But we would be happy to take your question on notice.

Senator BIRMINGHAM: Thank you. And for any countries that do reject adoption of the amendments to Annex VI, do the provisions of Annex VI still apply equally to those ships in terms of enforcement were they to enter Australian ports?

Ms Tan : Yes, it would apply.

Senator URQUHART: This is the fourth time in two years that AMSA has indicated that a new set of inspection measures will need to be implemented through its usual processes. Will these obligations require AMSA to seek additional funding to undertake these?

Mr Nelson : No. When our marine surveyors go on board a ship to do what we call a port state control inspection, there is a fairly extensive list of documents they have to sight. I think the MARPOL Annex VI amendments will add one additional document to that; two additional documents if you count the SEEMP, the energy efficiency plan. So there will be two additional documents our marine surveyors will have to look at. It might take an extra time during the port state control inspection but at this stage we are not envisaging any additional resources needed for these amendments.

CHAIR: As there are no further questions, thank you for attending to give evidence today. If the committee has any further questions, the secretariat may seek further comment from you at a later date.