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Rural and Regional Affairs and Transport References Committee
04/12/2015
Flag-of-convenience shipping in Australia

SUMMERS, Mr Dean, Coordinator, International Transport Workers' Federation

CHAIR: Welcome. Do you have anything to add about the capacity in which you appear before the committee?

Mr Summers : I am the national coordinator for the International Transport Workers' Federation in Australia. My responsibility is to prosecute the flag-of-convenience campaign in the Australian ports with the assistance of a number of dedicated and full-time inspectors, along with a raft of other workers who are aware of or familiar with the campaign objectives. They are wharfies, maritime workers and others in ports and areas that see seafarers firsthand.

CHAIR: Thank you, Mr Summers. The committee has received your submission as submission No. 22. Would you like to make any amendments or additions to your submission?

Mr Summers : No, there are no amendments or additions. It is pretty lengthy in its approach, but when I do the introduction I will explain it a bit better.

CHAIR: For the record, I have known Mr Summers for over 20 years since we were both baggy assed organisers in Fremantle for different unions. I am probably not allowed to say that but, anyway, we were. Mr Summers, would you like to make a brief opening statement before we go to questions?

Mr Summers : Sure. I will try to keep it brief. This inquiry came to life because of the events on the Sage Sagittarius, a Panamanian flagged coal vessel owned by a Japanese company and crewed by a full Filipino crew of seafarers from the captain down. The events on that vessel are now a matter of fact through a coronial inquest. The first fatality on board that vessel was a man overboard, and we now know from the inquest that that man was the chief cook who had told the captain a few days before that if he did not stop harassing, bullying and hitting the messmen he would go to Dean Summers of the ITF in his next port in Newcastle, only days away. That evening, the chief cook went missing over the side and was reported man overboard. His body was never recovered.

Paddy Crumlin is correct in that, if the ITF had not pushed the issue by going to the press and trying to publicise this unaccounted death and some of the information that we had received from the crew, specifically that they had adopted a citadel situation inside the ship for their own protection, nothing would have happened. We did go to the press and the ship, as a result, was detoured to Port Kembla so the federal police could investigate. They did an investigation and said, 'Come back to Newcastle.' On her way through the heads of Newcastle, the chief engineer was coshed on the back of the head and fell some 12 metres in the engine room to his death. This also is a matter of fact through the inquiry. It is still ongoing, but those facts have already been established.

Another investigation was immediately ensued by the New South Wales Police Force and it goes to the question of jurisdiction. The New South Wales Police Force, in their investigation, finally let the ship sail back to Japan. When she was in Japan discharging with her own gear, the Japanese national superintendent was discovered caught up—munched—inside of the self-discharge equipment, which was also highly suspicious. We were able to get some national attention on this and shine a light on this. This is what flag of convenience represents. This is what the flag-of-convenience system provides for. It does not generate this, but it provides for this. We said to the public and we said to the Four Corners program, that if this is the system that provides for FOC, and if the Australian government is intent on doing away with the Australian industry, then this is the industry, this is the style and registration of shipping that immediately comes in and fills that vacuum. That has happened.

In previous inquiries in front of you and Senator Heffernan, I have spoken about national security. Senator Heffernan said that nothing much has changed. Something has changed since the last time I was before you both, and that is that the Australian industry has suffered even more cutbacks, and more ships have gone off the Australian coast only to be replaced, as we have said, by flag-of-convenience ships. These ships are no better than the Sage Sagittarius. It does not talk to the quality of the machinery or the quality of the ships; it talks to the registration, it talks to the capacity to completely hide the ownership behind these ships. All of the registration processes and all of the opportunities to exploit the most vulnerable seafarers in the world are now in our ports, on our coast and carrying our cargoes at the expense of Australian jobs but, most specifically, at the expense of Australia's national security.

Our submission goes to three parts. It goes through the impact of the FOC system on our economy. Paddy has spoken about that, and there have been other areas of inquiry that go to the loss of those jobs, taxation revenue and other supportive mechanisms inside the robust Australian shipping industry. It goes to the environment, because we know that flag-of-convenience shipping has a very poor record on dumping fuel—and not just ships sinking like the Rena, who cost the New Zealand government millions and millions of dollars. I think that has been outlined in their submission. But just days before, that ship was in Brisbane. We missed by a whisker.

But, most importantly and most urgently, it goes to the impact that it has on national security and the vulnerabilities that the flag-of-convenience system provides for crime syndicates and for terrorist organisations. This is not us being a little bit excited about it; I am quoting from the next speakers. I do not want to steal any of their thunder, but it goes to the border protection submission, where they state very clearly that the vulnerabilities created inside the flag-of-convenience system are of concern to our national security. This is from the government department charged with protecting us and making sure our borders are not porous. But what we are doing with the demise of the Australian shipping is opening up our borders to seafarers, to owners and to possible criminal elements—described by the department of border security as having free entree not only into our ports but also through our ports and into our society. This is a problem, and we described this at length when we talked about the Maritime Security Identification Card.

Paddy has touched on the lengths that Australian maritime workers, Australian truck drivers and anybody else seeking an operational requirement to come onto a wharf or into a maritime security regulated zone have to go through. It goes against our grain to have our background checked, to have open background security checks for ASIO to delve into our history and into the things that we do on a day-to-day basis. These are open flag checks. They check on what I am doing today, tomorrow and next week, not only in the past. It is having the Federal Police understand our background for our entire lives, and some of our members have been stopped from going to work for things that they have done 35 years ago. Yes, they have criminal records—for stealing a boat 35 years ago. They paid the cost, they got fined, they did it, but that still comes up on their criminal record.

But we have accepted that. We have accepted that we live in a time of terrible risk, with the constant threat of terrorism. Our government tells us every day that we have to forgo some of our freedoms and some of our privacies, because there is a national security threat that undermines all of those things, and we have to accept those. We have done that. Australia seafarers and Australian transport workers have done that across the board; aviation and maritime. We accept that and we participate in those processes.

But what do we get out of that? We get our jobs taken away and replaced by seafarers from countries which our secret organisations have no capacity to talk to. In Fremantle—in your port, Senator—we had a dispute on a vessel called the Bader III, a cattle carrier, with 80 seafarers on board. Most of those were Afghani cattlemen and there were also Pakistani officers. They were issued with a notice from the company to say that, if they spoke to the Australian authorities or gave the Australian authorities any information, they would be fined $20,000 and never come to sea again. We have that document and we have seen that around the place.

Those seafarers were forbidden to talk to the ITF to tell us about the horrible conditions that were on board. So this identifies. These are from countries that ASIO and the Federal Police know. I am no expert in this area, but I doubt very much that we have the capacity for our government talk to the Afghani government about the background, security or capacity or vulnerability of their seafarers. Of course, that is impossible. But they are the people who replacing are Australian workers and these are the standards of security about the workers who are replacing Australian workers.

Time and time again, under maritime industry security forum, where I represent transport workers—and I am the only one from labour—with industry and government, we are isolated and we are treated as if we do not have any skin the game. But we do—we have more skin in the game than government departments. It is our men and women who are working and it is their lives that are at risk every single day. Yet, the issues are politicised in those forums at the expense of an Australian industry and at the expense of Australian secured workers. We are passionate about these issues.

When there is talk about FOCs, we know more about FOCs. We know more than anybody else in this country about how bad operators treat foreign workers in our ports—more than our security, ASIO, Federal Police and AMSA—because those workers are taught not to talk to official people, not to not trust the police. You can imagine a Filipino trusting an army general or something like, but they don't; they talk to us. They know that the ITF inspectors in Australia are the best in the world. They know that last year, we recovered $60 million of stolen wages from seafarers around the world. In Australian ports, we recovered $2 million of seafarers' stolen wages and saw it go back into their pockets—in cash in front of us, to make sure that it was there. And they can come back to us later on if they are intimidated or if they are black-banned.

We know about the issues and we know the vulnerabilities of these seafarers. I do not know if everybody understands what happened with the Sage Sagittarius. As we went through the inquiry, layers and layers of all the ills of the FOC system were exposed. The master on board that ship, who we know was very close to the Filipino military, rocketed from deck boy to captain in a very few years, had a little sideline of selling semiautomatic handguns. Everybody on that ship had to buy a semiautomatic handgun because that was the captain's side business. The captain and two of his cohorts were on a watch list by Australian Immigration and Border Protection, at the time Immigration, with a tick against their name. We only found out this information through the coronial inquest and we still cannot find out what a watch list means.

Those seafarers have the maritime crew visa, which is simply a transit visa, stacked up against a very invasive maritime security identification card forced upon all of us. There is a very scant view of them. The captains put their whole crew list into immigration and immigration give it a tick off, and in a few days it comes back and they are free to go through and work on those ships and come back through our ports. But on this occasion, three of the senior officers on board had actions and ticks against their names. We do not know what that means. We still do not know what that means. Perhaps somebody can ask that question later on. But it is of enormous importance to us.

When we heard from our friend, the rear admiral retired from the United States, the reason we wanted him to tell us about national security and about the Jones Act was not because we want a shipbuilding yard, though that would be fantastic for us all to have more jobs and an industry here where it should be, from an island nation perspective; but to hear how the US Navy and the US security agencies treat seafarers because they treat them with a level of value. The US Navy is no great friend of the trade unions in Australia—absolutely not. But we want them to tell you firsthand that we wanted to hear from them about the Jones Act.

The Jones Act essentially says that the fourth arm of defence, the merchant seafarers—and in Australia we are dumping our seafarers and replacing them with other seafarers from international markets under FOC ships—are of a value, not just a monetary value but a value in national security. We know who they are and what they are doing at all times. It is same in Australia: they are going to know what we are doing because we are going to be sitting on the unemployment lines while other seafarers are taking our jobs.

We know that the FOC system is corrupt. Border Protection's submission—and I wish I had written that submission; it was a fantastic submission—said that the FOC system openly advertises the security element and the secrecy element of their flags, so that you can never tell who actually owns the ship. You cannot tell; it is impossible. You cannot get through that network, that veil of secrecy, and it is there on purpose and people use that for very deliberate purposes.

Last week I was called to a ship in Newcastle with the death of a young Chinese seafarer. We were stopped from getting up the gangway. It was a flag-of-convenience Marshall Islands vessel called the Yangtze Oasis. It trades on the Australian coast and into international markets. We could not get on. I tried to engage the owners. I went to all of our intelligence organisations, our intelligence opportunities, to find out who owned it. We went to the Singapore office where it is registered—where it tells AMSA, where it tells ASIO, where it tells the federal police or where it tells Border Protection, if they ask, 'Yes, our office is in Singapore.' I got no response from the telephone call. I asked our Singapore office to go and talk to them. We have officers in Singapore and Hong Kong. They went to the office and said: 'There's no-one there. There's not an office there. A telephone rang from somewhere, but nobody answered it.' After some time—we tracked and tracked and tracked—we found a Hong Kong office. It was the same thing: nobody answered. We asked our Hong Kong people to go there. There is no office; it is a hairdressing salon.

Senator HEFFERNAN: Can we go to questions soon?

CHAIR: But it is important, though.

Senator STERLE: It has a little bit to do with national security.

Senator HEFFERNAN: We have got the message.

CHAIR: This is important. I want to go back to the captain. You said the captain was on the watch list. Senator Rice, were you going to ask the same thing?

Senator RICE: No, I just wanted to hear the end of the story with the Yangtze Oasis.

Mr Summers : There was no-one there. I tried to contact Border Protection. One of the problems we have that we have identified is that we do not have a dialogue with Border Protection. We do not have a dialogue like the US do with their navy. We do not enjoy any of that, and we are going to be working hard and I am working with AMSA to try to establish that.

Senator RICE: So basically you do not know—

Mr Summers : We still do not know. Nobody in this country knows who owns that ship.

CHAIR: Can we come back to the watch list with the Sage Sagittarius. You said the skipper was on Border Protection's watch list and that you found out since the coronial inquest.

Mr Summers : At the time it was not t Border Protection; it was Immigration. We have a document that says who has a Maritime Crew visa. Most of the crew, except three, had a Maritime Crew visa. The captain and two of his senior officers had ticks next to their name under some watch list. I do know what that is; we have not been able to find out.

CHAIR: We will ask the department.

Senator HEFFERNAN: You will find in public life that the more fair dinkum you are and the more you know the worse you are going to feel about it, because, as this committee knows, for many years I have been pursuing some stuff on the judiciary and it just disappears every time it is raised. It is a huge compromise. Do you really think that Australia can afford to do what the US does with the Jones report, or whatever it is?

Mr Summers : No, I do not think we can. As I said before, we are not asking for the Jones Act. What we are asking for is recognition that Australian seafarers—

Senator HEFFERNAN: I am pleased to hear you say that.

Mr Summers : are valuable to Australia and they are valuable to national security. That is what is lost in the politicisation of national security to get rid of our industry.

Senator HEFFERNAN: The US has scale and, whether the admiral believes it, they are technically insolvent, and you can only keep that up for so long. How do we compete so that our costs do not get completely out of bent? As you would be aware, 80 per cent of the people in Bangladesh, for instance, earn about $1 a day; $34 a month. Those are the average weekly earnings. We are increasingly becoming a globalised market and we are increasingly redefining our sovereignty. How do we maintain critical mass and the things that you want in coastal shipping without pricing ourselves out of the market?

Mr Summers : It is a bit difficult because we are apples and oranges, aren't we? The seafarers that I am talking about on the Sage Sagittarius do not pay any income tax, their company does not pay any corporation tax—

Senator HEFFERNAN: There is no bigger warrior on that in this bloody parliament than me. In the Group of Seven, $3 trillion was the tax avoided last year. Whether that admiral knows it or not, it is true. They missed out on between $650 billion and $800 billion, and they are not breaking the law because the law is out of date. The average punter in Australia is going to understand your argument. It is just: how the bloody hell do we remain competitive in the market?

Mr Summers : There is a cost for national security, and Australian seafarers are expensive lined up against the Filipino seafarer. But Australian seafarers have a role in an island nation carrying our own cargos. When I was before you on a different occasion, we spoke about the carriage of ammonium nitrate. What is the cost of one of those vessels being used for bad things, with no checks on those vessels and we do not even know who owns the ship? It is the cost. We cannot just stack up wages against wages. There is a premium to pay for security. Australian seafarers are small crews, even compared to FOC, highly trained and highly effective with a vested interest in the Australian security environment.

CHAIR: If I may, Senator Heffernan, I just want to add that you are spot on, Mr Summers. With cartage of ammonium nitrate within Western Australia—I would say it is all through Australia—our truckies are not allowed to leave their third trailer sitting in Wubin. They have to sit there waiting for the dog-runner to come up, but yet we can have 65,000 tonnes of the stuff floating around off our shores and no-one gives a stuff. But to come back, and I would be interested to hear—

Senator HEFFERNAN: I feel I have to declare an interest here. I actually used to use nitrate as a young bloke for blowing trees out.

CHAIR: But Senator Heffernan, I think it is important that we note here: yes, but how do we afford it? What if we took that same issue, and I know I am not supposed to ask you questions, to Australia's farmers and said, 'We're not going to support our Australian farmers; we'll just get the Chinese stuff.'

Senator HEFFERNAN: It is a conundrum.

CHAIR: I think it is important that we carry on. But, Mr Summers, what you are saying is that there comes a social cost as well. It may cost bit more to do business but if that links in to national security, where is the argument?

Mr Summers : A vessel like the Portland has had no industrial disputation for 27 years. They are not on movie star wages—they are small crews and they have cut down. There are seafarers on that ship, retrained from ABs and engine room workers into integrated ratings so that one guy can do two jobs and they can share the load. The officers in those jobs are highly skilled and very good. But it was replaced by a vessel called the Strategic AllianceSingaporean flagged, owned by the United States. We were able to find out the owners, although they are not responding. We went to them and we said: 'You've got some problems with maritime labour conventions. You're not paying the crew correctly.' There is a whole range of issues. They will not answer us. They will not talk to us. We have to align the issues—how our security is being undermined. I know you understand that, Senator Heffernan, but there has to be something done about that. If a security breach happens because of the shipping industry's demise, and they are replaced by FOCs, it will be very expensive, and we will all be sitting around looking stupid. We are blowing the whistle. We are raising the alarm. It is a problem. It is going to happen.

CHAIR: So what role can government play there?

Mr Summers : It has to be regulated. We have to support Australian shipping. We have to understand that Australian seafarers right across the board are as important as any other transport worker in this country and they should be supported and protected like any other transport worker in this country.

Senator HEFFERNAN: Do you have an idea of the size of the dilemma that we face? Roughly, what is the average hourly rate for an Australian seafarer?

Mr Summers : We do not break them down into hourly rates. Maybe it is $70,000 a year; maybe $80,000.

Senator HEFFERNAN: What would be the average, you may not know, for these other characters?

Mr Summers : The average for the foreign seafarers?

Senator HEFFERNAN: Yes.

Mr Summers : Can I tell you that one of the submissions from the International Chamber of Shipping says that there is an ILO minimum rate of US$1,200 a month. That is an optional rate. If you were to ask AMSA what the minimum rate is for the ports they control, they will tell you it is zero. There is no minimum rate for seafarers. It is pretty hard to compete on those terms.

Senator HEFFERNAN: How do you compete? China is now moving its labour intensive stuff into Bangladesh. By the way, talking about security, I noticed at the Senate door here the other day that one of the top six people in the People's Liberation Army was having a tour through here and then going out to Bungendore, and the Australian press not being allowed to go with them. Do not ask me what all that is about.

Mr Summers : One of the most topical issues is the sale of Darwin port to China. I do not want to get on that bandwagon, but, at the same time, that is stagnant; that is an area that is on its own. It is secured by the Australian government. But we are not talking about the ships that come in and out of those ports every single day with crews that are vulnerable and all the things that I have explained before. This is an area of concern that seems to go past our national security debate.

Senator HEFFERNAN: I thought it was quaint that the Northern Territory government, till I told them, did not realise that Landbridge Pty Ltd had two business partners, both sovereign entities in the mainland of China, and one of them was banned from doing business in America. If I can find that out why can't—

Senator RICE: Thanks, Mr Summers. It is very disturbing information you have been providing us with. You are critical of the limited checks on foreign crews compared to what happens in, say, the US and other parts of the world. With the vast majority of our shipping—so we have probably 95 per cent or more of all of the ships coming into Australia and servicing Australian waters being foreign crewed—if the government's deregulation agenda gets up will it be practical for Australia to have similar controls as the US?

Mr Summers : It will be practical for the carriage of coastal cargoes—if we are talking about foreign seafarers—to raise the level of regulatory obligation on them. Sure, they do not pay tax and other regulatory costs, but they are coming and trading on our coasts with no checks and balances on their backgrounds. It is feasible to say that if that is going to happen, let us make sure that we know who they are. Let us start to put some impost, some balance, back into that process.

Senator RICE: I am just thinking of the sheer numbers with the sorts of controls that the US puts in place and what the extra regulatory cost of that would be. How much of an extra effort would that be?

Mr Summers : For foreign ships, I do not know. It is a question for departments. But it is the cost of doing business. In the security debate under MISCF, we have said constantly that the cost of doing business in this country now is expensive. That is why we have to have security cards. That is why we have to have the ports putting up fences and putting security guards on those fences.

Senator RICE: It sounds like if we were going to do that and if we were to have proper security checks, that would negate some of the supposed benefits of having our shipping trade completely foreign crewed, foreign flagged, foreign operated.

Mr Summers : Absolutely, I agree. It would cut off just one of the many opportunities that FOC ships have to undermine our industries.

Senator RICE: In your submission, and in your evidence today, you were very critical of the flags of convenience and the way they operate—how they are unregulated and the huge labour exploitation and environmental issues. Most of your recommendations are actually trying to improve things. They are trying to fix up what seems to be a broken system. Do you think it is possible to fix the flag of convenience arrangements so that they would be safe, well regulated and meet Australian standards?

Mr Summers : I do not think the flag of convenience system can be fixed. The flag of convenience system is put in place deliberately and carefully. It is manufactured to do all of the things that de-regulation of an industry—a very important industry—is. Those things include to hide the ownership, to give you the cheapest possible crews around the place, to keep them on board for the longest possible period and to give them the least possible food—all of those things that I have described are in place. We are not about fixing that. We are trying to address that. We are trying to chase owners back to their beneficial ownership, if we can find out who they are. But we are not getting very far on that. Rather, we are 'abandating' that. The idea of this inquiry is to see the effects of the FOC system on the Australian coast. It is not to fix the FOC system. We wish we could. Another inquiry would be very helpful to do that. If we are replacing Australian shipping with FOC, we are saying let us understand the impact. Let the senators understand what that means and what the high cost of cheap shipping is. If the senators understand, then the public should understand what we are giving away. The Rear Admiral and others said it is a secret—a hidden—industry. Nobody knows how their goods are carted to and from Australia. As an island nation, almost everything is carted by shipping—almost all by flag of convenience. Yet nobody knows who brings it and who does not bring it. They should be aware there are ticking time bombs going for our environment, for our work and for our economy. But, again, I come back to the issue of our national security.

Senator RICE: So you are basically highlighting the costs of what seems to be cheap shipping—that is, it is really coming at a very high cost. You have expanded on the national security issues in some detail. How fixable are they with flag of convenience shipping?

Mr Summers : How fixable are our national security settings?

Senator RICE: Yes. Given that we have flag of convenience shipping, and they are operating around the world and coming into Australian ports, is it a matter that we just have to accept the high risk? Or, again, is it possible to fix the system from Australia to reduce that risk to a reasonable level, given the current uncertainty in the world?

Mr Summers : There are some things, I think, that government departments and government decision makers can adopt to lower that risk. One of the most important things, though—and we get back to the cabotage discussion—is: if we are going to have coastal cargoes—if we have alumina from west to east or ammonium nitrate all around to the mining companies—let's do those on Australian ships. That is not a huge amount of shipping. We have professional people trained up and ready to go, and we have something else the rest of the world does not have, and that is an appetite among young people to go into this industry. Our doors are constantly knocked on by young people trying to get into an industry that is being dismantled.

With ships that are just coming here from international markets and leaving, Border Protection's submission, again, says that the FOC system creates vulnerabilities from a security perspective, and yet they do not treat them any differently from other national-flagged ships. We would suggest that if they have recognised that there are higher vulnerabilities then Border Protection should focus more on FOC ships and less on national ships. Of course, they bear in mind a whole lot of other things. So should our port state control. AMSA should focus more—and they do a fine job. I can tell you here that AMSA, under the Maritime Labour Convention, have adopted a very proactive, inclusive, tripartite approach to seafarers' welfare. But, when it comes to administering and investigating ships, they should focus more on FOC ships.

There are all of these things. If we acknowledge—and I think our governments are starting to acknowledge this—that FOC ships are dangerous from a security perspective, let's do those things. The biggest, of course, is to support a national shipping policy that supports secured, safe, highly trained Australian domestic seafarers. That is No. 1. You cannot do anything unless you cover that.

Senator RICE: You were drawing a distinction then between national-flagged ships and flag-of-convenience ships.

Mr Summers : Yes.

Senator RICE: Of the international ships coming into Australia, what proportion are national-flagged ships compared with flag-of-convenience ships?

Mr Summers : The question was on national-flagged versus flag of convenience. Flag-of-convenience ships have overrun the world's markets. About 70 per cent of the world's fleet is flag of convenience. In Australia we have an opportunity to turn that back for our coastal cargoes but not for the international. I might just add that, on the international market, we do participate in the gas market. In the North West Shelf we have three vessels that have operated for more than 20 years in the international markets, competitively. There is a price—seafarers are more expensive—but in 20-odd years there have been no strikes, no industrial actions, no accidents and no environmental problems at all.

Senator RICE: I have one last question, and that is on the regulation and monitoring in terms of the environmental controls and things like rubbish, oil dumping and all of that. You say that AMSA try to do their best, but can you just reflect a bit more on the practicality, if you have ships that are flouting regulations and you cannot find out who they are owned by, of actually being able to control that and the level of risk that we are running.

Mr Summers : I think the answer is to force them into recognising their own responsibilities on the coast. They should pay for their clean-ups. They should pay for their visiting Australian ports. They have to be able to be forced to be responsible. We do not know who these operators are. They dump oil over the side. They get away with it. They pay. On the vessel Paddy spoke about earlier that ran aground on the Great Barrier Reef, they paid a small amount for the clean-up but nothing for the ongoing problem, which in our submission you will see, from experts on the Great Barrier Reef, is a problem that is going to keep on becoming more and more expensive, because the clean-up has not happened, and it is just going to get bigger and bigger. FOCs should pay on the Australian coast. They should pay their way as Australian ships have to.

Senator RICE: Basically paying a levy up-front—is that what you are proposing?

Mr Summers : No, I am saying that they should pay totally for their clean-up. They should pay—forget accidents—when they come on the Australian coast, and they should be made accountable for everything to do.

Senator HEFFERNAN: Just so you know, it is not just confined to this industry. There is between $7 billion and $9 billion worth of unspent rehabilitation money in mining in Australia, and in the United States it is hundreds of billions. What is happening as part of the way of doing business is that the company simply says, 'We're going bankrupt, and the taxpayers can rehabilitate the mine site.' That is actually happening as normal activity, a bit like the priests and the altar boys for the last 50 years.

Senator BULLOCK: Like you, Chair, I knew Mr Summers when he was a union official in Western Australia. He has never voted for me in his life, but everybody makes mistakes!

Just referring to your recommendations, there are two things I would like you to expand on. In recommendation 39 you said:

The Department of Infrastructure and Regional Development should adopt a less obstructive approach when dealing with inquiries from that RTF inspectors and maritime unions about vessels holding temporary licences.

Could you expand on how such a change of approach will bring benefits?

Mr Summers : It goes to the broader question of how the unions and how ITF are considered by government departments. We are considered to be a bit of a nuisance. One of the questions you asked before, I think, was about the Fair Work Ombudsman involvement in ensuring that those part B wages are paid. We know, we get complaints every day from seafarers who are on the Australian coast who think they are due this extra top-up money. The Fair Work Ombudsman is still investigating the first complaint we made two years ago.

We think a fleet of Gearbulk's ships were operating on the Australian coast with hundreds of thousands of dollars of unpaid wages. The Fair Work Ombudsman are incapable, in our view, of understanding the industry. They do not understand shipping. They understand some parts of the Australian economy and they understand trade unions very well but they do not understand shipping so their investigations go on and on. When we do an investigation, we are confined to the time the ship is alongside and it is very quick. We know when ship owners are lying, which is most of the time their lips are moving we say.

We know when we have got double books because we are trained and our inspectors understand this. We know the Maritime Labour Convention because we are highly trained in that. When the Maritime Labour Convention came into effect in Australia, we sat down with AMSA and their inspectors and worked through those issues but we do not get that from any other government department.

Senator BULLOCK: That was a little bit different to the question but have you got more confidence in AMSA to do that job than Fair Work?

Mr Summers : Absolutely because they inspect—

Senator BULLOCK: It would be a significant change of course, taking the industrial relations function out of the organisation set up to have the industrial relations function. Anyway, as we heard earlier, there has been little progress made on that front. But my question went to infrastructure and regional development. How do you think the proposal that you made in your recommendation would improve things? It is an invitation for you to say a few words.

Mr Summers : I try to on occasion, thank you. It goes to security again and that is the department that is responsible for the Office of Transport Security. What we are talking about is we understand what is going on on ships and we see and we find ships that we do not know who the owners are. We know that there are all sorts of issues going on board those ships and we do not have a relationship with our department. The department treats us like the enemy and it is a great opportunity lost. For many years we have told them that our wharfies, our seafarers, our tugs and everybody else are eyes and ears on the wharf and they should be part of the answer, part of the solution but they are not. When they start to continue to use every opportunity to ramp up the conditions under which you get a maritime security card then it is a lost opportunity. It turns people against them rather than trying to include them. The maritime security card was introduced for maritime security. It has now turned to crime fighting and the crime-fighting agencies have jumped on board and said that now we have to have it for crime and everything else so the list goes on and on. That list of requirements and background checks continues to grow.

Senator BULLOCK: In your recommendation 56, you say:

The Australian government should work with social partners in order to develop a sustainable fiscal model to derive the highest available quality of support for seafarers. A new seafarers welfare levy should be introduced.

We have had other submissions from people who are not here today, from the Australian Council of the Mission to Seafarers, the Apostleship of the Sea, and they are both keen to see recurrent funding available to help them do the jobs that they were established to do. With respect to this suggestion, what progress if any has been made?

Mr Summers : A part of the terms of reference was to audit the 48 recommendations from the Ships of Shame report. That is a body of work that we peeled off on its own. We are doing that in minute detail. That goes to seafarers' welfare as well and of course it is a big issue. But in the FOC system, the FOC ships do not pay their way when it comes to seafarers' welfare. Their seafarers need to get ashore and they need to have access off the ship—they need to have this.

Senator BULLOCK: They need access to you, for one thing.

Mr Summers : Access to be on the ship would be a nice thing as well. The ITF pays for that through grant applications. Paddy spoke about the ITF Seafarers' Trust, which collects money through this system and then distributes it around for buses in Sydney.

Senator BULLOCK: What about government action to provide recurrent funding for people providing welfare to seafarers?

Mr Summers : I think there should be a study and a look into it. And we are talking through the Maritime Labour Convention with AMSA about the possibility of levies. We are talking about it in some ports like in Newcastle and others. The biggest coal terminal in the world has a ramshackle seafarers' centre, is full of asbestos, is a long way out of the place, is dangerous, is grubby and is inferior to what seafarers should enjoy. So we are working with industry, with Rio Tinto.

Senator BULLOCK: Have you had a response from government?

Mr Summers : No, not really. We are yet to develop that as the recommendations would suggest.

Senator BULLOCK: I raised it so that we can think about it when we are doing our report.

Mr Summers : I will vote for you next time, Joe.

Senator MADIGAN: What do you suggest could be done to resolve the adversarial relationship between government and the maritime unions so as the issues surrounding flag-of-convenience ships could be addressed in the national interest?

Mr Summers : I think there has to be two things. The first, and I have spoken on it today, is a recognition that Australian seafarers, domestic seafarers, are of value and are a very important part of our security regime. The departments I spoke about before are responsible for maritime security, the running of the MSIC card and other things but do not see us as an ally. They do not see us as an asset. But, as our friend from the US has told us, they do enjoy a relationship, a dialogue with those most important departments in the US.

The other thing is that seafarers' welfare should be supported. The ITF should be recognised as an authority that understands this issue. We have worked with AMSA. As I said before, we have trained with their inspectors for the implementation of the very important Maritime Labour Convention but it stops there. We do not have dialogue with Border Protection. I have tried and I will continue to try with AMSA to establish that but these are critical things when we have seafarers who suffer from mental illness. The case in point came out of Freemantle.

At Christmas last year, a seafarer heard voices, jumped over the bow of a ship on the way out of port—so he was not jumping ship. He was picked up by the lines boat. He said that he heard voices from God telling him to jump so he jumped—it was not very good advice, in my view. He was taken to hospital. When he was declared fit, he was still in a psychotic state and he was put in a detention centre. We spent three or four days trying to get the attention of immigration to say that this guy was not trying to do anything other than go to sea but he has had a psychotic episode. The Maritime Labour Convention says he should have immediate attention to mental and physical health professionals. But he did not get that. He got sloughed up in a detention centre at Perth airport until finally we could fly him home, because home in the Philippines was a much safer place than Australia because he did not have those supports. This is why these dialogues are very important for seafarers to directly get support of all the things the MLC says they should have.

Senator MADIGAN: Finally, in this fair and ethical world of free-trade, fair-trade level playing fields, do you think that Australia could ever compete in this race to the bottom in the maritime shipping industry?

Mr Summers : Of course we cannot compete. We cannot compete on zero wages. We cannot compete on zero taxation. The FOC ships pay nothing into this country. They pay zero. In fact, when they leave ports, they leave us with a bill. We are happy to do that and we subsidise the FOC system by paying the bill. They contribute nothing to our economy, they take away from our environment and they create vulnerabilities to our national security.

CHAIR: With the advent of the possibility of us losing our domestic shipping industry to FOCs, we have not touched on a lot but we know it is there and we will not have that access to skilled, trained seafarers but also masters and captains and all that. What will that actually mean at the end of the day for Australia?

Mr Summers : It will mean a whole range of jobs and support bases are gone. It will not just be seafarers on ships; they are almost gone. We do not have any capacity in our fuel supply. No Australian ships are involved in carting fuel internationally. No Australian ships are involved in carting fuel nationally. It is a terrible loss. But we will not have tugs, we will not have pilots, we will not have all the infrastructure that a maritime hub, that an island nation should enjoy. So when we not have any maritime hub, everything will start to dismantle. We will not have any experience so we will have to go internationally to try to find those people to plug those gaps. There will be no consistency, no surety, no social interaction in that and so all of the things I have been saying will just be exacerbated right across the board, not just for the shipping industry but for the towing, the dredging and all the other things that an island nation, a nation of people who live on the coast enjoy and expect.

CHAIR: I read a letter into Hansard last week, an email I received from a gentleman who is one of your members or one of Paddy's members. He is 36 years old, he spent 18 years in every facet of the industry working his way up to skipper and he is now unemployed. Do we have an oversupply of experienced captains and masters in this nation at this stage?

Mr Summers : The entire world suffers from an undersupply of masters and senior officers. Australia has the capacity. We have got training organisations, we have got a young population who want to go to sea, we have got men and women who want to be seafarers yet the world is screaming for senior officers. It is just a no-brainer. We are an island nation. We have got everything at our fingertips. We have got demand, we have got a supply of seafarers and we have got the skills available so why do we not use them?

CHAIR: I thank you very much for your evidence today. I am very keen to find out where this ship is. I was going to ask you where the Sagittariusis. I would like to know where the ship actually is.

Mr Summers : She continues to trade. The captain who was responsible for the ship through the three deaths, the three highly-suspicious deaths, was moved off that ship and was penalised by being given the command of a brand-new ship in South America, where he enjoys all the benefits he has for the last many years.

CHAIR: That will be a question we can ask Border Protection next if he happens to head for our shores again. Thank you very much for your time.

Mr Summers : Thank you.