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Rural and Regional Affairs and Transport References Committee
Flag-of-convenience shipping in Australia

KINLEY, Mr Mick, Chief Executive Officer, Australian Maritime Safety Authority

STUART, Ms Therese, Acting General Manager, Maritime Identity and Surface Security Branch, Office of Transport Security, Department of Infrastructure and Regional Development

SUTTON, Mr Michael, Acting Executive Director, Surface Transport Policy Division, Department of Infrastructure and Regional Development

ZIELKE, Ms Judith, Executive Director, Surface Transport Policy Division, Department of Infrastructure and Regional Development

CHAIR: Welcome. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim.

The committee has received your submissions as submission Nos 11 and 7 respectively. Would anyone like to make any amendments or additions to their submissions?

Ms Zielke : No, thank you.

CHAIR: Would you like to make a brief opening statement?

Ms Zielke : We would just like to thank you for the invitation to appear today. Both the department and AMSA, as you have said, have made submissions. Those submissions were prepared with the intention that they would be read together. In effect, together they complete the story from both perspectives. We are very happy to take any questions the committee might have for us today.

CHAIR: Thank you. I do not know if you have been following the conversation this morning.

Ms Zielke : Some of it.

CHAIR: I asked the Department of Immigration and Border Protection whether the crew of the MV Portland were required to have the MCVs? They said yes. I also asked Dr Evans if they needed to have—

Ms Zielke : Do you mean if there was a replacement vessel?

CHAIR: Sorry?

Ms Zielke : The crew on any foreign ship that replaced MV Portland would require MCVs.

CHAIR: Yes. I take it that MV Portland will be shelved.

Ms Zielke : Alcoa's intention is that it will no longer have the vessel.

CHAIR: So there is a replacement vessel coming. Do we know where the replacement vessel is coming from?

Ms Zielke : We know that they are using a foreign ship to undertake those voyages that they were previously undertaking using MV Portland.

CHAIR: Do we know who owns the ship?

Mr Sutton : No.

CHAIR: We do not know because we have not asked or because we cannot find out?

Mr Sutton : Under the coastal trading act, that is not a requirement for them to advise us of the ownership of any vessel.

Senator HEFFERNAN: So if a ship was owned by another military organisation, you would not know.

Mr Sutton : It is certainly not part of—

Senator HEFFERNAN: How brain dead is that?

Ms Zielke : It is very unlikely that—

Senator HEFFERNAN: I know.

Ms Zielke : a commercial entity would be using another military ship.

Senator HEFFERNAN: The guy standing at the back of the room there is thinking, 'What is this mob up to?' If you are not entitled to know who owns a bloody ship that is using our resources and our ports, get with it.

Ms Zielke : If a company is applying for a licence then what it does is apply and provide us with information in relation to the ship and its registration, but we are not required to know who owns it at the time.

Senator HEFFERNAN: Through you, Mr Chairman, one of the things that totally give me the shits is the fact that we ignored what has been going on in churches et cetera and now we find that in a royal commission we are all apologising. The World Bank said last year there was $3 trillion on the merry-go-round running away from tax in the Group of Seven—what used to be the Group of Eight—and one of the mechanisms for that is governments like our own. Whatever the politics—I do not give a rat's who is in government—I think we are entitled to know who the bloody hell we are dealing with.

Ms Zielke : I cannot answer any questions in relation to entitlement. I can tell you what the legislation currently says.

Senator BULLOCK: It is your job to fix it up, guys.

Senator HEFFERNAN: Jesus! I cannot believe that. Jesus!

Ms Zielke : The information that the legislation requests was requested by government at the time that the legislation was written in 2012.

Senator HEFFERNAN: So Landbridge, who have just bought the bloody port, at least for 99 years—and I had to ring the Chief Minister up and say, 'Hey, there's a bit more to this story than you know, mate, and your Mr Tollner ought to get on the pace'—have, shall I say, business partners who are military types who they are pretending are fire types. For God's sake! I am not allowed to ask you for an opinion, but if the minister were here I would ram it down whoever that person's throat is. Surely we are entitled to bloody know who we are dealing with.

Ms Zielke : The recent review of our coastal trading legislation provided an opportunity for people to provide comment in relation to issues with the legislation.

Senator HEFFERNAN: I am sorry. I am here today listening to something that I think is senseless.

Ms Zielke : I am happy to take that on board.

Senator HEFFERNAN: Jesus Christ!

Senator BULLOCK: Although you can only work with the legislation you have. It is up to the government.

Ms Zielke : That is true.

Senator HEFFERNAN: I hope the committee takes it on board, because I just think that the ordinary, average Aussie would be shaking their head and saying: 'We're not entitled to know who owns the ships that are servicing our ports and doing whatever they're doing. It's bloody crazy.'

Ms Zielke : Senator, I will just note that you are using the word 'entitled'. What I am talking about is what the legislation actually covers.

Senator HEFFERNAN: I do not want to talk political semantics or what you have learnt at training school when you come to estimates. This is just plain English. I think we are entitled to know who we are dealing with, and until we do that—until the law catches up with technology—we are never going to be able to pay for our schools and hospitals, because it is normal behaviour now for these characters not to pay any tax. The admiral from the US did not realise it, but last year the US missed out on between $650 billion and $800 billion. Do you know what the turnover in the derivative swap market, which is one of the tools they use, was last year? Thirty trillion dollars. God help us!

Senator BULLOCK: Even if we did know who owned the vessels, they still would not pay tax.

CHAIR: Sorry, Senator Heffernan.

Senator HEFFERNAN: Sorry to make a point.

CHAIR: No, it has taken me by surprise too, and I want to come back to the MV Portland. I know we can say you can only work with the legislation that you have. We understand that, and it is an absolute fault in our legislation that we do not know and do not even ask who owns these ships. I do not know if this is for you, Mr Kinley, or you, Ms Zielke, but in terms of carting nitrate we know what nitrate can be used for. I said earlier—I do not know if you picked it up—that it is within the legislation that, if you want to operate trucks in Western Australia and you are carting ammonium, you cannot leave your dog sitting on the side of the road. I do not mean your puppy dog; I mean the second or third trailer. You have to stay with your trailers, and there is a reason for that, because it is identified as a commodity that can be used in explosives. It is used in explosives throughout our mining industry. What if ships are carting ammonium up and done our shores—or nitrate, I should say? Do we have any legislation or any regulation or something that says, 'This is a commodity that could be very dangerous if it fell into the wrong hands'?

Mr Sutton : Could I just clarify an earlier answer as well. Under the coastal trading act, an owner is an eligible applicant. If the owner applies for a temporary licence, by definition, we will know who the owner is. The people who can apply are owners, masters, agents, charterers or shippers of cargoes on ships. It would only be in a circumstance where the owner applies where we will necessarily know the ownership of the vessel.

CHAIR: What is an 'eligible applicant'?

Mr Sutton : They are the people who can apply for a temporary licence under the coastal trading act.

CHAIR: They are who—customers or shipowners?

Mr Sutton : It is shipowners, masters, agents, charterers of vessels—

CHAIR: Anyone.

Mr Sutton : It is anyone who falls into that category or shippers of cargo that is going to be carried by a vessel under a temporary licence.

CHAIR: It is bad enough we do not know who owns—I am supporting Senator Heffernan.

Senator HEFFERNAN: I still cannot get my head around this, in terms of legal liability. We are, under the legislation, not in a position to know who the owners are of some of these ships. We probably know who is leasing the ship or whatever. In the instance, recently, of the major implication of drugs, for all we know, a drug cartel could own one of these ships. Correct?

Ms Zielke : We cannot comment on that.

CHAIR: You could not rule it out though.

Senator HEFFERNAN: You could not say no, because—

Ms Zielke : Therefore we cannot comment; we do not know.

Senator HEFFERNAN: Anyone from Mr Putin to a drug cartel could own these ships. There has been a recent importation—the largest ever—out of a South American country into Spain, which involved 3½ tonnes of cocaine in a ship. Doesn't our law—which, in my view, needs to be immediately fixed—make that easier? We do not know who owns the ship.

Ms Zielke : I am sure Mr Kinley might like to comment, but that is why we have control mechanisms—in relation to when the ships come into port. Do you want to—

Mr Kinley : Senator—

Senator HEFFERNAN: Just pausing you—

Mr Kinley : Yes.

Senator HEFFERNAN: Surely, the ultimate responsibility, if the propeller falls out of the bottom of the ship or it is loaded with who knows what, is with the owner of the ship.

Ms Zielke : Yes, that is correct.

Senator HEFFERNAN: We have no way of pursuing the owner of the ship if we do not know who the owner of the ship is.

Ms Zielke : We do.

Mr Kinley : Any ship that comes into port will have a certificate of registration, which is a requirement to fly the flag of the country it is registered in. That certificate of registration will say who the owner is. That is the owner in that country of the ship, the company that owns it. There are other entities involved. They could be the ship's manager. They will be identified on the document of compliance for the ship. As for things like the ultimate beneficial owner, there are other ways you can find that out.

CHAIR: Mr Kinley, I cannot help raising my eyebrows. We do know every shipowner. Every ship that sails in and out of our ports or around our nation, we know who the owners are.

Mr Kinley : We will know who the registered owner is.

CHAIR: Every single ship.

Mr Kinley : Yes.

CHAIR: Without any dramas.

Mr Kinley : Yes.

CHAIR: How come we do not know—I asked the question, 'Who owns this—

Ms Zielke : You asked if this was a requirement under the coastal trading legislation. No, it is not a requirement under the coastal trading legislation.

CHAIR: I will check the Hansard but I thought I said, 'Do we know who owns the ship?'

Ms Zielke : I thought you said do we know who owns MV Portland. I am sorry, I thought you meant in the context of the coastal trading legislation.

CHAIR: Coming back, the ship that has replaced the MV Portlandwith a foreign crew, we know who the owner is.

Ms Zielke : We have a mechanism by which we—

Mr Kinley : If I knew the name and the IMO number I could look up on the database; they are registered under this.

CHAIR: That red flags it, for me. If someone wants to come and ply the transport trade between our ports, do we say: 'Okay, who is it? What's their background, who owns it and where does the crew come from?' Or do we just go, 'No worries, mate, come on in.'

Mr Kinley : From my point of view, from a safety point of view, generally, that is not a relevant factor. The thing that is far more interesting is the company that is managing and operating that ship.

Senator HEFFERNAN: So the answer is: no.

CHAIR: It is a no. Ms Zielke, do you wish to add anything? Do you, the department, know? Do you flag—

Ms Zielke : What I thought you were asking about earlier was in connection to the coastal trading legislation. Obviously the coastal trading legislation has been designed the way it is to deal with the movement of cargo around the coast. It is designed the way it is noting that the department of immigration has certain responsibilities with Customs as well, in relation to border protection, and that there are other mechanisms in relation to port arrangements et cetera. The coastal trading legislation is not trying to cover off on all of those aspects. It is only trying to deal with the movement of goods and who has permission to move those goods around the coast.

CHAIR: So, in simplistic terms, Border Protection—and they are not here to speak for themselves—do not get the application in front of them and say: 'Who owns this ship? Who are we dealing this?'

Ms Zielke : If it is not necessary for us to take that decision, no.

CHAIR: Okay. I will go back. When they make application to start plying their trade between our ports—I am not trying to put words in your mouth, and I am not allowed to ask you for matters of opinion. But I can ask you this very clearly: no-one sits there and goes, 'Hang on, before we let them start running in there we would need to know who they are.' No, you are allowed to say—

Senator HEFFERNAN: Come on, get on with the—

Ms Zielke : I am just double-checking with Mr Sutton. But I do not believe so, no.

Senator HEFFERNAN: Well done, Mr Sutton.

Ms Zielke : Mr Sutton is reminding me that we, of course, have the maritime security regime as well. Again, that is not part of the coastal trading act. It is another mechanism that we have in relation to arrangements.

CHAIR: What does that mean?

Mr Sutton : Of the vessels that are operating under temporary licences—by definition if it is a temporary licence it will be a foreign ship, so it will be subject to AMSA's port state control regime and it will also be subject to Australia's maritime security regime under the—

Ms Stuart : International Ship and Port Facility Security Code.

CHAIR: So in that fancy name—the title and all that—you do not go and seek to find out who owns that ship?

Ms Zielke : In relation to the coastal trading legislation, no. It is not one of the first things we do to check out who owns the ship.

CHAIR: Okay. It is not one of the first things, so you do do it? Is it the next thing you do?

Ms Zielke : No, it is not a requirement for us to do that for that piece of legislation.

Senator HEFFERNAN: We might recommend that it bloody well is.

CHAIR: We have established that, in Australia's legislation regime, we do not care. That does not come into it. They just can apply and no worries, come in. I will tell you why I ask that. We took evidence earlier on from Mr Summers from the ITF and he gave us some shocking examples of exploitation of foreign seafarers on Australian shores plying in and out and where they could not find out, because they are stonewalled, who owns the ships. That is why I ask: do we know? Obviously you have given the answer. We have no idea who they are. We do not even want to know who they are.

Ms Zielke : For this piece of legislation it is not a consideration.

CHAIR: Ms Zielke, I am talking about national security.

Senator HEFFERNAN: If we want to confine ourselves to this legislation—

Ms Zielke : Mr Kinley has told you that we have mechanisms to be able to find out if we need to.

Senator BULLOCK: It is clear, Ms Zielke, from the way you answer questions, that you provide your own context for the question in order to avoid giving an answer. This leads me to the issue that was raised by the International Transport Workers' Federation this morning, because they said it would help if the department would adopt a less obstructive approach when dealing with inquiries from the ITF inspectors and maritime unions about vessels holding temporary licences. It is clear to me, from the way you deal with questions from the senators both here and at estimates that the obstructionist approach is your default position. Would you like to comment on the issues raised by the ITF and why you do not take a more accommodating approach in dealing with them?

Ms Zielke : I am sorry you see it that way. In relation to the ITF, can I give you an example that comes to mind for me, and you can tell me if you think that is helpful at all. We have had examples where the ITF has been asking about a particular vessel, and it has come to us and said, 'Can you tell us if this vessel is actually working under a coastal trading licence right now?' Under the current legislation, the company does not actually report on its exact use of the licence until the voyage has actually been undertaken. So the ITF can come to us a couple of days before or a week before the voyage and say, 'Can you tell us if this vessel is travelling under a licence at the moment?' We are in a position where we are not able to confirm whether or not it is under a licence because we are not being reported about the voyage. While to a certain extent that is loose language, that is the kind of circumstances—

Senator BULLOCK: Do you make a note of the voyage before it is undertaken?

Ms Zielke : We are advised when the voyage is going to take place and we have a certain level of knowledge about that, but it is not confirmed until the voyage has actually taken place.

Senator BULLOCK: They would not be able to undertake the voyage without a licence, yes? You know that the voyage is going to take place, you know that they could not undertake the voyage without a licence, but you do not feel you can comment as to whether or not the—

Ms Zielke : We cannot confirm that it is under a licence. So the voyages the ships are actually undertaking are available on the web site when they first apply for their licence. There is information up there but what ITF are asking us to do is to confirm that arrangement.

Mr Sutton : I might add to that. When somebody applies for a coastal licence, they do not have to specify the vessels they are going to be using under the temporary licence. They can nominate the vessels but if they do not know the vessels or they do not choose to put in an application form, they do not have to provide that information.

Senator BULLOCK: But you could not on that basis check the vessel to see if it was seaworthy.

Mr Sutton : The act requires that, if they have not specified the vessel they are going to be using, within two days of the voyage they have to notify the department of the vessel they are using, but that is only—

Senator BULLOCK: So at that point you could confirm that the vessel was—

Mr Sutton : At that point, yes, we could confirm that—

Senator HEFFERNAN: Within two does: could that possibly mean that the ship has been and gone before you—

Mr Sutton : No, Senator.

Senator HEFFERNAN: Why no?

Mr Sutton : Before it undertakes the coastal voyage, they have to advise the department which vessel they are going to be using.

Senator BULLOCK: So if a vessel was going up and down the coast—up and down, up and down, one voyage after another, all planned—and the ITF rang up and said, 'Is this vessel operating under a licence?' you would know that.

Mr Sutton : In relation to particular voyages, not necessarily until two days before.

Senator BULLOCK: Would it be too much to ask, when faced with such an inquiry, rather than taking a technical approach and saying, 'We can't answer that because until the voyage is undertaken we do not know' that you could give such information as you do know? I am really getting back to Ms Zielke and saying that—

Ms Zielke : I get where you are going. I suppose the problem is that the ITF is asking us to confirm the arrangement for them to be able to take action, as I understand it. I am sorry: I am dealing with an area I am not 100 per cent sure of.

Senator BULLOCK: You could give a qualified response that—

Ms Zielke : We could qualify, is where you are going.

Senator BULLOCK: [inaudible] without giving them no answer.

Senator HEFFERNAN: I seem to have a problem. Mr Sutton, you may have said that there is no requirement to identify until two days after the voyage?

Mr Sutton : No, two days before the voyage.

Ms Zielke : Sorry, Senator. I said earlier 'until after'. My apologies. Mr Sutton has clarified it is two days before.

Senator RICE: On the same thing, if they do specify which ship they are using, are you able to confirm then?

Mr Sutton : I am not aware of the specific incidents to which the ITF refer in their submission. If there were specific incidents, I could certainly indicate that we would provide that information in future. There is nothing that would prevent us providing that information. So if there are any specific incidents that the ITF is referring to where there have been problems in the past, then—

Senator RICE: I suppose in general, if a ship is specified, even if it has not yet undertaken the voyage, you are able to give that information to the ITF?

Ms Zielke : I acknowledge what Mr Sutton has just said—that we can try to. I know the ITF is fairly well informed. If it was a situation where the applicant who had the licence only had one vessel, for example, then they would not be coming to us and asking us that question. They are generally only coming to us if there is an opportunity that it might not be that vessel.

Senator RICE: Yes, or they might be wanting to confirm exactly what licence they are operating under.

Ms Zielke : Yes. Therefore, if we do not have that confirmation as yet, we are unable to confirm.

Senator RICE: But even if the vessel has been specified—

Ms Zielke : Sorry, I am talking about where it has not been specified. It is normally only in those cases where they are actually asking us the question.

Senator BULLOCK: In my view, looking at the ITF submission, their issue went more towards mindset rather than specifics—and a predisposition to cooperate rather than obstruct is what they are looking for and certainly what I would encourage.

Senator HEFFERNAN: Am I wrong when I say that, under the present arrangements, you do not necessarily know who owns the ships that are plying our coastal routes? You know who is leasing them or whatever but you do not know who owns them.

Ms Zielke : I know you think I am being obstructionist—

Senator HEFFERNAN: No, no, I do not think anything.

Ms Zielke : In relation to coastal trading, yes. But that does not mean that we do not necessarily know that for other purposes. I am just saying for coastal trading.

CHAIR: I am going to invite the ITF to go through the Hansard and then provide to the committee answers to your statements here today, and we can all follow this trail.

Senator HEFFERNAN: I have not quite finished. If, as Mr Kinley points out, there are other means, mechanisms and reasons, why wouldn't that be the most basic thing that we as a nation would want to know? If you go to the toilet and there is not a roll of paper in the toilet, you think there is something wrong with the toilet. I think it is as basic as this.

Ms Zielke : It is not something that is required for us to actually consider as part of it. To a certain extent, the legislation for coastal trading is based on: is it an Australian-owned vessel? If not, it is a foreign owned vessel, and those are the two categories which we look at.

Senator HEFFERNAN: But that is as thick brained as the bloody land bridge thing in Darwin or—

Ms Zielke : We might have to change the legislation then. If government wanted the legislation to do that, then of course it could be changed to do that.

Senator HEFFERNAN: I would have thought there would be no-one listening who would not think that.

CHAIR: Can we just come back. You are saying applicants—whoever—apply two days before. They apply and you will tick off for a licence, but they do not have to specify the ship.

Mr Sutton : Correct.

CHAIR: They do not have to, until when?

Mr Sutton : Until a few days before the voyage under the temporary licence that they have been granted.

CHAIR: And who checks to make sure that that is the vessel that they have said?

Mr Sutton : The advice is provided to the shipping business unit within this division of the department.

CHAIR: Do we have a check in place that says, 'This is the ship—

Ms Zielke : We do not have anybody who physically goes out to the ship. But if a ship is found by any of the departments—immigration, customs, AMSA might be doing a check, et cetera—to not have the appropriate paperwork, then that is reported to us and we are able to then take action.

CHAIR: Does anyone go out there and actually enforce it, police it, check it to make sure it is all legit?

Ms Zielke : No, we use the other mechanisms that are underway.

Senator HEFFERNAN: Could I just pause you on the paperwork. This committee had the most unusual experience of dealing with a case where the paperwork was precise, but the event was a major incident. The paperwork for 32 containers that came through Sydney port was such that 32 containers of dirt from China—with all the biosecurity risks of weeds and rubbish in it—came through the port, according to the paperwork, as fertiliser. The OIE certification for bringing beef, which I blocked, from Brazil, said that Brazil was clear of foot-and-mouth disease, and it was not. There is nothing like having a look for yourself.

Ms Zielke : Senator, we are reliant on Immigration and Border Protection in relation to checking contents of containers in that regard.

Senator HEFFERNAN: Yes, I know, but the difficulty is that a lot of this is driven by facilitation, and you may or may not be aware of what the Crime Commission had to deal with in terms of some of the people involved in securing our ports. They were criminals. Pretty amazing.

CHAIR: Ms Zielke or Mr Kinley, you say that two days is the time you need to know. Are there any reasons why they cannot tell you earlier? Why not two or three weeks before? How did we get to two days?

Ms Zielke : I suppose they could but the legislation only requires them to do it two days beforehand. We may with investigation find out that some of them are doing it earlier. I just know what the legislation says.

CHAIR: Okay, so what is the normal practice? Do the majority of people stretch it out to two days or do the majority of them come in a week or two weeks earlier?

Mr Sutton : As I say, they are not required to specify the vessel in the application. My observation would be as a delegate that most applications do not specify the ship. But, as I say, they are required to provide that information about the actual vessel undertaking the voyage within two days.

CHAIR: I want to come back very quickly now. Mr Kinley, you are sitting there dodging a few at the moment so I am going to put this to you. I want to go back to ammonium nitrate. I sort of got sidetracked. The department officials do that to me regularly and most of the time I forget but it came back to me today. What happens with ammonium nitrate? Do you come in there, does AMSA come in there, and say: 'Hang on. This is a dangerous commodity and we really want to know what is going on. We really want to know the crew. We want to know who owns it and where it is coming from'? Are there any spot checks or is it just the trucking industry that happens to be squeezed to make sure they do not run off and blow up a mine or something?

Mr Kinley : I can talk from a safety perspective on board ships. There are requirements under the International Maritime Dangerous Goods Code for how those cargoes are stowed and secured.

CHAIR: Okay so it is not a question to you then. I am sorry I am being rude. It is because of the time. Ms Zielke, does your department go, 'We don't want this to fall into the wrong hands'? Border protection clearly talked about vulnerabilities. Did you hear me read that?

Ms Zielke : No, I am sorry I did not hear that.

CHAIR: All right. The summary from border protection states:

The regulatory, registration and compliance practices of the so-called FOC states have the potential to create vulnerabilities for Australia’s enforcement of laws in its maritime domain.

These vulnerabilities add to the attractiveness of FOC shipping to entities such as organised crime syndicates and other entities seeking to illegally exploit natural resources both within and outside the AEEZ.

So does the department say: 'We are not just going to let anyone cart this ammonium nitrate. We really want to know who they are, where they have come from, who they are employing, who is on the ship and all that sort of stuff'?

Ms Zielke : The goods we are dealing with in relation to coastal trading are between Australian ports, so we are not bringing in goods from outside. More broadly than that the department has a role in making sure that any regulations that are agreed by the International Maritime Organization—that through treaty arrangements they are adopted in legislation for the country, and the way in which we deal with dangerous goods is part of that. So we make sure that that legislation is in place and then that it can be enforced by the various agencies that are undertaking the checks.

CHAIR: I am sorry, Ms Zielke. You completely lost me.

Ms Zielke : I am sorry.

CHAIR: We hook up a road train of ammonium nitrate in WA. We are not allowed to let those trailers out of our sight. We have to stay there whether we want to or not. We cannot unwind the trailers and shoot into town to get a feed because of the danger if ammonium nitrate falls into the wrong hands. What protections do we have—and we do cart fertiliser around—

Ms Zielke : Yes, we do around the country.

CHAIR: Senator Heffernan knows it better than anyone. So do we have any safeguards so we make sure we are over everything—where the ship has come from, who owns it, who the crew are and their history—or do we just say, 'Apply for it. It should be right, mate. You can cart ammonium nitrate'? You can drive out of Incitec Pivot out there in Geelong and blow up an oil—

Ms Zielke : If you want a breakdown of exactly what we do in the steps I am afraid I do not have the knowledge. We will take it on notice. Maybe we could come back to you with a step by step of what happens in relation to the vessel. Would that be helpful?

CHAIR: That would be very helpful. At the moment I am a bit nervous because of the way we started the conversation. We do not even know who owns the ships at this stage. Whether they are carting salt, alumina or—

Mr Sutton : Going beyond the coastal trading legislation also relevant are the relevant maritime security provisions and the requirements for port security plans around Australia.

CHAIR: Mr Sutton, I understand all that. We have gone through that. This committee sat on that. We did that under Senator Heffernan's brilliant chairmanship. It was 10 years ago we were doing the MSIC stuff. We also know how much further it has gone down the line and what someone might have done 35 years ago in their youth. But you do not instil a great deal of confidence in me if we do know who even owns the ships. Senator Rice, did you want to—

Senator RICE: I do.

Senator HEFFERNAN: Just to further emphasise that, I could be someone with a bad intent who owns a ship. For coastal shipping, you do not necessarily want to know who owns the ship. So, with that intent, I just set up—as many do now—a company somewhere. There are nine sovereignties around the world that have zero tax for corporates. I could set up a shelf company that leases the company from myself and I could be the biggest mischief maker in the world. As Senator Sterle points out, if I really wanted to create a mischief, it would be hard. As you know, at times we get down under a week's fuel supply. If you blew one ship up coming from Singapore—it did not happen, but we nearly ran out of fuel two harvests ago for the farmers in Victoria. We are making it too bloody easy for them—if you had a mischief in mind. It was like doing away with security in this building. It was all right as long as nobody had a mischief in mind. We managed to fix that. It took a fake bomb to do it, but we did it. I just think there is a fundamental flaw here. We ought to think where we are in our times. To think where we are in our times, we have to think like the enemy, not like ourselves.

Ms Zielke : I was just going to say that I was able to hear the responses from the Department of Immigration and Border Protection this morning when they spoke with you. I know that they talked about some the process that they use in relation to assessing for MCVs, for example. I will just note that the coastal trading legislation sits in the environment of all of those other checks that are going on, but I am very happy to come back with the process in relation to how dangerous goods, in particular, are dealt with in detail.

Senator RICE: We are running out of time. I wanted to go to a number of the recommendations that the ITF made in their submission. They have 56 recommendations. I would actually like to get the response of the department and AMSA to all of those recommendations as to their viability. Are there any reflections on them? Obviously, that would take us the rest of the day, which we do not have. If I could have you take that on notice, I would find that very helpful.

Senator BULLOCK: I say 'hear, hear!' to that. I have three questions, and I am not going to get the time to ask them. But they are all responses to those recommendations from the International Transport Workers Federation. That may be a touch of overkill, but nevertheless I am interested in my three—

Senator RICE: I will name three areas that I would like to get a brief response on. The first is on practical mechanisms for flagged states to be sharing information about investigations and annual reports relevant to Australia. That is their recommendation 9. Then there is recommendation 24 on whether the Australian government has sufficient tools to effectively seek damages when ships strike Australians reefs when they are not all covered by IMO conventions. Then there are recommendations 30 to 32 about dealing with the level of fatigue. Recommendation 30 is:

The Australian government should consider the level of fatigue experienced by international seafarers to be a significant ship safety and environmental risk …

Recommendation 31 is:

Temporary Licences … should not be issued to ships working with only the very minimum number of crew specified …

I will probably stop there. Basically, most of the recommendations seem to be quite reasonable to me. I would like to get your response to them.

Senator BULLOCK: If we can add to the list recommendations 14 and 15, 36 and 56.

Mr Kinley : There are a couple of those that I could deal with just now. On the issue of fatigue with shipping, we are actually leading a lot of work at the International Maritime Organization's Sub-Committee on Human Element, Training and Watchkeeping with having the IMO guidelines revised and having them put into more of a fatigue risk-management basis.

At the moment, we have a very crude fatigue management. It is just about hours of work or hours of rest. Fatigue is far more complex than that, so we are pushing that work. There is the compensation regime for damage that ships may cause. You may be aware that we led the push at the International Maritime Organization to have the limits, under the Convention on Limitation of Liability for Maritime Claims, increased by 50 per cent after the Pacific Adventurer incident off Queensland. We will continue to work through the IMO to look at ensuring those limits remain reasonable.

We are currently working with the Great Barrier Reef Marine Park Authority to look at how, if we had another incident such as the Shen Neng, we could mount a response quicker in the future. They are two issues we are working on, right now.

Ms Zielke : Senator Rice, I would note that some of the questions deal with other portfolios but I am happy to take them on board, and we will try to coordinate those responses and come back.

Senator RICE: Thank you.

ACTING CHAIR ( Senator Heffernan ): I am chairing for a bit. As Senator Rice has to go, now, Senator Madigan.

Senator MADIGAN: Is the department able to give the committee any example where you have identified deficiencies in the legislation and where the department has provided a solution to government where there are gaps, holes, in legislation that you take care of—like in coastal shipping?

Ms Zielke : Do you mean in relation to the coastal trading act?

Senator MADIGAN: Yes.

Ms Zielke : We undertook a review of the legislation. We undertook the more recent formal process and prior to that we also held stakeholder consultations, because once the legislation was introduced in 2012 we were getting a lot of feedback that there were a lot of administrative issues with the legislation. At that time, we moved to make as many changes to the administration as we could, that we could deal with, in relation to the way in which applications were processed, for example, the level of information that was being asked of et cetera. But there are a number of issues that cannot be rectified without changes to the legislation. That is why the recent review found a number of issues as a result of the feedback from stakeholders.

Some of the most significant ones, in regard to that, were the administrative burden of the program—in particular, things that were excluding people from being able to participate. Applicants need to be able to identify a minimum of five voyages, for example, to be able to even apply for a licence in the first place. That is a key issue, in relation to a lot of shippers who would like to be able to move goods on a less frequent basis as well. There are a number of issues, in that regard, that stakeholders have raised. I am more than happy to provide you with some of the information that came out of that.

Senator MADIGAN: As a result of the department's review of the legislation, did any of these reviews point out where the bar should be lifted or was it all to lower the bar further? You did mention burden of compliance. That rings alarm bells, for a lot of people, as to lowering the bar. We have had questions from the committee, this afternoon, about the veracity of claims and whether those claims are checked. The committee is concerned whether the government, the department, is receiving the truth in these applications.

Ms Zielke : The coastal trading legislation does not deal with any safety issues. It does not deal with anything, in relation to registration of the vessels or ownership of the vessels, because other pieces of legislation are responsible for that; it is the same for security issues.

Senator MADIGAN: The message that you are giving us is that we just have to hope and pray that there are no holes in the other legislation that catches the crooks.

Ms Zielke : It is like the discussion you had with the department of immigration this morning. They were explaining to you the way in which they go through assessing the crews on the ships, for example, and also other issues in that regard. That is one of the mechanisms that we rely on in relation to the way in which the ships work around the coast and come into Australia in the first situation as well, whereas the coastal trading legislation is only focused on providing licences for the movement of goods between ports.

ACTING CHAIR: We might as well go home. Santa Claus sends his best wishes. I hope you all have a lovely Christmas and he finds your Christmas trees as individuals. I also thank the professional people behind the glass who have to put up with all of this, the secretariat and the witnesses who attended today. That concludes today's hearing. Merry Christmas.

Committee adjourned at 14:01