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Rural and Regional Affairs and Transport Legislation Committee
26/02/2018
Estimates
INFRASTRUCTURE AND REGIONAL DEVELOPMENT PORTFOLIO
Australian Maritime Safety Authority

Australian Maritime Safety Authority

[14:26]

CHAIR: I welcome the representatives of AMSA. You know the drill. Senator McCarthy.

Senator McCARTHY: AMSA took over fuel regulation for cruise ships in Sydney Harbour in January 2017. Under the previous regulator, the New South Wales EPA, there was a rigorous compliance monitoring regime in place which included taking fuel samples, checking logbooks, inspecting temperature gauges and checking bunker certificates. In response to a question at estimates on 27 February 2017, AMSA confirmed that its regime was less rigorous. You stated: 'We certainly have not been taking fuel samples, but the international regime for fuel is a bunker certificate regime. Again, we have no evidence that there is noncompliance with those certificates. We also understand from the New South Wales EPA that there was a very high level of compliance regardless.' Given AMSA's previously admitted limited monitoring for cruise ship compliance with its marine notice 21 of 2016, what evidence do you have that cruise ships are complying with the low-sulphur fuel regulation?

Mr Kinley : As we explained last time, as most of the regimes are under the international shipping conventions you take certificates at face value unless you have clear grounds to do further inspections. At this stage, we have issued 55 directions and we have done 48 compliance checks on 30 ships. There has been no reason to take further fuel sampling. Many of the ships have fitted scrubbers. The quality of the fuel and the amount of sulphur in the fuel is irrelevant because the scrubbers take the sulphur out of the exhaust. All the data we have from those vessels as well—they have logging systems that indicate that the emissions are within the prescribed limits—are that there is still a high level of compliance.

Senator McCARTHY: There are a number of unscheduled overnight stays at the White Bay cruise terminal, often due to bad weather or mechanical issues. In these instances, does AMSA monitor whether those cruise ships which have already switched to bunker fuel, expecting to depart within the hour, switch back to low-sulphur fuel once their departure is delayed?

Mr Kinley : I would have to check on those specific cases. But our directions apply whether it is an unscheduled stop or not, so we would expect the compliance to be in place anyway. My understanding is that the operators are very much aware of the requirements in Sydney. They are very careful to comply when they are alongside, and they allow adequate time regardless.

Senator STERLE: Are you 100 per cent confident that every single operator is compliant?

Mr Kinley : I am never 100 per cent confident.

Senator STERLE: I just wanted to clarify that because I mistook it that you had that impression.

Mr Kinley : I said 'most of the operators'.

Senator McCARTHY: AMSA relied on previous compliance monitoring by the New South Wales EPA when it stated at Senate estimates on 27 February last year that 'the second stage regulation requiring cruise ships to switch to low-sulphur fuel before entering the harbour was not necessary'. Does AMSA concede that it is not reasonable to rely on the results of a previous compliance monitoring regime, which was far more thorough, because the cruise ships may well have changed their behaviour and practices as a result of the less stringent monitoring?

Mr Kinley : No.

Senator GALLACHER: Can we get to the bottom of it? I was in Sydney a couple of weeks ago and there was a cruise boat turning over every 12 hours. So are we looking at 700-odd boats going in and out of Sydney Harbour at that main bay near Circular Quay, and how many of those do you actually check?

Mr Kinley : I said before that we have had 48 compliance checks—

Senator GALLACHER: So how many of the 700-odd boats that go in and out of Circular Quay in a year are checked for compliance?

Mr Kinley : As I said, we have carried out 48 compliance checks on 30 ships, and many of the ships—

Senator GALLACHER: Did you check 30 cruise ships or just 30 ships in total?

Mr Kinley : Cruise ships.

Senator GALLACHER: Thirty of the ones that birth next to Circular Quay?

Mr Kinley : Many of those ships are on repeat journeys, so there may be 700 port calls but there are not 700 ships involved.

Senator GALLACHER: So there are 700-odd and you checked 30?

Mr Kinley : Yes.

Senator GALLACHER: And that is across all the different operators?

Mr Kinley : Yes.

Senator GALLACHER: Could you provide on notice the details of who you checked, which lines they were and what the results were?

Mr Kinley : Yes, we can do that.

Senator McCARTHY: Contrary to statements at Senate estimates on 27 February last year, is AMSA now aware that there was evidence of noncompliance under the New South Wales EPA regime and that, consequently, a penalty notice was issued in May 2016 to the Pacific Jewel?

Mr Kinley : I think I am aware of that case, but I would have to go back and check on that one.

Senator STERLE: What about you, Mr Schwartz? Are you aware of that case?

Mr Schwartz : No, I wasn't.

Senator McCARTHY: Is anyone aware of it?

Mr Kinley : I understand that in the past—this is just my recollection; I'd have to go and check on it—there were certainly issues at one stage with compliance. But I understand that that compliance notice never proceeded.

Senator McCARTHY: Why?

Mr Kinley : I would have to check with New South Wales on that.

Senator McCARTHY: What is your policy around compliance and noncompliance?

Mr Kinley : What do you mean?

Senator McCARTHY: What is your process? You say you don't know about the Pacific Jewel. How do you—

Senator Scullion: He said he had an understanding of it. We will get the details back to you on notice. He didn't say he didn't know anything about it.

Senator McCARTHY: So what is your process around compliance and noncompliance?

Mr Kinley : Where we are at now, since we became involved in issuing the directions, is that we issue the directions to the ship that they are to comply with the sulphur emissions levels while they are alongside. We go on board the ships. As I said, there have been 48 compliance checks on 30 passenger vessels. We check the systems they have in place—their bunker notes. The bunker notes that they have for the fuel quality on board are part of an international system. These ships are used to complying in low-emissions areas around the world. So this is not something that we are aware of—certainly internationally widespread noncompliance in this regard. For the ships that operate scrubbers, we check that the systems are in place and being used. The scrubbers have measurements to check on the sulphur emissions of the discharge.

I have to say that we do get complaints from residents, in White Bay in particular. Sometimes they're about visible emissions. Visible emissions are not what we're talking about here. In fact, scrubbers will quite often have steam coming out of the funnel. It's about the noise the ships make. It's about visual amenity. It's about a whole lot of other things. It's about the smell. And we have followed up on those complaints where necessary, and when we feel there is something to follow up on. But generally these cruise ships that trade internationally are used to operating in emission control areas, and we check on the compliance and the systems they have in place.

Senator McCARTHY: When a penalty notice is issued, what happens then?

Mr Kinley : We haven't issued a penalty notice at this stage. Our normal means of compliance would be to issue a direction to comply, and we would follow that up. The penalty for not complying with a direction is actually a prosecution process. It's not a penalty notice process. We would issue a direction to comply and follow up on that. And there are other actions we can take and other directions we could issue.

Senator GALLACHER: Do you only test in Sydney Harbour? Have these 30-odd boats only been done in Sydney?

Mr Kinley : We're only doing this regime in Sydney at this stage.

Senator GALLACHER: You don't do anything in Perth, Adelaide, Melbourne, Darwin?

Mr Kinley : Not at this stage. Australia has no emissions control areas. The only places in the world that do have mandated emission control areas are some of the Baltic, the coast of the US—where these are internationally recognised emission control areas. In Sydney it's being done on a local level. But internationally we've been working closely with the International Maritime Organization. The sulphur limit for marine fuels will be reduced in 2020 from a maximum of three per cent down to 0.5 per cent. We have been very much working with industry to actually make sure that Australia's prepared for that. That's far more important for us, because this is not just about cruise ships; this is about all ship types.

Senator GALLACHER: For the people that live around the harbour, it's about cruise ships—trust me.

Mr Kinley : I'm sure it is, but we've got the whole country that we regulate.

Senator McCARTHY: Can I go back to the penalty notice? Apologies: I didn't clarify my question there. It's in relation to my previous question on the Pacific Jewel. With the question on notice that you have taken around the Pacific Jewel, could you also respond in relation to the awareness of the penalty notice that was issued in May 2016?

Mr Kinley : I'll follow up.

Senator McCARTHY: Thank you. The cruise ships had been practising switching to low-sulphur fuel before entering the harbour in preparation for stage 2 of the New South Wales regulation. Given the fact that cruise ships may not come within 200 nautical miles of the east or west coasts in North America and many parts of Europe, unless they switch to 0.1 per cent sulphur fuel and the special circumstances surrounding the topography of the White Bay Cruise Terminal and its extreme proximity to residential areas—and you've mentioned there have been complaints around there—what steps will AMSA take to direct cruise ships to switch to low-sulphur fuel before entering the harbour to protect the health of the community? Even if you wish to expand on those complaints that you've received.

Mr Kinley : It's our view that the New South Wales legislation that applied where they were controlling cruise ships could still be used by New South Wales if they wished. They've formed another view. So, we are certainly not planning on doing further work in that regard—with the cruise ships and the stage 2. We are more interested in the international regime and making sure that Australia is prepared to have bunker fuels coming down to 0.5 per cent in 2020—for all ships and not just cruise ships.

Senator GALLACHER: That sounded almost like, 'We're not interested in maintaining the status quo.'

Mr Kinley : Looking at how this has been regulated nationally, as far as I'm aware New South Wales can do things at that local level if they wish to. So there are options there as well. But, for us, we have to look at all international ships and not just cruise ships, and we are very much looking at how we work with industry to make sure they can meet those international—

Senator GALLACHER: If I were a resident a with a concern, who would I take it to: you or the New South Wales EPA?

Mr Kinley : I'll also just add that we've had New South Wales EPA and New South Wales Health providing us with information in the past, which was that the emissions levels in that area are not above the limits they set for health. So, they are in communication with us about these issues. The residents have, in fact, been raising issues and New South Wales EPA have been directing them to us.

Senator GALLACHER: But you're saying, 'The broader international picture is our goal; don't come here'?

Mr Kinley : No, I'm not. I'm saying people are already letting us know their concerns. Also, many of them are about other things, like: ships testing alarms—as they need to for lifeboat drills et cetera—and making noise; and visual emissions coming out of funnels. Again, that is not necessarily about sulphur. It may be about steam et cetera from scrubber. And it's about smell and it's about visual amenity and the amenity those ships are having in that particular port. We will do what we can—and we do what we can—within the legal framework that we work in, but, at the end of the day, we have no ability to decide where a port puts their cruise terminal and what residents are living within that area.

Mr Schwartz : Since December 2016, AMSA has been issuing these specific directions to each passenger ship entering Sydney Harbour with more than 100 passengers. That, in itself, is, in fact, a compliance notification. Failure to comply with that direction is, in itself, an offence. We have followed up on those notices and, to date, we haven't established any lack of compliance with those notices. We don't have a plan to turn that off, if that was the concern I was interpreting. So, at the moment we are continuing to issue those notices and we're continuing to follow up, but, through the way that we follow up, which is intended to be at an appropriate and proportionate sort of level to the risks that we're seeing, we haven't established any non-compliance.

Senator GALLAGHER: So, everybody over 100 passengers gets a notice, and you've tested 30 cruise ships?

Mr Schwartz : Thirty individual ships, but some of those have been done several times. As we said, we've done 48—

Senator GALLACHER: Is that over 12 months?

Mr Schwartz : That's since December 2016. There have been 48 individual compliance checks on 30 different ships, and the majority of those are unannounced. We don't ring them and say: 'We're coming down. Get yourself ready.'

Senator McCARTHY: That was since December 2016?

Mr Schwartz : Correct.

Senator McCARTHY: Can I take you to marine notice 21/2016, which states the following:

The Direction will allow AMSA to take into consideration the specific circumstances that exist if the Direction cannot be met due to:

• unforeseen and uncontrolled mechanical or equipment failure;

• the unavailability of compliant fuel;

• unexpected delays in departure beyond the reasonable control of the master; and

• an unscheduled berthing due to an emergency.

In any of the above circumstances, AMSA must be notified, and should be provided with supporting evidence about the reason and the steps being taken to rectify the non-compliance.

Has there been any noncompliance by cruise ships with marine notice 21/2016, and, if so, has AMSA been asked to take into consideration any of the specific circumstances listed in the direction for noncompliance?

Mr Kinley : We'll have to take that one on notice. We'll have to check on that one.

Senator McCARTHY: Further to marine notice 21/2016, the direction will have effect on all of the vessels, birthing and activities, within the port for a period of two years, subject to review. Given that the direction had effect for two years from December 2016, subject to review, what does AMSA intend to do in December this year?

Mr Kinley : The intention is to renew those directions.

Senator McCARTHY: AMSA has been invited to the quarterly meeting attended by representatives of the community and various government departments, including Health, EPA, ports and planning, but have declined. This leaves the community with no avenue to escalate their concerns and determine practical solutions. What steps will you take to liaise with the community (a) at all, and (b) regularly, regarding compliance monitoring, communication and complaints, as you've mentioned?

Mr Kinley : I think we are intending to put more information on our website about what compliance inspections we do. Apart from that, there is atmospheric monitoring in the area. I'm not aware of any issues of sulphur limits being breached there. People are contacting—

Senator McCARTHY: Who's doing that? Are you doing that atmospheric monitoring?

Mr Kinley : New South Wales EPA.

ACTING CHAIR ( Senator Sterle ): If AMSA was invited, what is your reason for not attending?

Mr Kinley : I would have to check on that, but, again, it is the ability to have someone available to attend the meetings. I think it was towards the end of last year, in a very busy time where a lot of people engaged in other work and travelled around the country and internationally.

ACTING CHAIR: You can check that out for us and find out the reason, can't you?

Mr Kinley : Of course, yes.

Senator McCARTHY: They're quarterly meetings. Have you attended any?

Mr Kinley : No, I haven't. But, of course, all we can talk about is sulphur emissions. We've taken actions on the sulphur emissions. We can't deal with any of the other issues, whether it's visual amenity or whether it's the other things that people are not happy about with cruise ships in that area like noise, smells or whatever. We are not the people who have the ability to either move the cruise ships to another location or put shore power in those cruise terminals so they wouldn't have to run generators, if the ships were alongside and could connect up to shore power. Within the limits of what we can do, which is direct the ships to use low-sulphur fuels, there is only one particular concern that we can deal with.

ACTING CHAIR: I'm not trying to tell you how to do your job. I understand when the community gets all excited. I come from the trucking industry and they all want their milk on their doorstep, but no-one wants a truck driving through their suburb to deliver it, so I get all that. But when all is said and done, if you can, you can sit in front of this committee and you can tell us that there is 'confusion'—my words, not yours—because sometimes there's steam coming out and some people think it's visual pollution and all that. But would it not assist AMSA if you did turn up to tell the people what you can do and what you can influence? Apart from having to give up—

Mr Kinley : I'm not saying we wouldn't turn up.

ACTING CHAIR: Senator McCarthy did ask about it quarterly, and your response was that you haven't been to any.

Mr Kinley : We were invited to the last one that we weren't able to go to. We can certainly look again in future meetings.

ACTING CHAIR: Mr Kinley and Mr Schwartz, we'll let you run away. Thank you. Now we will go to Australian Transport Safety Bureau.