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Ship owners, unions unite to protect merchant -

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Ship owners, unions unite to protect merchant navy

Reporter: Heater Ewart

KERRY O'BRIEN: Welcome to the program. Australia's merchant navy, once a vital service in time of
national emergency, is in danger of disappearing, according to ship owners and maritime unions.
Owners and unionists have formed an unusual alliance to fight what they claim is rorting of the
system by companies seeking to use cheaper foreign ships. The system is supposed to give first
preference to Australian-flagged vessels, but it's alleged that Australian trading companies are
exploiting a loophole that has already seen foreign-owned vessels win more than a third of cargo
movement around the coast. The alliance of owners and unionists is warning that the very existence
of Australia's merchant marine is under threat, a situation that they say that could prove
disastrous in some future crisis. Heather Ewart reports.

MICK DOLEMAN, MARITIME UNION OF AUSTRALIA: We have seen since this Government has come into power,
half of our fleet disappear. They've got rid of more ships than the Japanese sunk during World War

LACHLAN PAYNE, AUSTRALIAN SHIPOWNERS ASSOCIATION: The day of the all-Australian fleet with
'Melbourne' written on the stern has probably gone.

PAULL VAN OOST, PAN AUSTRALIA SHIPPING: From where we sit, today, it appears that the shipping
industry in Australia has been abandoned by the Government.

WARREN TRUSS, FEDERAL MINISTER FOR TRANSPORT: The reality is this is a tough trade. It's a
difficult industry. It's the Australian Government's policy to support the shipping industry.

HEATHER EWART: The Australian shipping industry is fast declining. Its registry has gone from 75
ships to 50 in the past 10 years and those remaining are struggling to compete with foreign
operators for our coastal trade. The Maritime Union and the ship owners are at one in blaming the

MICK DOLEMAN: If you wanted to destroy your business, be a Australian ship owner because you've got
to compete against all these foreign ship owners who don't have to comply with any Australian
standards or conditions or safety.

LACHLAN PAYNE: You wouldn't see it in the rail industry, you wouldn't see it in the road industry
and you sure as hell wouldn't see it in the airline industry, but it seems to be acceptable in
shipping. Well, it's just simply not.

HEATHER EWART: At issue here is a boom in the number of single-voyage permits issued by the
Department of Transport for foreign ships to carry domestic cargo along the Australian coast. The
case of the ship 'Stolt Australia' in Hobart last month has brought the debate to a head. The
'Stolt' was the only Australian flagged and operated chemical tanker left. 18 Australian crew
members were sacked after a company decision to abandon that role and instead sail the ship under a
Cayman Island flag using cheaper Filipino labour.

SACKED SHIPPING WORKER: This is our trade, this is our job. You know what I mean, this is all we

HEATHER EWART: Management has consistently been unavailable for comment, but industry insiders say
there's no doubt Canberra's guidelines enabled foreign ships to erode the 'Stolt's trade.

LACHLAN PAYNE: It really made people step back and say, "This has happened because there's a
fundamental flaw in the way that Australian ships have to be operated in this country, compared to
the way foreign ships are facilitated and operating in this country.

WARREN TRUSS: The 'Stolt' company have decided to put that ship in another part of the world. They
didn't believe it was any longer suitable for the Australian trade. That's a commercial decision
for them.

HEATHER EWART: The permit system has been around for almost as long as federation. What's
relatively new is how the Government administers the guidelines to issue permits for foreign
operators to carry domestic cargo. The system demands that shippers, that is companies wanting to
ship their cargo to another part of the country, must give Australian ships three days' notice to
apply for the job. If there's no Australian ship available, then a foreigner can take it.

WARREN TRUSS: So we will give priority to an Australian ship, where an Australian ship is available
under reasonable terms and conditions.

HEATHER EWART: And there is the catch - if a shipper claims the cost of using an Australian ship is
too high, the Government now allows this as rationale for issuing permit to a foreign operator. The
ground rules have shifted.

LACHLAN PAYNE: If you look the dictionary up, "available" is a pretty straightforward word, but for
the purposes of this administration, available is a huge word. Available means price. Available
means timing. Available means delivery. Available means a whole lot of things.

MICK DOLEMAN: So if you can get a cheaper ship - and there is plenty of them - to carry your cargo
you can do so.

WARREN TRUSS: Clearly if an Australian ship will cost twice as much as an alternative, well that's
not considered to be made available under fair and reasonable terms.

HEATHER EWART: The number of foreign operators carrying domestic cargo has jumped from a small
percentage 20 years ago to around 35 per cent.

MICK DOLEMAN: They're issuing single-voyage permits like confetti at a wedding.

WARREN TRUSS:Well, I think that's a nonsense claim.

HEATHER EWART: The union and the Australian shipowners argue that some companies are manipulating
the system to get a cheaper foreign deal.

MICK DOLEMAN: The shipper of a particular cargo will identify when that Australian ship is not
available of carrying some other cargo, and then put their application in. They'll put it in with
very short notice.

LACHLAN PAYNE: We hear of cases, for example, where a ship - a cargo might be available, an
Australian ship puts its hand up and says, "Yes, we can carry that cargo" and then the person
applying for the cargo might say, "We forgot to say the ship needs cranes" knowing that the
Australian ship doesn't have cranes.

WARREN TRUSS: My department will look through the various issues and make sure that the
arrangements are genuine and entered into in good faith.

HEATHER EWART: The organisation representing foreign operators says it's not aware of any

LOU RUSSELL, SHIPPING AUSTRALIA: That's been an allegation. I've never seen it proved. That's an
issue you would have to address to the domestic shippers.

HEATHER EWART: So we contacted one company after another who ship their cargo domestically and none
of their management teams were available for interviews. But some acknowledged privately it's no
secret that manipulation of the system to cut costs does go on. The Australian shipping industry is
calling for a level playing field and cuts to legislative red tape and costs it says foreign
operators don't have to deal with. It warns the merchant navy is disappearing.

LACHLAN PAYNE: In the future, if there was an emergency, I don't know where you would get people
with maritime skills from.

HEATHER EWART: The newest entrant to Australian coastal shipping, Pan Australia Shipping, started
up a service between Melbourne and Fireman earlier this year and says this was its experience:

PAULL VAN OOST: We were appalled at what we found in the Australian shipping industry and when we
got our first vessel, the new-build 'Boomerang I' - it was indeed difficult to even get a crew
together for the vessel.

HEATHER EWART: It's a far cry from the era when Bert Nolan was a seaman. He headed the Seaman's
Union for two decades. Now, 71-years-old, he can recall one ship he worked on like it was

BERT NOLAN, FORMER SEAMAN: It had I think it was 32 seamen junior members in the stokehold and
engine room alone. It had five firemen and three trimmers a watch and, from memory, I think there
was 21 on deck. I don't know how many stewards they had up in the glory hold. They still made a

HEATHER EWART: He can recall too how the Australian fleet and merchant navy were called upon to
back up the war effort in World War II. One in eight Australian merchant seamen lost their lives in
that war.

BERT NOLAN: That was probably the biggest percentage of loss of life in the whole of the war.

HEATHER EWART: The Australian fleet is unlikely to ever be called upon in the same way again. But,
the Minister for Transport is confident it could meet any challenge.

WARREN TRUSS: If a larger scale event occurred, there would be clearly a role for merchant vessels
and I'm sure they would be available.

LACHLAN PAYNE: I think they certainly would probably underestimate the difficulty of rounding up a
shipping capability.

HEATHER EWART: The Government argues if ship owners want policy alterations to boost their
industry, they need to mount a case.

WARREN TRUSS: If evidence can be provided that further changes need to be made, well, we're
prepared to look at them.

HEATHER EWART: But for now there's no sign that change is on the horizon and the industry is
sceptic al there ever will be.