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AMSA knew MV Portland workers were to be replaced -

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MICHAEL BRISSENDEN: The Australian Maritime Safety Authority knew Australian workers were going to be removed from the cargo ship MV Portland three weeks before they were escorted off by security guards.

The workers were replaced with a foreign crew last month, ending a lengthy stand-off with the ship's operator, Alcoa.

A Senate Estimates committee has heard the Government didn't investigate the mining company's financial circumstances before granting it a temporary licence to use a foreign flagged ship in Australian waters.

From Canberra, Naomi Woodley reports.

NAOMI WOODLEY: The Liberal Senator Bill Heffernan is known for his plain speaking and it was on display as he chaired an Estimates committee last night.

BILL HEFFERNAN: It is obviously a cock-up which both governments, the previous and this one, are party to.

NAOMI WOODLEY: They were discussing the lengthy dispute involving Alcoa and the ship, the MV Portland.

Months of legal and industrial action ended last month when several local workers were escorted from the ship by security guards and it sailed for Singapore.

In October last year Alcoa was issued a temporary licence to use a foreign flagged ship for 17 voyages over 12 months to carry alumina from WA to Victoria.

Michael Sutton was the Infrastructure Department official who made the decision and he was questioned by Labor Senator Stephen Conroy.

STEPHEN CONROY: Are you putting to this committee that you did not know an Australian ship would go out of service when you issued that temporary licence?

MICHAEL SUTTON: Senator, the short answer is...

STEPHEN CONROY: Just try yes or no.

MICHAEL SUTTON: Senator, we, I did not know it was going to go out of service.

NAOMI WOODLEY: The department secretary Mike Mrdak says that wasn't unusual.

MIKE MRDAK: It has not been practice for Australian operators to tell us that they are removing a vessel.

NAOMI WOODLEY: And the duty minister, Richard Colbeck, says it's unfair to expect the department to ask if the temporary licence was to replace a current Australian ship.

RICHARD COLBECK: And no-one else asked the same question, including the MUA, who were advised as part of that process.

If the MUA don't ask that question or raise that concern, why would you expect the officer to?

STEPHEN CONROY: You're the delegate, okay, you can't shift it onto people who might reply to you or not.

NAOMI WOODLEY: The Department's Michael Sutton also told the Greens Senator Janet Rice that Alcoa's financial circumstances were not investigated before the temporary licence was issued.

MICHAEL SUTTON: They made a decision not to use the general licence vessel and that's a black and white matter.

JANET RICE: But they don't have to justify that to you, they just made a decision to do it.

MICHAEL SUTTON: That's correct Senator, and that's the whole premise of the act.

NAOMI WOODLEY: Departmental officials say they weren't aware of the workers being removed from the ship before reading it in the media in January.

But the head of the Australian Maritime Safety Authority, Mick Kinley, told Labor Senator Stephen Conroy they knew on December the 21st because Alcoa had to submit new paperwork for the foreign workers.

STEPHEN CONROY: And so they clearly indicated to you that they were going to replace the Australian crew with a foreign source crew?

MICK KINLEY: That was what we understood from why they were applying for those certificates of recognition.

NAOMI WOODLEY: Mr Kinley says he assumes AMSA would have notified the department at the time, but he took the question on notice to confirm it.

MICHAEL BRISSENDEN: Naomi Woodley with that report.