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

CRUMLIN, Mr Padraig, National Secretary, Maritime Union of Australia

Committee met at 09:00

CHAIR ( Senator Sterle ): I declare open this public hearing of the Senate Rural and Regional Affairs and Transport References Committee. The committee is hearing evidence on its inquiry into the increasing use of so-called flag-of-convenience shipping in Australia. I welcome you all here today. This is a public hearing and a Hansard transcript of the proceedings is being made.

Before the committee starts taking evidence, I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. The committee prefers all evidence to be given in public, but under the Senate's resolutions witnesses have the right to request to be heard in private session. It is important that witnesses give the committee notice if they intend to ask to give evidence in camera. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may, of course, also be made at any other time.

Finally, on behalf of the committee I would like to thank all of those who have made submissions and sent representatives here today for their cooperation in this inquiry. I now would like to welcome Mr Paddy Crumlin from the Maritime Union of Australia. Do you have any additional information on the capacity in which you appear today?

Mr Crumlin : I am also the President of the International Transport Workers' Federation, which represents over five million international transport workers of aviation, road, rail and maritime related services.

CHAIR: Before we go any further, I would like to declare an interest. I have worked closely with Mr Crumlin over the years and I consider Mr Crumlin to be a personal friend. That is out on the table, so no-one can suggest otherwise. The committee has received your submission as submission No. 19. Would you like to make any amendments or additions to your submission?

Mr Crumlin : No, other than maybe to introduce it when you are ready, senators.

CHAIR: Mr Crumlin, it is over to you, and then we will ask some questions.

Mr Crumlin : Firstly, I endorse the submissions of the International Transport Workers' Federation and, of course, the Maritime Union of Australia. The MUA has been integral to the global efforts to deal with the quality and safety of flag-of-convenience ships. 'Flag of convenience' is a term where you register a ship in a place like Liberia, Panama or Mongolia—you do not necessarily have to have a coastline to register your ship there—for the sole purpose of avoiding accountability on regulation, including taxation.

Senator HEFFERNAN: It is the same with tax.

Mr Crumlin : The inquiry looks into the corrosive impact of flag-of-convenience shipping on labour standards, safety and the environment. In fact, I was on the maiden voyage of the vessel Portland in 1988, which was put together and brought the size of Australian crews from the high 30s down to 17. I did the inaugural trip. It has been working in that trade, carrying alumina between Kwinana and Portland, ever since. At the moment, there is a full-time Australian crew that is going to be removed and replaced by a full-time flag-of-convenience vessel. Alcoa, the company, have facilitated this through a government—and a department—that seems to have little regard for the economic benefits of a national Australian shipping line, and it has recently attempted to pass a bill that would completely strip away the small preferences and support that currently exist under the coastal trading act.

The impact of the loss of the ship is broader than the 40 skilled seafarers that are losing their jobs. The crew that are replacing them do not pay income tax; they do not live in the country. The shipowner-operator pays no corporate tax. The employers of the seafarers pay no corporate tax. There is no GST on bunker fuel. They do not pay customs duty on the vessel and it is not declared to Customs as imported.

Overall, when you take this into account, Australian purchases of foreign shipping services create a drain of nearly $9 billion annually on our balance of payments. We are the fourth largest user of ships in the world. Even though it is a relatively limited area, it is a very important part of the national transport infrastructure because Australian shipping has traditionally serviced Australian industries, interstate and intrastate.

The international shipping industry is currently not paying its fair share. This is our fundamental submission. It is not paying its fair share of tax and has no commitment to the security, social and environmental impact it has on Australia. This creates, basically, unfair competition. How can an Australian operator operate in an Australian industry with all the regulatory and legislative requirements of any Australian industry, including taxation, when its competitor does not? Our respectful submission would be, therefore, that flag-of-convenience and international ships are given a competitive advantage.

Going further into the whole issue of flags of convenience, MV Sage Sagittarius highlighted the potential abuse of seafarers. You would be aware of the New South Wales coroner's inquiry into the deaths that brought to light documents and also raised serious questions about national security. The reality is that Australian seafarers, like me and my father—who went to sea as a deck boy and is now 85 years old but was a Master, Foreign-Going—are fully scanned and background-checked. We have to get our maritime security card, which is the highest level of scrutiny. When you carry ammonium nitrate, with all of the risks to mitigate that, it was the determination of the Howard government, and reinforced by subsequent governments, that Australian seafarers, Australian port workers and Australian aviation workers should have the highest level of security scrutiny.

The people that are replacing us do not have that scrutiny. Many of them come from areas of precarious governance, such as the Philippines, Ukraine, Russia and many others, and it is just not possible to apply the same stringent, onerous criminal and security background checks to those seafarers, who are effectively working full-time, as is the replacement vessel for Portland in an Australian domestic transport industry moving only between Australian ports. Retired Rear Admiral Robert D Reilly is here to discuss that today and to make further submissions on the experience in the United States in that area.

There are some general areas we point to, such as the marine environment. There are some examples in our submission to show that this is about risk mitigation as much as it is about creating commercial and economic opportunity. The Shen Neng, if I might draw your attention to that, was a vessel that caused the largest known damage to the Great Barrier Reef caused by any ship, where the ship carved a three-kilometre long, 400,000-square-metre scar on Douglas Shoal. The Commonwealth sued the shipowners for $194 million in damage—that is at the light end of any potential failure.

The other thing you have to take into account, senators, is that many of these companies, because they do use flags such as those of Liberia and Panama, are $2 registered companies in overseas tax-free environments, including the Cayman Islands, Bermuda and many of those areas.

With other environmental shipping disasters, the government has cleaned up the impact first and then sought compensation—from an industry that is largely about removing any transparency about its governance and ownership.

Maritime authorities around the world have recognised that fatigue is a big factor. If you do not have any labour regulation and if you do not apply in any effective way any stringency to how work is done aboard these vessels then of course fatigue becomes very important. For example, the chief mate of the Shen Neng had slept for only 2.5 hours over the previous 39 hours due to the demands of the vessel.

On FOC and international ships workers are allowed to work up to 91 hours a week and 90 hours per week in exceptional circumstances, which speaks for itself. Australian fatigue standards say that anything over 50 hours per week is problematic. Australian seafarers have a rostered system. We do work longer hours and that is compensated by a fly-in fly-out approach so that rest can be taken and you can meet the continuous nature of seafaring life whilst still having sufficient rest to be able to recuperate.

Australia's experienced mariners, like my father, are needed as tug masters, harbour masters, stevedoring managers, logistic supervisors, port state control inspectors. They find their way into every part of Australia's maritime industry because, as I said, we are the fourth largest user of ships and it is fundamental not only to the economic and national interest but to the overall community interests of the nation. They are needed to support what is a $400 billion trade for our ports and are essential to that. By not having a shipping industry or replacing a shipping industry with an industry that is unfairly competitive all it does is really pose the question: who will be the governance of this important part of the Australian economy going forward?

The number of FOC and international ships visiting Australia has increased by 78 per cent since 2002. Prior to 1995 shipping was largely a bipartisan political situation and in fact some of the ships that were in the trade carrying alumina pre-the Portland was at the initiative of Mr Hunt when he was the minister for transport under the Fraser government. It enjoyed a high degree of bipartisanship for a long time that secured efficiency, secured productivity and secured governance but also was an important part of securing our part ownership of a trade that is essential to our national economy and national security interests.

Therefore the recommendations the ITF has provided and which the MUA supports largely fall into three categories: recommendations to Australian authorities to bridge the gap and encourage an industry to reduce its negative impact and to pay its fair share, recommendations to support the Australian shipping industry in the face of unfair competition and recommendations to the Australian government to take to international agencies to improve the regulation of international shipping in the long run. This is an issue for all of us. It is an international governance issue and it has got specific national interest issues.

I also have a lot to do with seafarers' welfare. I sit on the Seafarers Welfare Fund that provides counselling, early intervention, mental health and suicide prevention services to international seafarers. It is not an industry that is very good at that. It is a short-term industry that employs people from places like the Philippines and India. It churns those workers and, as indicated by the terrible situation on the Sage Sagittarius, this is a workforce under tremendous duress.

I also sit on an early intervention and counselling service together with employers and other independents in the industry called Hunterlink. It is based in Newcastle but also has a national network of support. It has done 1,000 counselling services to seafarers in and out of Australian ports and reports a high degree of mental stress, depression, bullying and harassment because effectively again there is no regulation and overview and nowhere for the seafarers to go so we are forced to give whatever charitable support we can on the basis of charitable donations from elsewhere.

Hunterlink is seeking with ISWAN, the International Seafarers Welfare and Assistance Network, to have the situation where seafarers regardless of what port they are in, whether it is Sydney, Melbourne, Fremantle, Brisbane, Hong Kong or Tokyo, as part of their overall vocation have the sort of support any employee would expect on the job. This is something that does not exist for them. We are currently collaborating on a possible establishment of an early intervention, counselling and psychological support. Dean Summers from the ITF can go into that in a little bit more detail.

Finally, I have a lot to do with the Maritime Labor Convention. I was in the ILO for over 20 years in my senior leadership position within the ITF. I see in some of the correspondence that somehow there is an argument that the Maritime Labor Convention is a protector for these seafarers. It is not. What it does is give effect to governance. Previous to the Maritime Labor Convention, if a ship was in Australia, there was no ability for the regulator in Australia to give any protection or to apply any Australian regulation or legislation to that vessel. That vessel was effectively regulated by, for example, the state of Liberia, the state of Panama, the state of Mongolia or wherever—the Cayman Islands or Bermuda—so there was no relevance. What the Maritime Labor Convention did was secure the support of international governments that that was not a sound basis for the protection of their national interest and, through the tripartite process, establish an accountability so that regulation, particularly national regulation, could be applied more effectively.

The MLC, I would put to you, is just the start of something, not the end of something. If we are a shipping nation—and we have been a shipping nation since we became a colony; we rely absolutely on our imports and exports to secure our future economic benefit—it is essential that we work, and continue to work, in a tripartite way to have productive, economic, safe and secure shipping and also to secure our fundamental national infrastructure in a competitive and transparent way. Thank you.

CHAIR: Thank you, Mr Crumlin. Can you give us a snapshot—I am cheating a little bit, because of a previous inquiry that Senator Madigan instigated last year on fuel security—on how may Australian seafaring jobs have gone in the past five to 10 years? Is the MV Portland a one-off, or are we seeing a trend?

Mr Crumlin : No. As I said, the FOC vessels have increased exponentially since 2002. What we had for at least 80 to 100 years under the Navigation Act was bipartisan support that Australian shipping was a fundamental ingredient in the use of international shipping in domestic shipping. That has now been removed. There was an identity, just as there is in many other countries—Brazil, the Philippines, China, Japan—that domestic shipping is fundamental to the national interest and is part of the national transport infrastructure; it is not an economic measure. That is a given all over the world. The regulations—the labour regulation, the safety regulation and the environmental regulation—apply in national standards.

FOCs were largely limited, by bipartisan support, to international shipping. Where there were problems—and they were identified in the Ships of shame report back in 1992, where the Kirki broke in half; there had been a swathe of 20 or 25 ships that had left Port Hedland that had never arrived at their destinations because of the poor quality of the vessels—the Australian government had an inquiry into international shipping. Part of the Maritime Labor Convention, and the bipartisan support for that, was to lift the international standards, but it was never to be at the expense of the national standards. It was an intrinsic part and, I would argue, continues to be one of the essential ingredients at a time of high risk in security and one of the essential mitigations going forward in a world that is much more dysfunctional and much more difficult than ever before.

There are more reasons. There has been this enormous drop-off. Some of it reflects the move away from manufacturing in this country—for example, the shutting down of the steel industry and other areas—but it still remains essential to those domestic industries moving cargo between cities. They can do it by rail, they can do by road or they can do it by seagoing short sea shipping. They all compete against each other; it is a competitive environment. If it is cheaper to do it by road or rail, they do it that way; if it is cheaper doing it by ship, they do it that way. Each of those areas of transport infrastructure are genuinely competitive within the framework of Australian competition policy, not being forced to compete with the transport provider who pays no corporate tax and has no accountability for regulation. It would not happen and does not happen in any other country. Lots of countries do not need cabotage because they do not have many ports and road, rail and land transport meet their transport needs. Countries that do need shipping—like the Philippines, Japan, China, the US, Australia, Indonesia, Brazil and South America—protect their domestic shipping because it is an intrinsic part of their domestic transport infrastructure. It is not a revolutionary concept; it is a process of governance and understanding. That does not mean you are not competitive, are not efficient, are not safe or productive. Of course we have to be. That is our responsibility. Otherwise, there would be a skewering towards road and rail. With the enormous needs and the enormous coastline and the diversity of the Australian economy, it is completely counterintuitive to remove shipping from the domestic infrastructure pattern.

CHAIR: Let us go back to the security scrutiny that you were talking about. You mention Port Hedland and, of course, around that area is the part of the world where have worked most of my life. I have security concerns, particularly around Dampier, as we would have around Curtis Island, with our offshore oil and gas facilities. Can you give us some examples of how the security scrutiny is nowhere near the Australian standards for foreign seafarers?

Mr Crumlin : Senators, it does not exist. You cannot have a ship turn up on a spot cargo to take a cargo of iron ore away and there is no requirement for any background checks—they are Ukrainian seafarers and Russian officers. How, in any meaningful way, are the Federal Police, ASIO and the network of security filtering for Australian seafarers ever going to screen that ship? And what happens in the interim because it is a fast turnaround at highly protective ports—partly, I would argue, through the productivity my union delivers on the waterfront, as demonstrated by the Productivity Commission's statistics. It is not a problem area. We have resolved those areas. We turned ships around. There is not a possibility to screen those vessels. So that is an enormous risk without any mitigation factors.

If you want to spread that out to that ship never leaving the Australian coast, as this replacement to the Portland—that vessel trades backwards and forwards between Kwinana and Portland and the crew are virtually full-time residents. Many of those seafarers are on the ship for 12 months. They have 12-month contracts. They never leave the vessel. We do not know who they are or where they are going and there is no possibility for us to screen them. There is no proposal in the legislation or anything else or in our configuration about that risk and how to mitigate it. It is an extraordinary situation, I would argue, Senators.

CHAIR: Does Border Protection actually go onto the ships and say, 'Who are you? Show us your passports'? Then do they check with other countries and say, 'Can you verify this' or do they not ask?

Mr Crumlin : It is a cursory overview; that is it. They are in and out of port. Customs do not have the capacity. We are the fourth largest user of ships in the world. The US is the first, China is the second, I think Japan is the third and we are the fourth. What possibility do we have of going to these places—we have ports all over North Queensland, Western Australia—to check everybody? It is a bit like checking containers. You take a very small sample and that is the mitigation, but containers are a much more regulated area than seafarers' identity because containers are regulated by Liberia, Mongolia or the Cayman Islands. They are regulated by far more stringent international—

CHAIR: We will be hearing from the Department of Immigration and Border Protection, so we forewarn them we are going to ask them that, too.

Senator RICE: You paint a picture of flag-of-convenience ships being basically unregulated—they are regulated according to the regulations of countries, which we know are set up as fronts. The proponents of deregulating our coastal shipping basically are saying that this is not the case—that these ships can be as safe as Australian ships. What would it take for ships that are flagged in Panama or Liberia to actually be safe and to have decent working conditions on them? Would that at all be possible?

Mr Crumlin : I have not been to Liberia, but I would suggest strongly that Liberia and Monrovia, with some of their health and other problems do not have the resources. Some 20 to 25 per cent of the world's fleet is registered in Liberia. I think I could pretty strenuously and objectively argue that they do not have any capacity to come anywhere near it. So it really relies on countries like Australia—port state control—to apply their resources and the governance that those companies are not capable of doing. If you extend it to Australian shipping—we are talking about ships that never leave the place. They do not paying any tax.

I do not understand how you can take 40 seafarers off a ship who are taxpayers and are integrated in the economic community and who have moved cargo for 50 years through economic cycles. They have never taken industrial action on that ship—on the record. Why can you take them off and replace them with someone? The companies they work for pay corporate tax, GST and income tax at every level—state and federal tax—and replace them with someone who does not pay any tax at all.

Captain Tate, who was the manager of Howard Smith Shipping said, 'Maybe you could bring up with the senators that whenever there are Australian ships we ask the question: are you going to make these people pay tax?' All the shipowners look out the window. They do not pay any tax. That is the basis of why they are so competitive and why the Australian ship owner cannot compete against them. It is because they are a tax free zone. So it is not just about security. It is also about economic security. On my last perusal of the fiscal problem it looks like we have a few taxation problems, and we are looking to ameliorate them.

Senator RICE: With these ships, whether they are on temporary licences doing coastal shipping or whether they are international ships in Australian waters, what are the Australian environmental standards and labour standards that they should be complying with?

Mr Crumlin : Basically International Maritime Organization minimums and ILO minimums. But, again, that is—

Senator RICE: How do they compare with Australian standards?

Mr Crumlin : The reason they are Filipino, Indian and Ukrainian seafarers is that they are cheap. They do not have the same training. It is very minimal training. They do not have the same risk mitigation. They do not have the same approach that we have in this country, because we are a developed country. If you go to Manila and look at the trucks and trains going backwards and forwards and then have a look at our trucks and trains it is a comparable analysis between shipping there and shipping here. We have a more highly regulated approach to safety, higher community standards and higher community expectations than they have in Manila. That is not to say that I am being critical in any way of their national development programs. But it is pretty horrifying when you see some of the things that are going on, for example, on motorbikes, where people are commuting backwards and forwards in the streets of Manila or Mumbai. That could not happen in Australia. Those standards in shipping could not happen under Australian regulation but do happen on those ships because we do not regulate them.

Senator RICE: Even though they are in Australian waters and are going in and out of Australian ports they do not have to meet the Australian—

Mr Crumlin : They are regulated by Liberian standards, with some minimums set by the IMO and the MLC, which are far, far, far below what our community expectations are.

CHAIR: You said $9 billion in taxation? We sat here yesterday listening to some of the crappiest arguments on taxation and taxation avoidance, and we are talking $9 billion and we do not even follow it up.

Senator RICE: I want to get a feel for the international shipping task of international ships coming into Australia. If we had stronger regulation in Australian shipping they would continue. What is the scale of our international task compared with, say, what the coastal shipping task has been or could be?

Mr Crumlin: It is enormous. It depends. We are going through a cycle of low manufacturing in this country, so there are fewer coastal ships. If we get back to a situation where we have a more ebullient approach to whatever the industries are, there will be more ships. What is happening in Europe and the US is that they are moving to short sea shipping, because it is very economically and environmentally friendly and a very safe way, because you do not have to repair roads and rail and there is no capital infrastructure. So you have little ships going into big hubs and then those hubs are taking the cargo away overseas. It is a very efficient way to have domestic transport sectors.

Coastal shipping comes and goes, but it is the only area in which we can build our skills. All of those ships coming into and out of Port Hedland or the Great Barrier Reef need pilots. A lot of those pilots have to be master mariners. All of those people checking the regulation and the environment have to be seagoing engineers. Where are these skills going to come from? From the time my father went to sea and started doing his tickets it took him 10 years of tertiary education and experience before he became a foreign-going master. You need to be on a ship for five or six of those 10 years having your active training program. How are we going to regulate our economy with those maritime skills if we have not got some semblance of an industry that employs Australians. That is one of the reasons Senator Heffernan's government supported the international shipping that would have Australian officers on some of those international ships registered in Australia.

The MUA in the international area is not arguing that all of those ships need to be manned by Australians. If there is an economic and commercial basis for it, that is fine. Internationally, all we want to do is have fairness and openness. That is why we wanted an Australian register to compete in that area. We have London financial services. London has not got any ships going there much, but it is the largest maritime financial cluster in the world. It is one of the things that keeps the economy going. Why don't we do that in Perth or Sydney? Why don't we have those maritime clusters, when we are the fourth largest shipping nation in the world? Can we have those maritime clusters without seafarers and a maritime tradition? It is just completely counterintuitive to any future. This is an industry that is clean and environmentally friendly. It can only grow as our agriculture grows because of the efficiency of our agricultural sector and of my wharfies. We can only grow into those areas and as we grow we should build those maritime clusters around it. You cannot do that if you have not got a shipping industry or you are favouring tax avoidance over the development of an Australian industry, for goodness sake.

Senator RICE: And shipping that has to meet much lower standards.

Mr Crumlin: Absolutely.

Senator MADIGAN: How many competency and security qualifications are required of Australian seafarers by Australian authorities?

Mr Crumlin: It is a complete filter. In terms of security there is a criminal background check that is very high. There is risk aversion. In fact, in the security checks even if you are accused of a serious crime you could have your MSIC card removed. It is obviously not very transparent because ASIO runs it on anything that may be a security threat. There is constant surveillance. There is constant engagement with the employer, because the employer is accountable under the MSIC to actively do the forensic work. It is just not left up to AMSA. It is not possible. You have to have the people doing it. So at every level the MSIC card has inbuilt filters to ensure the highest standards. We are of as high a standard as the United States. Perhaps you can ask the admiral about what they do there. We are as high as them. We are in best practice. We have accepted that. It was hard for us. Some people lost their job because of behaviour in the past and they have been rehabilitated. We put it down and accepted it as a part of our contribution to the national interest. It is the highest in the world and it is done at so many levels. I cannot take you through all the ASIO checks, because they are not available to us for good reason.

Senator HEFFERNAN: They are very good, I can assure you—but they are not though. One of the labour hire firms subcontracted to supply Sydney night patrol is owned by organised crime.

Mr Crumlin : I am sure that does not happen in shipping, Senator. The one thing about shipping is that you have got—

Senator HEFFERNAN: No, no. If flows onto the wharves, I can assure you.

Mr Crumlin : We have got these large companies that are very well governed and accountable at law. It is not like a small contractor in one of those areas: if there is a breach, they are in a lot of trouble.

Senator HEFFERNAN: I can assure you that some of the people who have got passes have a criminal background, and Senator Sterle knows all about it.

Mr Crumlin : If that is the case, I would argue that it would pretty horrifying if people from some other nationalities are not screened at all.

CHAIR: It is an aviation thing.

Mr Crumlin : All we can do is do better, and we are a willing participant in securing the national interest, Senator, and that is a bipartisan commitment.

Senator MADIGAN: You spoke about the security qualifications that are required of Australian seafarers. What about in the space of competencies?

Mr Crumlin : We go far beyond STCW—that is the Standards of Training, Certification and Watchkeeping for Seafarers—which is the IMO standard. We are of course much higher than that because, through the marine orders, there is a higher stringency, a higher training regard. We want to do better than the minimums. We want to excel because in our view, as a nation, we want to be better than the minimum at risk mitigation against environmental catastrophe and the consequential economic flow-on effects. There is a much higher risk of an environmental problem—and Australian ships do regularly trade in Australian waters—say, for the Portland than a ship that just occasionally comes to Australia. So we have been concentrating on securing the national interest by these ships permanently being there, and one of the big risk mitigations is to have much higher standards of accountability and competency. We are world leaders. If you go to the IMO—because we had bipartisan policies for so many years, up to 1995—we were the world leaders in regulation. Both the Liberal coalition and Labor had ownership of that. Since then, we are now a joke, because we do not lead in anything and, in fact, our whole policy is one of replacement. We are replacing the highest standards of risk mitigation in the area of competencies that we achieved over 80 or 90 years with the lowest standards. I say it on the record: I do not know what objective information there is about the joke, but we are the joke, unfortunately, and we are trying to turn that around.

Senator MADIGAN: Do any of the Australian authorities require minimum competency, licences, certificates say, for Australian seafarers to operate in our ports?

CHAIR: Or our coastline.

Senator MADIGAN: Coastal shipping.

Mr Crumlin : Australian operators operate under AMSA marine orders. If you do not meet AMSA marine orders, then you cannot sail. They are much higher standards. If a ship gets replaced by a Liberian flag, AMSA has not got any say. That is then regulated by the standards of Liberia and the IMO minimums. We are vacating an area of governance: we will just lay off all of those people that regulated the competencies of Australian seafarers, because there aren't any. We just leave it up to the Liberians, the Panamanians or the Bermudans—the Cayman Islands could do it for us.

CHAIR: As if we would sit back as a nation and watch our country get flooded by international truck drivers who do not have dangerous goods, fatigue management and all the regulations we want and we just say, 'That's okay.'

Mr Crumlin : We would say, 'Leave it to the Manila department of transport to do.' It is the equivalent. We are importing a standard that is appropriate for a certain stage of economic development, and it is the same with rail. If you get on a train in India and I represent over a million Indian railway workers, it is a pretty hairy experience. I would much rather get on the Ghan or get on a train to go up the North Coast or to Lismore. I would feel a lot safer. You notice the difference. Maybe we should all go there and get an Indian train and then come back—and it is a comparative thing with shipping. If you let go of your regulation and your ownership, you are importing a standard from another country. That is the hard fact of it.

Senator HEFFERNAN: Have you been on an Indian train?

Mr Crumlin : I have been on an Indian train.

Senator HEFFERNAN: Do you know why the railway lines only last about 40 per cent of the life of a railway line here?

Mr Crumlin : Why is that?

Senator HEFFERNAN: Because they shit on them. There is no sewerage. Two-thirds of the population in most of India has no sewerage.

Mr Crumlin : Now you know how Australian seafarers feel, because that is how we feel we are being treated.

Senator HEFFERNAN: Don't take the bait, mate.

Senator MADIGAN: Mr Crumlin, you mentioned the IMO pay rates with these flag-of-convenience ships operating on our coastline. Are you aware of those people being underpaid with these very minimal wages that they have under the IMO?

Mr Crumlin : Absolutely, and Mr Summers is best placed to talk about it. It is a constant. There is no accountability, so they have two sets of books. If there is a whistleblower, they do not get a job again. It is a hard industry. Some in the industry are very good and have high levels of governance, but others are terrible, and they are competing on the basis of low standards, so they have two sets of books. If you are an Indian or Ukrainian or Filipino seafarer, you are not in a position to fight back or go to your ombudsman. You will be out of a job. If you look at the Sage Sagittarius, there was all sorts of criminality involved there. Maybe those people wanted a better deal for their labour and that is the reason that some of these things happened to them. People go missing at sea all the time. The Australian Federal Police would not even have investigated the Sage Sagittarius if it were not for the ITF consistently drawing it to their attention. That is why we are here today, because we insisted that you need to look at what is going on here. We could have murder, mayhem, bullying and sexual assault—and we do have it—in our ports every day and we would know nothing about it because there is no screening, filtering or overview.

Again, spread that out into coastal shipping. I am not saying it is all ships; many of the ships are very well run. I negotiate an international agreement with many FOC operators, but the FOC operators are always competing with the bottom end of the market. It is like the things that are done on the Indian railways—they are the bottom end of the market and they drive the market. That is the problem in shipping. It is a process of constant engagement if we want shipping to be a big part of our national interest and our national economic future.

Senator MADIGAN: Where a foreign flagged ship is operating on our coast and, say, enters the port of Portland in Victoria or Port Kembla in New South Wales and the foreign mariners get off the ship, what level of checking is there of them in those sorts of ports in country or regional Australia?

Mr Crumlin : Very little. They walk out the gate with an international seafarer's identification card or a passport that tells you the minimum facts. They walk out the gate and are in the community. Some of them do not come back—that is the reality, of course. They integrate themselves into the local economy. On some of these ships it is not a really sought after job. If you combine that being in a threatening environment of harassment and bullying, it is a pretty good opportunity, when you see the open gate of Australia at the end of the wharf there, to walk through it. You are allowed to go down the road. It is more difficult in the United States for seafarers to leave their vessels—and that is an issue of seafarers' rights, too; do not get me wrong. But, in Australia, when you walk through that gate there is no reason you have to come back unless you have been herded or rounded up by the Federal Police. So they walk out the gate; that is the reality. They are walking away from a terrible situation into a better situation. Just like many of the refugees who come to this country, they would do almost anything to secure a little part of Australia and take great risks to do it. That is the reality.

Senator MADIGAN: Thank you, Mr Crumlin.

Senator BULLOCK: Mr Crumlin, I apologise in advance if you find the standard of the questions disappointing today, because, as you have pointed out, we are all in serious breach of Australian fatigue standards up this end of the table. I would like to go to your two-page submission that refers to the much longer ITF submission. I just want to turn to some of the recommendations in that for your comment, partly to fill in the gaps in my extensive ignorance. Recommendation 14 says:

That AMSA maintain its full specialised maritime safety responsibilities for the inspection of cargo handling equipment and operations in ports, and maintain and strengthen this area of Marine Order 32 …

I have two things with regard to that. Firstly, how is it going? Secondly, could you explain why it is important to strengthen Marine Order 32 for the health and safety of workers in cargo?

Mr Crumlin : A lot of ports that these ships go to have not got their own cargo-handling gear. So they will go into Western Australia and it will come under the Western Australian code, and then they will go to South Australia and it will come under the South Australian code. They go to Melbourne and around the coast, and all of them have different—

Senator BULLOCK: So uniformity is the issue?

Mr Crumlin : Yes, it is about uniformity. It is about national overview. We have been arguing for a long time that this duplication creates all sorts of contradictions and dangers.

Senator BULLOCK: Red tape; we should be—

Mr Crumlin : It is a COAG issue. Originally Marine Order 32, because this is international trading, was to have a single approach across the board. That has all moved now. In this fever of deregulation we have moved away, and we have argued robustly that AMSA should be the responsible regulator for those ships and that gear because there are Australian workers using the gear—Australian stevedoring workers—in all of those ports. But there is a plethora of different regulations, and what all of those different regulations amount to is nothing gets done and nothing gets addressed. There is not a single regulator. It is all too complicated for the local regulator, and, again, we moved from something where we were far better at it—more efficient, more accountable and had more transparent governance—into a situation where it is like a pakapoo ticket, which seafarers know is a Chinese laundry ticket. We are using a seafaring term. It is incomprehensible to be able to—

Senator BULLOCK: So things are getting worse in this area rather than better?

Mr Crumlin : It is a danger to not only those seafarers but also, particularly, the Australian stevedoring workers using those ships, as I said, registered in Liberia. They have to go up there and make sure that they are fit for purpose and safe and that they do not kill themselves or someone else in them. Yet for each of those state regulators there is the plethora of regulation, and no-one seems to care. It is someone else's problem.

Senator BULLOCK: Thank you for explaining that, because I did not understand it. Most of my time I have defended the Conciliation and Arbitration Commission and the Fair Work Ombudsman—the umpire. But in recommendation 36 of the ITF submission they are saying that awards should be enforced by AMSA. Why would we not have that done by Fair Work?

Mr Crumlin : The reality is that for international seafarers Fair Work cannot do it. That is part of the legislation that is before the Senate. It has been removed, so you cannot effectively regulate the labour. That gets to the core of the problem. You have these people over here on foreign labour standards, and there is no accountability, and they are operating full-time in Australian territorial waters and replacing ships that previously were under Fair Work. We have tried to take those awards to Fair Work with not much success, because in international shipping you are dealing with a very different legislative basis. They are not regulated by Australian legislation, so Fair Work—

Senator BULLOCK: What is this part B of the seagoing industry? Is that intended to cover international shipping?

Mr Crumlin : We went to the High Court and, for Australian coastal shipping, we were attempting to apply that because it is an applicable standard because those ships never leave, or they stay substantial amounts of time in, Australian ports. But we have not been able to do it with much success. The ombudsman has not been terribly interested in it. There are quite a few contradictions.

Senator BULLOCK: Do you think you can get that up with AMSA?

Mr Crumlin : We are seeking, but we need to do it more efficiently. There has to be a genuine approach to shipping reform that is tripartite. We want to sit down with the government, the opposition, the shipowners and the shippers to make all of those things clear and transparent. Senator Madigan was chairing a process. We want to move these contradictions and make it more commercially able. We know that Australian ships are not going to be able to service all of Australia's coastal needs, so let's have an economic and efficient way of supplementing those ships that is fair, properly regulated and transparent, does not add costs and makes the whole thing efficient but not at the basis of the Australian industry. That is all, Senator.

Senator BULLOCK: Is it fair to say that, with respect to these two sets of recommendations from the ITF, notwithstanding the sound justifications for them, we have made bugger-all progress to date?

Mr Crumlin : Yes; none whatsoever. There is no leadership. The legislation is just about taking everything away and not putting anything back. We are a country that has always had legislation that managed this, but there is the Australian domestic area and the overlap internationally. As I said before, we were the leaders of the IMO. We really formulated the MLC, and I was a big part of that. We rely so much on shipping. We wanted to deregulate the whole industry, even the components that are not owned by Australians or do not have Australians involved, because they come to Australia and they can cause economic and national damage. We wanted, with a tripartite approach, to be able to be best practice, because shipping is not going to go off the horizon of the Australian economy or the Australian national interest. Our problem is that we cannot get any runs on the board. All the legislation is about taking things away, not putting anything back and not building on anything. We really want to return to a bipartisan approach in all of these areas with governments of both colours, with the Independents and the Greens. This is about political productivity. We are just appealing and saying, 'We will be a constructive part of that conversation,' but we are not being given the opportunity.

Senator BULLOCK: I think Senator Heffernan must have been part of that bipartisan approach, because he was a leading hand on the pyramids! He has gone now.

CHAIR: Mr Crumlin, we could talk to you for hours, question you for hours and dig into that vast history you have. I am absolutely gobsmacked that in this nation—you have shone a light on this today—we can have blues over the sale of cattle properties that we will not let the Chinese have because, allegedly, one of them is too close to Woomera, but we can just turn a blind eye and watch Australian jobs go and not even put out a whimper. I am absolutely gobsmacked. That is a statement; it is not a question.

Mr Crumlin : I am sorry that Senator Heffernan is not here. I reckon this would resonate with him. I am sure he goes through the Hansard.

CHAIR: I can see him. He is not far away.

Mr Crumlin : I know he listens to everything I say, like I listen to everything Senator Heffernan says. That is one of the reasons: once you lose leadership; once you have not got a national approach. That is the reason the Chinese Army is buying the Port of Darwin. We have lost the plot in terms of the regulation of our shipping services. This is the joke that we have become. I go to China a lot. I know the Chinese trade unions. I am all for engagement. But I was very surprised when we found out that we have sold the Port of Darwin to the Chinese army.

Senator HEFFERNAN: Did they offer decent bribes?

Mr Crumlin : We had wharfies that were killed up there in the Second World War. One in eight Australian merchant seafarers died in Australian waters in the Second World War. Those things can happen because there is no maritime leadership. We have to fill the vacuum. We are a maritime nation, but we have not got any leadership. We have to win it back, senators. That is all I am appealing to. This is not an industrial issue or a political issue; this is a national interest issue. We are Australians, regardless of whether everybody loves us, and we are committed to the spirit of those wharfies and Australian seafarers who died—one in eight—in Australian waters, and we do not want that to disappear.

CHAIR: It should not come as a shock, but there are a couple of senators at the front here who are keeping a very close eye on the sale of the Fremantle Port and Utah Point. Did you want to add anything, Senator Heffernan?

Senator HEFFERNAN: We are 10 minutes over.

CHAIR: Do you want to add anything about the sale of Darwin Port? I thought it might trigger something.

Senator HEFFERNAN: No, we are too far over.

CHAIR: Can we make this a trend?

Senator HEFFERNAN: You would have discovered, if you had been to China, you can get a signature on anything you like, as long as you pay the right person the money, because you would have been offered a few bribes in your day, I guess.

CHAIR: Thank you, Mr Crumlin.