On April 8, the Australian Deputy Prime Minister and Minister for Infrastructure and Regional Development, the Hon Warren Truss MP, announced the release of an options paper on approaches to regulating coastal shipping in Australia.
The paper is focused on how foreign ships' access to domestic freight is regulated. Foreign vessels are currently permitted to carry cargo and passengers between Australian ports only after being granted a licence to do so. The licence process affords Australian ships the opportunity to make a case that they are in a position to undertake voyages that are proposed to be undertaken by foreign vessels.
The options paper considers three potential options for the future.
One option is to the repeal the Coastal Trading Act in its entirety which could have the effect of closing, rather than opening, the Australian coast. Lack of oversight of coastal trading activities would also result in the Australian Government losing visibility of the domestic coastal trade and could present a challenge to the collection of taxation and other levies.
The second option is to repeal the Coastal Trading Act and introduce a range of other legislative provisions to ensure open market access to coastal trade by all vessels. Such an approach would consider ways to address vessels' interactions with other Commonwealth legislation in terms of importation, immigration and workplace relations and maintain the existing regulatory policy settings in respect of competition, quarantine, revenue, safety and security.
The third option is to retain the Coastal Trading Act but with amendments to remove the aspects reported as unreasonably limiting, inflexible or onerous for Australian and foreign stakeholders. Operators and agents of both Australian and foreign flagged ships have raised a number of concerns about the operation of the current legislative framework, particularly around market access, tolerance limits, temporary licence amendment arrangements and the matters considered in the decision making process. This approach would retain some protection for the Australian flagged coastal fleet while providing greater flexibility to buyers of shipping services and both Australian and foreign suppliers of coastal shipping services.
The Australian Shipowners Association (ASA) welcomed the Acting Prime Minister's announcement. Angela Gillham, acting executive director of ASA said: "There is huge potential for Australia to capitalize on our natural advantages – to be a great shipping nation with a vibrant and diverse maritime economic cluster. Australia has the fifth largest shipping task in the world – a task that is forecast to double over the next 15 years.
"While the options outlined span the breadth of reasonable to extreme – the release of the options paper represents an opportunity to inject some fact into the hysterical debate around coastal trading.
"The Australian domestic shipping task has always been regulated and has always been met by a mix of local and foreign vessels. It is not in the long term national interest to open the coast and kiss the remainder of the local industry goodbye," she said.
"We look forward to discussing with the government how we can make some measured but significant changes that reduce unnecessary administrative burden and provide the long term policy certainty that the Australian shipping industry needs to grow," said Gillham.
Australia is heavily dependent on shipping, with 99 per cent of international trade volumes transported by ship and Australian ports managing 10 per cent of the world's sea trade.