On Course

ON BOARD THE SEAKAP IN PORT KEMBLA MUA SEAFARERS WERE PREPARING TO MAKE ONE LAST STAND. IT WAS FRIDAY EVENING, AUGUST 29, AND THE COUNTDOWN TO THE TABLING OF THE INQUIRY INTO AUSTRALIAN SHIPPING IN PARLIAMENT WAS UNDER WAY.

The Government commitment to revitalise Australian

coastal shipping was already in place. Both the maritime

unions and industry submissions to the inquiry on how

best to go about were well received. Yet on the eve of an

outcome another Australian ship was about to replaced with a

foreign flag vessel.

Branch secretary Gary Keane joined the crew on board. Banners

were prepared, comrade seafarers notified and a letter sent out

to the minister for transport that night:

“This exporting of Australian jobs flies in the face of the Rudd

Government’s inquiry into the coastal shipping policy and

regulation that is attempting to revitalize the Australian shipping

industry,” wrote MUA crew Trevor Moore, Bob Solomon, Noel

Anderson, John Hardwicke, Glen Massey, Darren Kinniburgh

and Gary Williams.

It was the second ship that year under threat and the union would

ensure the Seakap, like the Triton, would showcase the need for government intervention and regulation in the industry.

“The Seakap highlights the failure of the Howard years to support

Australian shipping,” said MUA National Secretary Paddy

Crumlin. “Howard pursued policies that actively promoted Flag

of Convenience shipping at the expense of Australian ships and it

is now up to the Rudd Government to demonstrate its support for

the Australian shipping industry and the urgent need for reform.”

As the Seakap sailed for Newcastle the crew prepared to barricade

themselves on board. Other ships sent messages of solidarity:

“The crew of the Osa Vigilant fully support our comrades on the

Seakap fighting this terrible act of trying to rob Australian

seaman from earning an honest living and (we) offer any

assistance that may be needed,” wrote the delegate and crew.

In Newcastle local maritime workers and their families rallied

with a flotilla of small boats bedecked with MUA flags, while

others joined the delegation boarding the ship led by Assistant

National Secretary Rick Newlyn.

“The crew have been briefed and they’re determined this ship

isn’t going anywhere,” he said.

“This is our coast, our ship and our cargo and we should be

working it,” chief IR Trevor Moore told Newcastle television.

Negotiations dragged on over the weekend until finally on the

Sunday evening ministerial intervention and last minute talks

between the union and Koppers in Pittsbourg, US, reached an

outcome.

Transport Minister Anthony Albanese had made it clear Koppers

would need to provide sustainable reason before it would be

permitted to replace the Seakap with a foreign vessel carrying

coastal cargos. The company was directed into mediations with

the maritime unions to establish the coastal requirement and the

options for an Australian crewed vessel replacement. A

memorandum of understanding was agreed to, committing the

company to a process with the union, with the minister prepared

to withhold permits in the event a long term solution could not

be arrived at. One of the immediate complications was the

Seakap had increasingly be repositioned in international trades

as the Australian market colllapsed. All details in regards to the

business will be fully assessed under the discussions.

“Under the Howard government the minister would have sent

the company a message of congratulations for getting rid of us,”

said MUA National Secretary Paddy Crumlin. “It was a helpful

change.”

“The Howard Government used the permit system to undermine

the union and Australian shipping,” he told ABC Radio. “There

was active collusion really between the Department of Transport,

the minister who has to write these permits and the shippers, to

avoid the use of Australian ships.”

The national secretary said the union wanted no less than a

commitment that Koppers would work with the union to bring

an Australian crewed vessel back onto the coast.

“And that’s what we’ve got,” he said. “We now look forward to

positive outcomes from the Inquiry.

THE REPORT

On October 20 the report, Rebuilding Australia’s Coastal Shipping

Industry: Inquiry into coastal shipping policy and regulation by the

House of Representatives Standing Committee on

Infrastructure, Transport, Regional Development & Local

Government was tabled in parliament.

To reverse the Seakap scenario which has seen the Australian

coastal fleet contract over the 10 years of 1996 -2006 from 75 to

46 vessels, the inquiry called for both regulation and incentives.

It key recommendations included tighter restrictions on the

permit system, tax concessions and investment in both shipping

infrastructure and training – all measures which the union had

included in its submissions. These were not about industry

handouts, but about nation building.

“The strongest argument for revitalising Australia’s coastal

shipping industry is an economic one,” the report said. “A

strong domestic shipping industry can relieve land transport

bottlenecks, infrastructure constraints and environmental

impacts, at the same time creating local employment.”

This was the key finding of the Inquiry. It was an outcome of

even greater significance at a time of global financial crisis.

The report highlighted the UK example where shipping now

supports 239,000 jobs and contributes 11 billion pounds a year

to the UK’s gross domestic product and UK tax revenues.

NATIONAL CHALLENGE

“Revitalising the Australian coastal shipping industry,” the

report said, “is a national challenge which will ultimately

require national strategies.” Current government policy, it said,

is to ensure the competitiveness and sustainability of the coastal

shipping sector within Australia’s domestic transport sector.

“Implicit within this statement is the expectation that when at

all possible, Australian ships, utilising Australian crew, being

paid Australian wages and conditions, should be employed in

the carriage of domestic cargo, as the Navigation Act originally

intended.”

REGULATION

It recommended ministerial guidelines should be tightened so

that permits were once again used by shippers only as a means of

coping with fluctuations in demand when Australian ships were

not available.

INCENTIVES

Top of the fiscal incentives recommended were accelerated

depreciation, a tonnage tax and PAYE crew concessions on

international trades. The report noted that when the Hawke

Labor government Shipping Reform Task Force introduced a

package of reforms in 1989 the Australian fleet grew. Between

1988 and 1994, 36 new vessels were introduced into the

Australian fleet, representing an investment of over $1.6 billion.

TONNAGE TAX

A new tax regime allowing companies with Australian registered

ships the option of paying tax based on the ships tonnage rather

than on their profits was also taken on board by the committee.

This option widely used in European nations had formed part of

the MUA submission. A tonnage tax is beneficial in years where

ships have made a lot of money but can have a negative impact

in years where ships do not, so the report recommended giving

companies a choice.

Accelerated depreciation

Like the Seakap, Australian ships are growing older and are not

being replaced. The report recommended fiscal measures

(including accelerated depreciation) to counter this. It noted that

in the early 1990s when accelerated depreciation was in place,

Australia had one of the youngest fleets in the world with an

average age of eight years.

Port capacity

Shipping is inseparable from transport infrastructure and the

report recommends the need for port development strategies to

cater for a growth. It calls for Infrastructure Australia to create a

national port development plan, addressing current and potential

capacity constraints and direct funding to critical port

infrastructure projects for both exports and coastal shipping.

Skills crisis

“Shippers, ship owners and unions have all voiced concern about

the lack of a skilled maritime workforce in Australia. The

shortage has been described as reaching ‘a critical point and is

undoubtedly the biggest issue facing the industry today,” the

report notes.

Just one per cent of local seafarers are 21 or under and by 2010

the Australian Shipowners’ Association predicts the industry will

be 2,000 staff short, further adding to bulging capacity

constraints across the wider transport sector

The ASA advised the inquiry that its members receive in excess

of 400 training applications annually. It had developed a

“Careers at Sea” website and an online application system called

SeaRecruit for people interested in a career at sea.

But the challenges were many — selecting suitable people;

training costs; the lack of training berths; the time required to

train; a shortage of trainers and the retention of maritime labour.

Another issue cited in the report was the disparity in

international training and certification standards. State or

territory qualifications fail to meet Australian Maritime Safety

Authority and international standards. As a result seafarers

trained at state institutions wanting to serve on larger vessels

must first do additional training to qualify.

The Committee recommends that one national maritime

training authority to overcome the skills shortage, as well as

opening up two-way movement between the merchant marine

and the Navy. This has been blocked until now because Navy

personnel lacked STCW qualifications that are recognisable by

AMSA and required in the merchant marine. However the MUA

has reservedjudgement on this.

Seatime

On job training requirements have been contentious, with the

Australian Shipowners’ Association questioning ‘the validity of

seatime.

“Some view the seatime requirements as a bastion of the past

which, in its current form, is a bottleneck in the system,’” the

report noted, recommending a national training ship to

overcome the problem. This was not part of the MUA

submission. Seatime is regulated internationally by the IMO

and is an essential part of gaining a qualification.

A training vessel

Training ships would also help keep seatime training costs down.

In the Philippines, maritime colleges have their own training

ships. Training vessels could have schools on board so that seatime

and knowledge could be gained at the same time. This would give

trainees the option to ‘compress your course, if not by 50 per cent

then probably by 25 to 30 per cent in real terms’, according to a

submission by Captain Allan Gray, noted by the inquiry. The

report also noted a training vessel would help those organisations

currently unable to train seafarers because they do not have

suitable ships to ‘facilitate the mandatory sea time component.”

Training cost inequities

A training ship would also help overcome the burden of training

costs falling on the blue water industry. The report noted that

many seafarers are trained in Blue Water then lured into higher

earnings of the offshore sector. As a result ‘the key trainer of the

industry historically, over many decades, has gone on strike

because they just see their investment being—in terms of their

delivery to their shareholders—wasted because they lose it as

soon as the people walk out the door...’

It costs approximately $75,000 to train integrated ratings. A

further $100,000 to $150,000 is required to train watchkeepers

to occupy more senior positions,” the report found. “This cost

burden is not spread widely throughout the industry. A small

sector comprised of shipping and management companies

provides the required training while the wider industry (offshore

sector, government authorities, educators, port authorities and

shore based management) benefits.”

The committee favoured mandatory training requirements

linked to the tonnage tax option.

Retention of qualified seafarers

Training is not the only problem behind the skills crisis. The report

found that getting people to stay in the industry is also an issue.

The report recommends incentives include offering a contract plus

bonus (stay two years and receive an extra year’s salary) or offering

a contract with penalties as part of the recruitment package.

PAYE TAX

For MUA seafarers, one of the most important

recommendations of the report was a measure so that

Australians seeking work on international ships were not forced

to “either accept lower salaries (once Australian income tax is

paid) or negotiate higher rates than other seafarers.”

Under the Income Tax Assessment Act, Australians working in a

foreign country are exempt from tax if they have been engaged

in that work for 91 days. But the high seas are not considered a

foreign country, putting Australian seafarers at a disadvantage.

The report recommends the Government review the Act,

clarifying the meaning of foreign service for income tax purposes.

Green ships

Shipping accounts for only four per cent of Australian transport

carbon emissions. The report notes the IMO has decided on

new long-term goals for ship emissions that, if ratified globally,

will continue to advance ship innovation and technological

adaptation as well, reducing emissions and increasing fuel

efficiency. It calls for an independent scientific study and report

on ship emissions in Australia.

The report also notes that if the national emissions trading

scheme under way does doesn’t apply to foreign ships operating

under permit on the Australian coast, Australian coastal shipping

operators will be at a competitive disadvantage.

Other issues noted in the report include the potential

employment of Australians instead of foreign maintenance crews

on ships, the need to use Australian ships and crew to transport

dangerous good such as ammonium nitrate for security reasons

where possible and the provision of one national safety authority

by review of both the Seafarers’ Rehabilitation and

Compensation Act 1992 and the Occupational Health and Safety

(Marine Industry) Act 1993.

The Workplace Relations Act 1996

The Committee did not make a firm recommendation on the

repealing Regulation 1.1102 in the Workplace Relations Act so

foreign crew working in the coastal trade would come under

Australian awards and conditions. This was left to the

government in the redrafting of Australia’s industrial relations

laws. However no changes as yet have been made to Fair Work

Australia legislation now before parliament to reflect this and the

union is working with the ACTU to ensure this.

Implementation and oversight

Implementation and performance monitoring will be integral to

the success of any government reform agenda. The report

recommends setting up a reform implementation group operates

under a restructured Australian Maritime Group.

It also recommends that key industry stakeholders including the

maritime unions should be represented on the restructured

AMG as advisory participants.

In conclusion the report stresses that coastal shipping reform

will require a long-term view and a systematic, staged approach.

“The Australian coastal shipping industry will be beginning this

process from a low point,” it says. “That should not, however,

restrict the reform process from moving forward in a timely

fashion. The Australian coastal shipping industry is an integral part

of the Australian economy and its revitalisation requires action.”

Meetings with the Minister

In his column for loyds List DCN, national secretary Paddy

Crumlin notes the report makes special mention of the MUA

submissions and that its recommendations are all broadly supportive.

“Yet it only provides a guide to the specific legislative changes

required on regulatory reform of the ship licensing and coastal

permit provisions and will require careful management to ensure

reform is achieved as the permit system has allowed a floating

free trade agreement on our coast employing foreign workers

excluded from national security, OH&S and industrial standards

applying to Australian seafarers.”

To this end the National Secretary has held a series of top level

discussions with the minister for transport on ways to implement

the recommendations in the lead up to the Government

response in February.

“We are confident the government has heard the union call for a

nationally integrated transport plan encompassing shipping and

ports and the need for equal investment in people, technology

and innovation,” he said.

“It is now time to harness the capital power including through

long term investment in infrastructure by superannuation funds

to underwrite capital investment.”

SEAKAP

Meanwhile the Seakap sailed from Australian waters, after 17

years shipping coal tar and pitch on the Australian coast.

The Australian crew sailed the vessel to Gladstone where it

made its last shipment, then on to Singapore were the Seakap

was due to be decommissioned. Instead it was sold to a

Croatian company to trade in the Black Sea.

“We were almost at the Gulf of Aden when the company

decided against risking pirates hijacking the vessel and diverted

us the Saudi Arabia,” said bosun Trevor Moore.

After waiting at anchor for five weeks the new owners flew in a

Filipino crew.

“So it’s gone, if the pirates haven’t got it,” said Trevor, back

home after a 14 week voyage.

Koppers made written undertakings to replace its second ship,

the FoC Rathboyne with an Australian crewed vessel within two

years. It also acknowledged "the contribution of Australian

seafarers, employees of Teekay shipping, in maintaining and

operating the vessel to high standards."

In return the union agreed to the company replacing the 26

year old tanker Seakap with a short term time charter.

“It’s always sad to see a ship go,” said Trevor, who will now join

the Karatha Spirit on the west coast. “I was disappointment we

couldn’t get a new Australian crewed ship straight away, but it’s

good the way it all came together in the end. It’s a good

outcome. If Howard was still in we wouldn’t have had a chance.

There would be nothing in it for us at all. The government ship

inquiry is going to give us a lot of things we were after. It will

put some light back into the industry. Anything that encourages

ship owners to put more ships on the coast is a good thing. The

union has done well for us.”

Copies of the Committee’s report can be obtained from the

Committee’s website at:

www.aph.gov.au/house/committee/itrdlg/coastalshipping/report

www.aph.gov.au/house/committee/itrdlg/coastalshipping/report

www.aph.gov.au/house/committee/itrdlg/coastalshipping/report

POSTSCRIPT

MUA member Trevor Moore, 43, was killed tragically on board the Karratha Spirit on Christmas Eve.

He is the second seafarer killed in a matter of weeks in work related incidents aboard Australian crewed vessels, the first mortalities in a seagoing job accident in 14 years.

The father of two died of massive head injuries on board the vessel 60 nautical miles off Karratha when struck by a mooring line during the operation to disconnect from the riser . At the time the vessel was being evacuated due to the approaching cyclone. The fatality is subject to a coronial inquiry, with the union intending to make a detailed submission

Union representatives, crewmates and family paid tribute to the former chief IR at his funeral at THE PALMDALE CREMATORIUM on the Central Coast in the HILLSIDE CHAPLE on January 8.

Full report next MWJ