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Ministerial Guidelines for Granting Licences and Permits to Engage in Australia’s Domestic Shipping

These guidelines were approved on the 21 December 2009 by the Hon Anthony Albanese MP, Minister for Infrastructure, Transport, Regional Development and Local Government.


Preamble

The Australian Government's policy is to foster a viable coastal shipping industry in a competitive domestic transport sector. The House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government is conducting an inquiry into coastal shipping and regulation. The inquiry will make recommendations on ways to enhance the competitiveness and sustainability of the Australian coastal shipping sector.

Purpose

  1. These Guidelines provide guidance for staff of the Infrastructure, Transport, Regional Development and Local Government (the Department) in administering the coasting trade provisions of the Navigation Act 1912 (“the Act”) and the Navigation (Coasting Trade) Regulations (the Regulations), and in issuing Australian coasting trade licences and permits.
  2. The delegate of the Minister may, in particular cases and after due consideration of issues of public interest and natural justice, depart from the Guidelines where it is judged reasonable to do so, provided that the requirements of the Act and the Regulations are adhered to.
  3. The Guidelines are made available as information for the shipping industry and do not constitute legal advice. Persons requiring advice in respect of the Act or the Regulations are advised to consult their own legal advisers.

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The Coasting Trade

  1. The Act defines the coasting trade (ie carriage of domestic cargoes and passengers) and details the requirements for engaging in that trade.
  2. Under the Act a ship is deemed to be engaged in the coasting trade if it takes on board cargo or passengers at any port in a State or a Territory, to be carried to or delivered at a port in the same or another State or Territory, and delivers that cargo or those passengers in that State or Territory.
  3. Part VI of the Act (The Coasting Trade) applies to trading ships only if on inter-State or overseas voyages, defined in s6 of the Act, but does not apply to trading ships on intra-State voyages (unless such ships have been declared under s8AA of the Act). The loading of coastal cargo covered by Part VI of the Act cannot commence unless a licence or permit has been issued.
  4. However, a permit is required for an unlicensed ship to carry intra-State cargo if the ship carries that cargo while on an inter-State or international voyage (or has been declared under s8AA).
  5. Passengers on through tickets to/from overseas and international cargo on through bills of lading are not considered to be part of the coasting trade.
  6. To facilitate tourist traffic, cruise liner passenger trades are exempt from the coasting trade requirements of the Act, other than those between Victoria and Tasmania.
  7. Unlicensed cruise liners carrying domestic passengers between Victoria and Tasmania require a permit (note this does not include passengers who are carried across Bass Strait as part of a longer journey involving countries other than Australia or States other than Victoria and Tasmania).
  8. Cruise liners are ships in excess of 5000 gross registered tonnes, capable of a speed of at least 15 knots, capable of carrying at least 100 passengers and utilised primarily for the carriage of passengers.
  9. The Act provides for substantial penalties for ships engaging in the coasting trade without a licence or a permit.
  10. The term “passengers” does not include rescued persons, stowaways, persons engaged in the business of the ship, children under 1 year of age, or persons on board in an official capacity (see section 6 of the Navigation Act).
  11. Where a ship carries Australian coastal cargo or passengers without an exemption (see paragraph 16), a coasting trade license or permit, then the master, owner and agent of the ship each commits an indictable offence (currently a fine on conviction, not exceeding $5,500 for a natural person and $27,500 for a body corporate).
  12. Offshore anchorage points or loading facilities outside State or Territory Coastal Waters (ie beyond the 3nm limit from the territorial sea baseline (TSB)) are not ports “within a State or Territory” for the purposes of Part VI of the Navigation Act. A permit is not required to carry cargo or passengers to or from such points or facilities to a port in a State or Territory.

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Exemptions from the Coasting Trade

  1. The Act provides for certain trades to be exempt from the requirement that a ship must be licensed or have a permit to engage in them. Exemptions are provided either by Ministerial Direction or through an Instrument signed by the Governor General.
  2. Ships engaged in trades between the mainland and the following Commonwealth territories, or in trades between those territories, have such exemptions:
    —Christmas Island
    —Norfolk Island
    —Cocos (Keeling) Islands
  3. Also exempt are passenger cruise liners operating in coastal passenger trades other than those between Victoria and Tasmania.

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Application of the Fair Work Act

  1. (A) Under the Fair Work Regulations 2009, all licence holders and some permit holders are, from 1 January 2010, required to comply with the Fair Work Act 2009.  Further information is available on the Fair Work Infoline on 13 13 94 or at the Fair Work website www.fairwork.gov.au. Failure to comply will be one of the factors considered in assessing whether the issue of any further licences or permits would be in the public interest (paragraphs 40–42 refer).

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Licensing Vessels to Engage in the Coasting Trade

  1. Under the Act, licensed ships receive preference in the carriage of inter-State cargo, in that a permit may only be issued if no suitable licensed ship is available or the service provided by licensed ships is inadequate.
  2. Licences are issued, pursuant to section 288 of the Act, on condition that: - seafarers employed on the ship are paid at least Australian wage rates; and - if applicable, the crew has access to the passengers' library.
  3. Licences are issued for a 12 month period (or part thereof) ending 30 June and are renewable annually.
  4. Licensed ships are not restricted to specific trades. A licensed ship may engage in the coasting trade at any time without a permit.
  5. Licences are not restricted to Australian flagged, owned or crewed vessels.
  6. The master, owner and agent of a licensed ship engaging in the coasting trade commits an offence if the ship is receiving, or has been receiving during the past 12 months, or is to receive, a subsidy or bonus from a foreign government. Due to the operation of the Crimes Act 1914, the maximum penalty for this strict liability offence is a fine of $5,500 for a natural person and $27,500 for a body corporate.
  7. All foreign nationals engaged as crew on licensed vessels must comply fully with Australia&rsquos immigration regime.
  8. All foreign vessels must comply fully with Australian Customs regulations. (See Internet sites at www.immi.gov.au and www.customs.gov.au respectively.)
  9. Licence applicants are required to make an undertaking to pay Australian rates of wages in accordance with Part VI of the Navigation Act 1912.
  10. A Coasting Trade Licence cannot be cancelled by the Minister other than for breach of the conditions of the licence, but may be surrendered by the holder.

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Single and Continuing Voyage Permits

  1. Permits, either a single voyage permit (SVP) or a continuing voyage permit (CVP), may be issued, pursuant to section 286 of the Act, to unlicensed vessels to engage in a coastal trade between ports where: a) no licensed ship is available for the service; or b) that the service as carried out by the licensed ships is inadequate; and the Minister is satisfied that it is in the public interest to do so.
  2. When considering the application, the matters relevant to vessel availability will depend, in large part, on information provided in the permit application itself, for instance, the specified ports, nominated time for the voyage, and the intended cargo. Therefore, the inquiry is whether there is a licensed ship available for the particular voyage or voyages for which the application is made.
  3. When considering an application the following should also be taken into account.

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Availability Considerations

  1. All relevant licensed ship operators are to be contacted by the Department to determine the availability and suitability of licensed ships for the voyage or voyages identified in the application;
  2. In considering the availability of licensed ships, the particular shipping requirements specified in the application are given due consideration.
  3. Delivery requirements are important factors in determining availability and whether the cargo can be delivered in a timely, sound and uncontaminated condition;
  4. Availability is determined on a case by case basis and should include consideration of whether a licensed ship can meet supply, production or service obligations specified in the application for the use of non licensed ship.
  5. A licensed ship may be considered unavailable if the operator cannot guarantee that it will be presented to ship cargo according to a schedule that meets the reasonable needs of the shipper. As a general rule, the Department will consider a licensed ship available if it can carry the cargo within a window of 3 clear days either side of the sailing date stipulated in the application. Licensed ships may also be considered unavailable if they have contractual arrangements that give other shippers priority at short notice.

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Adequacy of Licensed Services

  1. A licensed ship is considered inadequate when it is not suitable to perform the task. Suitability may be determined on the basis of the reasonable delivery requirements of the shipper, the carrier&rsquos ability to supply necessary equipment (e.g. containers or bolsters), technical characteristics of the ship in question and capacity of the ship to transport cargo safely.
  2. Shippers' reasonable delivery requirements are the primary determinants of whether the service provided by licensed vessels is adequate and, in particular, whether the cargo can be delivered in a timely, sound and uncontaminated condition. For example, cargo may be required to be containerised, or delivered in bulk, or transported in food grade holds, or be available at the unloading port on a particular date.
  3. To be considered adequate, carriage must be available to the shipper on reasonable commercial terms.

Public Interest Considerations

  1. Permits may only be issued where licensed tonnage is not available or is inadequate, and it is in the public interest. The public interest is assessed for each permit application on the merits of the case.
  2. The Minister (or the Minister's delegate) may grant permits either unconditionally or subject to such conditions as he or she thinks fit to impose in the public interest. Permits may be refused to vessels that have breached conditions for any previous permit.
  3. Assessment of the public interest includes having regard to a requirement for maintenance of supplies, production or service that could not be met by the use of licensed ships, and whether the unlicensed vessel involved would pose an additional risk to Australia's marine environment.
  1. (A) In relation to permit applications for passenger cruise ships, in determining whether the grant of the permit for which an application has been made will be in the public interest, a factor which is to be taken into account will be whether the grant of the permit could have a significantly adverse impact on the viability of Australian licensed and crewed cruise ships.

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Safety and Environmental Considerations

  1. Other matters which the delegate may take into consideration for a permit application include a ship's safety and environmental record.
  2. It will not be in the public interest to allow vessels with poor safety or environmental protection standards to carry coastal cargo under permit. Permits will therefore be issued on condition that the ships named in the permit comply with the standards of safety and marine environment protection of international conventions to which Australia is a party. Ships issued with permits will be liable for inspection by the Australian Maritime Safety Authority under its port State control program.
  3. Tankers: An independent inspection report based on the Oil Companies International Marine Forum (OCIMF) SIRE 2 inspection standards must accompany an application for an oil, chemical or LPG tanker. The inspection report remains valid for a period of 6 months from inspection. Also required for tankers is a declaration from the charterer stating that the ship is in a satisfactory condition to undertake the intended shipment.
  4. Dry Bulk Carriers: A completed Bulk Cargo Inspection Report (a proforma is available on the Department's Internet site: www.infrastructure.gov.au) must accompany permit applications for dry bulk carriers, together with a copy of a current Safety Management Certificate (ISM) and Document of Compliance issued by the vessel's classification society. Also required for dry bulk carriers is a written statement by the applicant declaring that it is satisfied the vessel is suitable for the intended voyage.

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Security Considerations

  1. Ships applying for a coasting trade permit will be required to have an International Ship Security Certificate or interim certificate.

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Last Updated: 28 January, 2014