Australian bill seeks to liberalise cabotage licenses

Australian bill seeks to liberalise cabotage licenses
Darren Chester MP introduced the bill

A bill which would open up Australia’s cabotage market to foreign shipping lines has been introduced to the country’s parliament.

Under current laws and licensing structures, Australian carriers can contest voyages applied for by foreign ships and face few restrictions, while foreign carriers have to meet a list of requirements and can only qualify for a far more limited license.

However, the Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 would restructure the licensing system, and would reduce the restrictions overseas shipping lines face.

When introducing the bill, Darren Chester MP said: “The stakeholders I have spoken to all agree there are aspects of the current Coastal Trading Act that are unreasonably limiting, inflexible or onerous.

“These restrictions are limiting or preventing the use of shipping to move domestic freight and are pushing costs up for businesses.

“It is an important part of the government’s red-tape reduction work to ensure legislation in place is being effectively implemented and not imposing excessive administrative burden.

At the moment foreign vessels can only operate under a Temporary License (TL) and must provide proof of five upcoming voyages, making it nigh-on impossible for Australian companies to use them for spot hire at short notice.

The amendment bill would change the licensing structure by allowing foreign carriers with only one voyage planned to apply for a TL.

The number of major Australian flagged vessels has halved in the last ten years, falling from 30 to 14, which prompted Chester to implement the bill, while the cheaper rates for a foreign flagged vessel were also a factor.

According to the bill, the cost of an Australian crew is around AU$4m more per annum than a foreign crew.

In addition, the demurrage charged by an Australian vessel is around AU$27,000 per day, while the fee for a foreign flagged ship is AU$10,000 per day.

However, the International Transport Workers’ Federation (ITF) hit out at the proposed amendments, and claimed the Australian government is killing off the country’s domestic shipping fleet.

ITF president Paddy Crumlin said: “The proposed changes would make it more difficult for Australian ships with Australian crew to compete in the coastal trade.

“Instead of enhancing a vital national industry with a long and proud tradition, the Turnbull government wants to send the jobs offshore.”

Crumlin pointed to the recent Senate Inquiry into Flag of Convenience Shipping, which found that unlike Australian seafarers, foreign crews have no background checks.

“They do not meet the same national security screening applied to Australian resident seafarers and are directly making Australian seafarers unemployed by effectively taking their jobs through the Flag of Convenience industry of rorting, poor safety standards and tax evasion.

“Australian workers cannot and should not be expected to compete with slave labour and systemic tax avoidance under the Flag of Convenience system.”