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Commercial overview of the shipping industry
Ten per cent of the world’s sea trade passes through Australian ports and 99 per cent of Australian exports are transported by sea. In terms of its ocean freight requirement, Australia has the ‘fifth-largest shipping task in the world – a task that is forecast to double over the next 15 years’. Notwithstanding the downturn in the energy and mining resources sector, the growth predictions principally to service the export of mining and agricultural commodities still hold. In addition, Australia has ‘the world’s fastest growing cruise industry’, with passenger numbers increasing by an average of almost 20 per cent per year since 2008. Per capita, Australia has more cruise passengers than any other nation, making it the fourth-largest cruise market in the world. However, because of the economics of operating Australian-flagged tonnage, the national fleet has only a small number of large cargo vessels, the majority of which are employed on Australian coastal trading services, access to which is largely restricted by federal cabotage legislation.
i Vessels registered on Australian shipping registers
As at 25 February 2019, 12,093 vessels were listed as being entered on the Australian shipping registers. In terms of vessel types, they can be grouped generally as follows: 224 cargo vessels, 325 passenger-carrying vessels, 8,357 pleasure craft, 1,951 fishing vessels and 504 specific purpose-type vessels.
Of those vessels, only 738 hold IMO numbers, the composition being approximately 68 cargo vessels, 62 passenger-carrying vessels, 28 pleasure craft, 188 fishing vessels and 323 specific purpose-type vessels.
ii Australian coastal trading
Australia has a substantial coastal sea freight task, which in 2015–2016 was reported to be 103.5 million tonnes, a 2.2 per cent increase from 2014–2015. To date, petroleum and dry bulk products remain the largest tonnage component of coastal freight. As at January 2019, there are approximately 134 vessels operating with a temporary licence and 85 vessels operating under a general licence.
All vessels that had transitional general licences granted have since surrendered their licences or the licence has expired.
iii Foreign-registered vessels in the offshore oil and gas industry
The safety of marine operations in the immediate vicinity of Australian offshore oil and gas facilities is regulated through the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).
A substantial number of offshore facilities and vessels, including foreign-registered floating production, storage and offloading vessels (FPSOs), floating storage units, accommodation vessels, drilling vessels, construction vessels and pipe-laying vessels also form part of the Australian shipping industry and are regulated by NOPSEMA.
NOPSEMA reported that, in 2017–2018, it conducted 155 inspections of offshore facilities in Australia, which was markedly higher than the number of inspections it had carried out in 2016–2017. According to NOPSEMA, this was due to a variety of factors, including the decommissioning of offshore platforms due to wells’ exhaustion or profitability.
iv Foreign-registered vessel calls to Australia
Data in relation to the exact number of foreign ships visiting Australia is limited; however, the Australian Maritime Safety Authority (AMSA) indicates that, in 2017, 5,873 (an increase of 2.7 per cent) foreign-registered vessels called at Australian ports. The average age of foreign flagged ships calling at Australia remained nine years old.
General overview of the legislative framework
An important characteristic of the Australian legal system is the distinction between federal and state or territory laws, both of which are relevant to shipping. From a constitutional perspective, the Commonwealth (i.e., the federal level of Australian government) has the power to make laws with respect to ‘trade and commerce’, which extends to laws relating to ‘navigation and shipping’. This does not, however, preclude the six states and two territories from also making laws relating to shipping; the primary constraint is that, in the event of inconsistency between Commonwealth and state or territory law, Commonwealth law prevails to the extent of the inconsistency.
From a territorial perspective, Australia has ratified the United Nations Convention on the Law of Sea (UNCLOS) and the Commonwealth exercises sovereign jurisdiction with respect to the territorial sea (i.e., 12 nautical miles seaward of the low-water mark or any proclaimed territorial sea baseline). Again, this does not preclude the states and territories from legislating with respect to their coastal waters and adjacent territorial sea provided there is no inconsistency with Commonwealth law. The Commonwealth also exercises jurisdiction with respect to Australia’s Exclusive Economic Zone.
At the Commonwealth level, the primary legislation regulating shipping in Australia is the Navigation Act 2012 (Cth), which was redrafted and re-enacted in place of the 1912 Act that preceded it. One of the main functions of the 2012 Act is the restructuring of the regulation of Australian vessels and seafarers, and accommodating the removal into new legislation of the overhauled cabotage scheme for coastal trades in Australia. The Navigation Act 2012 and other Commonwealth legislation also gives effect to a wide range of international maritime conventions and treaties to which Australia is party. State and territory laws typically regulate recreational vessels, ports and harbours, and other maritime infrastructure located within state boundaries.
