Welcome to the inaugural edition of TML Times, where we seek to bring you an update on recent developments affecting the shipping industry in Australia.

 

BIOSECURITY IMPORTS LEVY

A hotly debated topic in the shipping industry in Australia is the impending biosecurity levy on imports. This biosecurity levy was announced by the Australian Government in its 2018 Budget, which aims to improve strategic biosecurity. The levy will be implemented on 1 July 2019 and will be levied on all imports at A$10.02 per TEU and $1 per tonne of non-containerised cargo. Empty containers and empty commercial vessels arriving in Australia will also have to pay a levy of 2.7 cents per gross registered tonne. This fee will be levied on the port terminal operators.

Industry bodies have been up in arms because not only has the industry not been consulted prior to the introduction of this levy, it is felt that it will harm competitiveness of exports and there are concerns regarding the fee collection mechanism leading to duplicative charges down the supply chain and increased costs for the end-consumer.

 

COASTAL SHIPPING CASE UPDATE

The decision of Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400 which was released on 26 March 2019, is a timely reminder that owners (including demise owners) who have vessels plying in Australia need to be aware of the Australian Coastal Trading laws, and actions taken by their charterers or sub-charterers.

In this case, Transpetrol, the demise owner of the vessel Turmoil, was prosecuted by the Australian Fair Work Ombudsman for failing to pay its crew members in accordance with the Fair Work Act 2009 (Cth) (in particular, the Seagoing Industry Award 2010 and the National Minimum Wage Order 2014). These contraventions occurred because the Turmoil was sailing under a temporary licence issued pursuant to the Coastal Trading (Revitalising Australian Shipping) Act 2012 (Cth) (Act), which the sub-charterers had applied for, without the knowledge of Transpetrol.

For the unacquainted, a temporary license under the Act allows a ship to engage in coastal trading in Australian regulated waters, which is defined as the exclusive economic zone and waters above the continental shelf. Once a license is granted, the owner or demise owner of the ship is obliged to pay crew members on board the licensed ship wages in accordance with Australian awards and rates of pay. The government had imposed this obligation on the basis these ships were operating in the domestic economy and the seafarers were entitled to be paid Australian wages. If however the owner no longer retains possession of the ship or employment of the crew, then such obligations may not apply.

 

TOBACCO EXCISE CHANGES

In the 2018 Budget, the Australian Government announced major changes to tobacco trading in Australia. From 1 July 2019, importers will have to pay all duties and taxes to the Department of Home Affairs when tobacco products enter Australia. Tobacco products will only be stored in licensed warehouses after duty has been paid.

Presently, tobacco importers are able to defer the timing of payment of customs duty levied on tobacco products by transferring the products to licensed warehouses and paying duty once the goods are transferred out of the warehouse for domestic sale or export. This measure aims to minimise tax avoidance through illicitly distributing tobacco from these warehouses.

 

BROWN MARMORATED STINK BUG UPDATES

1 September to 30 April is the yearly brown marmorated stink bug (BMSB) season in Australia. Three ships have been expelled from Australian waters this season – the Triumph in November 2018, the Morning Composer in December 2018 the last being the MV Thalatta on 4 January 2019.

The MV Thalatta was a RO-RO carrying cargo from Germany, Belgium, Spain and South Africa. It arrived off Fremantle and following a controlled discharge, live BMSB were detected. All unloaded cargo was then reloaded onto the vessel and the vessel was redirected to anchorage. Further fogging at anchorage uncovered further BMSB and the Department of Agriculture and Water Resources (DAWR) instructed the vessel to leave Australian waters.

These expelled vessels then have to sail to either Indonesia or Singapore where all cargo needs to be discharged and treated before it can be re-delivered to Australia. This results in hefty claims for container detention fees, damage to cargo if perishable goods are on board the vessel, and other consequential delay costs.

This season has seen delays in DAWR processing shipments, insufficient inspecting officers, and a lack of approved treatment providers to deal with BMSB. The DAWR is looking at improving measures for the 2019-2020 season, so stay tuned for more information.

 

COMPETITION ISSUES AT PORT OF NEWCASTLE

In a major win for coal shippers, Glencore was successful in challenging the Port of Newcastle’s charges levied on coal ships in September 2018.

However, in another chapter of the long running saga, the Port of Newcastle has applied to the National Competition Council (NCC) to seek a revocation of the declaration of the shipping channel service at the Port.

The declaration was made under the National Access Regime, a regime to facilitate third party access to services provided through facilities with natural monopolistic characteristics. If a service is declared, access seekers have a right to negotiate terms and conditions of access or request the Australian Competition and Consumer Commission to arbitrate the dispute.

We wait with bated breath as NCC will be making its recommendation on whether to revoke the declaration shortly.

 

FINANCIAL INCENTIVES FOR GREEN VESSELS CALLING INTO PORT BOTANY AND PORT KEMBLA

Since 1 January 2019, vessels registered with the international Environmental Ship Index (ESI) and calling at Port Botany and Port Kembla will receive a rebate for each visit. The ESI evaluates ships according to the amount of NOx, SOx and greenhouse gasses it emits. Vessels with a valid ESI score of >30 will be entitled to rebates ranging from A$400 to A$2,500.

Given the increasing levies on vessels entering Australia and the impending IMO 2020 Global Sulphur Cap, going green may help the bottom line.

 

PROFILE

Janine is a Senior Lawyer with Thomas Miller Law Australia (TMLA) and since starting in May 2018 has been involved in some significant cases including matters involving jet fuel contamination and unpaid freight and demurrage.

Janine comes to TMLA with 6 years of experience as a shipping and transport law specialist having qualified in Singapore and worked in one of Singapore’s largest law firms before qualifying in Australia and working for leading maritime law firms.

Presently Janine is the Treasurer of the Australian Women’s International Shipping & Trading Association and sits on the Maritime Legal Steering Committee of Shipping Australia Ltd.

 

She speaks a handful of languages, including rudimentary French and Japanese, so as to enable her to indulge in her favourite hobbies of eating desserts and travelling. Out of the office, you can find her baking up a storm in the kitchen or pottering around in the garden.

You can contact her at janine.liang@tmlawltd.com if you have any questions on the above topics.