An Australian Senate investigation into flag of convenience (FOC) shipping is set to tighten policing for the 5,700 foreign-registered vessels trading to the country each year.
Chaired by Western Australia senator Glenn Sterle, the standing committee called for closer scrutiny of crew wages and ship security, and greater co-operation between law enforcement agencies that investigate crime on FOC ships.
Announced earlier this month, the moves come against a backdrop of a decline in Australian national flag shipping, which the committee estimates is on average AUD 5m ($3.9m) per vessel per year more expensive to run than the FOC sector.
The committee urges the government to take action to reverse the trend and grow the national register to counter the threat that FOC shipping poses to the country.
One critical change will be the increased monitoring of crew wages. The probe found that many FOC vessels trading between Australian ports under a temporary licence system had been dodging a requirement to pay within the minimum wage range.
“There are apparent loopholes being exploited to avoid proper wage payment, and a lack of regulatory oversight verifying the wages paid in Australian waters,” the committee said.
There are apparent loopholes being exploited to avoid proper wage payment, and a lack of regulatory oversight verifying the wages paid in Australian waters
It highlighted the case of Transpetrol's 50,000-dwt chemical tanker the Turmoil (built 2011), chartered by oil majors BP and Caltex. It allegedly traded in Australian waters for two years while paying its crew AUD 1.25 per hour, compared with the legal requirement of between AUD 15.95 and AUD 30.66 per hour.
The committee wants to see more action taken against FOC ships that are breaking Australian employment laws.
As such, it recommended that the Australian government fund the Fair Work Ombudsman to conduct the inspection of FOC wages “to verify the wages paid onboard accord with Australian legal requirements".
It has also made recommendations to tackle jurisdictional issues surrounding the investigation of crime on FOC ships.
The committee identified six deaths on FOC vessels trading to Australia between 2012 and 2017, for which it was unable to launch a criminal investigation or pursue a prosecution.
These included the deaths of Filipino seafarers Hector Collado and Cesar Llanto on the 105,000-dwt Sage Sagittarius (built 2000) in 2012, which a coroner's inquest said were “suspicious” but for which no prosecution has been made.
Inquest magistrate Sharon Freund pointed to “significant practical impediments” to investigating crime on FOC ships.
The committee also called for closer links between law enforcement agencies to investigate suspicious deaths and disappearances on FOC ships. These include the Australian Federal and New South Wales police forces, and maritime bodies such as the Australian Maritime Safety Agency and Australian Transport Safety Board.
It also asked the government for clear guidelines on jurisdictional issues surrounding crime on FOC vessels, including how to engage with the flag state involved; and legislative change to “provide clarity on jurisdictional responsibility for investigating deaths at sea".
The inquest into the deaths on the Sage Sagittarius in May 2015 raised some alarming security issues, the committee said.
Most troubling was that the vessel's master, Venancio Salas, admitted selling guns to members of the crew.
However, despite Salas’ admission he was allowed back into Australian waters on the 77,000-dwt bulker Kypros Sea (built 2014) in January 2016 under a maritime crew visa (MCV).
The senate committee report said he was an “alleged gun runner", adding that it was “very concerned Captain Salas was able to travel in Australian waters without an alert or red flag in place”.
Since the concerns over Salas were raised, Australia has tightened security. Between April 2016 and the end of March this year, there were 255,132 MCV applications and 13,102 refusals. That compares with 2,943 refusals in the same period for the year 2012/2013.
