- Amendments to FAL Treaty
Overview
2.1The proposed major treaty action is the entry into force of the Amendments to the Annex of the Convention on Facilitation of International Maritime Traffic, 1965 (London, 13 May 2022) (the Amendments).Australia has been a signatory to the original Convention on Facilitation of International Maritime Traffic, 1965 (FAL Convention) since 27 June 1986. The Amendments to the Annex were adopted by the 46th FAL Committee meeting in accordance with Article VII(2)(a) of the FAL Convention.
2.2The Amendments will enter into force for Australia on 1 January 2024, in accordance with the acceptance provisions of the FAL Convention, which establish that states are bound by the Amendments unless they expressly object which for Australia would have been prior to 1 October 2023.
2.3Shipping Australia submitted that ‘the Amendments to the Annex of the Convention on Facilitation of International Maritime Traffic should be adopted in Australia to ensure that there is consistency and harmonisation between Australia and the rest of the world in respect of the facilitation of international maritime traffic.’
Background
International Maritime Organisation
2.4The International Maritime Organisation (IMO) is the United Nations (UN) specialised agency ‘with responsibility for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships.’ The IMO is the ‘global standard setting authority for the safety, security and environmental performance of international shipping.’ The IMO has the primary role ‘to create a regulatory framework for the shipping industry that is fair and effective, universally adopted and universally implemented.’
2.5Most of the conventions adopted under the auspices of the IMO or conventions for which the IMO is otherwise responsible fall into three categories: maritime safety, the prevention of marine pollution, and liability and compensation, especially in relation to damage caused by pollution. There are also conventions relating to facilitation, tonnage measurement, unlawful acts against shipping and salvage. The FAL Convention is listed by the IMO as: ‘Other conventions relating to maritime safety and security and ship/port interface’.
The FAL Convention
2.6The FAL Convention was adopted on 9 April 1965 and entered into force on 5 March 1967. The Convention aims to prevent unnecessary delays in maritime traffic and aid cooperation between Governments. The Convention also aims to secure the highest practicable degree of uniformity in formalities and other procedures. Notably, the Convention reduces the number of declarations which can be required by public authorities.
Annex to the Convention
2.7The Annex to the Convention contains Standards and Recommended Practices on formalities, documentary requirements and procedures which should be applied to ships, their crews, passengers, baggage, and cargo on arrival, during their stay and on departure. The Annex also includes implementation procedures and appendixes that provide additional information.
2.8The FAL Convention is continually amended and updated by Governments at the FAL Committee of the IMO which meets once a year at the IMO’s London Headquarters.
Maritime Single Window
2.9A key issue in the Amendments is the Maritime Single Window, which is a digital reporting platform that simplifies the exchange of mandatory information between industry and government agencies. It further supports the long-term digitalisation of the shipping industry and allows Australia to meet its emission targets.
Reasons for the treaty action
2.10The FAL Convention arose from the recognition that international cooperation is essential to simplify and reduce the formalities, documentary requirements and procedures that are necessary on arrival, stay and departure of ships that are engaged in international voyages.
2.11Most of Australia’s imports and exports (ninety-nine per cent) are moved by sea. Australia’s domestic and regional interests are advanced through participation in the FAL Convention because it facilitates a cooperative and constructive approach to the vital maritime freight industry within the overall framework of the global rules-based order. This is welcome because Australia is not a large ship owning country and would otherwise have limited influence over maritime standards outside the IMO.
2.12The Amendments would support Australia in modernising its engagement with the maritime sector in line with international digitisation standards. This would benefit both industry and government in terms of efficiency. It would also create greater opportunities to adopt new maritime technologies.
2.13The FAL Convention is a key IMO treaty and Australia is seeking re-election to Category B of the IMO in 2023. If Australia implements these amendments, it will signal the country’s commitment to the IMO and strengthen re-election chances.
2.14Increasing electronic submission of regulatory reporting under the FAL Convention would contribute to reducing the administration required for regulatory reporting. This would benefit both maritime vessels and the Australian Government.
2.15The Amendments to the Annex that relate to public health measures would align health responses to the World Health Organisation (WHO) if there were a public health incident.
2.16The streamlining of shipping processes is regarded as being highly beneficial to Australia. Shipping Australia submitted that: ‘disharmony in jurisdictional and administrative matters results in higher costs, which are usually passed on ultimately [to] the end consumer. Everyday Australian families are therefore penalised for bureaucratic inefficiency and red tape.’Shipping Australia further noted: ‘It is clear from a variety of incidents … that there needs to be an end to the current disharmonious and fragmented approach to shipping policy and regulation in Australia.’
Obligations
2.17The NIA notes that the Amendments to the FAL Convention include both Recommended Practices and Standards however only the amended standards are compulsory. The obligations in the Amendments cover the following areas:
Definitions and general provisions (Sections 1A, 1B)
2.18Section 1B of the Amendments sets out general provisions which allow public authorities to take appropriate measures beyond the requirements of the Annex. Further, it sets out requirements that public authorities shall require only the minimum necessary information in relation to formalities, documentary requirements and procedures on the arrival, stay and departure of ships on international voyages.
Illicit activities (Section 1D, 1E)
2.19Section 1D sets out recommended practices and standards for improving activities to combat illicit activities, including drug smuggling and illicit trafficking of wildlife. Section 1E sets standards for reducing the risks of corruption that takes place through ship to shore interactions with ports.
Digitalisation of vessel reporting requirements (Sections 1C, 2A, 2B, 2C, 2D, 2E, 2G)
2.20Section 1C sets standards in relation to the electronic exchange of information.States Parties are required to establish, maintain, and use systems for the electronic exchange of information for vessel arrival, stay and departure. This would be transmitted through a Maritime Single Window. This amendment requires Australia to development and implement an Australian Maritime Single Window.
2.21Shipping Australia indicated that it is ‘strongly supportive of the “Single Window Concept”.’ This support was however qualified, with Shipping Australia further noting that ‘the Australian approach to implementation so far appears to be focused on a Single Window that is neither single – as in, there are multiple “single” windows being developed (by ports, port authorities and state authorities).’ Shipping Australia explained that: ‘a ship should arrive, provide data once … to a portal of some description (i.e., to the Single Window) and then be allowed to carry on its business without having to provide further data.’
2.22Another submitter from the shipping industry noted that ‘the Maritime Single Window which, with minor changes, can potentially support broader port and terminal industry requirements, enhancing safe and efficient operations, reducing workload and bureaucracy whilst supporting enhanced future interoperability.’
2.23This submitter further said: ‘The current workload associated with collation and submission of data for ship operators across multiple ports and terminals, each with slightly different formats and criteria is both high and repetitive’. The submitter explained that ‘this is not dissimilar to the current issues faced with government reporting requirements that the Maritime Single Window seeks to address.’
2.24As a solution to this issue, the submitter suggested that: ‘Reduction of this workload by entering the information once and using multiple times has the potential to reduce fatigue for seafarers and enhance maritime safety within Australia whilst increasing efficiency and streamlining processes.’ The submitter explained: ‘Standardised data formats will also [be] key in modernising and automating processes and workflows to support future machine-learning and AI applications.’
2.25Further amendments to the FAL Convention include setting standards relating to reporting and data collection in relation to the arrival, stay and departure of ships (sections 2A and 2G).Further amendments include standards relating to notification by public health authorities to shipowners regarding the application of public health measures to a ship and persons on board (section 2G).
Identification (Sections 3A, 3B, 3G)
2.26Amendments on identification include amending the standards relating to the formalities for arrival and departure of crew and passengers including the requirement of a valid passport (section 3A). Further changes on this topic include standards relating to expediting the clearance of passengers, crew, and baggage (sections 3B and 3G).
Treatment of stowaways (Sections 4A, 4B, 4C, 4E)
2.27These amendments include the amendment of standards for the treatment of stowaways including greater protection for those claiming refugee status (sections 4A, 4B, 4C and 4E).
Public health (Sections 3A, 3D, 6A, 6B, 7B, 7C)
2.28Amendments include standards for identification documents and vaccination proof (section 3A). Section 3D includes the granting of practique, by electronic means, to a ship that health authorities believe will not result in the introduction or spread of disease.
2.29Section 3D also amends the standard for duty-free ship’s stores to be allowed on board while in port.
2.30Section 6 of the Amendments focus on public health and quarantine. This section includes Standards to ensure that public authorities of a state not party to the International Health Regulations (IHR) shall endeavour to apply its provisions that are relevant to international shipping. Further, it is required that information is provided to ships relating to public health measures. Further, border control measures during a public health emergency of international concern must be aligned with the IHR and any relevant recommendations of the WHO (Sections 6A and 6B).
2.31The standards also set requirements for the treatment of a ship’s crew that require medical care. There are also increased powers for public health authorities to inspect ships, cargo, and baggage when there is a public health emergency.
2.32Section 7B contains an amendment relating to tariffs applied for the medical examination of persons on ships requiring assistance to ensure that no charges are generally made for medical examinations required for quarantine purposes.
2.33The Amendments outline that public authorities should facilitate the arrival and departure of ships engaged in certain activities including public health response activities, disaster relief work, the rescue of persons in distress at sea, the combating or preventing of marine pollution or other emergency operations designed to enhance maritime safety, the safety of life at sea, the safety of the population or the protection of the marine environment (section 7C).
Implementation
2.34When the Amendments enter into force for Australia on 1 January 2024, Australia would be compliant with at least 11 of the 59 standards. The Government notes that further consultation is being undertaken with respect to an additional 23 standards.As of October 2023, Australia would not be compliant with 25 out of the 59 standards.
2.35The Standards where Australia is currently non-compliant primarily relate to establishing a Maritime Single Window and customs and biosecurity border reporting.For the Standards that Australia is not compliant with when the treaty enters into force, there is provision in the FAL Convention (Article VIII) which allows a state to submit a ‘Statement of Differences’. This is when a state finds it impractical to comply due to formalities, documentary requirements or procedures that are required.
2.36The statement of difference is where the state notifies the Secretary General of the IMO where their domestic processes and legislation are different to the FAL Convention. Australia has submitted a statement of difference on four previous occasions when the Annex to the FAL Convention has previously been amended and in the current instance would do so again following 1 January 2024.
2.37The number of non-compliance standards would be determined by respective agencies but generally relate to the Maritime Single Window, the electronic exchange of information, and custom and biosecurity border reporting. When Australia is in compliance with the Amendments it would again notify the IMO.
Costs
2.38The costs associated with implementing the Amendments would be calculated as part of the process of identifying the required legislative changes and through implementation of a Maritime Single Window.
Impact Assessment
2.39An Impact Analysis is not required until after 1 January 2024 when a domestic enabling framework is established to implement the amended standards and associated changes to legislation.
2.40Shipping Australia submitted that: ‘Where domestic law applies, this should be completely aligned with international law. Where absolute alignment is not possible then domestic law should be as aligned as closely as is possible to international law so as to not hinder trade.’
Future treaty actions
2.41Amendments to the treaty enter into force one year after their acceptance by two-thirds of the Contracting Governments except where the Governments prior to an amendment entering into force make a declaration that they do not accept the amendment.
2.42Amendments to the Annex of the FAL Convention can be initiated by a Contracting Government by an individual proposal or through a conference that is convened for this purpose. These amendments automatically enter into force 15 months after the Secretary-General circulates the proposed amendments to other states.
2.43Contracting Governments that do not accept the Amendments are not bound by them but must follow the necessary notification procedures under the Convention (Article VIII). This Article provides for notification to the Secretary-General when a Contracting Government finds it impractical to comply with any Standard prescribed by the Convention or the Annex.
Consultation
2.44The NIA notes that there has been consultation with industry, consultation on design of the Maritime Single Window and consultation across Government.
Issues
Timing of referral to JSCOT
2.45At the public hearing, the Committee noted its understanding that the Committee’s consideration of the Amendments and reporting is required for the Amendments to come into force on 1 January. The Committee further noted that the period in which Australia could have registered any exceptions to the Amendments had already passed.
2.46In response, the Department of Infrastructure, Technology, Regional Development, Communications and the Arts (DITRDCA or the Department) affirmed that the period for exceptions ended on 1 October 2023. When questioned by the Committee as to why it had taken so long for the treaty to be referred to JSCOT, the Department said that this was due to competing priorities within the Department as a result of the redeployment of staff, as well as the number of portfolio agencies and the complexity of the Amendments.
2.47The Department further said ‘we're still going through that process of identifying Australia's compliance which we would have liked to have completed before appearing before you today.’ The Department further explained, ‘the number of amendments and the ambiguity in some of those amendments have made it a slower process than we had anticipated, which meant that we were later in coming to you than we would've liked.’
2.48The Committee noted that in situations such as these when there is a delay in referring the treaty, the value of the Committee’s consideration and input is substantially undermined. The Committee observed that by the stage when the treaty was referred, the Committee was no longer in a position to be able to provide an inquiry report that might have included recommendations that exceptions be lodged in relation to aspects of the agreement.
Failure to meet the Amendment standards
2.49At the public hearing, the Committee noted that Australia is not in compliance with 25 of the 59 standards. The Department clarified that the standards that are not met include those relating to the Maritime Single Window and to the requirements under the Biosecurity Act and Customs Act, including where the new standards are lower than Australia’s current requirements.
2.50The Department explained that under the FAL Convention, Contracting Governments can submit a notification of difference where it is impractical to comply with a standard due to domestic requirements and procedure. The Department noted that Australia has used this mechanism in response to previous amendments to the FAL Convention, in Australia’s case on four previous occasions. The Department explained that if the Committee recommends ratification then the Department will submit a notification as soon as possible following 1 January 2024.
2.51The Department explained that non-compliance is typically because the FAL Convention has lower minimum regulatory standards compared to Australia’s regulatory practices. The Department explained that while the FAL Convention aims to minimise reporting, Australia has unique regulatory requirements, that are necessary to support customs and biosecurity.
2.52The public hearing raised another area of Australia’s non-compliance with the Amendments, being the Maritime Single Window, which provides for the electronic transmission of reporting through a single digital portal. The Department noted that ‘government is currently scoping the design and implementation … and the department is consulting across government and industry to ensure a Maritime Single Window is fit for purpose for Australia.
2.53The Department explained that with respect to the Maritime Single Window, the issue is related to bringing about consolidated digital reporting for ships entering and leaving Australia. This change is so that ships can provide the information necessary under the FAL Convention to the Australian government.
2.54The Department explained that they are ‘still going through the process of scoping the design of that system’, and they expect to become compliant with those standards into the future but will not have completed that work on 1 January 2024. The Department further explained that contacts at the IMO had informally advised that approximately 70 per cent of countries would be in the same situation.
2.55The Committee questioned when Australia was obligated to meet the standards. The Department noted that there is no specific timeframe. The Department noted that with respect to some of the standards, Australia may never comply with them, for example biosecurity and customs. The Department noted that in some instances they would choose not to comply because it would result in a weakening of Australia’s requirements.
2.56The Committee inquired into whether pursuant to the Amendments, Australia can still apply its high standards. The Department explained that when Australia submits its notification of difference, they will indicate the areas where Australia is not compliant because Australia requires more information than the FAL Convention sets out. Following this, Australia will continue to receive information and its laws will continue to operate as they currently do.
Harmonious approach to shipping and integrated systems
2.57The Committee inquired into the issue of the Maritime Single Window and whether there are multiple single windows being developed rather than just one. The concern was raised as to whether shipping companies must engage with multiple authorities.
2.58The Department said that while they are seeking to the greatest extent possible to harmonise government requirements through the Maritime Single Window, they are not able to direct the port owners where they have private operations. The Department said that it has been consulting with states and territories and with a broad range of stakeholders to harmonise the process so that information can be recorded once and used for multiple purposes. The Department said they are engaging with all the major ports.
2.59The department explained that they want ‘to design [maritime reporting] in a way that it doesn't just meet the minimum requirements of the Maritime Single Window but also integrates with [other] systems so that ships coming to Australia don't have to interact or provide that same information multiple times.’
2.60In response to the submission to the inquiry by Shipping Australia, on the prompting of the Committee, the Department submitted that Shipping Australia ‘suggests the Australian Maritime Single Window will sit behind existing reporting systems to collect data, requiring the duplication of reporting effort by ships entering and departing Australian ports.’ The Department responded: ‘This appears to be a misunderstanding of the intent of the Maritime Single Window, which is intended to act as the single-entry point for the submission of all FAL related maritime reporting required by Commonwealth agencies and regulators.’
2.61The Department further submitted that through its consultation, it is ‘scoping the current landscape of digital systems across Australian ports and opportunities for interoperability and data sharing between a Maritime Single Window and other parties.’ The Department further said: ‘Changes that would weaken Australia’s system of border controls are not proposed.’
Digitisation and efficiency
2.62The Committee inquired into any negative consequences raised by failing to take up the amendments. The Department said that the consequences of not taking up the Amendment would be that Australia would not realise the efficiencies that a system as outlined in the Amendments offers.
2.63The Department explained that ‘digitalisation has a range of benefits—efficiency: allowing more timely arrivals and departures from ports, for example.’ The Department went on to explain: ‘There are a range of benefits you get from the more efficient movement that we wouldn't realise rather than it bringing any negative consequence that we wouldn't be realising the benefits.’
Privacy issues
2.64The Committee inquired into the privatisation of ports and whether there are any privacy protections in place in relation to the exchange of information. The Department said that there are no protections beyond the normal privacy protections under the Privacy Act.
2.65The Committee expressed its interest in issues specifically around privacy in relation to the exchange of information digitally. The Department explained that much of the information communicated is already provided to the Department therefore there are no immediate issues but that it is an issue for them to consider. The Department explained that the information being provided is already provided through paper-based forms and these amendments are focused on the digitalisation of that information.
2.66The Department submitted that while Standards under the Amendments seek to harmonise the electronic submission of data for maritime reporting, they do not address any requirements regarding data privacy. The Department explained that maritime reporting as required by Australian border agencies pursuant to the Customs Act 1991, Migration Act 1958, Biosecurity Act 2015 and Navigation Act 2012 is managed in line with the Privacy Act 1988. The Department said that these requirements would continue to apply to data collected through a Maritime Single Window. The Department said it is ‘currently engaging with the Australian Cyber Security Centre on cyber security best practice.’
Standards for illicit activities
2.67The Committee noted that the Amendments set recommended practices and standards for improving abilities to combat illicit activities, including drug smuggling and illicit trafficking of wildlife etc. The Committee asked if the Amendments improve this area for Australia.
2.68The Department explained that Australia already has in place policies relating to maritime reporting on illicit activities that consider international guidelines. The Department submitted: ‘By supporting the continued harmonisation of international data related to illicit activities, Australia stands to benefit by the identification of such activities by other governments before ships reach Australian shores.’
Overlapping state and federal responsibilities
2.69The Committee further inquired as to the responsibilities between the states and Commonwealth governments and whether there is double handling of information. The Committee further questioned if there have been some efforts to bring centrality to this process. The Committee questioned whether any attempt had been made for states and territories to strike agreements or to cede relevant powers to the Commonwealth to have a national system from first port of entry.
2.70The Department noted that it had been consulting with states and territories and with a broad range of stakeholders including the ports to seek harmonisation along those lines. The Department submitted a list of stakeholders consulted since June 2023. The Department further submitted that based on consultation activities it had a high level of support for the Maritime Single Window and that the Department had not identified any stakeholders who have expressed an expectation to sit outside the Maritime Single Window process. The Department submitted that consultations are continuing.
Future amendments
2.71The committee questioned whether there would be further changes in coming years to the FAL Convention as in this instance the Committee has been presented with a large set of changes. The Department explained that these sorts of amendments do not happen every year. They further explained that there might be amendments in the future, but they would likely be relatively minor for the next few years.
Conclusion
2.72The Committee notes the importance of the proposed major treaty action: the Amendments to the Annex of the Convention on Facilitation of International Maritime Traffic, 1965 (London, 13 May 2022). As a signatory to the original treaty, Australia is a strong supporter of the FAL Convention and of ensuring the streamlining and simplification of maritime traffic.
2.73The Committee is of the understanding that the FAL Convention exists to ensure there is a standard consistent, harmonised approach to maritime traffic globally rather than countries following their own plan. The Committee views that the cooperation between Governments on these issues is of utmost importance in ensuring international standards and that it is important that Australia is aligned with these standards.
2.74The Committee observes that as shipping and technology has evolved, there are opportunities to bring these administrative procedures and standards into the 21st century and the digital age. Part of this progress goes to how the standardisation and harmonisation of these procedures can be digitised. The Amendments and moving to this new approach therefore provide an easier and smoother process on one hand, but also a more effective process, with better reporting on the other hand.
2.75Key issues discussed at the public hearing as part of the inquiry into this treaty include the timing of the referral to JSCOT, failure to meet the amendment standards, aspiring towards a harmonious approach to shipping and integrated systems including a Maritime Single Window, digitisation and efficiency, privacy issues, the relationship of the Amendments to the International Health Regulations, standards for illicit activities, overlapping state and federal responsibilities and awareness of future amendments. The Committee considers that these issues have been addressed adequately by the Inquiry.
2.76With respect to the areas that are not currently in alignment with standards outlined in the Amendments, the Committee notes that the inquiry highlighted that there is the potential when you seek a smooth harmonised administrative procedure that it might not operate in a way that meets the individual national standards, for example in areas such as biosecurity or customs and that at times national standards may be higher or more rigorous than those contained in the treaty.
2.77The Committee notes that this treaty action was referred to JSCOT by The Hon Catherine King MP, Minister for Infrastructure, Transport, Regional Development and Local Government and tabled in Parliament on 7 November 2023. The request asked that the treaty be considered in an expedited manner and that the Committee conduct its inquiry, including a public hearing and table the report on the treaty in Parliament before the Amendments come into force on 1 January 2024. For a Category 1 major treaty action such as this one, JSCOT would normally conduct an inquiry and table the associated report for a period of 20 joint Australian Parliament sitting days.
2.78The Committee reiterates to the Department and the government more widely that the scrutiny function of JSCOT requires that the Committee be given adequate time to inquire into and report on treaty actions, especially where delayed referral means there is no opportunity for JSCOT’s consideration to result in meaningful feedback.
2.79The Committee notes support for ratification from the Government and other stakeholders including from industry.
2.80The Committee supports the ratification of the treaty and recommends that binding treaty action be taken.
2.81The Committee supports the Amendments to the Annex of the Convention on Facilitation of International Maritime Traffic, 1965 and recommends that binding treaty action be taken.
Mr Josh Wilson MP
Chair
11 December 2023