Security concerns and the visa clearance process

4.1        This chapter considers the potential security risks associated with FOC vessels and their crew.  Security concerns have been raised with regards to FOC vessels and crew carrying dangerous goods around the Australian coastline, and regarding the sufficiency of security measures at Australian ports.

4.2        This chapter considers the clearance processes for international maritime crew to enter Australian waters and ports, and considers the efficacy of the Maritime Crew visa (MCV). MCV processes are considered with particular reference to Captain Venancio Salas of the MV Sage Sagittarius, who in previous years was travelling around the Australian coastline, despite being an alleged gun‑runner.

National security concerns

4.3        The committee canvassed a number of issues in its interim report with regards to national security. Evidence received by the committee indicated that FOC vessels expose Australia to national security risks, through a number of factors such as:

• reduced transparency of ownership, leading to increased FOC use for illegal activity;
• opening Australian borders to infiltration by criminal elements; and
• a lack of appropriate background checks for FOC crew, particular for crew transporting dangerous goods.[1]

4.4        The committee remains concerned about the national security risks presented by FOC vessels, particularly those carrying dangerous goods in Australian waters.

4.5        In its submission to the committee, DIBP argued that certain features of FOC registration, regulation and operation make them more open to exploitation from organised crime syndicates or terrorist groups. This created a lack of transparency around ownership, and therefore a lack of accountability, and insufficient regulation and enforcement of standards by the flag state.[2]

4.6        DIBP went on to state that complex financial and ownership arrangements can complicate identification of the individuals and organisations involved in FOC operations, making FOC vessels 'more attractive for use in illegal activity, including by organised crime or terrorist groups'. Illegal activity can include 'exploitation of natural resources, illegal activity in protected areas, people smuggling and facilitating prohibited imports or exports'.[3]

4.7        The OTS noted in May 2017 that it was 'confident in Australia's current approach to maritime security'. Ms Sachi Wimmer, Executive Director, OTS, advised that Australia's approach was:

comprehensive and it involves a number of agencies and measures. It is designed to apply to all vessels, irrespective of flag state, which enter Australian ports...there is no information from the intelligence community at the moment to indicate any kind of specific threat of unlawful interference with Australia's maritime transport sector. As I said before, we monitor that very closely.[4]

4.8        This position was also put forward in DIRD's submission to the inquiry, which stated that the Australian Government's approach to maritime security had thus far prevented an attack in Australia, and that there was no information (in 2015) to indicate 'a specific terrorist threat to Australia's maritime transport system'.[5]

4.9        The OTS confirmed that it was not specifically looking at FOC vessels and the risks they may present to coastal trade, but rather the larger threat environment. Under its enabling legislation, the OTS does not receive information about ships that have been involved in criminal activities, but rather focuses on the security threat environment.[6]

4.10      DIBP advised the committee that all ships entering Australia must notify Border Force, and provide an Impending Arrival Report (IAR) not more than 10 days and no later than 96 hours prior to the estimated time of arrival of a vessel at its first Australian port. The IAR allows for the assessment of risk, determined by the location and movement of cargo, and provides extensive information on the vessel. Information includes a vessel identifier, the last overseas port of departure, estimated date and time at each port, a list of crew, and whether the vessel has any cargo to discharge.[7]

4.11      However, DIBP did note that only those commercial vessels looking to enter Australian waters had to complete IARs. Vessels, including FOC vessels, in international waters were not required to report to DIBP on their status or their intentions.[8]

4.12      Concerning FOC vessels, DIBP confirmed that all vessels entering Australia are critically assessed, regardless of FOC status, using open and classified information to determine risk. DIBP stated that it would be aware if an FOC vessel presented a serious risk to border security. Some of the processes involved in determining risk were detailed to the committee:

we have a reasonably extensive network of Department of Immigration and Border Protection officers based overseas...working in close collaboration in our effort to partner and share tactical information to strengthen our ability to reduce the threat offshore, before the threat hits us at the border. We are trying to aim for offshore disruption. It delivers a far more effective and efficient process.[9]

Dangerous goods

4.13      The House of Representatives shipping inquiry in 2008 received evidence about ships transporting dangerous goods around the Australian coast. The shipping inquiry heard evidence that ammonium nitrate in particular was carried by foreign‑flagged vessels, if the ships adhered to international safety standards. The inquiry noted that:

For security purposes, it would be preferable that dangerous goods such as ammonium nitrate be transported by vessels registered in Australia, yet the availability of ammonium nitrate must not be hampered. Therefore, it will be necessary to continue allowing foreign vessels to transport shipments of ammonium nitrate until there are sufficient Australian vessels available for its transportation.[10]

4.14      Since the shipping inquiry in 2008, there has been an ongoing, continued decline in vessels registered to Australia, and foreign‑flagged vessels continue to be the most feasible means for transferring dangerous goods around the Australian coast.

4.15      The ITF has noted that there are no Australian crews involved with shipping fuel around the Australian coast, down from 11 fuel tankers in 1995. The ITF argued that this:

flies in the face of any credible national security plan. Unlike Australian seafarers, foreign crews have no background checks yet they are carrying petroleum products, ammonium nitrate and LNG around the Australian coast.

More than half of Australia's fuel comes through the Straits of Hormuz to Singapore and the narrow Straits of Malacca, an area already notorious for its piracy. Add to that the potential flashpoint in the South China Sea and it’s clear we should be refining at home and shipping fuel around the coast using Australian vessels and crews.[11]

4.16      The committee questioned DIBP over how it assesses the risk of FOC ships that are entering Australian waters carrying dangerous and high‑consequence cargo. DIBP advised that it undertakes a risk‑based approach to all vessels entering Australia, whether or not the vessel operates under a FOC. DIBP uses the Vessel Threat and Risk Assessment System (VTRAS) to determine risk based upon 'a range of data inputs and indicators'. The risk assessment determines if any further action is required to address a threat, and 'the most appropriate risk treatment strategy'.[12]

4.17      DIBP further advised that in the 2016‑17 financial year (to 21 June 2017), 15 715 commercial vessels had arrived in Australia. Of these, 1072 had been searched by Border Force.[13]

Port security

4.18      The legislation committee asked the OTS about security zones and regulation at Australian ports. In response, the OTS confirmed that not all ports are regulated by the OTS, and maritime security zones do not necessarily cover an entire port. It was confirmed that regulation:

would depend on the operations of the port. There are some ports that have permanent zones established with a ship‑to‑shore interface. There are some ports where the zones are turned on and off depending on the arrival and departure patterns of vessels. There are other ports...that are not security regulated ports. It really depends on the operation of the port and the type and frequency of traffic which is coming in and out of that port.[14]

4.19      The OTS further confirmed that while its legislation establishes maritime security zones:

they are requested by the industry participant that we regulate as to when they will be established and where they will be established. If they have made a judgement that at particular times they do not need one, there will not be any MSIC controls around access to any areas of the port.[15]

4.20      In its submission to the inquiry, DIRD advised the committee that foreign‑flagged ships must comply with a port's security requirements. In addition, ports must have a security assessment and security plan in place that is approved by the Secretary of the department. The security plan:

includes a range of security measures informed by a security assessment, to protect both the facility and the visiting ship by setting out how they will interact. Examples of security measures include maritime security zones, access and escorting arrangements for crew, and CCTV monitoring.[16]

Foreign crew clearance processes

Maritime Security Identification Cards and Maritime Crew visas

4.21      Maritime Security Identification Cards (MSICs), administered by DIRD, allow unmonitored access for authorised card holders to ports and port facilities, who require access at least once a year. MSICs are issued to people who require access to the security zones of security regulated ports and security regulated ships, and who have cleared a security and criminal history check. MSIC holders still require permission from the relevant authority, owner or operator to access secure areas and zones.[17]

4.22      MCVs, administered by DIBP, allow non‑military, foreign crew on international voyages to temporarily enter Australia by sea (MCV holders must also depart by sea). The visa is valid for three years, but cannot be used to stay in Australia. MCV holders cannot work in Australia. They can only undertake the work which meets the normal operational requirements of the vessel.[18]

4.23      The key functions of the MSIC against the MCV were explained to the committee by DIBP:

The MCV does not allow people to enter the maritime security zone of a port unescorted. Only the holders of...the MSIC, can be in the maritime security zone unescorted. I want to be clear that the purpose of the MCV is to enter Australia. It is an immigration check for individuals, allowing them to remain in Australia for up to five days as part of a foreign crew on a foreign-flagged vessel. The MCV does not give work rights or allow unescorted access to the maritime security zones of an Australian port. The purpose of the MSIC is to allow an individual to have unescorted access to the maritime security zone. MSIC checks are different from the MCV checks because of the access the MSIC gives to those security zones mentioned.[19]

4.24      During Budget Estimates in May 2017, the legislation committee asked the OTS about MSICs and MCVs, with the OTS confirming that:

yes, we do regard the MSIC as a higher level of protection for those wishing to interfere with maritime operations, recognising that those who are on MCVs would not normally hold an MSIC and that you have to be escorted through any sensitive area of a port.[20]

4.25      The legislation committee raised its concerns that while the MSIC may provide an appropriate level of protection, an MCV still allows seafarers to access port areas, potentially while transporting dangerous goods, without the higher level of scrutiny of an MSIC.

4.26      The legislation committee also noted that while an MCV holder requires escorted access around ports at all times, this would be difficult to implement in practice. The point was also made that the immigration clearance process does not evaluate a person's intentions or employment history.[21]

4.27      The legislation committee asked the OTS whether it held concerns that the MSIC and the MCV were regulated through different agencies, noting the national security implications if clearance processes were not harmonised. The OTS advised it was not concerned, as the programs serve different purposes.[22]

Refused MCVs and detained applicants

4.28      For 2016‑17 (to end of April 2017), there were 255 132 applications for MCVs. DIBP advised the committee that there had been an increase in the refusal rate for MCVs. In 2012-13, there were 2943 refusals. For 2016‑17 (up to 30 April 2017), there had been 13 102.[23]

4.29      The increase in refusals was a result of 'improved internal risk settings', allowing for greater scrutiny of applicants by visa processing officers. Applicants refused MCVs were likely to be non‑genuine seafarers, and unlikely to comply with the visa conditions, with a minority refused 'because they do not meet the public interest criteria or special return criteria'.[24]

4.30      The committee also received evidence from DIBP regarding how many MCVs have been refused, while a vessel was at sea and travelling to Australia. If an MCV is refused while the vessel is in transit, DIBP ensures that the applicant is still offshore at the time of the refusal, and then restricts the movements of that person to the vessel. In 2016‑17 (to 27 June 2017), 11 individuals had been Restricted on Board on arrival, due to unsuccessful MCV applications.[25]

4.31      In the event DIBP has significant concerns about an individual who is restricted to a vessel, it has the ability to request that a vessel stand-off, although more generally the applicant is restricted to the vessel while at port. While stand‑offs would allow ABF to board a vessel, conduct a crew muster and make a determination of risk, it was unable to advise the committee of how often this occurs as it does not keep electronic records of stand‑offs.[26]

4.32      The committee was advised by DIBP about how many MCV recipients had been detained and placed in detention. DIBP advised that:

As at 21 June 2017, eight people who arrived in Australia on a Maritime Crew visa were detained in an immigration detention facility. During the period 1 July 2012 to 21 June 2017, 138 people have been detained after arriving on a Maritime Crew visa.[27]

Advanced Passenger Processing and MCVs

4.33      MCV applications for foreign commercial vessel staff must be lodged with DIBP, with processing times between 1 and 3 days (up to 4 weeks for a paper application).[28] The committee heard evidence from DIBP regarding trials of Advanced Passenger Processing (APP) to commercial shipping vessels and their crew. APP provides authorities with advanced notice of passengers and crew arriving in Australia and verifies whether they hold appropriate authority to travel and enter Australia.[29]  

4.34      In 2015 the department implemented the APP for outward travel, for departing air passengers and crew. The APP was then to be implemented for cruise ship passengers and crew. The committee was advised that outward APP for cargo vessel crew has been 'more challenging' due to stakeholder diversity and technological constraints.[30]

4.35      However, a four‑month trial of APP on cargo vessels concluded on 31 May 2017, with the outcomes of the trial currently being considered 'to determine whether to mandate the use of the APP system in the cargo ship environment'. If applied to cargo vessels, it will require 'significant stakeholder engagement to educate, train and support' stakeholders in its use, given the complexities of maritime travel.[31]

4.36      The use of APP on cargo ships will give DIBP 'more information and a more timely opportunity to do assessments against risk and make sure that everybody on board has a visa'.^[32]

Captain Salas and the MV Sage Sagittarius

4.37      Captain Venancio Salas Junior was in command of the bulk carrier MV Sage Sagittarius at the time Cesar Llanto disappeared off the vessel, and Hector Collado fell to his death.

4.38      As identified by the Coronial Inquest, at the time of the deaths there were a number of complex issues occurring on board the vessel, including harassment, bullying, a culture of silence and blacklisting, and the sale of guns by Captain Salas to crew members. Given these circumstances, the majority of the crew were reluctant to provide evidence to investigating authorities.[33]

4.39      In giving evidence to the Coronial Inquest, Captain Salas admitted that he had assaulted a crew member on several occasions, and that he facilitated the purchase of guns. Captain Salas organised for crew to complete gun applications, collected money for the guns (with the guns to be collected in the Philippines), and 'kept a small commission for his administrative efforts'. Additionally, Captain Salas admitted to stopping the vessel on the way to Australia, in order to trade alcohol for fresh tuna, in breach of company protocol.[34]

4.40      Overall, the Deputy State Coroner found that:

The conduct of Captain Salas, most of which was conceded by him during the course of his oral evidence, speaks volumes about the manner in which he ran his ship which in my view was through bullying and intimidation.[35]

Captain Salas in Australian waters

4.41      The committee's interim report presented evidence that there was insufficient oversight by Commonwealth and state authorities of FOC vessels and their crew, operating in Australian waters. This was highlighted by the case of Captain Salas and his alleged gun‑running activities, and the lack of communication between Australian authorities.

4.42      Over the course of this inquiry, the committee maintained a strong interest in Captain Salas and his movements around the Australian coast. In particular, the committee asked DIBP on several occasions to clarify how it was that Captain Salas was in Australian waters, but was not appropriately 'flagged' as a security concern, despite the events and investigations in 2012.

4.43      The Coronial Inquest commenced in May 2015. Captain Salas returned to Australian waters in December 2015, as Master of the Kypros Sea. Over January and February 2016, the Kypros Sea travelled between a number of Australian ports, primarily Gladstone and Weipa.[36]

4.44      The committee raised its concerns about the fact there was no alert on Captain Salas, to bring him to the attention of the Inquest. DIBP confirmed that 'an officer who forms a view that an individual should be on alert for some future intervention is authorised...to place an individual on alert' for their next entrance to Australia. However, in the case of Captain Salas, this did not occur.[37]

4.45      DIBP argued that it was aware that Captain Salas was in Australian waters, due to pre‑arrival reporting requirements. However, at the time the NSW Police were assisting the Coroner, DIBP was not advised or made aware that Captain Salas was a person of interest to the Inquest.[38]

4.46      DIBP argued that it had undertaken appropriate investigations into Captain Salas following the incidents of 2012. In September 2012, a comprehensive search of the MV Sage Sagittarius was completed, with no evidence of firearm smuggling detected. In 2014 and 2015, Customs and Border Protection boarded vessels on which Captain Salas was travelling, with nothing found that breached border controls.[39]

4.47      DIBP stated that:

When we talk about alerts, it relates to specific interest that an agency wants us to act on, to take some form of action or activity. When that incident first occurred [in 2012] there was a full operation. Subsequent to that and without being on alert, as an example, around January or February [2016], again, when Captain Salas arrived on the coast, we ran the data through the system and the officers picked up the connection through our intelligence holdings of this previous history that Salas has. That initiated a further interdiction and examination of the cabin...We continued to have an interest once it came to our attention through the unfortunate deaths on board, the suspicious deaths; notwithstanding he was not on a formal alert per se.[40]

4.48      The presence of Captain Salas in Australian waters in 2016 was brought to the attention of the Coronial Inquest by a journalist, Mr Owen Jacques, and not by any relevant authorities. DIBP clarified that:

the journalist did bring to the attention of the New South Wales police that were support [sic] of the coroner that, indeed, the vessel was on the coast. They then spoke to the coroner who suspended the inquiry that day and, then we were contacted to issue the subpoena, which we did. We facilitated his coming ashore because he was actually being replaced—another master had already come onboard so he was due to go back home. We did an interdiction. We searched his bags. We did that prior to him appearing at the coronial but, to my recollection, prior to that we were not aware that he was required to appear.[41]

4.49      DIBP later confirmed with the committee a timeline of events involving Captain Salas, after the deaths on board the vessel in 2012 and the investigation into alleged smuggling of firearms, of which no evidence was found by Customs. The timeline provided that:

• Captain Salas signed off the MV Sage Sagittarius and legally departed Australia via Sydney Airport on 14 September 2012;
• the AFP and NSW Police did not indicate any need for Captain Salas to remain in Australia to progress investigations, and Customs and Border Protection had no lawful grounds to prevent his travel;
• Captain Salas was granted an MCV on 19 July 2013, valid for three years;
• Captain Salas next returned to Australia in August of 2014, as Master of the Kypros Sea;
• during 2014 and 2015 there was no request for an alert to be placed on Captain Salas;
• On 16 February 2016, the AFP and NSW Police, on behalf of the NSW Coroner's Court, sought assistance from Border Force to issue a subpoena to Captain Salas for him to appear before the NSW Coroner;
• Border Force raised an alert the same day to notify the AFP immediately, to prevent Captain Salas leaving Australia and not complying with the subpoena;
• the subpoena was issued on 17 February 2016 at the Port of Gladstone, with Captain Salas appearing before the Inquest on the same day, and leaving Australia on 18 February 2016;
• the AFP and NSW Police did not request any further alerts be placed on Captain Salas, and Border Force could not legally prevent his travel;
• the ABF alert was deactivated on 18 February 2016 and this was the last occasion Captain Salas was in Australia.[42]

4.50      Under questioning from the committee, DIBP further detailed the processes in place at the time, confirming to the committee that under the newly‑formed DIBP, such events would not happen today:

In those days, the Customs officers were performing two functions: one was around border control of goods which concerned the allegation around firearms; equally, they were performing a function on behalf of the department of immigration which concerned the migration provisions, which was to establish and verify the bona fides of the individuals – the master and others...I cannot explain at this point what actions they may or may not have taken, but I can say [Captain Salas] was not placed on alert. Would it happen today? No, it would not happen today.[43]

4.51      Under the conditions in place today, and based on the information concerning Captain Salas, DIBP advised that it was possible that Captain Salas would not now be granted an MCV to travel to Australia.[44]

Committee view

4.52      The committee continues to be troubled by the fact that dangerous goods are transported to and around Australia by foreign crews. It is also very concerned that there are ports in Australia with no security in place. The committee viewed evidence during its inquiry that showed a foreign vessel at a port in a major municipal area, with no security checkpoints at the port entrance, around the port, or for boarding the vessel.

4.53      The committee was surprised to learn that maritime security zones at Australian ports were requested by industry participants, and not determined by the OTS. Additionally, evidence presented to the committee made it clear that some ports did not have adequate, or indeed any, security checks in place when FOC and other vessels were at port.

4.54      The committee notes that under the Maritime Transport and Offshore Facilities Security Act 2003, the Secretary of DIRD has considerable authority to establish maritime and port security areas. The committee encourages DIRD to ensure that all ports are regularly assessed to ensure proper security regulations are in place, and are not dependent on third parties requesting the establishment of a secure area.

Captain Salas and immigration alerts

4.55      The committee was very concerned that Captain Salas was able to travel in Australian waters, without a formal alert or 'red flag' in place, alerting authorities to the fact he was in Australian ports during the time of the Coronial Inquest. It was a journalist that set the subpoena in motion and ensured that Captain Salas gave evidence to the Inquest.

4.56      The committee asked DIBP on many occasions during its inquiry to clarify how Captain Salas was not on alert after the tragic events of 2012, and what processes were in place at that time to allow that to occur.

4.57      The committee remains concerned that Captain Salas was able to travel so freely around Australia without an alert against him, but notes DIBP advice that under the current risk assessment framework, Captain Salas might not now be granted an MCV. The committee hopes that the systems in place for DIBP and other authorities are now effective enough to ensure that a similar situation to that of Captain Salas does not occur again.

4.58      The committee notes that the creation of DIBP has allowed immigration and border control activities to become more harmonised. This should enable them to better assess and reduce risks to Australian security. The increased rate of MCV application rejections over the last year shows that the assessment of risk and intent of applicants is working to prevent non‑genuine seafarers from entering Australia.  The committee appreciates the work of DIBP in protecting Australia's borders.

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