Purpose and structure of the Bill

The Maritime Legislation Amendment Bill 2022 (the Bill) amends the Protection of the Sea (Prevention of Pollution from Ships) Act 1983 (POTS Act) and the Protection of the Sea (Harmful Anti-fouling Systems) Act 2006 (HAFS Act) to implement amendments by the International Maritime Organization (IMO) to international Conventions concerning pollution from ships and the use of certain anti-fouling systems.

The Bill contains four Schedules:

• Schedule 1 amends the POTS Act to implement requirements in relation to the discharge of persistent floaters
• Schedule 2 amends the POTS Act to implement a prohibition on the use of heavy fuel oil (HFO) in Arctic waters
• Schedule 3 amends the HAFS Act to implement a prohibition on the use of cybutryne in anti-fouling systems on ships
• Schedule 4 makes minor amendments to the POTS Act and HAFS Act to provide a consistent definition of ‘Marine Orders’ across relevant legislation.

Background

Australia is a party to numerous international conventions relating to the environmental impacts and safety of shipping. These conventions are administered by the International Maritime Organization (IMO), a specialised agency of the United Nations with responsibility for the safety and security of shipping and the prevention of marine pollution by ships.[1]

The International Convention for the Prevention of Pollution by Ships (MARPOL)[2] is the main convention covering the prevention of pollution of the marine environment by ships.[3] MARPOL aims to prevent both accidental pollution and pollution from routine vessel operations. MARPOL includes six technical annexes:

• Annex I: Regulations for the prevention of pollution by oil
• Annex II: Regulations for the control of pollution by noxious liquid substances in bulk
• Annex III: Regulations for the prevention of pollution by harmful substances carried by sea in packaged form
• Annex IV: Regulations for the prevention of pollution by sewage from ships
• Annex V: Regulations for the prevention of pollution by garbage from ships and
• Annex VI: Regulations for the prevention of air pollution from ships.[4]

Decisions on the amendment of MARPOL are made by the Marine Environment Protection Committee (MEPC) of the IMO.[5]

Australia has adopted all six annexes and implements MARPOL domestically through the POTS Act and the Navigation Act 2012.[6]

The IMO also administers the International Convention on the Control of Harmful Anti-Fouling Systems on Ships (HAFS Convention)[7], which aims to prohibit the use of harmful compounds in anti-fouling paints used on ships. The Convention entered into force in September 2008; Australia implements the HAFS Convention through the HAFS Act.

New requirements to limit the discharge of persistent floaters

At its 74th Session in May 2019, the MEPC adopted amendments to MARPOL Annex II to introduce new requirements for the control of discharges of persistent floaters.[8] The amendments came into force on 1 January 2021. The amendments insert requirements in relation to high-viscosity products, known as ‘persistent floating products’, which will require new cargo tank cleaning, prewash, and discharge procedures. The requirements apply in certain waters, including North West Europe waters, the Baltic Sea area, Western European waters and the Norwegian Sea.

Persistent floaters are ‘slick forming substances such as selected grades of vegetable oil or paraffin like cargoes’.[9] If discharged or spilled, persistent floating products can mix with floating materials (such as plastic debris) and form a floating crust or sink; if slicks come ashore, they can form concrete-like aggregates of sand that can persist for years.[10] Persistent floaters can be harmful to birds (via external coating, affecting birds’ ability to fly and thermal insultation), mammals (via smothering, affecting their respiratory system, and impairing eyesight), as well as fish, crustaceans and molluscs (due to asphyxiation and clogging of the digestive tract).[11]

Prohibition on heavy fuel oil in Arctic waters

At its 76th Session in June 2021, the MEPC adopted amendments to MARPOL Annex I to introduce a prohibition on the use, and carriage for use as fuel, of heavy fuel oil (HFO) by ships in Arctic waters on and after 1 July 2024, or for ships meeting certain construction standards with regard to fuel tank protection on and after 1 July 2029.[12] The IMO had at the 71st session of the MEPC in 2017 agreed to consider how to safeguard the Arctic from HFO and a ban was formally proposed at the 72nd session of the MEPC in 2018.[13]

Heavy fuel oil (HFO) refers to a broad range of different marine residual fuels and some distillate fuels; HFO is also referred to as bunker oil, heavy diesel oil, and in the POTS Act as ‘heavy grade oil’ (HGO).[14]

HFO has been described as the most significant threat to the Arctic marine environment from ships.[15] According to the International Council on Clean Transportation (ICCT):

HFO doesn’t readily disperse or breakdown in the marine environment and has a tendency to stick to surfaces like sea ice or sink and emulsify in sea water (rather than floating on the surface or evaporating off).[16]

In addition, the combustion of HFO produces high levels of pollutants. Black carbon, a component of fine particulate matter (PM_2.5), contributes to heart and lung disease and early death; black carbon ‘from all sources is the second largest cause of human-induced climate change and is contributing to the rapid decline of Arctic sea ice’.[17]

A similar ban on the use and carriage of HFO in Antarctic waters has been in place since August 2011.[18] In contrast to the ban in Antarctic waters, the ban on the use and carriage for use of HFO in Arctic waters does not extend to the carriage of HFO as cargo. Further, coastal state Parties bordering Arctic waters are able to issue temporary waivers, for ships flying their flag, until 2029.

Prohibition on use of cybutryne in anti-fouling systems

Anti-fouling paints are applied to the hulls of ships ‘to prevent sealife such as algae and molluscs attaching themselves to the hull’, [19] ‘causing reductions in vessel performance and fuel efficiency, and increasing vessel emissions’.[20]

Some chemicals used as anti-fouling agents have been found to have unacceptable impacts on the marine environment. The HAFS Convention initially banned the use of organotin biocides. However, more recently, cybutryne:

has been found by several scientific studies to be toxic and persistent, with a significant half-life in the marine/aquatic environment and potential to impact unacceptably non-target organisms and the base of food chains leading to seafood production and other ecosystems services.[21]

At its 71st session in July 2017, the MEPC approved a new output to amend Annex 1 of the HAFS Convention to include controls on cybutryne. At its 76th session in June 2021, the MEPC adopted amendments to Annex 1 and 4 of the HAFS Convention to introduce controls on the use of cybutryne and amend the form of the International Anti-fouling System Certificate.[22] The amendments will enter into force on 1 January 2023, with transitional arrangements of up to 60 months taking into account the typical five-year service period of an anti-fouling system.

Australian shipping

An overview of Australian shipping is provided in Chapters 1 and 2 of the Senate Standing Committee on Rural and Regional Affairs and Transport’s December 2020 inquiry report Policy, regulatory, taxation, administrative and funding priorities for Australian shipping.

Australian registered ships are required to comply with the POTS Act, HAFS Act and the Navigation Act even when they are operating outside Australia’s exclusive economic zone.[23]

In his Second Reading Speech, Senator Anthony Chisholm, the Assistant Minister for Regional Development, noted that Australian-flagged ships that undertake international voyages are unlikely to operate in North European and Arctic waters.[24] Further, the ‘Australian Pesticides and Veterinary Medicines Authority [APVMA] has never registered cybutryne or approved its use as an anti-fouling agent for ships in Australia’.[25] The changes proposed by the Bill are thus unlikely to significantly impact Australian shipping.

History of the Bill

An Exposure Draft of the Bill was published on the Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) website on 24 August 2022. There are minor drafting differences between the Exposure Draft and the Bill; specifically, the Bill, as tabled, removes a proposed exemption in the HAFS Act from the new prohibitions relating to cybutryne for Australian ships that do not engage in international voyages.

Committee consideration

Joint Standing Committee on Treaties

The Joint Standing Committee on Treaties has considered the amendments to MARPOL relating to the cargo residues and tank washing of persistent floating products and the prohibition on the use and carriage of HFO in Arctic waters, and to the HAFS Convention relating to controls on cybutryne.[26] The Committee supported the amendments and agreed that binding treaty action could be taken.[27]

Selection of Bills Committee

At its meeting on 27 September 2022, the Senate Selection of Bills Committee deferred consideration of the Bill until its next meeting.[28]

Senate Standing Committee for the Scrutiny of Bills

At the time of writing, the Senate Standing Committee for the Scrutiny of Bills had not yet commented on the Bill.

Policy position of non-government parties/independents

At the time of writing, non-government parties and independents do not appear to have publicly commented on the Bill.

Position of major interest groups

At the time of writing, major interest groups do not appear to have directly commented on the Bill itself. However, the Explanatory Memorandum notes that ‘the shipping industry has actively engaged in the negotiations at the International Maritime Organization to develop these amendments to the MARPOL and HAFS Convention’.[29]

The Explanatory Memorandum states that no comments were received during the public consultation period on the Exposure Draft of the Bill.

Financial implications

According to the Explanatory Memorandum, the Bill will have no financial impact on the Commonwealth.[30]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[31]

The Explanatory Memorandum indicates that although the Bill engages the right to the presumption of innocence, the Government considers the extent to which it does so is reasonable, necessary and proportionate to the objectives of the Bill.[32]

Parliamentary Joint Committee on Human Rights

At the time of writing, the Parliamentary Joint Committee on Human Rights had not yet commented on the Bill.

Key issues and provisions

Schedule 1 – Discharge of persistent floaters

Part III of the POTS Act implements Annex II of MARPOL, which relates to the prevention of pollution by noxious substances. Schedule 1 amends Part III of the POTS Act to implement the 2019 amendments to Annex II of MARPOL (as outlined in the background section of this Digest) to ensure that ships do not discharge persistent floaters and comply with prewash and discharge procedures in certain areas.

Item 1 adds a new definition of regulated persistent floater to subsection 15(1). The Explanatory Memorandum indicates that this definition is ‘as identified by 16.2.7 in column ‘o’ of Chapter 17 of the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (IBC Code)’.[33]

Section 21 of the POTS Act sets out ordinary and strict liability offences that are committed if a person engages in conduct that causes a discharge of certain substances from a ship to the sea.[34] Existing subsections 21(4), (5), (6), (7) and (8) set out exemptions to the strict liability offence in existing subsection 21(1B) for the discharge of different classes of substances. The classes of substances pose differing levels of hazard to marine resources or human health, or uses of the sea.[35]

Items 3 and 7 amend subparagraphs 21(4)(a)(ii) and 21(5)(a)(iv) relating to the discharge of a substance in Category X and a high-viscosity or solidifying substance in Category Y respectively to specify that the relevant prewash procedure is as specified in Appendix VI to Annex II of MARPOL. A Category X noxious liquid substance is one which, if discharged into the sea from tank cleaning or deballasting operations, is deemed to present a major hazard to either marine resources, or human health.[36] A Category Y noxious liquid substance is one which, if discharged into the sea from tank cleaning or deballasting operations, is deemed to present a hazard to either marine resources or human health or cause harm to amenities or other legitimate uses of the sea.[37]

Item 10 inserts proposed subsection 21(5A) which provides an exemption to the strict liability offence in existing subsection 21(1B) for the discharge of regulated persistent floaters in Category Y, provided that the ship’s tank is emptied in accordance with the Procedures and Arrangements Manual and washed in accordance with the prewash procedure specified in Appendix VI of Annex II of MARPOL and any resulting residues are discharged to a port reception facility at the port of unloading.

Items 5, 9, 13, and 17 make amendments to the exemption provisions to remove conditions relating to discharge of certain substances into the sea as water containing residues.[38] However, these are consolidated by Item 19 in proposed subsection 21(9A).

Item 20 inserts proposed subsection 21(13A) which provides that the exemptions in subsections 21(5) and (6) do not apply to the discharge of water containing residues from tanks that held regulated persistent floaters, or mixtures containing regulated persistent floaters, in the North West European waters, the Baltic Sea area, the Western European waters or the Norwegian Sea.

Schedule 2 – Carriage of heavy grade oil in Arctic waters

The Bill proposes to amend the POTS Act to implement the amendments to Annex I of MARPOL to ban the use, and carriage for use, of HGO by ships in Arctic waters.

Item 1 of Schedule 2 adds definitions of ship with fuel tank protection and ship without fuel tank protection.

Item 2 inserts proposed section 10AA which creates offences for conduct—by a person who is the master or owner of an Australian ship—that results in heavy grade oil (HGO) being used, or carried for use, as fuel on a ship in Arctic waters. Proposed subsection 10AA(1) creates an ordinary offence, with a maximum penalty of 2,000 penalty units ($444,000), while proposed subsection 10AA(2) creates a strict liability offence, with a maximum penalty of 500 penalty units ($111,000).[39]

Proposed section 10AA, including the offence provisions, penalties and exemptions (subsections 10AA(4) and 10AA(5)), is consistent with existing section 10A which implements the ban on the use and carriage of HGO in Antarctic waters.

Schedule 3 – Extension of controls on anti-fouling systems

The Bill proposes to amend the HAFS Act to implement the amendments to Annexes 1 and 4 of the HAFS Convention to introduce controls on cybutryne.

Item 1 of Schedule 3 extends the existing definition of HAFC (that is, a harmful anti-fouling compound) in section 3 to include cybutryne.

Item 2 adds a new definition of pre-2023 exempt platform. An exempt platform is already defined in existing section 3 as:

any of the following (within the meaning of the [HFAS] Convention):

(a) a fixed or floating platform

(b) a floating storage unit

(c) a floating production, storage and off-loading unit.

A pre-2023 exempt platform would mean ‘an exempt platform that was constructed before 1 January 2023 and has not been in dry dock on or after that date’. Exempt platforms are typically used in the offshore oil and gas industry. The Explanatory Memorandum does not elaborate further on the exemption.

Items 5, 7, 9, 11, 13, 15, 17 and 19 add a series of new identical paragraphs to the offence provisions to add a new component of the offence relating to cybutryne and applying the exemption defined for pre-2023 exempt platforms, being:

for a ship that has cybutryne applied to a designated external surface – the ship is not a pre-2023 exempt platform.[40]

Item 3 adds proposed paragraph (c) to section 4 to ‘broaden the definition of compliance with the anti-fouling requirements to include a transitional period for a ship already bearing a cybutryne anti-fouling system on 1 January 2023’.[41] Consistent with the amendments to Annex 1 of the HAFS Convention, the transitional period is up until the first scheduled renewal of the ship’s anti-fouling system after 1 January 2023, or the day that is 60 months after the last application of cybutryne to the ship before 1 January 2023.

Section 9 of the HAFS Act sets out the ordinary and strict liability offences that have been committed if a person engages in conduct including:

• taking (or permitting to be taken) a non-complying Australian ship to a shipping facility, or allowing a non-complying Australian ship to remain in a shipping facility (subsections 9(1), (2), (5) and (6))
• taking (or permitting to be taken) a non-complying foreign ship to an Australian shipping facility, or allowing a non-complying foreign ship to remain in an Australian shipping facility (subsections 9(3), (4), (7) and (8)).

Items 4, 6, 8, 10, 12, 14, 16, 18 make a series of amendments to remove references to the ‘on or after 1 January 2008’ time restriction as set out in the relevant offence provisions.[42] The Explanatory Memorandum states that ‘this time restriction was included as a transitional measure when the Act was first introduced to allow industry time to comply with the HAFC requirements for organotin compounds’.[43] This time restriction is no longer required.

Schedule 4 – Marine orders

The Bill proposes, in Schedule 4 (Items 1 to 14), to make minor amendments to the HAFS Act and the POTS Act to provide for consistent use of the term ‘Marine Orders’ as the term is used in the Navigation Act and the Marine Safety (Domestic Commercial Vessel) National Law Act 2012. This will replace the use of the existing term ‘orders’.

Marine Orders are legislative instruments made by the Australian Maritime Safety Authority (AMSA) under the HAFS Act and the POTS Act. For example, Marine Order 98 (Marine Pollution – anti-fouling systems) 2013 is made under the HAFS Act and gives effect to those provisions of the HAFS Convention that provide for controls on anti-fouling systems and prescribes survey and certification requirements and forms to be used to report certain matters. Similarly, Marine Order 93 (Marine pollution prevention – noxious liquid substances) 2014 is made jointly under the Navigation Act and the POTS Act and gives effect to Annex II of MARPOL and prescribes certain matters for Part III of the POTS Act.