REVIEW OF CABOTAGE IN AUSTRALIA
Introduction
The high cost of Australian coastal shipping has long Applications for licences and reports in relation to a
been the subject of debate in the shipping industry with voyage are then submitted through the Coastal Trading
reform to the cabotage regime being implemented in 2012 Licensing System through the Department of
in the Coastal Trading (Revitalising Australian Shipping) Infrastructure, Regional Development and Cities.
Act 2012 (the CTA).
Failure to obtain one of the above licenses before
The laws have been the subject of much discussion within engaging in coastal trading may lead to significant
industry circles due to the high cost of shipping within penalties including up to A$315,000 for a company or
Australia as compared to the costs of shipping A$63,000 for an individual.
internationally with a discussion paper released by the
There is a mandatory consultation period of 2 days which
Government in March 2017.
will apply to any application for a new temporary license
The significant inland rail project recently approved in the with the application taking approximately 15 business
2018 budget by the Government has also lead to days to process.
questions surrounding the infrastructure already in place
Energy Security Situation
at Australian ports and the low number of ships on the
Australian General Shipping Register. The “blue highway” A temporary licence can be amended when there is or will
and the significant potential to develop a thriving coastal be a shortfall in the Australian supply of liquid fuel by
trading industry in Australia utilising existing infrastructure making an energy security situation application. Before
is something which has been advocated for many years. deciding whether to apply under this category the
Shipping Business Unit at the Department of
Current regime
Infrastructure, Regional Development and Cities should
Cabotage concerns the right to operate sea, air, or other be consulted.
transport services within a territory. The current licencing
Developments
regime authorises vessels to carry cargo and passengers
between Australian ports provided they hold the correct It has been reported that the Coastal Trading (Revitalising
licence. All domestic movements of cargo or passengers Australian Shipping) Amendment Bill 2017 aimed at
must be authorised by one the three types of licences changing Australia’s cabotage regime is likely to go
provided by the CTA regime: before parliament in September this year. It has been
reported that the revised regime seeks to address a range
• General licences (for Australian Registered
of administrative issues in the CTA, which arguably
Vessels);
places unnecessary financial and administrative burdens
• Temporary licences (for foreign-flagged vessels); on shipping companies and the Australian businesses
and that rely on coastal shipping.
• Emergency licences (for emergency situations – It has been suggested that the reforms will make it easier
valid for 30 days). for international shipowners to apply for temporary
licences and therefore operate in Australian waters.
General licences
Although this may not immediately benefit some
A general licence will allow a vessel that is registered on Australian seafarers or Australian shipping companies, if
the Australian General Shipping Register unrestricted the bill is able to divert those goods that would usually be
access to trade intrastate within Australian waters for a transported by long haul road or rail to the “blue highway”
term of 5 years. there may be significant savings to be had at a national
level for decades to come.
The application must be accompanied by a statement that
each seafarer working on the vessel is ether an Australian For more information in relation to Australia’s cabotage
citizen, holds a permanent visa or holds a temporary visa regime please contact the author or the Thomas Miller
that will allow the seafarer to work on the vessel. Law office in Sydney.
Temporary licenses
A temporary licence will allow a foreign-flagged vessel to
engage in coastal trading in Australian waters for 12
months. Such a licence is limited to those authorised
voyages with voyages able to be added and amended if
necessary. A minimum of 5 voyages from one port to
another port in different states and territories in Australia
Author: Alistair Sullivan
must be detailed in such an application.
Thomas Miller Law
Level 10, 117 York Street
Sydney NSW 2000, Australia
Phone: +612 8262 5859
[email protected]
