Fortune Union Shipping Ltd, Hong Kong New Fortune Genius Management Ltd, China and Australian Maritime Safety Authority

Fortune Union Shipping Ltd, Hong Kong New Fortune Genius Management Ltd, China and Australian Maritime Safety Authority [2020] AATA 1711 (11 June 2020)
Division:GENERAL DIVISION
File Number(s): 2019/6465
Re:Fortune Union Shipping Ltd, Hong Kong
New Fortune Genius Management Ltd, China
APPLICANT

AndAustralian Maritime Safety Authority
RESPONDENT

DECISION
Tribunal:Deputy President J W Constance
Date:11 June 2020
Place:Sydney

The direction of the Australian Maritime Safety Authority, made 13 September 2019, that the ship M.V. Fortune Genius, IMO Number 9221877, not enter or use any port in Australia, is affirmed.
...........................[SGD].............................................
Deputy President J W Constance
CATCHWORDS
MARITIME SAFETY – direction that vessel not to enter or use any port in Australia for 365 days – hearing on the papers – Maritime Labour Convention – where Seafarers not given monthly account of wages – where more than one set of wage accounts were in use – where false documents presented to the delegates – where Seafarers coerced to sign false wage statements – where home allotments not made – appropriate period for exclusion – where Tribunal found the contravention was extremely serious and premeditated – decision affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 34J, 37
Navigation Act 2012 (Cth) ss 244, 246
SECONDARY MATERIALS
Australian Maritime Safety Authority, Compliance and Enforcement Policy
Maritime Labour Convention 2006
REASONS FOR DECISION
Deputy President J W Constance
11 June 2020
INTRODUCTION

On, or shortly before, 5 September 2019, the merchant vessel Fortune Genius sailed into the Port of Gladstone in Queensland. The crew on board included eight Seafarers from Myanmar.
As a result of a complaint received by the Australian Maritime Safety Authority, the Port State Control Officer and another Officer (as delegates of the Authority), carried out an inspection of the vessel and its records. This inspection revealed that the ship had several deficiencies, including serious irregularities in the payment of wages to the Myanmarese Seafarers. The Authority issued a detention order on 5 September 2019 as the delegates reasonably suspected, inter alia, that the vessel was involved in a contravention of the Navigation Act 2012 (Cth).
In exercise of a power given to it by the Navigation Act, on 13 September 2019 the Authority issued the following direction:
I, [name deleted] General Manager, Operations, a delegate of the Australian Maritime Safety Authority for the purposes of subsection 246(1) of the Navigation Act 2012
direct that the ship Fortune Genius, IMO Number 9221877, not enter or use any port in Australia.
This direction commences on the day the vessel next departs the Port of Gladstone, and ceases to have effect 365 days after the date of commencement unless withdrawn earlier.[1]
[1] Exhibit R1, 316.
M.V. Fortune Genius next departed the Port of Gladstone on 13 September 2019, the day the detention order was lifted.
The ship is an international trading vessel flagged by Panama. It is owned by Fortune Union Shipping Limited and operated by New Fortune Genius Management Ltd, the Applicants in this matter.
The Applicants have applied to the Tribunal to review the direction of 13 September 2019.
For the reasons which follow the direction will be affirmed.
BACKGROUND
Australia is a signatory to the Maritime Labour Convention 2006 (the Convention) which sets out standards for the working and living conditions of international seafarers. Australia has certain obligations under the Convention in relation to foreign vessels which enter its ports. This includes an obligation to exercise Port State Control over ships which enter those ports and which do not meet their obligations under the Convention. As a signatory to the Convention, Australia is responsible for enforcing compliance by foreign vessels while they are in Australian ports.
The Authority exercises Port State Control in Australia under the provisions of the Navigation Act. It is referred to by the acronym AMSA in this Act and in parts of these reasons.
As M.V. Fortune Genius sails under the flag of Panama, which is a party to the Convention, it is required to meet the relevant standards imposed by the Convention.
The Applicants assumed ownership and management of the vessel on 10 April 2019.[2]
CONVENTION AND LEGISLATION
[2] Exhibit R1, 299.
Maritime Labour Convention 2006
The Convention consists of general provisions and a Code, which sets out mandatory standards and non-mandatory guidelines.
Regulation 2.2 of the Convention provides:
All seafarers shall be paid for their work regularly and in full accordance with their employment agreements.
Standard A2.2 provides in part, that:
·payments due to seafarers must be made at no greater than monthly intervals and in accordance with any applicable collective agreement;
·Seafarers shall be given a monthly account of the payments due and the amounts paid.
The Navigation Act 2012
Subsection 246(1) provides, in part:
AMSA may, by notice in writing given to the master or the owner of a vessel, give any of the following directions:
(a) that the vessel not enter or use any port, or a specified port or specified ports, in Australia or the exclusive economic zone of Australia;…
The circumstances in which the Authority may give a direction in relation to a foreign vessel are limited by subsection 246(2). They include a foreign vessel when it is in an Australian port.
HEARING DISPENSED WITH
The parties have consented to the review of the direction made by the Authority being decided without a hearing and I have determined that the issues for determination can be adequately determined in their absence. I have therefore reviewed the direction by considering the material lodged with the Tribunal.[3]
[3] This procedure is provided for in section 34J of the Administrative Appeals Tribunal Act 1975 (Cth).
I have allocated the following exhibit numbers to the material I have considered:
Exhibit A1:Statement with annexures made by Lofty Chen and lodged with the Tribunal on 5 November 2019;
Exhibit R1:Documents lodged with the Tribunal in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (Cth).
FACTS
Based on the documents in exhibit R1, I am satisfied of the facts set out in paragraphs 20-29 on the balance of probabilities.
On 5 September 2019 the Authority was notified of a complaint that the wages of some of the Seafarers on the M.V. Fortune Genius had been underpaid.[4]
[4] Exhibit R1, 229.
On 5 and 6 September 2019 the two delegates of the Authority carried out a detailed inspection of the ship and its records. The delegates prepared a detention report which includes copies of the relevant documents.[5]
[5] Exhibit R1, 228-256.
The vessel was detained by the Authority on 5 September 2019. The notice of the detention specified a number of deficiencies relating to the payment of wages to the group of crew members from Myanmar.
The deficiencies in the operation of the ship identified during the inspection included:
·Seafarers were not given a monthly account of wages;
·more than one set of wage accounts were in use, contrary to regulation 2.2 of the Convention;
·the Myanmarese Seafarers had not been paid at monthly intervals in full for their work in accordance with their Seafarers Employment Agreements and/or collective bargaining agreement;
·some Seafarers had been coerced by the Master to sign false wage statements;
·the delegates were presented with false documentation purporting to show home allotments made on behalf of the Myanmarese Seafarers; there was no objective evidence that these allotments had been made;
·the above actions/failures were in breach of the conditions of employment set out in Article IV of the Convention.[6]
[6] Exhibit R1, 270.
The delegates located two different sets of Seafarers Employment Agreements relating to the Myanmarese Seafarers.
One set, produced by the Master to the delegates, include a monthly wage of US$1,806 and entitlements to overtime and paid leave. These documents appear to have been issued in China. They were kept in the Master’s files, identified as “official/formal” agreements. The Seafarers concerned were not provided with copies of these documents.[7]
[7] Exhibit R1, 236-237.
The agreements held by the Myanmarese Seafarers appeared to have been issued in Myanmar. These documents provided for payments of US$900 or less per month and did not include provisions for paid leave and overtime.[8]
[8] Exhibit R1, 232-234.
At the request of the delegates, the Master produced a statement of the calculations of the monthly payments to all crew members.[9] This document recorded that all crew members had been paid all wages owing in a timely manner up to 30 August 2019 in accordance with the Seafarers Employment Agreements apparently issued in China. It recorded also that amounts retained from the wages owing to the Seafarers from Myanmar for allotment to their families had been duly paid. A signature, purporting to be that of the relevant crew member, appeared beside each record.
[9] Exhibit R1, 238.
Contrary to the records supplied by the Master, for the period covered by the statement:
(i)the Myanmarese Seafarers were paid at rates of US$900 per month or less;
(ii)they had not been paid for the months of July and August 2019;
(iii)their home allotment retention amounts had not been remitted to family members;
(iv)the signatures of some had been forged; other members had signed under coercion.[10]
[10] Exhibit R1, 242, 244-245, 249-250.
On 6 September 2019 the Master advised the delegates that the underpayment to the Myanmarese Seafarers was US$39,135.18.[11] On 13 September 2019 the Master advised that the correct figure was US$69,987.72.[12]
[11] Exhibit R1, 244.
[12] Exhibit R1, p 252.
ISSUES FOR DETERMINATION
The following issues arise.
(1)Should the power to issue a direction that a specified vessel not enter or use any Australian ports be exercised in respect of M.V. Fortune Genius?
(2)If so, what is the appropriate period for which the direction should apply?
DISCUSSION
Issue 1: Should the power to issue a direction that a specified vessel not enter or use any Australian ports be exercised in respect of M.V. Fortune Genius?
The Navigation Act does not specify the circumstances in which the power under section 246 should be used, other than it is part of Chapter 8 which provides for “compliance with, and enforcement of, this Act.”[13] This includes action to enforce the provisions of the Convention.
[13] Subsection 244(1).
The Applicants did not argue that the making of a direction refusing access to Australian ports was inappropriate. Their submissions related to the period of the refusal of access.[14]
[14] Exhibit R1, 4-5; Exhibit A1.
I am satisfied that the power to make a direction that M.V. Fortune Genius not enter or use any Australian ports should be exercised.
I have reached this conclusion for the following reasons:
·the seriousness of the breaches of the Convention;
·the extent of the underpayment of wages; and
·the steps taken by those in charge of the vessel to attempt to hide the breaches.
Issue 2: What is the appropriate period for which the direction should apply?
The Applicants’ argument
The Applicants argued that the period of exclusion should be no more than three months. The following reasons were advanced:
a)    The owner and operator of the vessel Fortune Genuis had no prior adverse findings or directions against them in respect of payment or treatment of crews on board any of their vessels or for any wage related breaches of the Maritime Labour Convention, and their compliance history was good;
b)    The owner had only purchased Fortune Genius in April 2019 and had yet to familiarise itself with the manning arrangements, including the operations of the crewing agencies that it continued to employ after the purchase;
c)    The owner and operator had made all payments to the crewing agencies and had no knowledge of any failure to pay crew;
d)    The owner and operator did not knowingly or intentionally underpay or deny payment to seafarers;
e)    The failure to pay the crew was not due to a ‘systemic’ issue caused by the owner or operator;
f)     The owner and operator cooperated fully with the Port State Control Officer and AMSA;
g)    The crew have been paid in full what they were owed;
h)    The crewing agencies have immediately been replaced with another crewing agency.[15]
[15] Exhibit R1, 4-5.
The Compliance and Enforcement Policy
In September 2018 the Authority issued Version 2 of its Compliance and Enforcement Policy.[16] This Policy is published on the Authority’s website and has been publicly available since.
[16] Exhibit R1, 191-208.
The objectives of the Policy include:
oto support the objects of the maritime safety legislation;
oto facilitate consistent decision making.[17]
[17] Exhibit R1, 194.
The Policy refers to the range of enforcement options available to the Authority, from “engagement and education” through to “prosecution”. It includes the option of “directions”.[18]
[18] Exhibit R1, 199.
The matters which may be taken into account in determining the response to a particular contravention of the law, include:
othe severity of the issue or finding;
othe culpability of the duty holder or other relevant person in bringing about the issue or finding, including whether there was a bona fide mistake;
othe motivation of the duty holder;
othe compliance history of the duty holder;
omitigating factors such as self-reporting or timely, voluntary steps taken to address the issue;
othe need for deterrence.[19]
[19] Exhibit R1, 199.
Reasoning
The Policy is not binding on the Tribunal but it does provide a useful guide in considering the appropriate period during which the exclusion of M.V. Fortune Genius should be in place.
I agree with the submission made by the Authority that an exclusion of 365 days is appropriate and that therefore the decision under review should be affirmed.
In summary, my reasons for reaching this conclusion are:
·the seriousness of the contraventions;
·the contraventions were deliberate and planned in advance;
·the contraventions were uncovered only after a complaint to the Authority;
·the Master did not deal with the Authority honestly during the investigation;
·during a four-month period after the vessel was acquired, the Applicants did not take action to check how the vessel was being operated;
·the need for deterrence; and
·the exclusion period is consistent with earlier decisions of the Authority.
The contraventions are extremely serious. Eight members of a crew of 23 were denied the wages to which they were entitled, either all or in part. In addition, the families of the Seafarers were denied the support which the Seafarers believed they had provided for them. The average amount which had been underpaid for each of the Myanmarese Seafarers exceeded US$8,000 over a period of only five months.
The operation to defraud the Seafarers was premeditated and involved considerable planning. Two sets of employment agreements were obtained. The set held by the Master and identified as “official/formal” were not provided to the Seafarers concerned; the second set, copies of which were held by the Seafarers, provided significantly less benefits and wages. Seafarers’ signatures, apparently accepting the payments, were forged or obtained by coercion.
The unlawful conduct was only uncovered after complaint and investigation by the Authority. The statements made on behalf of the Applicants seek to minimise their involvement by relying on the acquisition of the vessel only five months before the investigation. It is argued on behalf of the First Applicant (the owner) that it “had yet to familiarise itself with the manning arrangements” on the vessel. However, this consideration is of minimal weight in the absence of evidence as to the steps taken (if any) by the Applicants after the vessel was acquired to check that it was being operated in accordance with the law.
The Master of the vessel did not deal with the Authority honestly, even after the contraventions had been uncovered.
The Applicants have not advanced any evidence of the identity of the person or persons responsible for the planning of the deception or of attempts to ascertain such evidence.
It is important that the exclusion be for a sufficiently long period to act as a deterrent for the Applicants as well as deterring others from similar conduct. I note that the Authority has made its Policy available to the public.
The period of exclusion is consistent with the periods imposed in similar circumstances, thus providing for certainty in administrative decision making.
In September 2017 a Panama flagged vessel was excluded for 12 months for keeping two sets of wage accounts to disguise the underpayment of crew. In July 2018 the Authority excluded a Hong Kong flagged vessel after an inspection revealed that crew had been deliberately underpaid approximately AUD$56,000. On each occasion details of the contraventions and the exclusions were publicised and operators were warned that the Authority “takes a zero tolerance approach to the mistreatment of crew and all vessels coming to our shores should be aware of the consequences.”[20]
[20] Exhibit R1, 288-289.
CONCLUSION
The direction of the Australian Maritime Safety Authority, made 13 September 2019, that the ship M.V. Fortune Genius, IMO Number 9221877, not enter or use any port in Australia, will be affirmed.

I certify that the preceding 51 (fifty -one) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance

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Associate
Dated: 11 June 2020

Date(s) of hearing: Heard on the papers

[2020] AATA 1711

11 June 2020

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