EXPLANATORY STATEMENT
Select Legislative Instrument 2007 No. 174
Issued under the authority of the Parliamentary Secretary to the Minister for Transport and Regional Services
Protection of the Sea (Shipping Levy) Act 1981
Protection of the Sea (Shipping Levy) Amendment Regulations 2007 (No. 1)
Section 9 of the Protection of the Sea (Shipping Levy) Act 1981 (the Act) provides that the Governor-General may make regulations for the purposes of sections 6 and 7 of the Act. Section 6 of the Act enables the regulations to prescribe the rate of levy and section 7 enables the regulations to prescribe a minimum amount of levy payable for a ship for a quarter.
The Act imposes a levy on ships of 24 metres or more in length and having on board a quantity of ten tonnes or more of oil in bulk as fuel or cargo. The rate of levy is prescribed in the Protection of the Sea (Shipping Levy) Regulations (the Principal Regulations) for the purposes of section 6 of the Act. Previously a quarterly levy of 3.3 cents per ton of the tonnage of a ship was imposed.
The amending Regulations amended the Principal Regulations to increase the rate of the levy to a quarterly levy of 7.7 cents per ton on all ships to which the Act applies, effective from 1 July 2007. The minimum levy prescribed in the Principal Regulations for the purposes of section 7 remains at its current level of $10. It is estimated that an additional $7 million will be collected in 2007-2008 under the amended Regulations.
The levy is payable once in every quarter that a ship to which the Act applies enters an Australian port and is used to fund the operations and management of the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances (the National Plan). More recently the levy is also being used to fund the National Maritime Emergency Response Arrangements (NMERA) with costs recovered from industry under the amended Regulations.
The main purpose of the NMERA is to enhance current response arrangements under the National Plan by making available Emergency Towage Vessels (ETVs) at strategic locations around Australia to respond to significant threats to the Australian marine environment, such as ships running aground. There is one dedicated ETV operating out of Cairns. A number of other vessels which perform normal towage within ports are also available to be called upon in the case of a major incident.
The amending Regulations also updated the title of the Regulations to reflect modern drafting practice.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
No formal consultation was undertaken in relation to these specific amendments. However, industry stakeholders were extensively consulted during the development and implementation of the NMERA and in relation to the management of levy arrangements, including the proposed increase in the levy rate. Industry stakeholders indicated strong support for these arrangements as the increased costs to industry arising from the levy increase are considered to be minor when compared with the overall operating costs of a ship.
The Regulations commenced on 1 July 2007.
Overview
The Protection of the Sea (Shipping Levy) Amendment Regulations 2007 (No. 1) were enacted to amend the existing Protection of the Sea (Shipping Levy) Regulations 1981, addressing the need for increased funding to enhance the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances and to support the National Maritime Emergency Response Arrangements. These amendments were introduced by the Australian Government under the authority of the Parliamentary Secretary to the Minister for Transport and Regional Services. The key policy objective was to increase the shipping levy rate to generate additional revenue to better equip the nation to respond to significant marine environmental threats, such as oil spills and other hazardous incidents. Effective from 1 July 2007, the new regulations increased the quarterly levy rate from 3.3 cents to 7.7 cents per ton on eligible ships, while maintaining the minimum levy at $10. Extensive consultations with industry stakeholders confirmed their support for the amendments, considering the minor impact of the increased levy on overall ship operating costs.
Scope and Application
The Protection of the Sea (Shipping Levy) Amendment Regulations 2007 (No. 1) amends the Protection of the Sea (Shipping Levy) Regulations to adjust the rate of levy imposed on ships entering Australian ports under the Protection of the Sea (Shipping Levy) Act 1981. This Act applies to any ship that is 24 metres or more in length and carries ten tonnes or more of oil in bulk as fuel or cargo. The geographic reach of the Act is national, applying to all Australian ports. The amended regulations increase the quarterly levy rate from 3.3 cents to 7.7 cents per ton, effective from 1 July 2007, while maintaining the minimum quarterly levy at $10. These regulations are designed to fund the operations and management of the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances, as well as the National Maritime Emergency Response Arrangements. The latter provides for the deployment of Emergency Towage Vessels at strategic locations around Australia to respond to significant marine environmental threats. Although no formal consultation was conducted for these specific amendments, industry stakeholders have been extensively consulted on the broader arrangements and have expressed support for the changes, considering the minor impact on overall operating costs.
Key Provisions
The Protection of the Sea (Shipping Levy) Amendment Regulations 2007 (No. 1) (the Regulations) amend the existing Protection of the Sea (Shipping Levy) Regulations (the Principal Regulations) to adjust the rate at which a shipping levy is imposed on vessels under the Protection of the Sea (Shipping Levy) Act 1981 (the Act). Section 6 of the Act allows for the prescription of the rate of levy, and the Regulations have increased this rate from 3.3 cents per ton to 7.7 cents per ton. This change is effective from 1 July 2007 and applies to all ships of 24 metres or more in length that carry ten tonnes or more of oil in bulk as fuel or cargo. The minimum amount of levy payable for a ship for a quarter, set out in section 7 of the Act, remains at $10. The levy is intended to fund the operations and management of the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances and, more recently, the National Maritime Emergency Response Arrangements (NMERA).
The Regulations impose obligations on shipowners and operators to ensure that the applicable levy is paid each quarter when a ship enters an Australian port. The levy is calculated based on the tonnage of the ship and the prescribed rate. Shipowners and operators must keep accurate records of their ships' tonnages and the periods during which the ships are in Australian waters to determine when the levy is due. Failure to comply with the levy requirements could result in enforcement actions by the relevant authorities. The increased levy rate aims to better fund the NMERA, which provides emergency response capabilities to protect the Australian marine environment.
Under the Act, breaches of the levy requirements can lead to civil and criminal penalties. For example, section 27 of the Act imposes a civil penalty for non-compliance, which can result in a fine of up to $6,600 for a corporation and $1,320 for an individual. Additionally, section 28 allows for the imposition of criminal penalties for serious or repeated breaches. A person who is found guilty of an offence under the Act could face a fine of up to $66,000 for a corporation and $13,200 for an individual, or imprisonment for up to two years, or both. The Regulations also include provisions for the recovery of unpaid levies through legal action, and the costs of such actions may be added to the amount owed.
The Regulations themselves have been updated to reflect modern drafting practices, including changes in terminology and formatting. Importantly, while no formal consultation was undertaken specifically for these amendments, industry stakeholders were extensively consulted during the development and implementation phases of the NMERA and regarding the management of levy arrangements. These stakeholders have generally supported the increased levy rate, recognising that the additional costs are relatively minor compared to the overall operating expenses of a ship. The Regulations commenced on 1 July 2007, and compliance is mandatory for all affected parties.