EXPLANATORY STATEMENT
Select Legislative Instrument 2009 No. 102
Issued under the authority of the Minister for Infrastructure, Transport, Regional Development and Local Government
Protection of the Sea (Shipping Levy) Act 1981
Protection of the Sea (Shipping Levy) Amendment Regulations 2009 (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 1982 (the Principal Regulations) for the purposes of section 6 of the Act. Previously a quarterly levy of 9.6 cents per ton of the tonnage of a ship was imposed.
The amending Regulations amended the Principal Regulations to increase the rate of the quarterly levy to 11.25 cents per ton on all ships to which the Act applies, effective from 1 July 2009. The minimum levy prescribed in the Principal Regulations for the purposes of section 7 remains at its current level of $10.
The levy is payable once in every quarter that a ship to which the Act applies is in an Australian port. The levy 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). Since 1 July 2007 the levy has also been used to fund the National Maritime Emergency Response Arrangements (NMERA).
This increase is the third and final annual increase intended to fully fund the NMERA. The cumulative effect of the three increases is to increase 2009-10 levy collections by an estimated $12.5 million in comparison with the amount collected in 2006-07 (when the rate was 3.3 cents per ton). With this latest increase, the amount collected will increase 2009-10 levy collections by an estimated $2.5 million in comparison with the amount collected in 2008-09. Most of the levy is used to fund the NMERA.
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 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 2009.
Overview
The Protection of the Sea (Shipping Levy) Amendment Regulations 2009 (No. 1) were enacted to address the need for increased funding to support the National Maritime Emergency Response Arrangements (NMERA), which aim to enhance response to significant threats to the Australian marine environment. The Regulations were made under section 9 of the Protection of the Sea (Shipping Levy) Act 1981 by the Minister for Infrastructure, Transport, Regional Development and Local Government. The primary policy objective of these amendments was to ensure that the levy adequately funds the NMERA, which includes the provision of Emergency Towage Vessels at strategic locations around Australia. The amendments increased the quarterly levy rate from 9.6 cents to 11.25 cents per ton, effective from 1 July 2009, thereby raising an additional $2.5 million in 2009-10 compared to the previous year. Despite the increase, industry stakeholders supported the amendments, considering the additional costs to be minor relative to overall ship operating costs.
Scope and Application
The Protection of the Sea (Shipping Levy) Act 1981, as amended by the Protection of the Sea (Shipping Levy) Amendment Regulations 2009 (No. 1), applies to ships of 24 metres or more in length that carry ten tonnes or more of oil in bulk as fuel or cargo. The Act is enforced within the jurisdiction of the Commonwealth of Australia, and the levy is payable by ship owners or operators whenever a qualifying ship is present in an Australian port. The Act authorises the imposition of a shipping levy, which is used to fund 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 (NMERA) since 1 July 2007. The rate of levy has been increased to 11.25 cents per ton, effective from 1 July 2009, with a minimum quarterly levy of $10, to fully fund the NMERA. These Regulations are a legislative instrument under the Legislative Instruments Act 2003, and while no formal consultation was undertaken for these specific amendments, industry stakeholders were extensively consulted during the development and implementation of the NMERA and in relation to the management of levy arrangements.
Key Provisions
The Protection of the Sea (Shipping Levy) Amendment Regulations 2009 (No. 1) modify the existing regulations by increasing the quarterly shipping levy rate from 9.6 cents per ton to 11.25 cents per ton for ships of 24 metres or more in length carrying ten tonnes or more of oil in bulk as fuel or cargo (section 9). The regulations, made under the authority of the Protection of the Sea (Shipping Levy) Act 1981, apply to ships visiting Australian ports and are designed to ensure sufficient funding for the National Maritime Emergency Response Arrangements (NMERA). Despite the increase, the minimum quarterly levy remains at $10, unchanged from the previous regulations.
Entities governed by these regulations, primarily shipping companies operating large vessels, are required to calculate and pay the updated levy based on the tonnage of their ships when they are in Australian ports. This levy is crucial for funding the NMERA, which aims to enhance response arrangements under the National Plan to Combat Pollution of the Sea by Oil and other Noxious and Hazardous Substances. Companies must ensure compliance by correctly applying the levy rate to their vessels, which involves precise calculations based on the ship's tonnage and the duration of their stay in Australian ports.
Failure to comply with the levy requirements can result in legal consequences. Under the Act, non-compliance can be considered an offence, potentially leading to civil or criminal penalties. While specific penalties are not detailed in the explanatory statement, it is understood that breaches could result in fines or other legal actions, depending on the severity and intent of the non-compliance. The precise penalties would be determined by the courts, taking into account the circumstances of each case. The increased levy rate aims to fully fund the NMERA, and any shortfall due to non-compliance could impact the effectiveness of the emergency response arrangements.