The Senate Inquiry into Flag of Convenience (FOC) Shipping has found serious risks.

The Rural and Regional Affairs and Transport References Committee report chronicles gaping holes in Australia’s national security framework, with the report being published  just one day after a government announcement to create the new Ministry of Home Affairs.

FOC shipping refers to international trading vessels that are registered in tax havens such as Liberia, Panama and the Marshall Islands. These registries are renowned for their lax labour laws, poor investment controls and lack of ownership oversight.

The Australian Border Force Submission states: “The Department notes that whilst a significant proportion of legitimate sea trade is conducted by ships with FOC registration, there are features of FOC registration, regulation and practice that organised crime syndicates or terrorist groups may seek to exploit. These features are:

• A lack of transparency of the identity of shipowners and consequent impediment to holding the owner to account for a ship’s actions.
• Insufficient flag state regulatory enforcement and adherence to standards.

The Senate Report states: “The committee maintains that [FOC] vessels present serious security risks to the Australian coast, which need to be properly addressed.

“The committee takes the view that, by not agreeing to review the current state of the maritime sector in Australia, the government is failing to address the serious security, economic, human rights and environmental vulnerabilities in the sector.”

The committee called on the Federal Government to grow the Australian maritime industry in the face of what it calls “very real and current risks to our nation” posed by FOC vessels and their crew.

In a recently published opinion peace, Opposition transport spokesman Anthony Albanese also referred to the security implications of not having a domestic shipping industry.

“Indeed, defence experts have long recognised the importance of maintaining a domestic maritime workforce,” Mr Albanese said. “It ensures that Australia has a pool of highly skilled labour that can be quickly mobilised during times of war or other national emergencies.

“Furthermore, Australian seafarers undergo stringent background checks to ensure they pose no security threats.  Overseas seafarers whose backgrounds are a mystery to us do not undergo such close scrutiny.”

International Transport Federation (ITF) president Paddy Crumlin said the conservative Australian Government is intentionally encouraging the morally ambiguous – and at times criminal – underbelly of FOC shipping.

“The Turnbull Government has allowed Australian seafarers to be replaced by FOC lawlessness that now threatens our very national security.

“Under their legislative abuses Australian seafarers, properly trained, security-screened and resident taxpayers, have been sacked and their jobs in a domestic transport sector given away to whoever comes over the horizon without a word of inquiry about their background.

“The solution is simple: stop destroying and start supporting and growing  our domestic shipping industry and the Australian working men and women that work there, and in doing so we will help keep our borders safe,” Mr Crumlin said.

ITF national coordinator Dean Summers said the inquiry had officially laid bare the murky world of FOC shipping that the Turnbull Government has so far chosen to ignore.

“The Senate Inquiry heard multiple accounts of the very worst of what FOC shipping has to offer – murders, gun-running, intimidation, bullying, harassment and slave labour,” Mr Summers said.

“The appalling case of multiple murders at sea onboard the Sage Sagittarius was the basis for this inquiry and serves as a shocking reminder of what can happen when an entire industry is little more than a race to the bottom.

The committee called for a comprehensive whole-of-government review into the potential economic, security and environmental risks presented by FOC shipping.

The committee said it was very concerned by FOC vessels carrying dangerous goods around Australia’s coast, including ammonium nitrate and petroleum products. Last financial year, only 1,072 of the 15,715 commercial vessels arriving in Australia were searched by ABF.

“The committee is very disturbed by the many examples of job losses, poor working conditions, inadequate wages and deaths and disappearances at sea,” it stated.

“To have seafarers disappearing and dying in and around Australian waters, and while in transit to Australian ports is unacceptable.”

The committee recommended that:

1. The Fair Work Ombudsman (FWO) implement an inspection program for ships with foreign seafarers to verify paid wages meet Australian legal requirements.
2. The Federal Government fund the FWO wages inspection program.
3. The Federal Government implement clear procedures on how to respond to deaths that occur on ships travelling in or to Australian waters.
4. The Federal Government consider legislative amendments to provide clarity on jurisdictional responsibility for investigating deaths on ships travelling in Australian waters.
5. The re-establishment of an advisory body made up of key maritime industry stakeholders to advise government on new Australian shipping policies and workforce development and training opportunities.
6. The Federal Government review the Australian maritime industry with a view to grow and support it.
7. The Federal Government review the potential economic, security and environmental risks presented by FOC vessels and foreign crew.

The committee’s full report can be found here.