Administration

National Plan 1995/1996 Financial Position

National Plan financial statements prepared by Coopers and Lybrand accounting for the cost of National Plan administration and operations are included as an Appendix

The operating surplus of $182,749 for the 1995/1996 financial year was in line with the 'break even over time' policy set by Government. Revenue from the Protection of the Sea Levy provided the main source of funding for National Plan operations, with some additional funding from equipment hire.Income from the Protection of the Sea Levy decreased by 4.18% compared with the previous year. The Protection of the Sea Levy was reduced from 3.5 cents per ton to 3.3 cents per ton as at 1 July 1995.

Total income received during the 1995/1996 financial year increased by $773,705 compared with the previous year. The large increase in incident revenue and expenditure is mainly attributable to the Iron Baron incident, which contributed $635,043 to direct expenses and $865,239 to revenue. Principally, the hire of the National Plan equipment contributed to the surplus in revenue for Incident Recovery.

Revenue from National Plan equipment hire for commercial use decreased in 1995/1996 from $87,182 in 1994/95 to $11,575 due to a reduction in the demand for the hire of National Plan equipment by industry for contingency plan arrangements.

National Plan expenditure increased by 41.41% from 1994/95, with total expenses of $4,274,135.Savings were achieved in staff costs due to a five month vacancy in the Plant Inspector's position. Consequently, travel costs were reduced due to National Plan equipment audit inspections being delayed to the following financial year. Revaluation of National Plan vessels attributed to the 29.22% increase in depreciation. A program was commenced decanting dispersant where containers have failed. This expense included purchase of suitable containers and freight charges. Following a recommendation from the Iron Baron Review four wildlife kits were purchased.

As at 30 June 1996 the National Plan's total assets were $9,176,672 compared with total liabilities of $526,051. This places the National Plan in a very good financial position, with equity totalling $8,650,621.

Policy and Legislation

The Criminal Law Division of the Attorney-General's Department agreed that a number of improvements be made to the enforcement provisions of the Protection of the Sea (Prevention of Pollution from Ships) Act 1983. This Act implements the operational provision of the International Convention for the Prevention of Pollution from Ships (MARPOL).

It is proposed that the Act be amended to provide for action to be taken against a person responsible for an illegal discharge from a ship other than the master and owner. Strengthened oil spill incident reporting procedures will also apply where the master of a ship does not or is unable to meet the reporting requirements set out in the legislation. The opportunity will also be taken to align various provisions of the Act with the Criminal Code Act 1995. It is proposed that the amendments be introduced during 1996/97.

AMSA reached agreement with the Great Barrier Reef Marine Park Authority (GBRMPA) regarding enforcement of maritime pollution standards in the Reef region. Essentially, this agreement provides that breaches involving international shipping and domestic merchant shipping will be handled by AMSA, and breaches involving non-merchant shipping (eg trawlers, fishing vessels, pleasure craft etc) will be handled by GBRMPA.

GBRMPA will issue infringement notices which are more applicable to smaller discharges such as those regularly reported occurring from fishing vessels. AMSA has administrative responsibility for MARPOL Australia-wide and is in a position to obtain evidence if necessary from ships in any Australian port and overseas.

Discussions continued during the reporting period regarding the implementation of recommendation 13 of the House of Representatives Standing Committee on Transport, Communications and Infrastructure report "Ships of Shame". The recommendation was that "the Australian Government requires proof of possession of adequate Protection and Indemnity insurance cover as a prior condition of entry of any foreign vessel into Australian ports".

It was agreed that this would best be achieved by amending the Protection of the Sea (Civil Liability) Act 1981. The amendment will require ships to carry on board a declaration, containing details to be set out in subordinate legislation, that insurance coverage is in force in respect of the ship. One objective of the proposal is, as far as possible, to minimise the impact on the vast majority of shipping which has appropriate insurance coverage. This will be achieved by using as far as possible documentation normally carried on board ships, such as a certificate of entry with a Protection and Indemnity (P&I) Club. Draft amendments became available for consideration in May 1996 and consultation with industry is continuing with a view to bringing the requirements into force during 1996/97.

On 9 October 1995, Australia acceded to 1992 Protocols amending the International Convention on Civil Liability for Oil Pollution Damage 1969 and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971. These Protocols enter into force for Australia on 9 October 1996.

The changes will increase Australia's entitlement to be compensated for oil spills from oil tankers flying the flag of any country from the current maximum of some $A120 million to a maximum limit of $A220 million for each incident. Provision also exists for the limits to be further increased to a maximum of approximately $A400 million when levels of imports of oil in the largest importing countries party to the Convention exceed 600 million tonnes in a calendar year.

Membership of the international Civil Liability and Fund Conventions provides certainty of reimbursement of pollution combat costs, pollution damage and direct economic loss arising from oil tanker spills. Other benefits of the new arrangements include the extension of the area of operation of the convention to the edge of Australia's 200 nautical mile Exclusive Economic Zone (EEZ), the inclusion of the bunkers of tankers on ballast voyages and the clarification of the pollution damage included in convention coverage to cover reasonable costs of reinstatement of the marine environment.

Audit

Fifteen recommendations of the November 1994 Australian National Audit Office (ANAO) project audit Report No 9, "Is Australia ready to respond to a major oil spill?", have been accepted and implemented by AMSA. The House of Representatives Standing Committee on Transport, Communications and Infrastructure (HORSCOTCI) reviewed the ANAO Audit Report and, in particular, the three recommendations not accepted by AMSA.

The National Plan Advisory Committee endorsed AMSA's response on all recommendations at its fourth meeting on 30 March 1995.

The recommendation that AMSA propose a clear definition of responsibilities resulting in only one party being responsible in an oil spill response was not agreed to on the basis that existing arrangements were the most efficient possible given jurisdictional responsibilities under the Constitution. The ANAO noted the existing arrangements were a compromise, recommending that AMSA continue pressing for improved arrangements.

The recommendation that AMSA request governments to define overriding powers for AMSA for all oil spill responses at sea was rejected on the grounds that State/Northern Territory Governments had previously objected to this arrangement during the National Plan Review in 1992. The issue was of States' rights, and not likely to be resolved at the NPAC forum. The ANAO suggested AMSA might seek other avenues in implementing this recommendation.

AMSA questioned the benefits of the recommendation that AMSA develop indicative standards for shoreline clean-up, given the range of standards likely to be confronted in a pollution clean-up operation. However, AMSA indicated it was monitoring Canadian and US approaches and that it would give consideration to this recommendation in the event that it could have benefits.

HORSCOTCI made a further four recommendations, all of which were accepted by AMSA and are in the process of being implemented.

The 23 recommendations of AMSA's internal auditor's 1994 National Plan Equipment Review have also been fully implemented.

Outstanding matters, while not strictly the subject of audit reviews, are the recommendations of the Iron Baron Review, issued in January 1996, which are at an advanced stage of implementation. Still to be implemented are recommendations expected to flow from the report of Exercise George Bass.

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