Financial statements

Report of operations

30 JUNE 2003

Enabling Legislation and Responsible Minister

The Australian Maritime Safety Authority (AMSA) is established under the Australian Maritime Safety Authority Act 1990 (No 78 of 1990) which came into effect on 22 October 1990. The main objects of the Act are to:

  1. promote maritime safety;
  2. protect the marine environment from pollution from ships and other environmental damage caused by shipping;
  3. provide a national search and rescue service; and
  4. promote the efficient provision of services by the Authority.

AMSA commenced operations on 1 January 1991 and has the following statutory functions as specified in section 6 of the Act, to:

  1. combat pollution in the marine environment;
  2. provide a search and rescue service;
  3. provide, on request, services to the maritime industry on a commercial basis;
  4. provide on request services of a maritime nature, on a commercial basis, to the Commonwealth, a State, a Territory or their authorities or agencies;
  5. perform such other functions as are conferred on the Authority by or under any other Act;
  6. provide consultancy and management services or to perform any other prescribed functions relating to any of the above matters; and
  7. perform functions incidental to any of the previously described functions.

During 2002-2003, the Transport Safety Investigation (Consequential Amendments) Act 2003, amended section 6 of the Act with effect from 1 July 2003 to include a new function arising from the enactment of the Transport Safety Investigation Act 2003. The function is to cooperate with the Executive Director of Transport Safety Investigation in relation to investigations under the Transport Safety Investigation Act 2003 that relate to ships.

During the period covered by this report, the responsible Minister under the Australian Maritime Safety Authority Act 1990 was the Hon John Anderson MP, Minister for Transport and Regional Services.

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Organisational structure

In November 2002, AMSA consolidated its three corporate bureaus, Chief Financial Officer, Chief Information Officer, and Corporate Strategy, into a single Corporate Services Division. The General Counsel Bureau was maintained as a separate entity reporting direct to the Chief Executive Officer for corporate governance reasons. The AusSAR Division was renamed the Emergency Response Division, after transfer from the Maritime Operations Division of the Environment Protection Unit, which is responsible for coordinating marine pollution preparedness and response.

AMSA's services are mainly provided, on a cost recovery basis, from fee and levy revenue sources. It also receives Community Service Obligation (CSO) funding from the Commonwealth Government specifically relating to search and rescue and boating safety education.

AMSA's head office is situated in Canberra. Principal offices are located in Brisbane, Queensland; Sydney, New South Wales; Melbourne, Victoria; Adelaide, South Australia and Fremantle, Western Australia. (A list of AMSA office addresses are included in the Appendices to this report.)

Review of operations and future prospects

AMSA's outcomes and outputs are described at the beginnign of this annual report and the review of AMSA's operations and future prospects is discussed under each Output Group.

The report also provides a financial snapshot and performance summary for the last four financial years including 2002-2003 and detailed financial statements. Performance review data against the measures included in the Portfolio Budget Statements for 2002-2003 appear at the end of each output group.

Significant events

There were no significant changes in AMSA's state of affairs or principal activities during 2002-2003 and no events occurred relevant to section 15 of the Commonwealth Authorities and Companies Act 1997 during 2002-2003 or after the financial year's end.

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Judicial decisions and reviews by outside bodies

During 2002-2003, there were no judicial decisions or decisions of administrative tribunals that had, or may have, a significant impact on AMSA's operations.

AMSA contributed to the following Coronial inquests into fatalities arising from incidents that led to search and rescue operations involving AMSA and two Parliamentary inquiries that included examination of AMSA's response to particular incidents in relation to its search and rescue functions:

On 28 August 2002, the Coroner's report was handed down from the inquest into the loss of three crew from the fishing vessel Margaret J in April 2001. The Coroner found that the crew had, in all probability, already perished before the search and rescue authorities, the Tasmania Police and AMSA, were alerted that the vessel was overdue on 13 April 2001. The report concluded that there was an extensive search operation based on the then known information about the vessel's intended voyage. The Coroner identified areas where coordination of search and rescue services and relations between AMSA and the Tasmania Police could be improved. Both AMSA and the Tasmania Police had been working together since the incident to address these issues and strengthen cooperation in search and rescue operations.

On 19 September 2002, the Senate Rural and Regional Affairs and Transport Committee proceeded with its inquiry into the role of AMSA and the Tasmania Police in the search for Margaret J. The inquiry had been established by an Opposition motion in the Senate on 25 June 2002, but was subsequently deferred by the Committee until the Coronial inquest had reported after the Coroner had raised the potential prejudice to his inquest from the Senate inquiry preceding the inquest. The Committee held a hearing in Canberra on
19 September 2002, when AMSA gave evidence, and on 27 November 2002 in Launceston, when the Tasmania Police gave evidence along with another witness. The Committee was originally to report on its inquiry by the last sitting day in June 2003, but deferred the report until the last sitting day in 2003
(16 December 2003).

On 23 October 2002, the Senate Select Committee on a Certain Maritime Incident tabled the report from its inquiry into the role of Commonwealth agencies, including AMSA, in the response to Suspected Illegal Entry Vessels (SIEV) coming to Australia. The inquiry had been established by an Opposition motion in the Senate on 13 February 2002. AMSA gave evidence to the inquiry at hearings on 1 May 2002 and 11 July 2002 in relation to the involvement of its search and rescue services in various SIEV incidents. The report made no recommendations directly relevant to AMSA's operations.

In May 2003, the Coroner's report was handed down into the loss of four men aboard a motor cruiser Just Cruisin' that sank in rough seas off the Queensland coast in July 2001. The incident had involved an extensive search for the vessel and its occupants, part of which was coordinated by AMSA in conjunction with the Queensland and New South Wales Police services. The sunken wreck was found at the entrance to Moreton Bay but the occupants were never located. The Coroner's report did not make recommendations that were relevant to AMSA.

On 24 July 2003, the Coroner's report was handed down from the inquest into the loss of eight persons in the crash of an aircraft into Spencer Gulf in South Australia in May 2001. The report found that on the balance of probabilities the occupants of the aircraft had not survived the crash. The Coroner concluded that, in these circumstances, it was unnecessary for him to assess the quality of the search and rescue operation, which had been coordinated by AMSA with the South Australian Police coordinating the surface search. However, he found that the search effort was timely and appropriately targeted and the evidence established that the operation was conducted with a high degree of professionalism and skill.

During 2002-2003, the following reviews by the Australian National Audit Office (ANAO) and the Productivity Commission included examination of aspects of AMSA's operations or made recommendations relevant to AMSA's operations:

In June 2003, the ANAO released audit report no. 49, Management of the Navigation Aids Network, from its performance audit of AMSA's management of the aids to navigation network. The audit focused on AMSA's strategic planning, the management of revenue and expenditure to support the network, contract management practices, and accountability and performance reporting arrangements. The report made no recommendations for improvement in AMSA's administration of this function and identified elements of AMSA's management as displaying best practice in the public sector.

In June 2003, the ANAO released audit report no. 52, Absence Management in the Australian Public Service, from its performance audit reviewing the management of unscheduled absence in 74 APS agencies. In addition, comparative data also was included from eight statutory authorities, including AMSA, which was ranked first amongst the statutory authorities in recording the least number of days of absence per full time employee.

In June 2003, the ANAO released audit report no. 53, Business Continuity Management, examining business continuity management arrangements across four Commonwealth organisations, to assess whether their frameworks exhibit the principles in the 2000 ANAO Better Practice Guide to Business Continuity Management.

In May 2003, the ANAO released audit report no. 41, Annual Reporting on Ecologically Sustainable Development, from its performance audit examining the quality of Commonwealth agencies' annual reports on ecologically sustainable development and environment performance, as required by the Environment Protection and Biodiversity Conservation Act 1999. The audit included the survey of 45 Commonwealth departments, agencies and other bodies, including AMSA, collecting data on their ecologically sustainable development framework.

In December 2002, the ANAO released audit report no. 23, Physical Security Arrangements in Commonwealth Agencies, evaluating the protective security policies and practices of seven Commonwealth agencies to determine whether they had established an appropriate physical security control framework based on the principles outlined in Part E of the Commonwealth's Protective Security Manual.

In December 2002, the final Government response was released to the recommendations of the Productivity Commission report, Review of Cost Recovery by Commonwealth Agencies, released in March 2002 from its public inquiry into cost recovery arrangements by Commonwealth Government regulatory, administrative and information agencies, including AMSA. The Government response introduced a formal cost recovery policy to heighten the transparency, consistency and accountability of cost recovery by government agencies. The Government also issued guidelines for the policy's implementation, Commonwealth Cost Recovery Guidelines for Information and Regulatory Agencies, which apply to AMSA.

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Effects of ministerial directions

There were no Ministerial Directions issued during 2002-2003.

Directors and Audit Committee

The particulars about AMSA Board members and their attendance at meetings of the Board and the Audit Committee are provided in this annual report.

Statement of Governance

The Board, Chief Executive Officer and senior management discharge their duties within the framework of the Australian Maritime Safety Authority Act 1990 and the Commonwealth Authorities and Companies Act 1997.

Role of the Board and AMSA management

The Board has three key roles:

The Chief Executive Officer is appointed by the Minister after receiving the recommendation of the Board and, under the Board's strategic guidance, manages the Authority. It is the role of management to manage resources to produce outcomes that achieve the strategic objectives established by the Board, and to provide prompt and regular advice to the Board on any matter relevant to the discharge of its duties.

Senior managers and staff are required to maintain the highest standards of integrity, accountability and responsibility in the exercise of their duties and their dealings with stakeholders.

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Board structure

AMSA has seven directors, of which six are independent non-executive directors appointed by the Minister. The Chief Executive Officer is a director ex officio.

Dr Kenneth Moss
Member since 8 April 1999; Chairman since 1 July 2001 until 30 June 2005.
Mrs Sarina Bratton
Member 1 September 1996 to 31 August 2000 and from 9 October 2000; Deputy Chair from 8 April 2002 until 7 April 2004.
Mr Tony Hyams
Member from 1 September 1998 to 31 August 2000, from 9 October 2000 until 8 October 2002, and from 9 October 2002 until 8 October 2004.
Mr Barry Vellnagel
Member since 1 April 2002 until 31 March 2005.
Captain John Paine
Member since 1 April 2002 until 31 March 2005.
The Hon. Virginia Chadwick
Member since 8 April 2002 until 7 April 2004.
Mr Clive Davidson
Member ex officio since 4 May 1998.

The Board normally holds eight formal meetings each year. Additional meetings are held if required, although no such meetings were held during 2002-2003.

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Committees

The Board has one formal committee, the Board Audit Committee, which assists the Board in fulfilling its audit, accounting and reporting obligations. The Committee is independent from management and comprises at least three members of the Board, other than the Chief Executive Officer. The Chair of the Committee and the members are appointed by the Board and any other Board member may attend its meetings as an observer. The Board does not delegate major decisions to the Audit Committee. Membership of the Audit Committee during 2002-2003 was as follows:

Mrs Bratton
Chair throughout 2002-2003.
Mr Hyams
Member throughout 2002-2003.
Mr Vellnagel
Member throughout 2002-2003

The AuditCommittee normally holds four formal meetings each year.

In addition, the Board establishes ad hoc committees as required to handle issues as they arise, such as to consider and make recommendations on senior executive remuneration.

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Governance practices

The Board bases its approach to governance on the Australian National Audit Office Better Practice Guide Corporate Governance in Commonwealth Authorities and Companies of June 1999. This includes the following measures:

Indemnities and insurance premiums for officers

AMSA provides indemnities and insurance cover to Board members and other officers in line with the Commonwealth Authorities and Companies Act 1997.

Statutory requirements

This annual report provides reports required under the following statutory provisions:

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