AUSTRALIA: An Introduction to Shipping: The Bar

AN OUTLINE OF AUSTRALIAN SHIPPING LAW 

A: Background 

1. Much of the Australian economy depends on sea trade. The Australian mining and resources sector, an essential part of the Australian economy, is almost entirely reliant on export by sea. Indeed, 99% of Australian exports are transported by sea. More than 12,000 vessels are entered on Australian shipping registers and approximately 6,000 foreign-registered vessels arrive at Australian ports each year. Australian maritime and shipping law is consequently both well developed and essential to the Australian economy.

2. Maritime and shipping law broadly encompasses issues arising whilst at sea, including navigation collisions, environmental liability and safety, as well as disputes arising whilst not at sea, including ownership of goods or cargo, arrangements for the construction of ships as well as general contractual disputes.

B: Key Legislation in Australia 

1. The Australian Commonwealth government, as well as the governments of the various States and Territories of Australia, have the power to make laws in relation to shipping. However, noting Australia’s federal system, the important caveat is that, by virtue of Australia’s Constitution, the Commonwealth legislation will take precedence in the event of any inconsistency between Commonwealth and State or Territory legislation.

2. There is similarly a distinction in which Australian courts have jurisdiction over disputes. Generally speaking, the federal courts have jurisdiction over matters relating to Commonwealth legislation whilst the relevant State and Territory courts have jurisdiction over matters relating to persons and other subject matter situated within their territory or arising out of that State or Territory’s legislation. In reality, the majority of shipping and maritime litigation is heard in the Federal Court of Australia as the most relevant legislation comes from the Commonwealth Parliament.

3. The following are the most important pieces of Commonwealth legislation:

a. Navigation Act 2012;

b. Carriage of Goods by Sea Act 1991;

c. Australian Maritime Safety Authority Act 1990;

d. Admiralty Act 1988; and

e. Shipping Registration Act 1981.

4. Important statutes from the States and Territories include:

a. Marine Act 1981 (NT);

b. Maritime Services Act 1935 (NSW);

c. Marine Safety Act 1998 (Qld);

d. Harbours and Navigation Act 1993 (SA);

e. Marine and Safety Authority Act 1997 (Tas);

f. Marine Safety Act 2010 (Vic); and

g. Western Australian Marine Act 1982 (WA).

C: Basic Introduction to Australian Shipping Law

C1 Definitions, Registration and Ownership 

1. To attract the effect of the shipping or maritime legislation, the statutory definition of ‘ship’ or ‘vessel’ must first be satisfied. A broad definition of ‘ship’ or ‘vessel’ is given under most of the Commonwealth legislation. For example, under s14(1) of the Navigation Act 2012 (Cth) a ‘vessel’ is any kind of vessel used in navigation by water, however propelled or moved. Nonetheless, naval vessels are expressly excluded from this definition by virtue of s10.

2. Registration of title is not required for ownership of an Australian ship or a share thereof. However, legislation does govern transferring or transmitting ownership of ships. The Shipping Registration Act 1981 (Cth) represents the principal legislation in this area, stipulating conditions and requirements for registration. A guide to assist in this registration process can be found on the Australian Maritime Safety Authority website, and accessed here.

C2 Choice of Law and Jurisdiction 

3. Parties to shipping or maritime contracts involving Australia should pay particular attention to choice of law and choice of jurisdiction issues. Because of Australia’s federal system, contractual clauses purporting to confer jurisdiction on ‘Australian Courts’ will generally be invalid. So too will choice of law clauses that reference ‘the laws of Australia’. Rather, such clauses should specify a particular Australian jurisdiction – for example ‘the laws of Victoria’ and the ‘Courts of Victoria’ for effective choice of law and effective choice of jurisdiction clauses respectively. That said, as CMA CGM SA v The Ship ‘Chou Shan’ (2014) 311 ALR 234 confirmed, jurisdiction, once established, will generally be exercised by Australian courts, absent the defendant persuading the relevant Australian court that it is a clearly inappropriate forum for the proceeding. If there are any substantial geographical connections to the relevant forum, Australian courts are inclined to choose to exercise their discretion and hear the matter, almost without exception.

4. Further note should be made of an aforementioned important piece of Australian shipping legislation – the Carriage of Goods by Sea Act 1991 (Cth) – and its effect on choice of law and jurisdiction agreements. Australian law shall apply to any contract for the export of goods from within Australia to any place outside of Australia, and will do so with mandatory force (s11 Carriage of Goods by Sea Act). Any clause purportedly to the contrary is ineffective. Interestingly, the reverse does not apply – cargo contracts whose destination is Australia are not mandatorily subject to Australian law by virtue of s11 of that Act. Similarly, and somewhat counterintuitively, shipping contracts involving moving cargo from one Australian port to another Australian port will not have Australian law apply mandatorily.

C3 Safety Regulation 

5. The Australian Maritime Safety Authority is the chief regulator of marine safety in Australia. Its functions include combating pollution in the marine environment, providing a search and rescue service and providing services upon request to the maritime industry, both commercial and governmental. It has the power to issue maritime orders in the furtherance of its functions, which include safety regulations and which are capable of being the subject of judicial or merits review by the Administrative Appeals Tribunal.

6. At a high level, safety regulation in Australia mirrors the International Convention for the Safety of Life at Sea 1974. These regulations manifest in either the Navigation Act 2012 (Cth) or alternatively the Marine Safety (Domestic Commercial Vessel) National Laws Act 2012 (Cth). Determining which of these two Acts shall apply to a particular vessel turns on the definitions of ‘regulated Australian vessel’ and ‘foreign vessel’ under the Navigation Act.

D: Emerging Issues for Australian Shipping Law  

D1 Environmental Regulation 

1. Australian shipping law is not immune from an ever-increasing emphasis by legislators and regulators on environmental protection. Of particular concern is:

a. how greenhouse gases are affecting and contributing to climate change; and

b. how nitrogen dioxide and sulphur oxides affect animals and humans alike in coastal and port areas.

2. Within the Australian context, environmental regulation can be complicated and often State or Territory and Commonwealth legislation overlaps. That said, the fundamental pieces of Commonwealth legislation and related Marine Orders which pertain to environmental protection take their form from the International Convention for the Prevention of Pollution from Ships 1973 (‘MARPOL’). The MARPOL upper limit on emissions, as set out in Annexure VI, has come into effect in Australia. MARPOL is aimed at preventing both accidental pollution and pollution from routine vessel operations. It includes six technical annexes:

a. Annex I: Regulations for the prevention of pollution by oil;

b. Annex II: Regulations for the control of pollution by noxious liquid substances in bulk;

c. Annex III: Regulations for the prevention of pollution by harmful substances carried by sea in packaged form;

d. Annex IV: Regulations for the prevention of pollution by sewage ships;

e. Annex V: Regulations for the prevention of pollution by garbage from ships; and

f. Annex VI: Regulations for the prevention of air pollution from ships.

D2 Cybersecurity Laws and Artificial Intelligence in Shipping

3. Much of modern shipping makes use of advanced technology including artificial intelligence and computer sensors. This makes the interplay between cybersecurity laws, digital data regulations and shipping law inevitable. An unstated premise of much of Australian shipping law, particularly that which relates to injuries and negligence at sea, is that ships are manned by people with natural persons in control. The emergence of new technology threatens to undermine this assumption.

4. The Australian Maritime Safety Authority to date has been supportive of this emerging technology in applying its existing regulations. It provides advice on how to navigate this challenge and to date has introduced risk-based general and specific exemptions. Further information can be found on its website.