Friday, May 1, 2020

Shipping Union Points to Leaked Report to Warn of Potential International Supply Chain Disaster

Call for Stakeholders to Come Together to Solve Vulnerability to Any Crisis
Shipping News Feature

AUSTRALIA – The transport unions in the country must stare enviously at the situation in the US when it comes to who controls the nation's shipping resources. Whilst the depredations of World War 1 produced the Merchant Marine Act of 1920, commonly known as the Jones Act, probably such protection for native maritime workers and resources does not exist almost anywhere else outside America, except within communist state run regimes.

Whilst at home detractors of the US regulations are called naïve and profit seeking at best, and traitors and insurgents at worst, the century old legislation continues to demand that domestic vessels, travelling between any native ports are not only constructed and flagged at home, but owned by US registered companies and manned and worked on by US citizens. It additionally prescribes certain rights for seafarers including allowing injured sailors to make claims and obtain damages from their employers for the negligence of the ship owner, the captain or members of the crew.

Whilst overseas the Act is often viewed as protectionist, it applies only to vessels on domestic routes, but it would be transferable to much of the trade now under scrutiny by the Maritime Union of Australia (MUA) which is urging the Morrison government to work with industry, unions, and experts to solve critical vulnerabilities in the nation’s supply chains after a leaked Defence Department commissioned report revealed essential services would break down within months in a major crisis.

The MUA says the report, produced by Engineers Australia, should be published in the public domain saying citizens have a right to know exactly what impacts a breakdown of international trade could have on key sectors of the economy. Foreign owned shipping carries 98% of the country’s imports and exports, which the MUA says makes the island nation highly vulnerable to disruptions caused by natural disaster, military conflict, or economic crisis.

This of course is not a new argument with the union advocating action, and presumably more subsequent employment for local workers, since 2015. In November 2018 it published ‘Australia’s Fuel Security – Running on Empty’, commissioned from shipping expert John Francis, which examined the nation’s reliance on foreign-owned tankers to supply petrol, diesel and jet fuel.

So it seems that the MUA views Australia’s position as much more vulnerable in times of crisis than even stringent legislation along the lines of the Jones Act would allow, with the Covid-19 pandemic providing a stark warning and causing shortages of medical supplies and essential products across the economy. MUA Assistant National Secretary Ian Bray, said:

“This Defence Department report has vindicated our repeated warnings that Australia is incredibly vulnerable to any major crisis that impacts on international trade, revealing how quickly essential services and the broader economy would grind to a halt. Of particular concern are indications that essential services like clean water could be impacted within weeks, along with our health system, while the fuel needed to transport food and essential goods would run out in less than two months.

“Australia has received a clear warning from Covid-19, which has shown how quickly shortages of health products and essential consumer goods can occur when supply chains are impacted. Unless there are actions taken to address these risks, a future military conflict, natural disaster, economic crisis or pandemic that cuts seaborne trade will result in catastrophic consequences.”

“There are solutions available that would make the country more resilient to a crisis, such as creating domestic stockpiles of fuel and other essential products, increasing local manufacturing capacity, and creating a strategic fleet of Australian-owned vessels to carry essential goods, but they will need cooperation and clear leadership to deliver. The Covid-19 crisis has provided an unprecedented opportunity to put politics aside and work together to defend our nation’s long-term interests by securing supply chains and addressing clear vulnerabilities.

“The union has been warning for years that the decline of Australian shipping is a national security risk, a view vindicated by this Defence Department report, which is why we continue to urge the Australian Government to invest in the creation of a strategic fleet. When 98% of our trade depends on foreign-owned ships, with no guarantee we could continue to access them in a crisis, it is clear that we are in an incredibly vulnerable position.”

Mr Bray said the union was urging the Morrison Government to release the full Defence Department report and convene an urgent round-table of experts, including industry representatives and unions, to develop potential solutions.