Shen Neng 1

Government first needs to show competence in pilotage regulation

Lloyds List by Steve Pelecanos – Tuesday 20 April 2010

SHIPS have been running aground on the Great Barrier Reef ever since Captain James Cook undertook his historic voyage along Australia’s east coast. It is hardly a new phenomenon, but it is a phenomenon to which Australia’s community has obstinately refused to become desensitised.

Each time the newspapers carry a headline, the radio waves fill the air or the evening television news show pictures of ships hard and fast on the reef, with ribbons of oil fanning out from the stricken hull, it generates a gut-wrenching odium in the national psyche.

When Shen Neng 1 ran aground on the reef earlier this month, politicians, sensing the public’s disgust, queued up to fly over and ‘inspect’ the casualty and then lined up to face the television cameras calling for an extension to the compulsory pilotage area.

It is rare to see politicians of all political persuasions calling for more pilots — an event, one would think, that pilots would heartily support.

However, the Australasian Marine Pilots Institute took the opposite view. It would rather see the government show competence in pilotage regulation before it rushes into propagating the mess over which it currently presides.

When pilotage first started in the Great Barrier Reef in 1874, it was carried out by individual master mariners with local knowledge, who offered their services to transiting ships. By 1884, the competition between pilots had degenerated into a dog-eat-dog environment and the Queensland government decided to regulate the coastal pilotage area. It introduced proper standards of service delivery, selection criteria, examinations for licences and also set the pilotage fee.

In 1993, the regulation of pilotage was ceded by the Queensland government to the federal government. It took a giant step backwards to an environment similar to that which existed in 1874. It seems the federal government had come under the spell of the economic rationalists, who were basking in the glory of their moment in the sun and decided to once again deregulate pilotage and open it up to competition. The result? Pilotage had again become a dog-eat-dog environment.

The federal government almost immediately recognised its blunder and embarked on a programme of trying subtly to fix the mess that had been created. It did this by introducing layers of incremental change each time something went wrong — similar to applying a band-aid to another leak in a rusty bucket. As a gauge of its anxiety, the Australian Maritime Safety Authority has conducted eight formal reviews into reef pilotage in the last 17 years. This is an extraordinary number.

No matter how many layers of regulation AMSA introduces or how many reviews it conducts — until it has the courage to throw away the bucket and replace it with a new one — the problem, which in essence is a structural one, will not be fixed.

The model that has emerged on the Great Barrier Reef is unique. A new animal has been created, one AMSA has called a “pilotage provider”, but more commonly known as a middleman.

There are three such middlemen in business on the Great Barrier Reef and they compete with each other for market share. Each has contracted a number of pilots to provide pilotage services to their ships. A pilot contracted to one middleman cannot contract to another.

Middlemen do not take responsibility for the performance of the pilot and if there is an accident, they remain at arm’s length. The pilots compete with each other to be assigned work by the middlemen, who are in a position to decide whether or not, and to what extent, the pilots can feed their families. They ruthlessly exercise this power over the pilots. They will vary what they pay the pilots for each task, claiming a need to slash their price to get the work. The discounting always comes out of the pilots’ share, the middleman is always assured of his cut.

AMSA has issued 76 pilot licences for the Great Barrier Reef. The 76 individuals do not belong to any organisational structure. Therefore, there are 76 ways of executing the pilotage task, 76 safety management systems, 76 passage plans, 76 under keel clearance calculation methodologies, 76 organisational cultures — the list goes on.

These are 76 individuals who have mortgages to pay and families to feed and have no security of tenure and no security of earnings. These are 76 individuals who compete with one another for ships and are therefore pressured into acting in a way that no professional pilot will act. For them, more ships is more money. They are compelled to take short cuts to be on the pilot boarding ground before their colleagues so as to be first on turn for the next ship.

They turn a blind eye to ship defects and inappropriate practice because they do not wish to lose customers. They will alter their fatigue records so as to appear to be properly rested to minimise their wait between ships. In fact, most of the accidents on the reef since 1993 have been fatigue-related.

Today’s bureaucrats in Canberra are saddled with an awful legacy created by their predecessors, one that they are working with the Australasian Marine Pilots Institute to fix. They have the support of their minister. These are the first rays of common sense to emerge from the nation’s capital since 1993.

The pilots’ institute’s position is quite clear. It does not want to see an extension of the compulsory pilotage area on the Great Barrier Reef until the current debacle is fixed. It does not want to see a structurally unsound pilot service spreading to other parts of the reef. That is no way to achieve the best safety outcomes.

Australia needs to show that it can run a properly regulated pilot service to give confidence to all stakeholders that if the compulsory pilotage area is ever extended, it has a good chance of providing the benefit expected. Currently, that would be very doubtful.

STEVE Pelecanos has worked in the maritime industry for 40 years. He has held a number of senior positions including ship’s master, pilot and harbour master. He was also a past president of the Australian Marine Pilots Association and chairman of Brisbane Marine Pilots. He is head of standards and training at the Australasian Marine Pilots Institute. Capt Pelecanos has introduced many changes to the pilotage profession and written and presented numerous papers on pilotage at many international industry fora. 

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