Pasha Bulker 243 - Independent investigation into the grounding of ...

international reputation and reduce costs to the industry by sharing coal chain
capacity proportionally amongst the producers.
In April 2004, a capacity allocation system, authorised by the ACCC 13 , was
introduced. Such a system, operating under different names, has been in place,
intermittently, since then. When an allocation system is in place, periodical coal
demand nominations from producers and declared coal chain capacity are used to
calculate the pro-rata reduction to each producer’s nomination. In simple terms, if
the coal chain capacity is, for example, 90 per cent of the total of the forecast
demand, then a reduction of 10 per cent is applied to each producer’s nomination.
The quantity of coal sold, therefore, is intended to match the coal chain capacity
and result in only the necessary number of ships arriving to load.
A capacity allocation system lapses when the authorised time period is completed
or a system is ‘voted off’ by a majority of coal producers. Once a system lapses, reapplication
for authorisation must be made.
In September 2006, producers voted off the capacity allocation system in place at
the time. Depending on individual circumstances, some producers believed that the
allocation system was disadvantageous as it reduced their profits. Some of the other
producers considered that the system was unnecessary because the queue had
reduced to 20 ships.
In early 2007, the queue was, once again, more than 50 ships when PWCS, at the
request of a number of coal producers, re-applied for another capacity allocation
system. In March 2007, when authorisation for the system was obtained, the
number of ships waiting at anchor off Newcastle exceeded 60. The queue persisted
and, at the time of the incident, there were 57 ships in the anchorage.
1.3
The incident
At 0605 on 23 May 2007, Pasha Bulker arrived off Newcastle after a 12 day
voyage from Japan. The 22 000 tonnes of water ballast on board was sufficient for
good weather and all of the ship’s water ballast tanks, except the fore and aft peak
tanks, were full. All of its cargo holds were empty in readiness to load coal. The
ship had sailed from Japan in a similar condition and completed a ballast water
exchange, in accordance with Australian quarantine requirements, during the
voyage. It had draughts of 4.85 m forward and 7.10 m aft, which was slightly less
than the 7.17 m aft draught necessary to keep the propeller blades fully submerged,
at the top of their rotation, in still water. The ship had on board 760 tonnes of fuel
oil and much smaller quantities of diesel and other oils to operate its machinery.
At the time, there were 57 ships in the anchorage and Pasha Bulker was scheduled
to berth on 12 June. Newcastle VTIC provided the standard advice for the ship to
anchor south of 32º58’S and at least two miles from the coast. The master identified
a vacant position in the congested anchorage, about five miles south of Nobbys
Head, and manoeuvred the ship towards it.
13 The Australian Competition and Consumer Commission (ACCC) administers the Trade Practices
Act 1974 and other acts and is responsible for regulating and promoting competition and fair trade
in the market place to benefit consumers, business and the community.
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