Coastal pilotage regulation review - Australian Maritime Safety ...

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AMSA – Coastal Pilotage Regulation Reviewsame conditions of competition which characterize the provision of pilotage services inthe GBR could exist in Victoria. However, those conditions do not currently exist in fact.No competitor has chosen to enter the market in Victoria although it is possible. Theconclusion is that significant barriers to entry exist in Victoria which may not currentlyexist in the GBR. These barriers may lie in the difficulty of obtaining licensed pilots orthe costs of providing transfer arrangements. Other differences also exist. The equity ofthe principal Victorian pilotage provider is held by the serving pilots. With someexceptions, the equity of the pilotage provider companies in the GBR is not held byserving pilots. While there has been no suggestion at present that the possibility ofcompetitive provision of pilotage services detracts from operational safety in Victoria,that is not the case in the GBR – many pilots, AMPA and its international affiliated body,the International Marine Pilots Association (IMPA) allege that competitive provision bythe 3 pilotage providers does detract from an optimal safety outcome. Finally, there isconsiderable differences in the operation of coastal and port pilotage, both in duration andfunctions with the skills and knowledge required being different in many respects.1.6 Paragraphs 1.1 to 1.5 (inclusive) of Appendix I make it clear that there are a range ofalternatives which have been adopted for the provision of pilotage services in Australia.Competition in the GBR has lowered the price for pilotage by over 50% with (as the nowdefunct Prices Surveillance Authority found) a consequent benefit to ship-owners – itappears that this benefit has largely been purchased at the expense of the pilots with pilotremuneration being also cut by over 50%. It also appears that cost pressures as a result ofcompetition have other effects, most probably in the area of the investment in plant usedfor pilot transfer. It is understandable that many pilots bitterly resent the dramaticreduction in their remuneration and working conditions which have occurred as a result ofcompetition. It has been said that the consequences (apart from the obvious direct effecton lifestyle) have been personal and marital difficulties as well as bankruptcy. It has alsobeen said that considerable tension exists between the two major competitors and thisdoes not engender the proper environment for safe pilotage. There is no doubt that the twomajor organisations (and many pilots within those organisations ) have a history and carrybaggage associated with the formation of, and aggressive competition between, the twogroups. Indeed, such tensions were manifested in issues which required resolution by theCourt of Appeal of the Supreme Court of Queensland 31 . However, neither this review northis report is the proper place to agitate these issues.1.7 The Australian Marine Pilots Association (AMPA) and the International Marine PilotsAssociation (IMPA) argue that there is no place for competition between pilotage servicesin the same pilotage area. AMPA also says that all licensed GBR pilots are in agreementwith this position 32 . Moreover, it is also understood by this reviewer that the policy ofIMPA is to oppose the competitive provision of pilotage services in any case. Inexpressing the converse view, the Australian Shipowners Association (ASA) and31 Richardson & Ors v Radford & Ors [1996] QCA 554 (on www.austlii.edu.au)32 AMPA supplied the review with the results of a questionnaire circulated to all GBR pilots. No pilot expressedsatisfaction with the current system of supplying pilotage in the GBR and all wanted change. 70% of pilots preferred theoption of serving as a pilot of a pilot owned company providing services under contract to the Government underconditions of serial competition with 20% preferring the pre 1993 option with only one company with exclusive rights.The balance preferred other variations. Pilots saw no advantage to the current system other than to the ship-owner. Allreplies received agreed to AMPA acting for pilots if a non-competitive scheme could be negotiated.John McCoy Created on 4 Dec 2005 Page 30 of 34
AMSA – Coastal Pilotage Regulation ReviewShipping Australia Ltd (SAL) prefer to see the present competitive arrangements remainwith regulation achieving appropriate safety outcomes from providers. 33 A change in theway pilotage is provided in the GBR would require a change in policy by AMSA, changesto legislation and a variation in government policy. The rational and respectable way toproceed with such changes is by an analysis of the costs of options with respect to thesafety benefits to be derived. If a cost/benefit analysis of the various options with respectto safety has been done by any party, it is not available to this reviewer. In any case, nosuch analysis was offered by the parties advocating a change from the currentarrangements.1.8 This Appendix has been included to acknowledge a major issue which was continuallyraised by pilots in the course of this review. Having recognized this wider issue, it mustbe reiterated that any recommendation to change the current arrangements for theprovision of pilotage in the GBR is completely outside the terms of reference of thisreview.33 A member of ASA also contacted the reviewer. This member is a major Australian user of one of the GBR providerswho was totally satisfied with the service the company’s ships received from pilots of one provider which he considered“exemplary”. He also said that he would be totally opposed to any change.John McCoy Created on 4 Dec 2005 Page 31 of 34
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