Logistics News

Little warning for shipowners on PHVBS burden

December 22 letter comes after 18 months of scheme planning


The trenchant response for shipowner representative body Shipping Australia Ltd (SAL) to the prospect of its members being milked for cash for a Western Australian government social scheme may in part have been due to how they found out.

WA instituted the Port Hedland Voluntary Buy-back Scheme (PHVBS) in June 2020 to buy residences in the suburb of West End affected by Port of Port Hedland iron ore dust that it is the responsibility of the government-owned port operating company and miner BHP to suppress.

At some stage in the 18-month process that followed a long investigation into the dust issue, the state government, through the state-owned Pilbara Ports Authority (PPA), decided the mechanism for the payment would be by charging ships through their agents when they arrived at the port and again when they departed.

This is to be used to fund Hedland Maritime Initiative Pty Ltd, a wholly owned PPA subsidiary, to fulfil the scheme’s goals.

The first it or its members knew about the plan was through a PPA letter dated December 22, SAL tells ATN.

In the letter, PPA claims the PHVBS Port Charge “substantially reduces the overall cost of vessels exporting iron or from the Port”, due to it supporting a related port expansion.

This would be “through development of changed land uses in land adjacent to the operating port for the benefit of all Port users”.

It is aimed to also support a PPA plan for a “strategic buffer zone” for the port and the town.

Read how SAL raised its PHVBS alarm, here

While it is unclear how and by how much owners of ships transporting iron ore will gain from PHVBS and related plans, casting it in this way appears to allow PPA to use the “user pays” principle.

This is as opposed to SAL’s counter-argument that “polluter pays” is more relevant, given the PHVBS was initially a solution to the problem of iron ore dust pollution in West End.

And while there is a part in the letter dealing with ‘transparency’ there is not one on ‘consultation’.

Though SAL has argued that its members will have great difficulty in passing on the charge to other elements of the supply chain, as the WA government envisages, it is understood the government believes the mechanism has been used with other port charges without garnering SAL complaint.

It is also on record as saying all elements involved in the trade are making enormous profits at present.

ATN has sought BHP comment on whether it will pay any levy passed on by shipowners.


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