Logistics News

SAL bats back McGowan PHVBS response

Shipowner group insists polluters will avoid pollution levy costs


Shipowner body Shipping Australia Ltd (SAL) continues to object to Western Australia’s move to charge shipowners to pay for a government social-amelioration effort in the face of iron-ore dust pollution at Port Hedland.

Both the port administration and the miners are responsible for controlling the dust, though it appears that a different solution is favoured, perhaps given the mined ore pile’s size and proximity to the town’s affected suburb.

The charge is aimed at paying for “the PHVBS [Port Hedland Voluntary Buy-back Scheme] property acquisition costs, any operational subsidy necessary for the activation of land outside of the proposed Maritime Precinct, the costs of administering and managing the PHVBS and the costs of planning for the redevelopment of the Maritime Precinct”. 

The state government-owned Pilbara Ports Authority (PPA), through wholly owned PPA subsidiary Hedland Maritime Initiative, is in charge of the PHVBS.

The state government and the PPA argue that, like other port charges, this would be passed on to the miners involved, notably BHP.

Read how the PPA responded to initial questions on the charge, here

But SAL argues that this view – reiterated in a response from WA premier Mark McGowan to its questioning of the matter – misunderstands the situation.

SAL quotes the response as saying that the charge “will be levied on all vessels exporting iron ore from the Port of Port Hedland, via their shipping agents, under the expectation that the shipping agents will on-charge the PHVBS Port Charge to each applicable vessel exporting iron ore or the iron ore producer”.

SAL responds: “Such a comment either utterly misses the point or betrays an astonishing ignorance of, or indifference to, the fact that putting a charge on ocean-going ships means that the iron ore industry does not pay any of the PHVBS Charge at all!”

“Here’s why: overseas buyers of iron ore do a deal with iron ore miners for the supply of iron ore via the Port of Port Hedland.

“The overseas buyers then do a deal with ocean shipping companies to sail a ship to Western Australia and pick up the iron ore for transport to where it is needed.

“The legal ownership of the iron ore transfers to the overseas buyers the second that the iron ore is loaded onto the ship.

“At no point does the iron ore mining industry do a deal with the owners / operators of the ships that carry the iron ore.

“So the shipping companies will never actually have a chance to pass on the surcharge to the iron ore industry and no iron ore surcharge levied on a ship will ever be paid by an iron ore miner!”

In response to ATN questions on how the PHVBS charge came to be decided in this form and what consultation with shipowners was undertaken, a PPA spokesperson all but confirms they were left out of loop entirely.

“When the [state] Government refers to the PHVBS being ‘industry funded’, they are referring to the iron ore industry and not the shipping industry,” the spokesperson says.

No details were supplied on a range of questions about how the mechanism was arrived and how it was supposed to work.

Nor did it address the difference between charges on ships being used for port maintenance and improvements for the handling of ships and the PHVBS, which is aimed at a social issue unrelated to the function of ships.


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