Australia: Increased penalties for Commonwealth shipping offences


Published: 5 February 2013

Penalties for breaching Commonwealth shipping laws such as the Navigation Act 1912 and the Customs Act 1901 increased as of December 2012.

Fines for breaches of Commonwealth shipping legislation are often expressed as a number of "penalty units".

The value of a penalty unit under Commonwealth laws was previously A$110 per unit. From 28 December 2012, the value of a penalty unit increased to A$170. As a result, fines for a breach of Commonwealth shipping laws have increased by more than 50%.

The costs of delayed customs reporting

Under the Customs Act 1901(Cth.) and Customs Regulations 1926 (Cth.), any ship arriving in Australia from a place outside of Australia must, before its first port of call in Australia, report to customs each member of the crew who will be on board the ship at the time of its arrival at the first Australian port.

Operators of the ship must file reports electronically and within the prescribed time period being:

  1. Not earlier than 10 days before the ship's estimated time of arrival; and
  2. Not later than 96 hours before the ship's estimated time of arrival.

Failure to comply with the reporting requirements is a strict liability offence, meaning that an offence is committed regardless of the reason for failing to submit the required crew report or the extent of the delay.

The consequences of delayed customs reporting

By failing to file the report on time, an operator of a ship will have committed a separate offence for each individual crew member on board the ship e.g. an operator of a ship failing to file a report on time with 30 crew members on board will commit 30 separate offences.

The penalty for committing these separate offences is hefty. An operator of a ship can be fined up to 120 penalty units (now, up to A$20,400.00) per offence if it is found that the ship intentionally contravened its reporting requirements.

If there is found to be no intention but there is still a failure to file the report on time, then the operator of a ship will face fines of up to 60 penalty units (now, up to A$10,200.00) per offence.

Oil Pollution in Australia – Master, owners and charterers' strictly liable; Penalties Increased

With the introduction of the Maritime Legislation amendment Act 2011 the strict liability offence for the discharge of oil or an oily mixture from a ship into the sea regulated in Protection of the Sea (Prevention of pollution from ships) Act 1983 was extended.

The amendments added the Charterer to the class of persons liable for oil pollution, meaning that charterer from then on faced the same strict liability as Masters' and Owners.

Along with charterers stricter liability the amendments also increased the penalties for oil pollution, from A$275,000 to A$11 million for a corporation.

Due to the new increased penalties the maximum fine applicable to an offending corporation has increased from the A$11 million to A$17 million as of 28 December 2012.


The increased value of a penalty unit will be felt across the board and will expose companies to inflated levels of financial liabilities for breaches of Commonwealth shipping laws.

Companies should make a conscious effort to comply with Commonwealth shipping legislation in order to avoid costly fines.

It is therefore essential that all companies operating in Australian Waters review their insurance arrangements; risk management practices, including screening of Owners, operators and manning agents responsible for chartered vessels; and consider drafting additional charter party clauses to deal with this new exposure.

Furthermore companies should update all crew members and make them aware of their reporting requirements prior to calling at their first Australian port and reporting systems should be implemented to safeguard against any failure and/or delay in reporting on time.

At present, the fines imposed under State/Territory laws are not set to increase, but this may be reviewed by the State/Territory governments in the near future.

This article is based on Norton White's Shipping Newsflash of 17 January 2013.