Protection of the Sea (Shipping Levy Collection) Act 1981

Levy: The charge imposed by the Protection of the Sea (Shipping Levy) Act 1981. This Act does not specify the rate or the base; it only provides the collection mechanism. The levy applies by reference to each quarter, and is payable in respect of a ship if, during that quarter, the ship was in an Australian port and had on board at least 10 tonnes of oil in bulk, unless an exemption applies.

Foreign-going ship: Defined (section 4) as a ship engaged in making overseas voyages. An overseas voyage is one where the ship is present outside the outer limits of Australia’s exclusive economic zone, with a specific exclusion for voyages that begin and end in Queensland and are only incidentally outside the EEZ within the Torres Strait Protected Zone. This definition matters because foreign-going ships have a different payment trigger: they pay on account only if a Collector gives written notice when the ship enters an Australian port during a quarter (section 8(3)), whereas other ships must pay on account from day one of the quarter.

Exempt period: A rolling three-month credit for foreign-going ships (section 6). If levy is payable in respect of a foreign-going ship for one quarter, the next quarter’s liability is reduced by so much of that next quarter as occurs before three months have passed since the earliest Australian port call in the previous quarter (excluding port calls that themselves attracted no levy). This prevents double-counting for ships that make short, repeated visits.

Oil in bulk: Defined (section 4) as oil in bunkers or tanks, or in bunkers and tanks. The definition of “oil” is broad: any hydrocarbon oil or hydrocarbon liquid fuel, including crude oil, fuel oil, diesel, lubricating oil, heating oil, petrol, aviation fuel, and kerosene. This means the levy applies not only to cargo oil but also to fuel carried for the ship’s own propulsion if it is in bunkers or tanks and totals at least 10 tonnes.

Tonnage: Means the net tonnage of the ship, determined in accordance with the Tonnage Measurement Convention unless the ship’s net tonnage was determined otherwise (section 4(2)). Net tonnage is the measure used to calculate the levy under the Levy Act (though the rate itself is not in this Collection Act). The Act cross-references the International Convention on Tonnage Measurement of Ships, as amended.

Collector: Either a Collector within the meaning of the Customs Act 1901 or an authorised person appointed by the Minister under section 4B. Authorised persons can be delegated the appointment power to departmental officers. This gives the executive wide discretion to designate who may exercise the distress and detention powers.

Protected Zone: The Torres Strait Treaty zone between Australia and Papua New Guinea. Ships that incidentally pass through waters outside the EEZ but inside this zone on a Queensland-only voyage are not treated as making an overseas voyage, so they remain subject to the same payment rules as non-foreign-going ships (the definition of overseas voyage excludes them).

The primary duty holders are the owners and masters of ships that call at Australian ports while carrying at least 10 tonnes of oil in bulk. There is no de minimis exemption for smaller quantities: if the ship carries any oil in bulk and the total amounts to 10 tonnes or more, the levy is attracted for that quarter, subject to the emergency and foreign-going exemptions. The joint and several liability of section 9 means the Commonwealth can pursue either the owner or the master individually for the entire amount, regardless of internal arrangements. This exposes masters (who are often employees or agents) to personal liability for a charge they may not control.

The Act also affects customs officers and persons appointed as authorised persons, who now have statutory powers of distress and detention without court order. The Minister and delegated departmental officers are empowered to appoint authorised persons, creating a class of officials who can board ships, distrain goods, and order detention.

Shipowners and operators of foreign-going vessels face particular complexity: they must track their quarter-to-quarter port call history to calculate the exempt period entitlement under section 6. Those who fail to maintain records risk overpaying or being pursued for levy that was not in fact payable, because the burden of proof in recovery proceedings is on the defendant (section 10(2)). The Act does not impose any duty on the Collector to proactively assess or notify; the master of a foreign-going ship may receive a section 8(3) notice requiring an advance payment, but otherwise must self-assess and pay at quarter end.

Because the levy is defined by reference to “oil in bulk” in “bunkers or tanks”, the Act affects any vessel that uses heavy fuel oil or carries any hydrocarbon liquid in bulk, including tugs, fishing vessels, dredgers, and ferries, not only large tankers. The 10-tonne threshold is low: a small coastal barge carrying diesel fuel in its bunkers may exceed it. The emergency exemption in section 5 is narrow: only port calls solely for water, provisions, fuel, crew changes, medical disembarkation, sheltering, or repairs qualify. A ship that loads or discharges cargo, even a minor amount, will lose the exemption for that quarter.

Duty to pay levy: The owner and master must pay the levy for a quarter by the due date (the end of the quarter - section 7). For non-foreign-going ships, an amount equal to the expected quarterly levy is also payable on the first day of the quarter as a payment on account (section 8(1)). For foreign-going ships, the Collector may issue a written notice to the master requiring payment on account when the ship is in port (section 8(3)), and that amount is payable within the period specified in the notice.

Right to avoid payment on account: If the owner or master satisfies a Collector that levy is not payable, and is not likely to become payable, for that quarter, then no payment on account is due (section 8(5)). This places the burden on the shipowner to produce evidence (e.g., that the ship will not enter any Australian port that quarter, or will not carry oil in bulk) before the start of the quarter for non-foreign-going ships, or at the time of the Collector’s notice for foreign-going ships.

Right of refund: If an amount paid on account exceeds the levy actually payable (including if no levy becomes payable at all), the excess must be repaid to the master or owner (section 8(4)(b)). The Act does not specify a timeframe for repayment, nor any interest for late payment.

Right to challenge levy in proceedings: In debt recovery proceedings under section 10, the defendant may rebut the presumptions in section 10(2): that the ship carried at least 10 tonnes of oil in bulk at some time during the quarter, and that no exempt purpose (section 5) applied. The burden is on the defendant. This is a significant right because it is the only formal avenue to contest liability short of paying and suing for a refund.

Rights upon distress: The Collector may enter the ship and seize goods and equipment, but must hold them for three days before sale. The sale must be by public auction (section 11(2)). After recovering the levy and expenses, any surplus must be paid to the owner or master on demand (section 11(4)). The Commonwealth is deemed the absolute owner for purposes of the sale, extinguishing any third-party security interests? The interaction with the Personal Property Securities Act 2009 is addressed in section 12(4): while a ship is detained for unpaid levy, a person does not have the power of seizure under section 123 of the PPSA. This effectively subordinates secured creditors to the Commonwealth’s levy debt during the period of detention.

The principal penalty is the offence under section 12(2): if a ship detained by a Collector goes to sea without being released, the master commits an offence punishable upon conviction by a fine of up to 5 penalty units. As of writing, 5 penalty units under the Crimes Act 1914 is $1,100 (since 1 July 2023, one penalty unit is $220). This is a modest sum compared to the commercial value of a ship or the levy amount, but it is a criminal conviction. The offence is one of strict liability (section 12(2A)), meaning the prosecution does not need to prove fault; the master’s only defence is to show that the ship was released or that they did not take it to sea (actus reus). The master cannot argue ignorance of the detention order or that the ship was taken by others without their knowledge, because as master they are presumed in command and in charge (definition of master in section 4). This imposes a high standard of care: the master must physically verify that any detention order has been lifted before departing.

The distress power (section 11) is a self-help remedy. The Collector may enter the ship and seize goods or equipment belonging to the ship. There is no requirement for a warrant or court order. The only limit is that the goods must belong to the ship, and the Collector must hold them for at least three days before auction. The three-day period is short; it may not afford the owner time to arrange payment or challenge the levy. The sale proceeds go first to the levy and expenses, with any surplus returned.

Detention (section 12) is even more potent: the Collector may detain the entire ship until the levy is paid. This effectively stops the vessel from trading and can cause cascading commercial losses (demurrage, missed charters, crew costs). There is no requirement for the Collector to give notice before detention. The only statutory check is that the detention must be for “levy payable” - but the term includes amounts payable on account under section 8 (section 12(3)). So a Collector can detain a foreign-going ship for an unpaid advance payment notice under section 8(3), even before final levy is determined for the quarter. The Act does not provide for a review of the Collector’s decision to detain, nor a mechanism to lift detention by providing security.

Criminal Code chapter 2 applies to all offences (section 4A), incorporating standard principles of criminal responsibility (physical and fault elements, mistake of fact, etc.) but the strict liability nature of section 12(2) is express, so those provisions are excluded for that element.

The regulation-making power (section 13) allows penalties up to $200 for offences against regulations. This is a minor amount, but the power is broad: regulations may prescribe matters necessary or convenient for carrying out the Act.

Customs Act 1901: The definition of “Collector” incorporates Collectors under the Customs Act, and “Australian port” incorporates ports proclaimed under the Customs Act or under State/NT law. This ties the levy collection machinery to existing customs infrastructure, allowing customs officers to act as Collectors without separate appointment. The definition of “oil” is standalone and does not rely on customs definitions.

Protection of the Sea (Shipping Levy) Act 1981: This Collection Act is entirely dependent on the Levy Act for the substantive obligation. The Collection Act does not impose a charge; it only collects the levy imposed by the Levy Act. The two Acts are linked by commencement (section 2) and by the definitions of “levy” and “Levy Act”. If the Levy Act were repealed or amended to zero, the Collection Act would become otiose.

Criminal Code Act 1995: Chapter 2 applies to all offences created by this Act (section 4A). This imports the default fault elements (intention, recklessness, negligence) for physical elements of offences, except where expressly displaced. The strict liability in section 12(2A) displaces the default fault requirement for the offence in section 12(2). The Code’s provisions on mistake of fact, intervening conduct, and geographical jurisdiction also apply.

Personal Property Securities Act 2009: Section 12(4) overrides the secured party’s power of seizure under PPSA section 123 while a ship is detained for unpaid levy. This means that during the detention, a secured creditor (e.g., a mortgagee or equipment financier) cannot seize the ship to enforce its security. The Commonwealth’s levy debt effectively takes priority over perfected security interests during the detention period. The Act does not address what happens if the ship is sold under distress: does the PPSA apply to the sale? The distress sale under section 11 would likely be a statutory disposition, but the Act is silent on how PPSA interests are extinguished or subordinated.

Repealed Acts: Section 3 repeals the Pollution of the Sea by Oil (Shipping Levy Collection) Act 1972 and its 1979 amendment. These were the predecessor collection statutes for an earlier oil pollution levy regime. The current Act is the sole collection mechanism.

Tonnage Measurement Convention: The Act adopts the international convention’s definition of net tonnage but allows for ships whose net tonnage was determined otherwise (section 4(2)). This creates a potential gap: a ship with a pre-existing net tonnage certificate not based on the convention might need conversion, but the Act says to use that net tonnage expressed in tons. This may lead to disputes if the calculation method differs.

The Act as currently presented does not include a table of amendments, but internal evidence shows that it has been amended since its original enactment in 1981. Section 4A (application of the Criminal Code) was inserted to codify criminal responsibility; the Criminal Code was enacted in 1995 and its chapter 2 commenced later, so this section must have been added or amended after that. Section 4B (appointment of authorised person) is also likely a later insertion, as the original Act may have relied solely on Collectors under the Customs Act. The note in section 4 referring to the Treaties Library online via AustLII (2012) indicates that the definitions of Protected Zone and Tonnage Measurement Convention were updated to refer to current treaty text. Section 12(4), which references the Personal Property Securities Act 2009, was inserted after 2009. The original 1981 Act would not have contained that subsection. The overseas voyage definition’s exclusion for Torres Strait Protected Zone voyages was likely added by amendment to implement the Torres Strait Treaty (done in 1978, entered into force in 1985). The section 6 exemption period formula may also have been refined over time. The Act’s short title remains “Protection of the Sea (Shipping Levy Collection) Act 1981”, so all amendments are incorporated into that principal Act. For a precise timeline, one would need to consult the Federal Register of Legislation; the text provided does not include amendment history details. The Act repealed two earlier statutes upon commencement, establishing it as the sole collection Act.

The Act itself does not cite any case law, and no decisions are mentioned in the source text. However, the enforcement provisions (distress, detention, presumptions) are likely to have generated litigation in the Commonwealth’s administrative law jurisdiction. The power to detain a ship without court order and without prior notice is susceptible to challenge on natural justice grounds, though the Act provides no internal merits review. Section 10(2) shifts the burden of proof, which could be tested against the principle that the party asserting a debt must prove it, though in taxation-like matters such reversals are not unusual. The joint and several liability of owner and master may lead to contribution disputes between them, but those are not litigated under this Act. The exemption for emergency purposes (section 5) is fact-intensive: a ship that calls for bunkers and also conducts crew change or minor repairs arguably qualifies, but if it also loads stores that are not “provisions”, the exemption may be lost. Such borderline cases could be litigated. The “overseas voyage” definition’s exclusion for Queensland-to-Queensland voyages that enter the Protected Zone may also produce disputes if a ship’s presence outside the EEZ goes beyond an “incidental part” of its voyage. The PPSA priority issue (section 12(4)) could be litigated if a secured creditor challenges the Commonwealth’s detention as invalid or seeks compensation for loss of ability to seize. Without access to case databases, it is not possible to state whether any such challenges have succeeded. The Act has been in force for over 40 years, so some litigation history exists, but the source provided does not disclose it.

Presumption of liability in recovery proceedings: Section 10(2) places the evidentiary burden on the defendant to prove that the ship either carried less than 10 tonnes of oil in bulk at any time during the quarter, or that it was in port only for an exempt purpose. This means that if the Commonwealth sues for unpaid levy, the owner or master must come forward with positive evidence (e.g., bunker delivery receipts showing consumption, port log showing no oil on board, or evidence of emergency call). Failure to do so means judgment will be entered against them, even if the Commonwealth presents no evidence at all. This is a significant reversal from ordinary debt recovery.

Payments on account for foreign-going ships: Under section 8(3), a Collector may issue a notice requiring payment on account when a foreign-going ship is in an Australian port. The notice can require payment “within such period as is specified”. There is no statutory minimum period. A Collector could demand payment within hours, effectively forcing the master to pay immediately or risk detention. The Act does not require the Collector to consider whether the levy is likely to become payable; the only escape is if the owner or master satisfies the Collector that levy is not and is not likely to become payable (section 8(5)). That satisfaction is entirely at the Collector’s discretion.

Deemed ownership on distress sale: Section 11(3) deems the Commonwealth absolute owner of the goods or equipment sold. This may override third-party property rights. If a ship has equipment on board that is leased or subject to a retention-of-title arrangement, the lessor or seller may lose that property in the distress sale. The Act does not require the Collector to check ownership; the goods belong to the ship, not necessarily to the owner.

Exempt period for foreign-going ships is quarterly and non-transferable: The exempt period under section 6 applies only to the next succeeding quarter. If a foreign-going ship makes a single port call in a quarter, the exempt period for the next quarter begins from the earliest non-exempt port call time. But if the ship makes multiple calls, the exempt period is calculated from the earliest call in the previous quarter. This formula can produce odd results: a ship that calls early in quarter 1 might have a long exempt period in quarter 2, but a ship that calls late in quarter 1 might have a very short exempt period. Also, the exempt period only applies within the next quarter; unused exempt time does not carry forward.

Strict liability for escaping detention: The master who allows a detained ship to go to sea commits an offence even if the master did not know about the detention order. The prosecution need only prove the ship was detained and it went to sea without release. The onus is on the master to show they were not the person who took it to sea. This is a trap for a new master coming aboard after a detention was ordered but not flagged.

No de minimis for oil quantity: The 10-tonne threshold is absolute. If the ship has exactly 10 tonnes of oil in bulk at any moment during the quarter, the levy is attracted. There is no allowance for a few kilograms below. Given that bunker tanks often hold residual fuel, a ship that consumed fuel down to 9.9 tonnes on arrival may still be liable if it had 10 tonnes earlier in the quarter.

Regulation-making power is broad: Section 13 allows regulations on all matters required or permitted or necessary or convenient for carrying out the Act. This could be used to impose detailed recordkeeping or reporting obligations not found in the primary legislation, with penalties up to $200 for breach. Operators should monitor regulations made under this Act.

Maintain accurate records of oil in bulk: For each ship that may call at Australian ports, the owner and master should keep a running log of the quantity of oil in bunkers and tanks, measured in tonnes. This includes fuel oil, diesel, lubricating oil, and any other hydrocarbon liquids in tanks. The critical threshold is 10 tonnes. If the ship never carries 10 tonnes of such oil in bulk at any time in a quarter, no levy arises. Records should be preserved for at least the limitation period for debt recovery (which under Commonwealth law is six years from when the debt arises).

Track port call purposes: If the ship enters an Australian port during a quarter, document the purpose of the call. Only calls solely for the purposes listed in section 5 (water, provisions, fuel, crew engagement/discharge, medical disembarkation, sheltering, repairs) will qualify for the exemption. Any other purpose (loading or discharging cargo, embarking passengers for non-medical reasons, dry docking not for repairs, etc.) will make the levy payable for that quarter. A ship that combines an exempt purpose with any other purpose loses the exemption. For example, taking on bunkers (fuel) and also loading ship’s stores that are not “provisions” would likely disqualify.

Evaluate foreign-going ship exempt periods: For ships that make overseas voyages, calculate the exempt period for each quarter under section 6. This requires knowing the earliest time in the previous quarter when the ship was in an Australian port (not counting port calls that themselves did not attract levy). The exempt period in the current quarter runs from the start of the quarter until three months after that earliest time. If the exempt period covers the entire quarter, no levy is payable. Maintain a spreadsheet or calendar tracking these dates.

Make timely payments: For non-foreign-going ships, the payment on account is due on the first day of the quarter (section 8(1)). For foreign-going ships, if a Collector gives a notice under section 8(3), pay within the specified period. Final levy for the quarter is due at the end of the quarter (section 7). Paying on time avoids the risk of distress or detention. A Collector may still detain even if the payment on account is due but not yet paid, so do not wait.

Deal with payments on account proactively: If the owner or master believes that levy will not become payable for a quarter (e.g., the ship will not call at any Australian port, or will carry less than 10 tonnes of oil in bulk), they should approach a Collector and provide evidence to satisfy the Collector under section 8(5). This avoids the need to pay on account and then seek a refund. Evidence might include voyage orders, charter party showing no Australian ports, or a continuous summary of bunker levels.

Respond to recovery proceedings: If sued for unpaid levy, do not ignore the claim. The presumption under section 10(2) will be applied unless the defendant adduces evidence to rebut it. Gather documentary evidence (bunker delivery notes, port logs, statements of witnesses) to show either that the ship carried less than 10 tonnes of oil in bulk at all times during the quarter, or that each port call was solely for an exempt purpose. Legal advice is advisable given the reversal of proof.

Comply with detention orders: If a Collector detains the ship, the master must not allow the ship to go to sea until the Collector releases it. The master should obtain written confirmation of release. The offence under section 12(2) is strict liability, so even accidental departure (e.g., the master was ashore and a pilot took the ship out) may result in a conviction. Ensure that all crew and the pilot are aware of the detention and have instructions to stay in port.

Review regulations: Periodically check the Federal Register of Legislation for regulations made under section 13. These may impose additional obligations such as reporting forms, recordkeeping, or notice requirements. Non-compliance could attract a $200 penalty per offence, but more importantly, failure to comply with a regulation might prejudice a defence in levy proceedings.