An Australian Coastguard Simon Crean - Leader of the Opposition and Mark Latham - Shadow Minister for Economic Ownership and Community Security, Shadow Minister for Urban Development and Housing

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Policy Paper - 007 - 27 November 2002

An Australian Coastguard

Australia is the world's largest island, with more than 37,000 kilometres of coastline, yet it is without an effective maritime policing capacity. To our north, Indonesia (the world's largest archipelago) is also without maritime policing.

This is why our part of the world is so vulnerable to maritime crime: people smuggling, gun-runners, drug smugglers and illegal fishing. We live in an uncertain international security environment. The threat of terrorism is real. For the protection of our borders and the security of our nation, Australia needs a Coastguard.

The existing border protection system is ineffective and inefficient. It involves a maze of different organisations with competing roles and responsibilities. This results in serious gaps in mission, tasking and capabilities. It has left Australia's borders open to the worst of international crime.

This is why a Crean Labor Government will establish an Australian Coastguard, built around four principles: better capability, specialist personnel, a volunteer effort and making the best use of national intelligence.

Better capability

The Australian Coastguard will include new, purpose-built ships. There is a major gap in current capability. Navy Patrol Boats do not have the range to protect Australia's Indian Ocean territories, including Christmas Island. The Government has had to use guided missile frigates for this task. The frigates are far too expensive for the role and are essentially unsuitable for border protection operations. This is why new, larger offshore patrol vessels will make such a difference to our ability to protect our maritime borders.

It's now been revealed that the full cost of operating a Navy frigate in this role is $1 million a day. In fact, Navy has been forced to use its two 71 metre hydro-graphic survey vessels for more than 450 seagoing days in the last year just to fill this gap. There is a clear need for a larger, offshore patrol vessel in this role.

Coastguard's patrol vessels will be capable of operating across the northern approaches to Australia. Its ships will be able to conduct boarding operations and to carry large numbers of additional passengers. They will be fitted with light to medium arms and apply minimum necessary force. The ships will be at least 80 metres long with helicopter capacity, which is a significant force multiplier.

Once Coastguard is established, Labor plans to develop an effective capability for surveillance and interdiction duties in the Torres Strait Islands area, in particular, looking at the requirement for smaller, faster vessels.Labor will examine the best method of bringing the planes and helicopters currently used for air surveillance under the Coastguard organisation.

The Coastguard fleet will be established with three boats, ensuring the capacity to train and repair while maintaining effective operations. There are several working examples of offshore patrol vessels of this type. These include the Royal Navy's Castle Class 81m Patrol Vessel and the US Coastguard's 270-Foot Medium Endurance Cutter. The Royal Navy is currently bringing into service the River Class Future Offshore Patrol Vessels. A number of other projects are in development, including a proposal for an 80m Offshore Patrol Vessel.

Specialist Personnel

Personnel trained and specialised in the maritime policing role will staff the Australian Coastguard. Many of these personnel will be drawn from existing border protection organisations. This will achieve real savings over employing serving RAN personnel. It also offers a way of retaining former naval personnel in service to the public.

In addition to the Coastguard vessels, RAN and Australian Customs Service vessels will continue to perform surveillance and interdiction duties, under service agreements with Coastguard. Australian Coastguard personnel will be posted on RAN and Customs vessels carrying out surveillance and interdiction and will perform the maritime policing functions. They will have the power to enforce all Commonwealth laws in the maritime environment, including border protection laws. They will also be deployed to RAN or Customs vessels not specifically tasked for surveillance and interdiction, which observe criminal activity while on other duties, or are otherwise required to respond to a particular incident.

Coastguard personnel will also play a valuable intelligence liaison function. They will receive specialist maritime policing and border protection training. This will be conducted as part of the Australian Maritime College facility in Launceston, Tasmania, which has the capacity to train patrol boat personnel.

Coastguard Volunteers

Labor will completely revamp the existing Customs Watch system to provide effective training and support for a nationwide team of Coastguard Volunteers.

Just as our police forces benefit from the efforts of Neighbourhood Watch, Coastguard will be supported by Australian citizens in coastal areas who provide information on movement patterns and unusual activity on our borders. A major civilian effort is crucial to border protection. The current system does not take advantage of the power of our coastal communities.

Labor will invite the existing volunteer agencies, the Royal Volunteer Coastal Patrol and the Australian Volunteer Coastguard Association, to assist in developing the charter of the new Coastguard Volunteers. The Coastguard Volunteer system will draw on the voluntary assistance of commercial and recreational fishing vessel owners, as well as other operators. The basic function will be to support coastal surveillance. It will also conduct public awareness programs and recruiting, vessel safety checks, safety patrols, environmental protection, plus supporting search and rescue.

As part of this system, Labor will develop a Coastguard Volunteer Vessel program. Commercial and recreational fishing vessel owners and other operators will be given incentives and opportunities to participate in the National Coastguard Network. There will be training for crews in safety, search and rescue procedure, detecting illegal activity at sea and procedures for reporting. Owners will be provided with Coastguard Volunteer Vessel livery for their vessels, plus discounted boat registration. Communications support will be provided to Coastguard Volunteer Vessels when operating in priority areas for Coastguard surveillance and response.

Coastguard Volunteers has the potential to become the biggest volunteer network in the nation. In protecting Australia's borders, our coastal communities are our frontline. As Australia faces a growing number of threats in an uncertain international environment, we need to mobilise all our resources – government and community-based – to improve national security.

Intelligence

Intelligence is a key driver of effective border protection. Currently, Coastwatch conducts surveillance on behalf of other agencies (its "clients"), so it is not able to direct the surveillance effort itself. Coastwatch cannot centrally direct and set priorities. Instead, it has to balance the competing demands of the various client agencies in a bureaucratic structure involving three separate interdepartmental committees. This is not a sound structure for border protection intelligence.

Because Coastguard will be responsible for surveillance of Australia's maritime borders, for responding to and enforcing border control laws, it will be able to direct the border protection intelligence effort. It will be fully integrated into our national intelligence, defence and surveillance network.Importantly, Coastguard will have access to the JORN radar surveillance network.

Under Labor, there will be additional investment in technical surveillance infrastructure. Once established, Coastguard will develop a Fixed Sea Bed Array in conjunction with the Navy to provide a major new technical surveillance capability. This is a key investment for effective, integrated, intelligence-driven border protection.

A National Coastguard Network

Coastguard's new patrol vessels and helicopters, the Coastguard personnel aboard Navy and Customs vessels, and the Coastguard Volunteer Vessels will be part of a National Coastguard Network. This network will work closely with elements of the Navy. As well as the Coastguard's own vessels, the 15 RAN Fremantle Class Patrol Boats and their replacements and Customs' eight Bay Class vessels will assist with maritime policing, surveillance and interdiction, with Coastguard staff aboard.

Coastguard's network will also include fixed-wing aircraft, as well as land- and sea-based helicopters. Coastguard's patrol vessels will be helicopter capable and Coastguard will own helicopters for this purpose. RAAF maritime patrol aircraft can also be assigned to Coastguard for border protection duties. The planes and helicopters currently used for air surveillance under the Coastwatch arrangements will also be part of the Coastguard network.

These include:

• 5 Bombardier Dash 8-200s with radar and optical electro-optic sensor equipment to operate fisheries patrols;
• 3 Reims F406s with the same radar as the Dash 8 and night vision equipment for medium range seaward operations;
• 6 Britten-Norman Islanders for visual littoral search;
• 1 Shrike Commander for visual search;
• 1 x Bell 412EP helicopter equipped with electro-optical vision equipment, and
• 1 x Bell Longranger IV helicopter for visual surveillance and special purpose transportation.

Australia's private fleet includes more than 10,000 registered commercial vessels operating in Australian waters, over 2,000 commercial fishing vessels and an estimated 500,000 registered recreational boats. Brought together under the Coastguard Volunteer Vessels program, these form a vast national capability to guard our coastline.

Organisation and powers

Under Labor's plan, Coastguard will be a statutory law enforcement agency within a new Department of Home Affairs. Coastguard will develop inter-operability with the Australian Defence Force so that it can be quickly and effectively co-opted to undertake important coastal defence duties in times of war and national emergency. Labor will also negotiate inter-governmental agreements with the States for sharing intelligence information obtained from State Government-owned patrol boats about vessels suspected of breaching any Australian laws, whether Commonwealth or State.

Coastguard will have the power to enforce all Commonwealth laws in the maritime environment. These new powers will close loopholes in the current Coastwatch system by giving a single border security authority the capacity to enforce the laws against people smuggling, quarantine breaches, illegal fishing and drugs. In addition to legal powers, Coastguard personnel will be trained, armed and authorised to use minimum necessary force to enforce all Commonwealth laws.

Coastguard will be headquartered in Darwin, with operating bases at Broome and Cairns.

Current system unsustainable

The current Coastwatch contract-out system, particularly as it applies to the RAN, is unsustainable. The Howard Government has had to assign sophisticated Navy frigates to routine surveillance and interdiction operations – an expensive, inappropriate and unsustainable ad hoc measure.These ships cost $1 million per ship per day for this task, but they are not capable of operating safely in blue-water border protection roles. For instance, sailors have to jump 10 metres from the deck of a warship into the water to recover people.

To give some further indication of the unsustainable impact of border protection operations on the Navy, as a further ad hoc measure shortly before the 2001 election, the Howard Government took the RAN's two hydrographic (naval survey) vessels away from their survey work, re-painted and armed them, and tasked them with surveillance and interdiction duties in northern areas.

The present level of RAN involvement in border protection is unsustainable from a personnel point of view. Navy personnel are highly, and expensively, trained in naval war-fighting. Those skills are not being used in the border protection role. Their role is also interfering with training to maintain those skills. The effects of this are clear. Apart from the waste of money and human resources involved, there is anecdotal evidence of falling morale among RAN personnel on frigates, which are not doing the job they are trained for.

These criticisms have been echoed both by the Auditor-General and the Government-majority Joint Committee on Public Accounts and Audit. The Audit Office in its report on Coastwatch (2000) expressed concern about many aspects of Coastwatch. The Joint Committee in its Review of Coastwatch (2001) echoed this and many other concerns. It emphasised in particular the huge gap in Australia's capability to survey and interdict unauthorised vessels in the southern maritime zones.

Coastguard Costings

-	Y1	Y2	Y3	Y4	Total
Acquisition of offshore patrol vessels	60.0	60.0	60.0	0.0	180.0
Operating patrol vessels (direct cost)	5.0	10.0	22.0	34.0	71.0
Additional personnel	10.0	20.0	30.0	30.0	90.0
Acquisition of helicopters	0	25.0	25.0	25.0	75.0
Operating helicopters (direct cost)	1.0	5.0	9.0	12.0	27.0
Coastguard Volunteers	20.0	21.5	22.5	24.0	88.0
Coastguard Volunteer Vessels	8.0	9.0	9.5	10.0	36.5
Fixed sea-bed array	20.0	10.0	0	0	30.0
Administration and start-up	10.0	5.0	0	0	15.0
Total (millions)	134.0	165.5	178.0	135.0	612.5

Additional Material

RAN Patrol Boats and Coastwatch

The contract-out model has always relied on the RAN maintaining a large fleet of patrol boats, which are substantially available for non-Navy tasks by Government direction. The Government argues that even though the total cost of using naval patrol boats for border protection tasks is very high, greater than would be the cost of using a tailor-made capability, the RAN needs to maintain and operate these boats for its own purposes anyway – such as training junior officers in command on relatively small boats – and so the cost of using the patrol boats for border protection is really only the additional operating cost.

With a third of the patrol boat fleet dedicated to Coastwatch tasking this policy has always been questionable. However since guided missile frigates were first used for border surveillance and enforcement in 2001 the practice of Coastwatch relying on the Navy for almost the whole of its requirement for surface vessels has become indefensible. In short, if the Government uses a warship for border surveillance and enforcement, it cannot use it for any other role. Yet the RAN has effectively been on permanent station in the Persian Gulf since 1991; over recent years naval ships have been increasingly committed in support of operations in our immediate neighbourhood, such as East Timor, Bougainville and the Solomon Islands; and all the necessary tasks of training and maintenance remain. Protection and surveillance of maritime borders has long been an unacknowledged determinant for naval force structure; now the RAN's whole strategic planning for operations has been turned upside down by the growth in the task.

There will be a continuing role for the Navy's Patrol Boat fleet in maritime surveillance and interdiction. But the border protection role is not the Navy's primary task. The Navy is for fighting war at sea. A Coastguard would be good for Navy.

Failings in the Current Border Protection Structure

The existing structure of border protection, surveillance and enforcement is flawed. Australia urgently needs to develop a more effective, efficient and sustainable way to protect our borders. The basic organisational structure is weak and other aspects of Government policy further distort its effectiveness.

Coastwatch can look but it can't touch – surveillance and enforcement are separate

The first principle of the existing system is that border surveillance is separated from the enforcement of border and maritime laws. Coastwatch, which is an agency within the Australian Customs Service, co-ordinates maritime surveillance on behalf of a dozen Commonwealth law enforcement agencies, while the agencies separately enforce their own parts of the border controls and maritime laws. This doesn't work for a number of reasons.

First, the separation prevents effective direction of the surveillance effort. Because Coastwatch is conducting surveillance on behalf of other agencies – its "clients" – it is not able to direct the surveillance effort itself. Coastwatch cannot centrally direct and set priorities. Instead, it has to balance the competing demands of the various "client" agencies in a bureaucratic structure involving three separate interdepartmental committees.

Secondly, the separation means that when Coastwatch patrols find a border incursion, they can't directly enforce the law. Instead, Coastwatch manages the activity until the particular client agency can assume control of the situation, typically once the offenders are brought to shore.

Coastwatch – a maritime surveillance agency that doesn't own any planes or boats

The second principle of the existing system is that it is a contract-out system. The national border surveillance organisation doesn't own any planes or boats. For air patrols, Coastwatch enters into long-term contracts for planes and helicopters, and also has some support from the RAAF. For sea patrolling, the RAN provides the equivalent of six patrol boats and the Australian Customs Service provides the equivalent of one and a half smaller Bay Class Vessels.

Apart from the special problems of using RAN ships (see box), the buy-in arrangement for border surveillance is supposed to be more flexible and efficient because the contracts shift management effort and risk off Coastwatch and onto the contractor. For the system to work this way, Coastwatch would need to be given sufficient money, either from its client agencies or from a budgeted appropriation, to buy all the surveillance services it needs, and allowed to find those services from the best available sources. In short, a "purchaser-provider" model.

Of the total cost of the Coastwatch output, around 75 per cent by value is provided by direction from the Government, free of charge from the Defence Force ($131.78m out of $174.29m in FY 2001/02). These cannot be substituted for other services. In effect, Coastwatch has all the disadvantages of owning and operating these patrol boats and Orion aircraft and none of the advantages.

Of the remaining small proportion of the Coastwatch output that is actually budgeted by Coastwatch, another $5m is spent on a fixed proportion of the cost of the Customs-owned Bay Class Vessels, which are owned by the National Maritime Unit within Customs. Again, Coastwatch has all the disadvantages of owning these vessels and none of the advantages.

What is more, in this complex bureaucratic arrangement, Customs fills the role of client, service provider and parent organisation to Coastwatch. As a client, Customs submits surveillance tasking to Coastwatch and then as a service provider, Customs carries out the surveillance for Coastwatch. As the parent organisation, the CEO of Customs is expected to supervise and manage the Director-General of Coastwatch.

These structural problems have been further exacerbated by a separate Service Level Agreement between Coastwatch and one of its clients, the Department of Immigration and Multicultural and Indigenous Affairs (DIMIA). Prior to 1999, all of Coastwatch's surveillance activities were paid for out of the Defence budget or the Coastwatch budget. However, in mid 1999 DIMIA was allocated additional funding in the order of $85 million over four years for surveillance and response against people smuggling activities.

With this funding DIMIA paid Coastwatch for flying hours specifically for detecting people smuggling – outside the three interdepartmental committee priority process – and Coastwatch leased two new aircraft and a helicopter. This has further distorted the process for Coastwatch to purchase surveillance services, by creating another de facto owned capability, and further compromised the process for Coastwatch to co-ordinate surveillance priorities, by setting up a specific service agreement not subject to Coastwatch's ordinary priority process.

This is not a sound structure for the conduct of border surveillance. Further, the many distortions and confusions inherent in the present system are not purely managerial. The serious flaws in Coastwatch's structure have major impacts on the effectiveness, efficiency and sustainability of border surveillance and enforcement operations.

Ineffective

The contract-out system cannot provide effective maritime border surveillance because there is essentially no market for suitable surface vessels outside of the government border protection system. Contracting out border protection surface operations is not like contracting out hire-car services.

This is why the present contract-out system for maritime border surveillance is so compromised. It's not possible for Coastwatch to contract-out for such a specialised piece of infrastructure and such a specialised role. As a result, the boats actually doing the patrolling are owned by the RAN and by Customs and Coastwatch pays only a tiny proportion of the cost. It is this "stove piping" of the capability into fixed providers for a fixed number of sea-going days which denies Coastwatch the flexibility and efficiency benefits of a genuine contracted-out system.

At the same time, the boats Coastwatch has to use have been bought by external organisations for their own purposes and are not tailor-made for border protection. Because of this, the boats made available to Coastwatch under the present system do not provide comprehensive national coverage of Australian waters with surface vessels effective in border protection operations.

For instance, the RAN Patrol Boats are unsuited to many border protection operations. Helicopters cannot take off and land on the RAN's existing patrol boats. Indeed the patrol boats simply can't operate in significant portions of Australian waters, including the northern waters around Christmas Island, Cocos and Keeling. Neither will the replacement patrol boats, due to be commissioned gradually from 2004 onwards.

The current patrol presence in the Heard and McDonald Islands fisheries zone is inadequate for sustained illegal fishing patrols. Search and rescue in the Southern Ocean and Australian Antarctic Territory is not properly covered, as the current patrol presence are inadequate to carry out "safety of life at sea" tasks. The replacement patrol boats are only capable of carrying 80 additional passengers. This is not enough to handle overloaded boat situations.

Inefficient

As well as being ineffective, the contract-out system cannot provide efficient maritime border surveillance because the resources for which Coastwatch contracts, particularly in surface vessels, are not substitutable with each other in response to changing priorities. Coastwatch's surface vessels are provided as fixed resources by external agencies, and the air surveillance is tied up in long-term contracts as well.

The patchwork of resources available to Coastwatch, from the Australian Defence Force, Customs units, and some from contracted private or commercial sources including planes, helicopters and a fisheries vessel, all come with different levels of training, equipment and primary tasking, as well as very different cost implications.