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Marine industry development strategy

Department of Industry, Science and Tourism

Australian Marine Industries and Sciences Council

January 1997

Commonwealth of Australia

ISBN 26651 4

Contents

Executive summary

Australia's marine industries show continuing prospects for strong growth. They are currently major employers and have very good potential to create new jobs in high value added, regional enterprises - a key aim of national economic policy. Marine industries also contributed an estimated $6.6 billion to national exports in 1994, or 7 per cent of total exports, and have excellent potential to build on this.

Marine-based industries grew from $16 billion in 1987 to about $30 billion in 1994. This represents 8 per cent of Australia's total economic production (GDP). Annual growth was about 8 per cent in real terms indicating expansion well in excess of general economic growth. Some individual industry sectors have grown much more rapidly. This is an impressive performance upon which Australia can build further.

Australia's marine industry performance would not be possible without our strong skill base and excellent marine research capability. Skilled people and a continuing high-level capacity in research and innovation will be essential to further growth and must remain as key issues for governments and industry. AMISC cannot overemphasise their importance.

In addition to helping Australia achieve national economic and employment objectives, full and sustainable development of marine industries will help Australia meet international sea law requirements in management of the oceans we claim as a nation. These claims cover 16 million square kilometres, including the Exclusive Economic Zone (EEZ) and the continental shelf extending beyond this. This area is close to twice Australia's land area and represents a large yet relatively unexplored resource.

The objective of this Strategy is to advise the government on how it might maximise sustainable wealth generation from marine industries. To this end, AMISC outlines important issues for the development of marine industries in Australia. To sustain further growth, the industries must be:

Marine industries cover a broad range of activities and enterprises. The Strategy outlines opportunities for development, industry sector by sector, and highlights key issues, especially focussing on those common to many marine industries. However, AMISC does not address many of the specific sectoral issues. These are more effectively left to existing government sectoral managers or the industries themselves. Instead it is the major cross-sectoral issues that are of particular interest to AMISC. They are often not adequately addressed through the existing sector-based management approach.

Interest in marine industries is a world-wide phenomenon. Many countries formally claimed large marine zones in late 1994 with the entry into force of the United Nations Convention on the Law of the Sea. Marine areas are seen by many as one of the last relatively unexplored resources and frontiers for industry development. Consequently, countries which develop leading edge marine industries or technologies have the potential to supply a very wide international demand. Australia has this potential. In addition, we are well-placed geographically to satisfy rapidly growing demand in the Asia-Pacific region for marine goods and services. Areas where Australia's industry strengths match regional demand include seafood, marine science and technology, training, tourism, recreation, offshore oil and gas and some shipping services.

AMISC identified the following prospects and key issues in its analysis of individual industry sectors. Industries are listed alphabetically.

Aquaculture

There is excellent potential for growth in this relatively new industry. Key factors influencing this will be:

Emerging industries

The emerging industries include businesses based on marine biotechnology, alternative energy and seabed minerals. They have great potential, provided there is a supportive business environment for the development of new enterprises and the necessary technologies can be economically developed or accessed.

Fisheries

Prospects for further development lie in improved value adding and handling, and identification and development of new fisheries, including those in offshore, remote and international waters. Key issues are:

Offshore oil and gas

The outlook for this sector is very positive, combining new market opportunities for identified gas reserves and good prospects for further discoveries of oil and gas. Key issues include:

Shipbuilding

Prospects for commercial shipbuilding are very good. The industry is already highly export-oriented and growing rapidly. Growth of defence shipbuilding is more uncertain and will depend in part on export success and on opportunities for diversification. Key issues include:

Shipping transport services

There is likely to be substantial growth in demand for these services. Our ability to meet the demand will depend on improving the competitiveness of Australian operators. Key issues include:

the cost structure and efficiency of the Australian industry including intermodal links; and
prospects for development of new high speed cargo systems.

Supporting and 'high technology' industries and services

This covers a broad selection of industries such as marine instrumentation, engineering design and environmental management. Growth will be driven by international demand in the sectors which they support. Key issues are the effective linking and networking of support industries with their clients and the effective application of research to meet market needs.

Tourism and recreation

Based on past growth, the outlook for tourism and recreation is very good. Growth in overseas visitor numbers has been especially strong. Key issues are:

Key issues

AMISC has identified the following as key issues influencing industry development and which are common to many or all marine industries. The Council believes that because of the pervasiveness of these issues across many industries, there is considerable value-added in an industry-wide approach to government. AMISC sees itself as being in a strong position to act as an 'umbrella' to bring views together and articulate some ideas on behalf of industry.

Regulation and management of marine industries

The current regulatory and management system for marine industries is fragmented and non-transparent. It is substantially hindering the achievement of both industry growth and ecological sustainability objectives. Management responsibility is spread across many different agencies and multiple levels of government. Deficiencies in communication between the many elements lead to inconsistent advice and confusion about where responsibilities lie, as well as being unnecessarily time-consuming.

Managing for outcomes

Successful development of the industries will require a management approach driven by achievement of outcomes, not simply compliance with process. The process based approach is overly bureaucratic and inefficient. It focuses on the means, not the ends, and promotes lack of trust and respect among stakeholders. It hinders efforts to capitalise on Australia's excellent research base and capacity for innovation because, for example, the process based approach must be necessarily limited by the technologies available at the time a process is specified.

Management for outcomes requires effective cooperation among all stakeholders. Australia is already moving towards managing issues by focussing on outcomes and performance criteria. This can be seen in enterprise bargaining and vital areas like worker safety. There would be great benefits in applying this approach to marine industry development and marine environmental protection.

Multiple use

The vision behind this Strategy is a coordinated approach to marine development that fully accommodates multiple use. Our marine areas are public assets and must be managed to maximise benefits for all potential users. In that context, we must not just plan for the environment, but consider how industry will grow in that environment along with other users. Too often, environmental protection and balanced industry development are seen as mutually exclusive.

Basic data

A more comprehensive and coordinated national effort is required to collect basic data on Australia's marine environment. Such information is essential both to assess resources and opportunities for development as well as to provide effective management and monitoring. AMISC notes that some significant efforts are already being made in this area.

Research and training

High quality research and training are critical to industry development although they are very diffuse issues about which AMISC has not made any specific recommendations. In many cases, these issues, especially the needs for skilled personnel, will need to be progressed by individual industry sectors in collaboration with government, and based on the specific needs of firms and industry areas. In the case of marine science and technology, the government is developing a national marine science and technology plan. AMISC is keen to support and contribute to the plan's development.

AMISC makes a number of recommendations aimed at progressing the above issues.

Recommendations

Government marine policy and decision-making

Governments at all levels in Australia should regularly and frequently review their policies and decision-making processes affecting marine industries, and work in consultation with industry and other interested parties to achieve this. Wherever possible, they should ensure that:

In many cases achieving this will involve resolution or rationalisation of responsibilities and processes with other parts and levels of government.

Ecologically sustainable development

Governments throughout Australia should develop and introduce, as a matter of high priority and in consultation with stakeholders, consistent legislation to define and apply ecologically sustainable development principles to marine industry development, where this has not already been done.

Basic data

Governments should recognise the importance of adequate basic data for sustainable industry development and environmental management. They should consider development of a National Marine Data Program, based on the existing work of the Marine Data Group (MDG) and its networks. The program should be developed in the context of the national marine science and technology plan and cover data collection and management issues including:

Adequate resourcing of any data program will be essential. Consistency of resourcing over long time scales is important. High priority should be placed on this by governments, data collectors and processors.

Implementation of the recommendations

The Commonwealth Government should place high priority on the development of policies consistent with this Strategy and ensure that such policy development involves the widest practicable consultation with industry and other stakeholders. For example, the issues raised in this strategy should be an important focus for the government's national oceans policy and the national marine science and technology plan. A commitment to translate policies into action agendas must also be a priority and should involve, in the first instance, a high level expression of commitment through the Council of Australian Governments (COAG). AMISC would welcome a government response to these recommendations.

Introduction

The Australian Marine Industries and Sciences Council (AMISC) is an advisory body set up by the Federal Government to highlight issues and opportunities for the development of our marine-based industries. It reports directly to the Minister for Industry, Science and Tourism.

The Council prepared a draft Marine Industry Development Strategy for Australia. This was released for public comment in April 1996. The current document represents a revision based primarily on AMISC's examination of the comments made about the draft.

While this document does represent a completed version of the strategy which will be forwarded to the government for consideration, AMISC believes that further revision will be appropriate based on feedback from the marine and wider community. AMISC welcomes such feedback. However, the Council does not intend producing a revised version of the Strategy for at least 18 months.

For the purposes of the strategy, marine industries include all resource, manufacturing and service industries with a substantial link to the marine environment. A definition can be found in Section One. They include but are not limited to offshore oil and gas exploration and production, marine tourism, fishing and aquaculture, coastal engineering, marine management and environment planning, shipping, shipbuilding, boatbuilding and marine research and education services.

There are four main sections in this document.

Section One describes the objective of the strategy, the domestic and international context in which the industries operate and the outlook for the industries.

Section Two analyses issues and opportunities for marine industry sectors and industry areas that do not easily fit into industry categories. Key issues for each industry are highlighted.

The key sectoral industry issues lead into Section Three which discusses options for action and recommendations, focussing on key cross-sector issues that need attention.

Section Four is a brief overview of marine industry performance.

There is a more detailed profile of marine industries in Appendix B.

Section one: The objective of the strategy

The objective of this Strategy is to advise the government on how it might maximise sustainable wealth generation from marine industries. To this end, AMISC outlines important issues for the development of marine industries in Australia. To achieve this development the industries must be:

Competitiveness is based on the total business environment in which firms operate, including the regulatory environment. Regulation and government control are particularly important for marine industries because the seas and oceans are publicly owned and are therefore the responsibility of governments.

Sustainable development must embrace both effective sustainability as well as optimised development. Multiple use of marine environments will be essential in many cases to achieve optimised development. Effective sustainability needs to be defined in terms of tolerable levels of impact. 'Tolerable' may well vary from one area to another.

Readers should note that AMISC's role is to provide advice to the Commonwealth Minister for Industry, Science and Tourism. AMISC has not been charged with implementational responsibility.

General principles

The Strategy is based on four general principles:

Regulation by outcome, not prescriptive process

Current regulation and control of marine industries, particularly environmental regulation, is often focussed on processes to be followed by industry rather than on broader outcomes to be achieved. A shift in practice is needed to place primary emphasis on outcomes. For example, rather than prescribing how a firm should treat waste and discharge into the marine environment, the firm should be told that it must minimise its impact on the marine environment to an acceptable and defined level. The firm should be allowed significant freedom in how it achieves this outcome. Monitoring of performance by government is still essential to ensure the specified outcomes are achieved.

Multiple use

This Strategy supports and encourages multiple use of, and access to, marine areas. However, AMISC recognises that the management structures, policies and data needed to allow multiple use are lacking in many cases. Marine policy and management agencies should work together to tackle this issue. AMISC also recognises that the types of acceptable usage will vary depending on the zoning and characteristics of an area but emphasises that decisions should be based on sound scientific principles.

Business and microeconomic reform

This Strategy does not discuss 'generic' business and microeconomic reform issues in any systematic way. Nevertheless, AMISC endorses continued progress in this area. It is as important to the development of marine-based industries as it is to other industry areas.

Ecologically sustainable development

The principles of ecologically sustainable development (ESD) have been endorsed by the Commonwealth and all State governments. References in this Strategy to development are intended to mean ecologically sustainable development as endorsed by governments.

In the 1992 National Strategy for Ecologically Sustainable Development, ESD is defined as:

"using, conserving and enhancing the community's resources so that ecological processes, on which life depends, are maintained, and the total quality of life, now and in the future, can be increased."

The core objectives of ESD from the above source are:

There are also several guiding principles including the so-called precautionary approach which says that "where there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation".

Performance measures

The primary measures of success of the strategy will be:

These are the primary outcomes the strategy is designed to achieve.

The following subordinate outcomes will contribute to the primary outcomes and, as appropriate, can also be used as performance indicators:

Marine industries defined

Marine industries can be classified into categories:

(based on a definition by L K Braute and K Venkataraman in Marine Industrial Technology Monitor, 3(2): 1, 1995; United Nations Industrial Development Organisation)

Marine resource-based industries are those directly involved in recovery of marine resources and related downstream processing. They include offshore oil and gas, fisheries, marine-based pharmaceuticals, aquaculture and seabed mining.

Marine system design and construction includes ship design, construction and repair, offshore engineering and coastal engineering.

Marine operations and shipping includes marine transportation systems, installation of floating and fixed marine structures, diving operations, dredging and waste disposal.

Marine-related equipment and service industries include manufacturers, engineering and consultant firms in marine electronics and instrumentation, machinery, telecommunications, navigation systems, special-purpose software and decision support tools, ocean research and exploration and environmental monitoring. It would also include training and education.

Not all of these industries will be explicitly covered in the strategy, although most receive mention.

The outlook for marine industries

AMISC strongly believes that marine industries have excellent potential to contribute to future economic growth and employment, to a greater extent than many other segments of the economy. These industries were valued at approximately $16 billion in 1987 and $30 billion in 1994 - representing annual growth of about 8 per cent in real terms. This is very strong growth and if it continues, even at a substantially slower rate, marine industries are likely to become even more significant in the national economy in the future.

Marine industries are also contributing substantially to export performance and exports were estimated at $6.6 billion in 1994, or 7 per cent of total exports. These industries are currently major employers:

In addition to growth in existing industries, there is considerable potential for development of new marine-based industries, for example pharmaceuticals and fine chemicals derived from marine organisms. Australian research, technology and skills, combined with access to very large and diverse marine areas with very high biodiversities, place us in a strong position to develop and capitalise on such new industries.

In some sectors, the resource base on which industry growth depends is relatively untapped - both in Australia and overseas. This heightens the prospects for growth and will also result in considerable competition among maritime nations to develop leadership in technologies and industries needed to access and manage such resources.

The principles of ecologically sustainable development are endorsed by governments throughout Australia. Although these principles are not adequately defined in law, they will continue to provide the framework for industry growth and development.

The extent of growth is difficult to predict. Relatively little is known about the potential of Australia's 16 million square kilometres of ocean 'territory' which includes the coastal zone, the EEZ and the continental shelf. There are some cases where we do have good or reasonable resource information. They include many fisheries resources and oil and gas reserves in some regions. A similar situation exists in many other countries.

Most of Australia's marine claims under UNCLOS are not strictly part of our territory although we have extensive rights to the resources in the claimed areas. These areas are vast and only small sections have been systematically explored. It is reasonable to assume that the resources and the potential for industry development are very large.

Another difficulty in assessing the marine industry potential is that systematic economic data is not collected for many industries or the supporting infrastructure such as marine research. A stocktake of current industry activity and infrastructure would be a substantial task but would help to confirm the economic and employment significance of the industries. It would also be important for improved government management and decision-making systems - it is difficult to manage in the absence of data about precisely what is being managed.

Others have attempted to place a value on marine industry growth. For example, the Ocean Outlook congress in 1994 and subsequent report predict the industries will be valued at between $50 billion and $85 billion by the year 2020. Copies of the report are available from the CSIRO in Hobart, telephone (0362) 325381.

Australia is already a world leader or is world-competitive in many marine industry areas. There is great potential to build on this. Current strengths include the designing and building of high speed aluminium ships and ferries, offshore oil and gas, marine research, tourism, environmental management, algal aquaculture, fish farming and fisheries management. This expertise is not restricted to the private sector. There is a substantial skill base in government or semi-government agencies in areas such as marine management, research, education and training.

Many other nations have focussed attention on exploring and sustainably exploiting their marine claims. Regionally, and perhaps internationally, Australia has the potential to be a future leader in technologies and industries for marine development, based on our existing industry strengths and technology base. Australia is also well placed geographically since the Asia-Pacific region is likely to be one of particular opportunity. Many factors point to this including the rapidly growing regional affluence, dominance of seafood in diets, rapidly growing energy demands and accelerating marine (and other) environmental problems. Australia is also rare among developed nations in having a strong research and management capability in tropical marine systems. Our science, technology, training, management and tourism services are some of the areas where we have strong regional export markets or potential.

Sustainable industry growth will need some generic inputs. For example, relatively little is known about many of our marine ecosystems, although such information will be critical in determining the types and extent of industry development for many sectors. Environmental issues more generally will need ongoing attention. One key issue is marine pollution, the main source of the latter being land-based.

Other inputs that will influence growth include the extent of knowledge of our marine resources, the development of leading edge marine technologies, and broader business environment factors such as the transparency of the government policy and regulatory environment. People will also be essential in the form of skilled managers, researchers and labour. Social science and economic research will also be needed to model demand trends and directions and effectively manage for sustainable development.

The domestic context

Australia's seas and oceans are the community's property, and therefore managed by governments. This contrasts with the land where there is substantial private ownership and private management.

Hence, marine management and industry development has the potential to be much simpler than development on land. In reality, it can be just as complex or more so. Up to three levels of government may be involved: Commonwealth, State and local. The Commonwealth's interests are driven by both domestic demands and obligations under international treaties and conventions to which we are a party. Within each level of government, a number of different departments or agencies may have responsibility for an issue. The outcomes of such a complex management system can include:

Many marine industries and activities are located along or near the coast and close to land and private land owners. Such owners understandably, have an interest in marine activities near their properties. Hence, some of the complexities of terrestrial land use planning can also affect marine areas.

Environmental principles underpin decision-making across all levels of government. The frequent complexity of these issues means there are often delays and uncertainty in the process for environmental approval of projects.

AMISC supports the principle of ecologically sustainable development (ESD). However, the principle, including elements such as the 'precautionary principle', is not well-defined at present and often not embodied in legislation. The result is confusion and disagreement about the meaning and application of ESD. This should be rectified through legislation and other means. Development of any legislation should include consultation with all stakeholders. AMISC makes a recommendation in Section 3 of the strategy on this issue.

The complexity, cost and lack of transparency of regulation is compounded, in many cases, by an emphasis on dictating detailed procedure rather than achieving broader outcomes.

Regulators who prescribe detailed processes and controls which must be followed by firms have to accept responsibility for achieving the outcome desired from regulation. In many cases this outcome is ecologically sustainable development. Risk aversion on the part of regulators and policy makers and poor availability of information often lead to excessively onerous and voluminous regulation.

AMISC supports an outcome focussed approach, involving firms (project proponents) determining the best way of achieving the outcomes required by government, and government monitoring their performance.

Shifting responsibility for achieving the ultimate outcome to project proponents will achieve simpler and more effective systems for management of risk. Of course, an essential requirement of this approach is adequate monitoring systems and baseline information for comparison. Unfortunately, this is lacking for many marine systems in Australia. The need for an improvement in the availability of basic data and monitoring is discussed elsewhere in the Strategy.

Case study

Safety case regime

Before the Piper Alpha oil platform disaster in the North Sea, off the United Kingdom in 1988, most international safety legislative regimes were highly prescriptive. One of the most significant findings of the inquiry into the disaster, headed by Lord Cullen, was that prescriptive regulation was no guarantee of excellent safety performance. It guaranteed nothing more than compliance to a minimum level.

Lord Cullen recommended the establishment of the objective based Safety Case regime. The Safety Case concept has been adopted in Australia and developed through cooperation between government, industry and unions. In Australia, the Safety Case includes details of safety management systems and risk assessment studies which, once accepted by the regulator, form a co-regulatory guidance document. The document sets both the standards to be achieved and the mechanisms for achieving them. The system allows operators the flexibility to manage safety in a way which best suits their specific requirements. All offshore facilities in Australia were required to have Safety Cases in place by 1 July 1996.

The move to the Safety Case regime has already had an impact in Australia. As companies have worked with their employees to develop the Safety Cases there has been a change in mindset. Safety has become a part of everyday business, and has improved markedly in the upstream petroleum industry since the system was first mooted in 1988. Safety performance, as measured by lost-time injury (LTI) frequency rate (number of LTIs per million hours worked) has improved from 9.6 in 1988 to a level of 4.2 in 1995.

Clearly, an outcome based approach has achieved a better performance than the prescriptive approach it replaced.

The application of outcome driven regulation becomes more complex in multiple use environments. In these situations, more than one party can contribute to an impact. Managers can still regulate by outcome, but all of the parties must cooperate and reach agreement. There are many ways to do this. For example, in some fisheries many people may compete for the same limited stock. This can be managed by establishing sustainable catch limits in consultations with all stakeholders and then allocating quotas in an equitable way within these limits.

Australia is making important new steps to recognise the value and uniqueness of its vast marine areas and to ensure that its marine industries and resources are effectively managed. The Federal Government has started developing a national oceans policy to provide a framework for ecologically sustainable development of our marine areas. The government has also begun development of a national marine science and technology plan which will both contribute to the oceans policy and represent an important plan in its own right. AMISC is already in the process of injecting the views outlined in this strategy into these processes. The Council encourages others with an interest to provide their input. Further details can be obtained from the AMISC secretariat.

Recent international developments

Late in 1994, the United Nations Convention on the Law of the Sea (UNCLOS) came into effect. Australia formally claimed its Exclusive Economic Zone (EEZ) and other marine zones. These zones cover an estimated 16 million square kilometres or close to twice Australia's land area.

Before UNCLOS came into force, many nations, including Australia, in effect recognised many of its provisions as customary international law. Australia had also put in place policies and legislation consistent with UNCLOS. For example, Australia declared an Australian Fishing Zone in 1979 with similar boundaries to our current EEZ.

In addition to the newly proclaimed EEZ, Australia has also long claimed a territorial sea taking in the immediate coastal region and a portion of sea beyond this. The territorial sea was extended to 12 nautical miles in 1990 to be consistent with UNCLOS. The coastal and near coastal region has been and will remain one of our most important marine areas. It is easy to access, it underpins considerable economic activity, such as port operations and tourism, and Australia's population is heavily concentrated close to it.

UNCLOS has created greater certainty in the legal framework and heightened awareness of our marine assets and opportunities for their use among politicians and in the wider community. It is important to recognise that UNCLOS not only provides us with internationally recognised rights of access to our EEZ and continental shelf resources, it also charges us with their care and sustainable management.

Other international developments will also have an impact of development of Australia's marine resources. For example, the Convention on Biological Diversity has entered into force with the aim of protecting biodiversity in all environments. Marine biodiversity is especially large. The Commonwealth, State and Territory governments in Australia have also recently signed a national strategy on conservation of biodiversity.

Why should marine industries be considered as a group?

Management of marine-based industries by governments is largely conducted on a simple sector by sector basis at present. This should continue but within a more integrated approach to marine policy and decision-making. Within industry itself, there is also considerable merit in greater cohesion between different marine-based industries, particularly in presenting a united input to government. Such cohesion could also help achieve improved export activity. In the latter case, AMISC sees merit in a broad-based industry export group. However, the diversity of industries and some level of competition between them will have to be addressed to achieve greater cooperation.

There are clear arguments for an integrated management approach from an environmental perspective:

There are other important benefits from this integrated approach including:

AMISC draft strategy and earlier discussion paper

AMISC circulated over 2,000 copies of a draft of this Strategy in April 1996 and also circulated a precursor discussion paper to a limited group of industry associations, government agencies and others in August and September 1995. Almost 100 responses have been received to date commenting on these documents. Most strongly agreed with the issues emphasised in the draft Strategy and the approach AMISC has taken to these. Others suggested changes or new issues that should be emphasised in the Strategy. A selection of comments received is outlined below:

The need for regulatory reform and application of multiple use principles was endorsed widely. Governments should be encouraged to take a 'can do' approach rather than a controlling one. A more detailed analysis of government regulatory systems and legislation will be needed for regulatory reform. Multiple use will be challenging to implement because of the inherent problems of balancing access among users including the balance between public and private benefits. Above all, consultation and involvement of all interested parties will be essential for progress and 'ownership' of the outcomes.

The importance of adequate and widely -accessible marine data sets was supported by many and a number of helpful suggestions were provided. Adequate funding will be a challenge.

AMISC could make a very valuable contribution to the implementation of ecologically sustainable development in the marine environment because of AMISC's wide scope. However, the Strategy should not confuse ecologically sustainable development with economically sustainable development. On environmental issues more broadly, these are likely to be the key limits or determinants of industry growth now and in the future.

The great potential of marine industries is not adequately promoted in the draft, nor is the importance of links between industry sectors and the issues that cross sectors. A stocktake or audit of current industry capability and performance is needed as a starting point.

AMISC's role should be broadened so it actively participates in the reform process. It should be given a wider mandate and the necessary additional resources. There is insufficient responsibility placed on industry to take action in support of the reforms proposed in the draft Strategy.

It is important to focus industry development on the pursuit of export opportunities, particularly in the rapidly developing Asia-Pacific region. Australia is particularly well-positioned to do this because of its research, management and industry development experience in tropical marine environments, including coral reef ecosystems. Very few other developed nations can match this. Further detailed analysis of technological trends and market opportunities is warranted. Related to this, one respondent suggested the formation of an EEZ Exporters Group, perhaps modelled on a similar group in the UK.

Australia should promote its strengths and capability in marine services, for example marine research, management, education, training, environmental assessment, surveillance and enforcement. These are of a very high standard and have great export potential. Major international marine conventions such as UNCLOS and the UN Conference on Environment and Development emphasise collaboration between nations. This creates opportunities for Australia.

A significant fraction of respondents, including government agencies, agreed that a 'one-stop-shop' approach to regulation would be desirable. Assessment of skill needs for marine industries now and in the future and further development of programs to meet these will be very important to growth. Some respondents referred to existing initiatives in this area such as the Tourism Training Australia network and Australia Maritime Training Inc which are also active in export markets.

Marine research will benefit from greater coordination in Australia between the many groups and agencies involved. More effective information dissemination about research and research priorities is also needed. A more critical analysis of research issues, funding and research infrastructure is needed. Management of marine research should be separated from other research and should be directly accountable to government. The document is not a strategy yet. It would also benefit from more detailed industry sector recommendations to address the key issues raised in Section 2.

Section two: issues and opportunities

Areas of emerging opportunity in various marine industry sectors are covered in this part of the Strategy. The industries are listed in alphabetical order.

Aquaculture

Key issues

Developing and implementing systems for integrated or coordinated, area-based coastal and marine management is the main issue. AMISC places high priority on this issue as it not only affects aquaculture development, but all other industries and users of the coastal and marine environment. Current government management approaches are generally fragmented between agencies and are not good enough in many respects.

Integrated, area-based management systems that bring together all key regulators and users will be very important for resolving multiple use conflicts. They will also provide a more accessible, transparent and consistent management framework within which the industry can develop and coexist with all other users. The primary benefit of this approach from an industry perspective is to reduce the level of uncertainty in aquaculture developments. This will improve the capacity of the industry to attract investment.

AMISC notes that a consequential outcome of this management approach will also be more clearly defined scientific data needs.

The Commonwealth Government is taking an increasing role in aquaculture through strong research support, and involvement in the growing range of national issues, for example chemical usage, labelling and air freight. AMISC encourages this cooperative approach to industry development.

Aquaculture has existed in Australia for a long time. But it is only in the last decade that industries such as pearl oysters, salmon, tuna farming and edible oysters have made a major contribution. These species will continue to expand along with newer aquaculture species such as prawns, abalone, mussels, barramundi and other finfish. Holding of rock lobster is also likely to increase.

Aquaculture shares many common issues with the wild capture fishing industry. For example, value adding and a detailed understanding of market demands will be very important to growth and exports in both areas. Our skills base and training in aquaculture are very good, at least in niche areas, and export of these services is another area of opportunity.

Aquaculture does not face the same problem as wild fisheries in natural limits to the volume of production. However, growth will be limited through the availability of suitable sites for aquaculture operations. This will apply to both:

Intensive pond aquaculture on land where availability of water as well as nutrient levels in discharged water are limited; and
Cage aquaculture in natural waterways and open waters which increasingly competes with recreational users, tourism operators and other users. This is a significant issue in many States including Tasmania where an advanced management approach involving revised legislation is being implemented.

These issues can be overcome, but at a cost. In the case of pond aquaculture, the cost is water treatment and/or recycling technologies. There are several options for improving site availability for aquaculture operations that depend on leases over natural waters:

Industry growth will also depend substantially on technological advancements, for example in:

Access to broodstock is one of many issues on which close cooperation with the wild-capture industry is essential. The recent formation of closer relations at the State level, and the Australian Aquaculture Forum's formation and membership of the Australian Seafood Industry Council are important steps in this process. There is also common interest in other issues, for example, the issue of exotic marine pests introduced through ship ballast water and other means.

The continued support of the main research agencies or funders such as the CRC for Aquaculture and the Fisheries Research and Development Corporation, are central to aquaculture's continued growth.

A National Strategy on Aquaculture in Australia has been prepared by the Standing Committee on Fisheries and Aquaculture (which exists under a Commonwealth and State ministerial council). This strategy, which was released in 1994, covers many issues relevant to industry development and has significant support from the industry.

Case study

Managing by outcome, not prescription: Tuna farming in South Australia

Tuna farming was pioneered in Australia in 1991. On face value, there were formidable environmental barriers - nutrient overloads in bays, shortage of feedfish, potential fish disease and numerous other problems.

Instead of placing strict regulations on the industry, the South Australian Government and local communities identified the outcomes and performance indicators which would result in ecologically sustainable development.

The industry, government and community then developed a management plan to provide a framework to meet and monitor the target. The result today is a highly successful industry, and major progress towards new standards in environmental science and in environmentally friendly feeds.

The industry went from no production in 1990 to over 2,200 tonnes in 1995 with exports worth $75 million. It created over 400 new direct jobs and around 1,000 indirect jobs.

Emerging industries

Key issues

A number of emerging marine industries could be significant in the long term. They will need appropriate industry support, and a conducive development and regulatory environment. It is difficult to be specific about needs at this stage, and policy and support should evolve with the industries. Generally, their successful emergence and growth will depend on:

There are several small or as yet undeveloped marine industries that may have considerable potential for growth. They include:

These areas have great potential provided technological problems can be overcome and substantial investment and capital can be found. Economic viability and sustainability will also be critical factors affecting growth.

Australia has already demonstrated leadership in the marine biotechnology and chemical area. It is the world's largest producer of natural beta carotene, a chemical used in food colouring and vitamins. This chemical is extracted from aquacultured marine algae.

More broadly, the use of marine organisms as sources of new chemicals for medicine, food processing and manufacturing has great potential. A major competitive advantage in marine biotechnology and chemicals for Australia will be our very large biodiversity which provides the resource base for so-called 'bioprospecting'. This diversity is not just confined to areas such as tropical reefs but is reported to include other marine areas such as deep ocean floor communities. Our ability to effectively tap this biodiversity will depend on adequately conserving it and on developing legal frameworks so that intellectual property of novel new chemicals or organisms can be protected.

Another emerging area in biotechnology is bio-remediation which uses marine and other organisms to digest contaminants and toxins in the environment. More generally, environmental protection technology and services will be areas of growth, although they are not limited to the use of marine biotechnology.

Seabed mining is a largely undeveloped industry but with large potential provided technical and environmental problems can be overcome such as potential coastal erosion or impact on sediment dynamics. There has been some commercial activity to date. Some low value materials such as gravels and limestone have been dredged. Further extraction of gravel and sand may occur in the future, particularly close to urban areas with few or no land based resources of this type. It is likely that much more valuable, but perhaps more inaccessible, minerals such as metals and gemstones will also be targeted in the future. Some licences have already been granted for gold and diamonds in Australia. There is also serious interest in some deep water manganese and metal ore deposits. Analysis indicates that it is now economically viable to extract deposits of this type in some areas.

Alternative energy is another largely undeveloped area which has been the subject of some limited experimentation. Growth will be determined by a range of factors including technological feasibility and pricing, as well as the availability of other energy sources. Some have suggested that significant potential exists for tidal energy schemes in Northern Australia.

Several respondents to the 1995 AMISC discussion paper raised fresh water extraction from seawater as a more indirect opportunity. The rationale is based on the arid nature of much of Australia which limits further growth. It was argued that if cost effective technologies can be developed and applied to extracting fresh water, then this obstacle can be overcome. New, cheap technologies would also have considerable export potential.

Fisheries (wild capture)

Key issues

AMISC believes many of the issues outlined below can be addressed through existing mechanisms involving industry, research and regulatory stakeholders. The main issues are:

The fishing industry is a relatively mature industry and is very efficient, with a world-class small boat fleet. Government policy and management arrangements are relatively highly developed - and perhaps entrenched. Nevertheless, our management is well regarded internationally and has export potential in itself. In the latter case, a new voluntary Code of Conduct for Responsible Fisheries Management, produced by the UN's Food and Agriculture Organisation, has been finalised and may generate further demand for quality management approaches.

There is potential for limited growth in fisheries, but not through substantial further catches. Many fisheries stocks are already exploited to, or beyond, their sustainable limit and sustainability will remain an important issue. The main opportunities lie in improved handling, value adding and marketing of existing catch as well as improvements in by-catch and waste utilisation or minimisation. In the value adding area, there are two general market niches at opposite ends of the processing scale:

Demand in Asia is expected to grow significantly in the medium term, driven by rapidly rising incomes and a strong preference for seafood, especially fresh produce.

In meeting this demand, the Australian industry faces problems in the availability and reliability of air freight. The industry is awaiting the results of a parliamentary inquiry on this issue. However, the industry will probably need to do more itself. Current coordination through State air freight councils, and establishment of holding facilities at Asian hubs, for example WA lobster at Denpasar, are good models. The development of high speed sea transport systems may also create new ways of delivering seafood to export markets.

Developing new market niches will require:

New Zealand has been especially successful at niche marketing and provides a model. An example is New Zealand's exports of chilled snapper to Japan, and also the New Zealand mussel industry.

On the resource side, work is needed to determine new offshore resources and ensure the sustainability of current stocks. This will involve further collection and analysis of data, new systems to reduce by-catch (including birds and other non-fish species), the avoidance of seafloor damage from bottom trawling, improvement of management and consultation processes, reducing the impact of marine pests introduced through ballast water and other sources, and reducing the risk of new pest introductions.

Fisheries management is complex and demanding. Insufficient research introduces uncertainty. Stocks and migratory species pose difficulties when they cross international or State boundaries. Fisheries management is also increasingly required to take a total ecosystem approach. This will mean greater involvement in contentious areas such as coastal development, habitat damage, effect on other species and the impact of pollution and rubbish (including from fisheries operations). It also requires important, wider environmental issues to be addressed, such as land-based sources of marine pollution. Some of these issues may well be canvassed in an inquiry by a federal parliamentary committee which is currently underway into the management of Commonwealth fisheries.

The potential for new fisheries is significant but will require substantial capital investment to harvest in offshore areas. Australians are increasingly fishing outside the EEZ for tuna and deepwater species. Development of new fisheries will depend on a flexible management and regulatory framework that encourages discovery and investment and, at the same time, prevents non-sustainable harvesting. The growing interest in fishing international waters will also mean a growing impact on our industry of international regulatory mechanisms and fora. Australia is already active in some areas such as regional management of Southern Bluefin Tuna.

Significant ongoing research effort will be needed to address many of the issues outlined above including management and regulatory systems, resource assessment, environmental protection, processing, packaging and handling, and fishing and vessel technology. Questions of resource allocation and coordination between research providers will need to be addressed by the government.

Offshore oil and gas

Key issues

There are two broad strategies that should be pursued:

Petroleum is Australia's highest value resource industry and is an important conduit for technology transfer. An estimated 90 per cent of Australia's oil and gas production is currently sourced from offshore areas.

Exploration in the Australian offshore petroleum industry began in the early 1960s. The first oil and gas discoveries were made in the mid 1960s in the Gippsland Basin. This region remains important to meeting Australia's demand for petroleum. Recent discoveries in the northern and western areas of Australia have proven crucial in supplementing national energy needs.

Prospectivity for oil and gas is considered to be highest in the Carnarvon and Bonaparte Basins which cover the north-west region of Australia. Potential oil and gas formations exist in a variety of other offshore areas which are virtually unexplored.

Continued exploration is essential to an industry such as this which utilises a non-renewable resource. The industry conducts extensive seismic and other survey work in offshore areas to pinpoint prospective areas. This is underpinned by broader-scale baseline research conducted by the Australian Geological Survey Organisation (AGSO). AGSO's work makes an important contribution to understanding the basic structure and features of the continental margin. It also fulfils our obligations under UNCLOS to define Australia's legal continental shelf. AGSO has recently been competing for business with some commercial seismic survey operators. There is concern in the industry that unless AGSO costs its services on a fully commercial basis, it may reduce the availability of services and leading edge technology from private operators in future.

Case study

Managing by outcome, not prescription: whales in the Otway Basin

Several years ago, controversy raged about the alleged adverse impacts that seismic surveys in the Otway Basin, off the Victorian coast, would have on the calving of the Southern Right Whale.

Instead of imposing restrictive regulations on the petroleum industry or excluding it, the Australian Nature Conservation Agency sat down with the company concerned to identify the risks and how they could be mitigated.

The company decided not to conduct seismic activities during the whale migration period, even though whale numbers were increasing and there appeared to be no obvious impact of seismic work on numbers. Further research has also been initiated by the company to improve understanding of whale behaviour.

The cooperative approach led to a mutually agreeable outcome between the parties consistent with sustainable development. A better understanding of the patterns of whale migration and breeding may allow these guidelines to be further refined, based on a clearer knowledge of the risks and impacts involved.

The opportunities for growth in the industry remain very positive and the rewards substantial. However, a range of factors will ultimately influence the industry's overall performance. These include:

In addition to the benefits of oil and gas production, the development of internationally competitive local engineering and supply industries also provides considerable benefits to Australia. A recent Austrade study has highlighted the export potential of firms within the supplying industries although international competition is strong in this area.

Shipbuilding

Key issues

Many shipbuilding industry development issues appear to be covered by existing consultations between the government and industry groups such as the Australian Shipbuilders' Association and the major defence shipbuilding contractors. Nevertheless, AMISC wishes to emphasise the importance of these consultations, particularly those on:

AMISC also highlights the impressive achievements in the industry to date, particularly in the production of high speed aluminium vessels. There is considerable potential for the industry to build on this strength. There are also likely to be significant benefits in strengthening ties between the civilian and defence segments of the industry.

In the case of civil shipbuilding, the industry has existed in Australia since 1789, and is now just emerging from one of its most significant and dramatic transformations. The industry has moved largely into a few specialised niche areas and this has been highly successful. The industry has stopped building steel container ships and bulk carriers. It now concentrates on the large high speed aluminium vessels such as car and passenger ferries and large luxury motor yachts.

The shipbuilding industry in Australia is highly export-oriented. More than 80 per cent of civil production is exported and the industry supplies between a quarter and a third of the world's high speed ferry market. A few firms still build in steel, but for specific areas such as fishing vessels and offshore service vessels for the oil and gas industry.

The industry is in a strong position to build on its past successes. The Australian Shipbuilders Association has a Strategic Plan which aims to increase exports to $1 billion by the turn of the century. This will require average annual growth of about 25 per cent until the year 2000. Growth in recent years has been around 20 per cent a year. Of course, continuing growth is not assured. Existing and newly emerging international competitors are working hard to take market share from Australia.

The industry's growth will depend on staying ahead in innovative design and construction and maintaining high standards of quality and cost competitiveness. The industry will also need to investigate and target new niches and applications. These include transferring the high speed passenger designs to cargo applications or further investigating the longer term prospects and implications for new developments such as 'flying boats' or wing-in-ground effect craft. Two initiatives are relevant:

New product development will require the further encouragement of innovation and R&D, in addition to a supply of well trained and skilled technical supervisors and managers. Innovation can be enhanced by stronger links between the industry and research agencies, in the latter case including the Australian Maritime Engineering Cooperative Research Centre and higher education institutions which receive government support. In terms of skills, naval architecture, marine engineering and other specialised skills are very important, and are also very difficult to replace if lost.

Another important factor influencing growth may well be the highly subsidised nature of the industry internationally. An OECD agreement to remove these subsidies has recently been negotiated among major shipbuilding nations not including Australia. The agreement's effectiveness is currently being examined although the agreement's entry into force has been delayed by uncertainty about whether or not the US will ratify it. Australian shipbuilders presently receive a modest subsidy in the form of the shipbuilding bounty. The bounty has been extended to the end of 1997 and no decision has been taken on support measures after this.

If the OECD agreement is finally implemented and proves effective, the economics of production of large traditional steel ships may improve for Australia in relation to our competitors, although it is not clear whether or not such and industry would develop here.

International standards are also important for the industry. These are generally set by classification societies. There is concern in parts of our industry in relation to some flag states setting their own rules.

Significant growth opportunities and potential for cost-savings exist in the supplier chain for the shipbuilding industry since many inputs are imported at present. The industry and the national economy will benefit significantly if more goods can be supplied locally through more effective networks and capacity in the domestic supplier chain. Promising developments have already been seen in this area. One example is the replacement of imported passenger seats with locally produced high quality products.

While civil shipbuilding has a high profile, the dominant area of shipbuilding in Australia at present in terms of value, is defence construction. This still mostly involves steel vessels.

The potential for growth in defence shipbuilding will largely depend on our ability to win export contracts and diversify, although historically domestic government contracting has been the primary source of business for defence builders. Tempering these prospects, it is anticipated that defence building will represent a smaller share of the international shipbuilding market in coming years. The industry and its supplier chains would appear to be highly efficient and cost-competitive internationally so, on the supply side at least, the potential for exporting exists.

To be a successful competitor in export markets, the industry will need to extract the most from Australia's domestic design capability. This is a challenge because of the difficulty in providing a consistent supply of work to maintain or further develop such a capability. At present, Australia's design strength is limited to smaller vessels such as patrol craft. Design and research capabilities will, nevertheless, be important in developing hull shapes and instrumentation suitable to the unique, warm, shallow waters found around much of the coast in northern Australia.

The extent to which Australia should rely on foreign design capability is a significant area of debate. Some suggest that we don't have a choice because of the size of our industry and because substantial ongoing government funding would be needed. Others point out that we won't succeed in a field of very limited international competition unless we have our own design capability since most foreign designers are employed directly by competing foreign shipyards.

There is some export activity already including small specialised vessels for surveillance and interdiction, and landing craft.

A major report on the Australian industry, The Australian and New Zealand Ship Construction and Repair Industry, was completed in 1995 for the Department of Defence. Its recommendations are being considered in the wider context of defence industry planning. The recommendations suggest ways of ensuring the long term sustainability of the industry. These include improved procurement planning and contracting and more realistic risk sharing between the government and the prime contractor.

There are clear distinctions and dichotomies between the civil and defence building industries. However, there is great merit in encouraging greater links and cohesion between the two to enhance the capacity of both to retain and develop skills and critical mass in design and construction. This can be achieved, in part through greater efforts to adopt commercial technologies and vessel types in the defence area and increased use of commercial support for warship maintenance and repair.

Shipping transport services

Key issues

The likely growth in shipping demand worldwide and Australia's own heavy dependence on foreign sourced shipping services means there is considerable potential for growth in the local industry. This growth depends on reducing the current high cost structure of the Australian flagged fleet. A continuing high level of commitment by governments, the industry and labour unions is needed to address these cost competitiveness issues. Cost reductions will improve growth prospects for both international and coastal trade.

There should also be further investigation and development of new innovative marine transport services such as those based on Australia's aluminium shipbuilding skills. These could be the basis for new, high speed cargo services. Continuing cooperation will be necessary between stakeholders including shipowners and builders to pursue opportunities, with help from governments where appropriate.

As an island nation, Australia depends on shipping, particularly for export of bulk primary commodities. We are one of the largest users of shipping in the world. Domestic and international trends in shipping are likely to have a significant impact on our economy. However, Australia is currently not a major shipping provider itself.

Globally, there are strong prospects of growth in shipping demand, particularly in the regional market. Australian shipping service providers have the potential to share in this growth but our chances of realising this potential are uncertain. Our industry currently has difficulty competing for domestic demand for these services and a large portion of our shipping needs are provided by overseas ship owners. An important factor here is the comparatively high cost internationally of operating Australian vessels. The Bureau of Industry Economics completed a report in July 1995 on coastal shipping in Australia. Key findings, which are largely applicable to Australian-flagged international trade vessels as well, are:

labour costs are the most significant contributor to the comparatively high cost structure; and
ancillary charges such as fuel, maintenance and repair are also relatively high in Australia and weaken our competitive position, although these are less of a problem in international trades because of access to overseas fuel and repair facilities. In the case of repair, Australian yards are apparently competitive in more technically demanding repair work but not in that requiring unskilled labour where a number of Asian ports located on major shipping routes have a solid advantage.

On the other hand, some costs are comparatively low in Australia. This includes the net cost of government charges. However, the industry says the low net cost will no longer exist when the capital grants provided for Australian shipowners who purchase new ships ceases from 1 July 1997. Continuing areas of concern include:

Comparison of the competitiveness of Australian-operated shipping with overseas operators is complicated by the sometimes sub-standard quality of overseas crews and vessels, which drives down costs. However, the evidence still suggests that Australian vessels are relatively costly to operate. This requires ongoing action if Australia is to increase its share of world shipping. A great deal of work has been done already to improve cost competitiveness.

One solution suggested in response to the draft of this strategy was to decouple provision of Australian shipping services from the use of Australian-flagged vessels. It was argued that the Japanese shipping industry operates on this basis.

There is also excellent potential for Australian industry growth in coastal shipping. But again there are questions about the industry's ability to compete. Australia has a cabotage policy like that in many other countries although the government has indicated this will be wound back. Cabotage, in effect, restricts the operation of foreign vessels on our coastal trade routes (but only for interstate, not intrastate, trade). Australian coastal shipping, therefore, is currently not competing with foreign coastal traders. Instead it competes with other domestic transport such as road and rail.

Foreign vessels do have some avenues for operating in our coastal trade. One contentious area is the use of 'single voyage permits'. As their name implies, these permits are issued on a single voyage basis. The Act under which they are issued requires that the Commonwealth Department of Transport ensures that no Australian-licenced and crewed vessel is available for the required voyage prior to issue of a permit to an overseas operator. There has been a growth in use of these permits in recent years which is of concern to the Maritime Union of Australia. Australian shipowners also have an interest in ensuring that the permit system is not abused as this would take business from them. Nevertheless, Australian shipowners and other users argue that these permits are necessary to meet demand that cannot be provided by the local industry.

Coastal shipping provides a very energy-efficient alternative to road and rail transport, resulting in lower fuel costs and much lower greenhouse gas emissions per tonne of cargo moved. The arguments for an enhanced coastal shipping industry look even better when the large infrastructure costs associated with road and rail construction and maintenance are considered. These infrastructure costs are often government subsidised. Ships do provide a well-established alternative to road and rail elsewhere in the world, particularly for long haul movement of road trailers which can be directly loaded onto vessels.

Coastal shipping's major disadvantage compared with road transport is the need for multiple handling. With coastal shipping, goods must be taken to port facilities by road or rail, handled through the port cargo system, shipped to the port of destination and then go through the reverse process at the other end. This inevitably affects reliability and cost. Reliability is an important issue for customers and market surveys show it is a primary factor in their choice of transport.

Generating increased growth in coastal shipping will therefore require exceptionally good performance at all points in the transport and handling chain. Waterfront reform and efficiency improvement are very important and have a high priority in the government's microeconomic reform process. In the case of waterfront performance, there are some recent indicators. The Bureau of Industry Economics released a report in August 1995 titled Waterfront 1995 International Benchmarking. Our performance is mixed:

As noted, part of the problem for container handling efficiency relates to port equipment. Throughput at most Australian ports is sufficiently low by international standards that it may be difficult to justify the capital cost of improving this equipment.

Another less substantial problem is the sometimes inconsistent requirements of different State jurisdictions for vessel regulations, for example on survey and pilotage. Cost-efficiency could be improved by greater consistency across jurisdictions. Some progress is being made. The Marine and Ports Group of the ministerial-level Australian Transport Council is addressing a range of issues in this area. Action has also been taken on maritime safety aspects between Commonwealth, State and Territory governments. A Steering Committee and full-time office has been established to address inconsistency in maritime safety regulations.

The quality of service, for example delivery times and reliability, will be another factor influencing growth prospects for both coastal and international shipping. Waterfront and vessel technologies will both be important here. New ship technologies offer potentially exciting opportunities, for example through the extension of the high speed ferry technology to cargo applications. This could create a completely new transport niche. Internationally, a number of firms are developing these ideas, including several in Australia. A study of cargo demand has already been carried out as a joint government/industry initiative.

Supporting and 'high technology' industries and services

Key issues

A number of key 'horizontal' technologies or intermediate inputs are important to marine industry development. Many of these fall under the category of 'high technology' marine industries and include:

Further development of these industries has great potential to provide more timely and efficient products and services to other marine enterprises. Such development would lead to import replacement and new export industries. Success in further developing supplier and support industries will require an ongoing commitment by both government and private sector purchasers to articulate their needs and work closely with existing or potential suppliers.

The key issues highlighted in the section on emerging industries are relevant here.

The development of EEZ resources will be underpinned by a number of key services, products and technologies that have considerable potential for further development. Competitiveness and efficiency in these areas will improve the overall competitiveness and efficiency of the marine industries.

By their nature, support industries and high technology industries overlap. Categorisation as a support industry can be somewhat arbitrary.

The export potential of supporting and high technology industries is substantial. Many other nations are also actively addressing the largely untapped potential of their EEZs. There will be a concurrent rapid demand worldwide for the technologies and skills necessary to manage and exploit marine resources. If Australia can take a lead, even just in niche areas, it stands to profit very substantially.

Many of the support industries and services fall under the category of high technology marine industries. These industries were defined in a 1985 paper by H. Kite-Powell of the Woods Hole Oceanographic Institution, Maryland USA as including:

For the purpose of this discussion, AMISC broadens the definition to include a range of other services such as marine management, scientific, social and economic research and legal services relevant to marine industries and development.

Worldwide, these industries are worth tens of billions of dollars. Some are particularly significant. Anti-fouling technology is very important to many marine industries as biofouling, or the growth of marine organisms on structures, is a major problem. Its impacts are felt widely in industries including shipping, aquaculture, and offshore and coastal engineering. Environmentally friendly preventative or treatment systems are needed to replace traditional products such as organo-tin compounds.

Most marine industries rely on instrumentation, communications and navigation equipment and services. Australia is a significant importer of these. The world market is very substantial and the development of an indigenous industry should be investigated further. Most ventures would have to be export focussed to achieve the necessary economies of scale.

Engineering services and fabrication are also key inputs for many marine based industries. Even the design and operation of fishing nets can require complex engineering in the form of hydrodynamic modelling and analysis. Some industries are particularly reliant on advanced engineering, for example the offshore oil and gas industry. Coastal engineering, involving an understanding of coastal dynamics and the design of structures, is a rapidly growing and important category.

A highly capable and diverse environmental management and consultancy industry has grown in Australia along with political and community concern about environmental issues. Improvements to government policy and decision making on marine development as outlined in this Strategy, could provide an international marketing edge for private consultants as well as the government agencies that have built up this capability. For example, Australia is well-known internationally for development and management of marine protected areas. Some Australian consultants are already exporting services. There may also be opportunities domestically and overseas in other environmental service and technology areas such as oil spill equipment, modelling and management if Australia can demonstrate a competitive advantage in these areas.

Aquaculture technologies and handling of marine organisms in controlled conditions is likely to emerge as an important enabling technology in many areas from biotechnology to live fish marketing, as well as in its more direct application to aquaculture.

The Council does not wish to comment in detail on marine and maritime legal services except to note that they are a significant and specialised area. They provide important support for industry development.

Last but by no means least, high quality research, education and training will be critical to future industry development and marine management. These services underpin all marine industries and their support sectors.

Research is essential to both support the development of new and existing industries and to monitor and manage industry impact on the environment. Research in this context is not limited to scientific research but also includes the social sciences as these are critically important to many aspects of marine development and management. Research is dealt with more fully in the following section Options for the future. AMISC has responsibilities to advise the government on research needs for industry development and the effectiveness with which these needs are met. Australia has an excellent base of capability on which to build. There is also a variety of problems that need consideration. For example, lack of coordination between public sector research providers was highlighted in a 1993 report to the government Organisation of Marine Research.

Education and training will be essential for further industry development almost universally. Excellent sectoral initiatives in tourism, and shipping and shipbuilding have already been implemented. These should be copied or further developed for other industries as appropriate. Eventually, AMISC hopes that broader education and training opportunities that cut across existing industries will become more widespread, stimulated by and building on the big picture approach taken by AMISC to marine issues. Initiatives such as the Centre for Maritime Policy at the University of Wollongong are already making a valuable contribution to understanding broader marine management issues.

Tourism and recreation

Key issues

The major issues requiring attention, are:

Marine tourism and recreation are very substantial industries although the economic data on them are based on estimates. Tourism and recreation are generally experiencing rapid growth both in Australia and worldwide. This, combined with the size of the industry and Australia's diverse and often pristine marine environments, makes the outlook for tourism and recreation very positive.

Marine tourism and recreation include a very wide range of activities such as recreational and sports fishing, surfing, cruise shipping and boating. There are many business opportunities in providing goods and services within Australia to both local tourists and those from overseas. However, there are also opportunities to export goods and services directly. An example is recreational boating and marina development in which Australia has strong capabilities.

A number of industry segments are showing especially good growth. These include cruise shipping and ecotourism. Australia does not have a significant domestic cruise shipping industry but efforts are underway to tap into rapidly growing international markets. The Commonwealth Government, for example, has released a detailed Cruise Shipping Strategy and the Tourism Council Australia is also encouraging development. The Tourism Council notes that Australia has to improve its competitiveness in general waterfront infrastructure, quarantine and immigration procedures, industry regulation, port waste handling facilities, fuel costs and other costs to improve the chances of success.

Some offshore markets have particularly strong potential as a source of tourists to visit Australia. The Asia-Pacific region, with the growing affluence of its population, is one such market and is already a substantial source of inbound tourists.

Domestically, the further development of marine tourism and recreation is very closely linked with both access to suitable sites on land and in the water and the maintenance of these in an attractive and 'healthy' state. This will depend upon resolution of management issues in two areas related to ecologically sustainable development:

improved basic information about marine environments, including biological and physical characteristics, to underpin industry planning and management decisions. Data, particularly on biological systems and their dynamics, is often inadequate; and
resolution of access issues, including multiple use access, through development of more transparent, consultative and 'user-friendly' management systems.

In multiple use management, the interests of tourism operators and others may often be indirect. They may relate, for instance, to the inherent wilderness value of an area of coast or reef, rather than the need to undertake a defined activity in a defined area of water. Any management system must be flexible enough to take account of indirect, intangible values.

In many cases, government policy and decision-making systems create difficulties for the industry. This is primarily because there are often many agencies involved in regulation, decision-making and planning. This leads to inconsistency, lack of clear lines of responsibility, and approval processes that take longer than they should.

Management systems should encourage responsible behaviour among all stakeholders, for example through development and adoption of sustainable best practice by industry stakeholders. Another management issue of specific interest to the tourism and recreation industry is the application of 'user' charges. The industry believes these should only apply where:

Because of the labour-intensive nature of the industry, appropriately skilled personnel will be central to further development. The National Tourism Industry Training Committee Ltd, trading as Tourism Training Australia, has been established as the leading industry training network. It was established in cooperation with unions, the Federal Government and industry associations.

Case study

A strategic approach to training: Tourism Training Australia

Tourism Training Australia was established by the Federal Government and the tourism industry to encourage the supply of well-trained and skilled people to meet current needs and future growth in the industry.

In cooperation with the government, unions and industry associations, Tourism Training Australia progresses training in all industry segments and promotes the benefits of training. It assesses and provides advice to governments and educational institutions on industry training needs, strategies and plans. It also coordinates the development of new initiatives involving industry, the government and the education system.

Tourism Training Australia has over 40 specialist staff throughout Australia, supported by a head office in Sydney.

There is a wide range of more specific issues that will also affect prospects for the industry. One is access by the industry to the Diesel Fuel Rebate Scheme. Fuel costs are significant for some businesses in the industry but the industry is currently not eligible for the rebate. Some issues are common to other marine industries, for example the impact of exotic marine pests introduced through ballast water and other means.

Section three: options for the future

This section suggests some ways of addressing the wider issues identified in the Strategy.

AMISC has an advisory role and the comments here should be read in that context. They are intended to be helpful and constructive, not prescriptive.

In AMISC's view the most important issue in this Strategy is regulation and control of marine industries. A primary difficulty is the fragmentation in the current regulatory system involving many different agencies and all levels of government, leading to confused lines of responsibility and inconsistencies. These problems are a symptom of inadequate government policy and decision-making systems.

Another important issue is the lack of basic data about our marine environment. To both tap and manage our marine resources, we must first know what they are. However, little is known about the physical and biological characteristics of much of Australia's marine claims.

Marine research is also important, and in many cases is also linked to marine data collection and management. AMISC's terms of reference charge it with advising the government on marine research needs related to industry development. Research is essential to underpin long term development in virtually all marine industries.

Finally, a general issue is recognition and the profile of marine industries in the wider community and in political circles.

While there is no specific heading on training and the skills base in this section of the Strategy, AMISC repeats it earlier comments on the significance of this issue to industry development. Individual industries and firms, in collaboration with government, will need to devote continuing and substantial attention to this topic because of its importance to sustaining future growth and competitive advantage.

Regulation and control of marine industries

Governments, as custodians of the marine environment and its resources, have a responsibility to ensure industry development meets government and community objectives. This generally means development must be ecologically sustainable. This is not in question. However, there are significant weaknesses in the current regulatory and planning regime affecting the approval of marine projects and their ongoing operation.

These weaknesses impede both development and the application of sustainability principles. The main issue is the fragmentation of policy and decision making across many agencies and levels of government. Some of the consequences are:

The lack of coordination and fragmented regulation has been highlighted before as a major problem in marine management, for example in the Resource Assessment Commission Coastal Zone Inquiry in 1993.

The current regulatory and decision-making system is also characterised by an emphasis on compliance with detailed processes, rather than achievement of more broadly-stated outcomes to achieve environmental protection. Both approaches still involve quantifying standards to be met and government monitoring but in the outcome-driven approach, there is much greater flexibility in how technology is used and how the outcome is achieved. For example, regulations that specify a certain type of effluent treatment technology immediately show their weakness when an existing or new technology proves more effective. It is inappropriate for regulators to specify that type of detail.

Case study

Performance-based building codes

Regulators in many areas of government are now recognising the value of performance, or outcome-based codes. The development of an Australian Building Code is but one example.

The code, known as BCA96 for short, actually takes two approaches. One is a full performance-based standard which specifies how structures and components like fire doors and the like should perform. Builders and construction firms are free to use any suitable techniques and materials to meet the standard.

The second alternative approach outlined in BCA96 is an older 'prescriptive' code which specifies building techniques and components in detail. This detailed specification is based on generic building designs and is generally conservative to cover worst-case scenarios. The prescriptive part of BCA96 is 'deemed to satisfy' the performance standard. It is also optional and is in place for those who don't have the skills to design new solutions to building problems in order to meet the performance code. It recognises the relatively limited technological capability available to some segments of the building industry.

Application of the performance-based code is estimated to save the industry 10 per cent, or around $3 billion annually.

BCA96 was developed by the Australian Building Codes Board in a highly consultative process with the industry, States and territories. It is due to be adopted by all States and territories by July 1997.

Approach

AMISC recognises that current government policy and decision-making systems have, in many cases, evolved over considerable time. It may be undesirable or impractical to discard them and start anew. Nevertheless, there are great benefits in developing approaches that are more transparent, coherent and outcome focussed. The Council is proposing a concerted effort by responsible agencies to shift the approach to management of the marine environment in this direction. In all cases, quality assurance should be integrated into any approach. Proper assessment, sharing and management of risk is also essential.

The regulatory environment for marine industries should aim to ensure:

In essence, governments and industry should work in partnership with each other, and with other key stakeholders, to define issues and reach decisions. Such an approach would develop mutual trust, respect and ownership of decisions. Examples of this type of approach can be found in some of the case studies in this Strategy.

Further work is needed to develop and apply systems consistent with the above. Some has already been done. See, for example Risk, uncertainty and ignorance: policy process and institutional issues, by Stephen Dover, Centre for Resource and Environmental Studies, Australian National University. This is a paper presented at the Fenner Conference on the Environment, Canberra, 13-16 November 1995.

Of course, the recommended approach would also have great benefits in many other areas of government policy and decision-making. Implementation could involve better coordination and information flow between existing agencies, transfer of responsibilities between agencies on a temporary or permanent basis, or new institutional entities such as 'one-stop-shops' or 'clearing houses' to act as a single, responsible point of contact for industry. This approach needs to apply through the entire life cycle of projects or activities, not just their initiation.

In order to achieve sustainability, policy and decision-makers need to take a 'whole ecosystem' approach. In general, this will mean some kind of area-based approach. The definition of the area or region to be managed will be important. This should be driven as much as is practicable by the biological and physical interactions in the marine areas in question. Zones where minimal interaction occurs should be used as area boundaries. In some marine environments much more basic data will have to be collected before adequate boundaries can be defined.

It is pleasing to see progress in implementing the 'whole ecosystem' integrated approach in some jurisdictions. For example, AMISC's attention has been drawn to an integrated marine environmental study for the Carnarvon Basin supported by the Western Australian Government. The Carnarvon Basin is of great interest because of large oil and gas deposits as well as the existence of tropical reef systems which are attracting increasing tourism.

Recommendation

Governments at all levels in Australia should regularly and frequently review their policies and decision-making processes affecting marine industries, and work in consultation with industry and other interested parties to achieve this. Wherever possible, they should ensure that:

In many cases achieving this will involve resolution or rationalisation of responsibilities and processes with other parts and levels of government.

Ecologically sustainable development

The principle of ecologically sustainable development is not well-defined and often not reflected in legislation in Australia. Immediate action is needed to remove confusion, uncertainty and inconsistency in interpreting and applying ESD. Clearer definition and articulation of ESD must involve consultation with stakeholders, and may require significant research effort to develop workable and clear specifications. Further development will also need to take account of existing government legislation, strategies and agreements.

Recommendation

Governments throughout Australia should develop and introduce, as a matter of high priority and in consultation with stakeholders, consistent legislation to define and apply ecologically sustainable development principles to marine industry development, where this has not already been done.

Government-industry partnership

A strong government-industry 'partnership' approach to policy and decision making also has major benefits for industry development through government purchasing. This applies to all industries. It is particularly significant in the marine industries because of high levels of government procurement, for example in defence and research.

In major government purchases such as defence vessels, a strong initial engagement between the government and industry can help define project requirements. It allows a greater lead time for 'tooling-up' in local industry and integration of both local and overseas technology into planning and products. In this way, imports can be replaced by domestic industry production. Major items like warships require through life maintenance and servicing. If this can be done by domestic industry, costs and response times can often be reduced and import bills further lowered.

A partnership approach to government purchases of minor items can similarly lead to import replacement and, often, to development of export-oriented industries. Unless government purchasing needs are clearly articulated, industry cannot be expected to readily develop products or services to meet them.

The issue of government purchasing and its impact on industry development has been the subject of major reports, the most recent being Australian Government Purchasing Policies: Buying our Future, also known as the Bevis report. The government has responded to this report, accepting the majority of recommendations including the establishment of a National Procurement Board. Some related initiatives have also been announced. For example, ISONET Ltd has been formed to help Australian suppliers gain better access to government purchasing through the Industrial Supplies Office (ISO) network.

Implementation of the strategy

A champion or leader will be needed to drive development of a new 'partnership' based management approach to marine development. The Council has looked at some Commonwealth coordination mechanisms that may be relevant.

Within the government, there has, until recently, been no central coordinating group with overall responsibility for Commonwealth marine activities. There are more informal or limited groups. These include:

the marine industries group in the Department of Industry, Science and Tourism which supports AMISC.
the coastal and marine group in the Department of the Environment, Sport and Territories (DEST) which has an environmental focus. It is responsible for the Commonwealth Coastal Policy announced in the May 1995 Budget.

Heads of (Commonwealth) Marine Agencies (HOMA) which provides coordination across major Commonwealth marine science and technology agencies.

Between the Commonwealth and other levels of government there are various committees and fora, notably a number of Ministerial-level groups. They include:

Some intergovernmental agreements are also in place, such as the Intergovernmental Agreement on the Environment.

However, there is now in place one important coordination initiative on government ocean responsibilities. The Federal Government has committed to develop a national oceans policy. The oceans policy will be developed by a group drawn from Federal Government agencies with major marine responsibilities. The convenor of the group is the Department of the Environment, Sport and Territories and the underlying theme of the oceans policy is ecologically sustainable development.

The scope of the oceans policy is not yet clearly defined, but it is likely to include a very wide range of issues associated with marine management. The process for developing it is similarly not yet finalised but will involve consultation with a range of groups including States. This Strategy will be one important input to the oceans policy group. The oceans policy has great potential to address issues raised in the Strategy but AMISC emphasises that options and solutions must be developed in a consultative way with affected parties. AMISC intends to continue promoting its views to the oceans policy group and encourages others to do so. The contact is Mr John Gillies, telephone (06) 274 1432.

Ultimately, the oceans policy work must lead to action to address the marine management problems highlighted in this strategy and by others. This must involve a commitment by all levels of government. AMISC believes that COAG would be an appropriate forum for expressing such a commitment and endorsing an action agenda.

Recommendation

The Commonwealth Government should place high priority on the development of policies consistent with this Strategy and ensure that such policy development involves the widest practicable consultation with industry and other stakeholders. For example, the issues raised in this strategy should be an important focus for the government's national oceans policy and the national marine science and technology plan. A commitment to translate policies into action agendas must also be a priority and should involve, in the first instance, a high level of commitment through the Council of Australian Governments (COAG). AMISC would welcome a government response to these recommendations.

AMISC is aware of efforts that have already been made to work across levels of government or industries. There has been progress in the management of fisheries across jurisdictions through the Offshore Constitutional Settlement which defines the respective responsibilities of the Commonwealth and the States. Some co-management arrangements are in place and this approach might be applicable in other marine management areas.

In some cases, it may be possible to develop new management approaches from existing industry sector management systems. For example, the Tasmanian Government is implementing new legislation on aquaculture, the Marine Farm Planning Act. This Act introduces area plans which are developed in a highly consultative process aimed at reaching agreement on sites suitable for aquaculture operations and securing medium-term access to these. The principles and objectives of this approach align closely to those AMISC supports.

Consultative and properly integrated management approaches will not only be more effective, they will also help to identify and rank research needs and more forcefully articulate them.

Basic data

Basic data on physical and biological marine systems is essential in assessing new resources and opportunities for virtually all marine industries and to manage their development. There are also users who require real-time data for operational activities. Users in the latter category include oil spill response teams, shipping traffic routers and weather forecasters. However, the large size of Australia's marine economic zones and the cost of research means even though considerable work has been undertaken to date, there are substantial gaps in data.

Under the UN Convention on the Law of the Sea (UNCLOS) Australia has responsibilities to advance knowledge and ensure sustainable utilisation of EEZ resources, and to protect the marine environment in its marine zones. The Convention gives us first right of access to resources in our zones, but if we do not use them we are required to negotiate access by others. Hence there is some external pressure for action. We cannot deal with resource determination and management only when the time suits us.

More immediately there is the cost of missed opportunities because data may not be available to allow project risk or viability to be adequately assessed. Project proponents and financiers will simply not commit resources if the uncertainty is too high.

Marine data is also important outside the marine sector, for example in weather and climate prediction.

It is important that existing research and data gathering by different agencies and groups is properly coordinated to avoid duplication and maximise consistency and utility of the information collected. Standards for the types of data and how they are collected and presented are part of this. It has also been suggested that significant amounts of data have already been collected, but a substantial amount of it is not published or archived in an accessible form.

Policy questions also arise, such as who should pay for data collection and how access to publicly collected data should be costed. A policy on access costing called Commonwealth Public Interest Spatial Data Transfer has been developed by the Commonwealth Spatial Data Committee (CSDC). It covers data collected in the public interest and says the cost should be based on the marginal cost of providing access to and copying of the data. The costs of collecting and updating data are not to be included. The CSDC is also developing a list of rights and responsibilities of data 'custodian' agencies.

Data costing is a complex and somewhat subjective issue that requires policy makers to both encourage data use and keep the cost on the public purse to a minimum. Encouraging data use is important because the best quality management or business decisions will necessarily involve considering the most comprehensive relevant data.

Considerable data is also collected by industry and held in private collections. There is a need to examine ways of making this data more accessible especially when the passage of time or other factors have reduced the commercial sensitivity of such data.

Marine scientific data is itself part of the wider national marine science and technology system. The Federal Government has begun development of a national marine science and technology plan which should consider basic data.

Approach

AMISC suggests that a National Marine Data Program be developed and be provided with appropriate resources. The program needs to be included in the national marine science and technology plan which is currently being developed. There is a significant number of existing groups that can and probably should play a role in such a marine data program and which have already been active in this area. AMISC does not attempt to mention them all in this discussion but does refer to those with greater prominence, particularly at the national level.

A National Marine Data Program would aim to focus the energies of the numerous agencies, committees and programs. One group that appears well placed to play a central role is the Marine Data Group (MDG). The MDG is a joint body co-sponsored by the Heads of (Commonwealth) Marine Agencies, which represents the major Commonwealth marine agencies, and the Commonwealth Spatial Data Committee (CSDC). The MDG has been working with a range of groups on national marine data requirements and databases.

There are three technical advisory groups (TAGs) currently under the MDG. All have a role in the data program and one of these, the Technical Advisory Group on Ocean Data Management (TAGODM), has played a prominent role to date. The other two TAGs are involved with biological and fisheries data, and geophysical and geochemical data. Two further groups on socio-economic aspects and marine chemistry are in planning.

While federal agencies are well represented in the MDG work, State agencies, higher education, consultancies and industry are not as strongly represented. The MDG is currently supported solely through the resources of its sponsors. More secure and independent resource support will assist its capacity to grow and become more representative. Fortunately, there is growing interest among State groups on coordination and, in particular, the work by the MDG. Involvement is expanding and AMISC encourages the widest participation. This will help ensure that all interests are addressed, and that databases are better coordinated and integrated, avoiding duplication of effort and the wasting of scarce resources.

As already noted, the MDG is by no means alone in the field of ocean data in Australia. Other prominent organisations or groups exists. Some of these groups are referenced later in this discussion. AMISC suspects that the issue of coordination and pre-eminence among these groups needs further attention but this topic is not the subject of detailed discussion here.

Recommendation

Governments should recognise the importance of adequate basic data for sustainable industry development and environmental management. They should consider development of a National Marine Data Program, based on the existing work of the Marine Data Group (MDG) and its networks. The program should be developed in the context of the national marine science and technology plan and cover data collection and management issues including:

Adequate resourcing of any data program will be essential. Consistency of resourcing over long time scales is important. High priority should be placed on this by governments, data collectors and processors.

AMISC notes the detailed work of the MDG and others towards a better coordinated and user-oriented marine data system. Without pre-empting a more detailed consideration, the Council believes the following elements will be important in such a program.

One of the first steps should be an inventory of existing information, databases and capabilities:

Some information is already available at the Commonwealth level, but a survey will be necessary to identify the extent of state and industry databases. The existing Commonwealth work is in the form of a Marine and Coastal Data Directory of Australia (known as the 'Blue Pages') and includes information collected by groups outside the Commonwealth. This is still under development and is being done by the Australian Oceanographic Data Centre (AODC). It will also be important to incorporate local government agencies and community groups that have data records. Quality assessment will be important in looking at some existing data.

It will be valuable to locate and encourage proper archiving of and access to data that has previously been collected, but not yet 'published'. Attention will be required from both public sector researchers as well as private firms that may have data that no longer offers them significant competitive advantage and can therefore be made more widely available.

There should be networking of existing key players throughout Australia, including Commonwealth, State and local authorities, academic institutes, industry and consultancies:

An effective and adequately resourced strategy for data management must exist:

There must be continuity in existing key parameter collection. Unfortunately data collection and management is sometimes a casualty of budget cut backs. Data which is genuinely in the national interest, should be untouchable and properly maintained:

Priority areas for data collection should be considered systematically. Some stakeholders have already suggested priorities including:

As noted, a range of groups with responsibility for data collection or management already exists. Some of those drawn to AMISC's attention are:

Networks, links or cross-membership already exists between the range of groups interested in marine data. An effective and well-coordinated marine data program will require continuing effort to ensure that the various groups strengthen their links and coordination mechanisms with one another and with data users.

AMISC has an ongoing interest. Its role would be to continue promoting the need for comprehensive data to government and articulating the aspects it sees as important:

Marine research

Marine research is essential for the long-term development of marine industries. It is important in providing technologies directly related to industry development and in helping to predict and sustainably manage their impact on the marine environment. It also has wider importance, for example in weather and climate prediction and global warming research. AMISC has been specifically charged in its terms of reference with advising the Commonwealth Government on aspects of research that relate to industry development.

This Strategy is focussed on domestic research effort, and specifically public sector providers, although AMISC also notes the importance of various government programs which support domestic private sector research and development, such as the R&D tax concession. Research from overseas sources will remain important in the future, as it has generally to date.

The ensuing comments make reference largely to marine science and technology. AMISC still recognises the importance of other types of research such as that covering legal and economic aspects, human resources and public policy. The comments below apply to all types of research.

For industry to be adequately supported by public sector research, the necessary infrastructure and resources must be available. There must also be processes at the micro and macro levels to ensure industry and other users of the research are adequately served.

Some previous reports have examined marine research in Australia. The Commonwealth commissioned a report on Organisation of Marine Research which was published in 1993. The report found a lack of coordination between the different public-sector research bodies and a lack of overall direction. This report recommended the formation of AMISC, albeit with wider terms of reference and greater resourcing than at present, to address this and other marine coordination issues.

A major presentation was made to the Prime Minister's Science and Engineering Council in December 1995 on marine science and technology and the implications of Australia's recently declared marine EEZ. Two AMISC members, Brian Jeffriess and Lesley Borowitzka, were involved in preparing the presentation. A publication was produced based on this presentation titled Australia's Ocean Age: Science and Technology for Managing our Ocean Territory.

In May 1995 the Industry Commission published its final report on Research and Development. This inquiry report looked at both publicly funded research and private R&D in Australia, and the schemes that support them. The Commission concluded that R&D is important to economic development and outlined its views on the rationale for government support.

Approach

AMISC will not make any specific recommendations at present on the level of resources that should be directed to marine research. This Strategy instead focuses on the mechanisms and management processes needed to ensure that industry and other users are able to adequately articulate and meet their research needs. More effectively fulfilling research needs is an essential element of the enhanced government-industry 'partnership' which AMISC is promoting to encourage industry development.

Ultimately, networks of research users and researchers will have to be strengthened, or established where they don't already exist. Only in this way can needs be effectively discussed and articulated, and research findings disseminated to the target audience.

AMISC endorses wider principles that should be applied to the funding of research. The Council strongly supports an emphasis on research to support users of the marine environment, including industry and government decision-makers. AMISC also supports continued resourcing of strategic and basic research, although the balance between these areas and more applied research needs to be frequently reviewed by governments and research providers, in consultation with industry and other users.

This Strategy does not make specific recommendations on priority topics for marine research, but AMISC may examine that issue in the future. Nevertheless, some important areas of research will be apparent from the discussion earlier in this strategy of opportunities in specific marine industries. AMISC hopes this will help influence priorities in the research community. Brief mention has already been made about the importance of marine research outside the marine sector. As already mentioned, oceanographic research is very important for weather and climate prediction. Australia's weather and climate variability is strongly influenced by oceans. This influence is especially relevant to an arid continent such as Australia where drought and other weather phenomena have major economic and social impacts.

Other reports have listed priorities for research related to marine development. For example, the Ocean Outlook report outlines the research needs of various marine industries. The Resource Assessment Commission's Coastal Zone Inquiry reported on research needs for coastal zone management. Research aimed at supporting individual users, combined with an effective baseline data collection and resource assessment program, should underpin the sustainable development of both existing and emerging industry opportunities.

AMISC also notes that the Federal Government has committed to develop a national marine science and technology plan which will be important in articulating and implementing research priorities. Two AMISC members, Brian Jeffriess and Lesley Borowitzka, are also members of the working group which is overseeing the development of the marine science and technology plan.

More immediate actions have also been suggested to help provide industry with its research needs. A register or database of marine research is sometimes proposed and has, in fact, been implemented in the past. This may look appealing but may not be effective by itself. In many cases, users and potential users of research may not be aware that they need any research in the first place. Even if they do, they may not know what they need or what is feasible. This is a reflection of management weaknesses in some Australian enterprises. Governments enterprise development programs are addressing these management problems across industry as a whole.

Better coordination of Australia's marine research effort will also be important and can be achieved by a greater commitment to communication between various research agencies and groups. AMISC encourages this, although it is noted that no truly national, comprehensive group currently exists that could coordinate research. Nevertheless, more limited coverage groups exists and can make a valuable contribution, for example the Heads of (Commonwealth) Marine Agencies (HOMA).

At the national level, AMISC notes the existing collaboration between a number of major research bodies such as the Australian Institute of Marine Science, the CSIRO, and the relevant Cooperative Research Centres. These links should be further strengthened. Other research providers should also be involved. A similar commitment by research users or potential users to improve communication on research issues is also essential. Industry associations and more informal networks can help achieve this and Cooperative Research Centres such as the Australian Maritime Engineering CRC can play an important role.

Wider recognition of the significance of marine industries

Public and political support for marine industries and their sustainable development can be enhanced by improving awareness about them and the contribution the industries make to national social and economic growth. Awareness raising needs to include information about industry areas that are currently not well known, such as aquaculture, as well as improving information about more prominent industries.

The benefits of profile raising are difficult to quantify but are important, for example when:

Approach

AMISC strongly endorses the existing promotional and lobbying effort of associations and groups that represent various marine industries. The Council also encourages formation of industry associations or groups in industries which do not yet have them.

Many industry associations contribute to the preparation of important economic data about their industries, such as turnover and employment. This is very valuable in promoting the industry as well as having broader value for bodies such as AMISC. Unfortunately, comprehensive data is not available for all marine industries although this would be very useful to the Council and governments. AMISC strongly endorses continuing efforts by industry associations on data collection. There would also be merit in conducting a more general audit to fill gaps in current information although resources to do this are not identified at this stage.

AMISC also encourages the formation of networks or links between different industries to help take some of the issues identified in this strategy more forcefully to governments and the wider community. Cohesion on this level can not be artificially engineered but must rely on foresight and commitment by industry members and their associations based on the benefits they see from such an approach. This shift of focus away from a strictly sectoral one will not occur overnight but will be accelerated if by the development of multiple use marine management systems that will bring currently disparate industries into closer contact with one another.

Section four: industry sector performance

Current estimates value the marine industries at about $30 billion per annum (Table 1). The major marine industries are offshore oil and gas, and marine tourism and recreation. Marine tourism is also the largest employer of the marine industries. Total direct tourism employment is estimated by the Bureau of Tourism Research at 535,600 and a substantial portion of this would be in marine tourism, possibly around 35 per cent. Other major employers include fisheries (19,000; Australian Bureau of Statistics data) and offshore oil and gas (6,200; Australian Petroleum Production and Exploration Association survey estimates).

Caution is needed when interpreting the economic data below for marine tourism since this is only an estimate. Little specific data is collected on the marine component of the tourism and recreation industry. Marine tourism takes in a wide range of activities including scuba diving, game fishing, recreational fishing, and simply holidaying at the beach. The size of this industry is no doubt a reflection of the extensive and attractive coastline in Australia as well as major features such as the Great Barrier Reef.

TABLE 1: Australian marine industry performance

Total Production
Industry sector Domestic only($ millions) Exports($ millions) Imports($ millions)
Marine tourism & recreation (domestic) 13,200 a (not applicable) ? b
Marine tourism & recreation (overseas visitors) (not applicable) 2,010 a (not applicable)
Offshore oil & gas c 5,336 2,474 3,060 d
Defence shipbuilding 1,120 0 480 e
Commercial fisheries (aquaculture) f 374(118) 1,366(185) 666
Shipping g
coastal 600 (not applicable) 20 h
international 1,612 (not available) 8,323
Civil shipbuilding 97 i 550 i 246 j
Boatbuilding j 327 55 27
Total 22,666 6,455 12,822

Notes: All figures 1993-94 except civil & defence shipbuilding and fisheries which are 94-95, and offshore oil and gas which is a 1995-96 estimate:

a - Marine tourism is calculated as 40 per cent of all domestic tourism and recreation and 19 per cent of overseas visitor tourism (export figure) using data and methodology presented in Oceans of Wealth? (Australian Government Publishing Service, 1989)

b - Imports would represent Australian tourists who went overseas for marine tourism and recreation however, data is not readily available

c - estimate based on ABARE data(Australia’s Oil & Gas Resources, 1996)

d - In addition, Australia imported refined products valued at $658 million, and exported bunker fuel and ‘other petroleum products’ valued at $1,364 million.

e - based on an estimate of 30 per cent foreign input into the major building projects

f - Figures for the aquaculture component of the industry, where know, are shown in brackets.

g - export and import figures for shipping relate to the value of shipping services sold offshore by Australian ship operators or imported (provided by foreign shipping companies)

h - based on volume of cargo carried coastally by overseas operators under single voyage permits

i - Estimate from Ernst & Young Jervoise Bay Industry Estate Study 1994

j - Estimates from IBIS

As noted, the other major marine industry is offshore oil and gas. About 90 per cent of Australia's oil and gas production is sourced from offshore areas. This is a major industry in its own right as well as having strategic significance in reducing our dependence on imported energy.

Other significant marine industry sectors include:

Some of the smaller industries show great promise. One of these is civil shipbuilding which is currently growing rapidly and is highly export-oriented. For example, Australia currently supplies between one quarter and one third of the world market for high speed aluminium ferries.

Aquaculture (Figure 1) is already substantial and export-oriented. Its growth prospects are very good given the increasing international demand for seafood and the limits on meeting this demand from wild-capture fisheries.

Australian Aquaculture

Some industries are not covered or shown separately in Table 1:

Because of the diffuse nature of many of these industries, data on them is not readily available. However, that does not mean they are insignificant. It is likely that Australia has considerable competitive advantage in many of the above areas.

More detailed summaries on marine industries, including some of those not listed in Table 1, can be found in Appendix B. A more detailed discussion of the prospects for various industries can be found in Section Two of this Strategy.

Appendix A: membership and terms of reference

Membership

**Term expired in February 1996; positions currently vacant

Terms of reference

  1. Advise the Minister for Industry, Science and Tourism on ways to encourage the sustainable development of marine-based industries, any directly related matters, marine science and technology priorities and marine industry opportunities.
  2. Develop a Marine Industry Development Strategy, including evaluation of achievements, opportunities and economic prospects.
  3. Encourage and support coordination within and between relevant government agencies and industry bodies in order to promote marine industry development.
  4. Provide advice on the directions and priorities for marine-based research effort funded by the Commonwealth, including project opportunities, and develop links with State and other agencies on research supporting marine industry development.
  5. Promote communication between research users and researchers, including the encouragement of collaborative research funding by industry.

Appendix B: marine industry profiles

Civil and defence shipbuilding

Civil shipbuilding

The civil shipbuilding industry is highly export-oriented and is performing well. Its main success area has been in high speed aluminium ferries and luxury motor yachts. Innovative design combined with advanced manufacturing technology have helped the industry achieve the high quality standards and low costs necessary for successful international competition.

The extension of this ferry technology to the development of fast cargo vessels was the major issue for the government/industry Task Force on a Ship of the Future, formed in 1995. The work of the Task Force has now been overtaken by further joint assessments, with industry, of demand for fast cargo services.

Access to finance and the shipbuilding bounty are significant issues for the industry. The Export Finance Insurance Corporation (EFIC) is a substantial finance provider for the industry.

The shipbuilding bounty provides direct support for the industry. In 1996-97 the bounty is a 5 per cent subsidy against costs incurred by a builder for construction or modification of a particular vessel. Eligible vessels are those from 150 to 20 000 gross construction tonnes. Builders must be registered with the scheme to be eligible for bounty payment. The shipbuilding bounty runs until the end of 1997.

The industry sources technology and testing facilities internationally. A major Australian technology input is vessel design, for example Incat Design of Sydney's innovative wave-piercing designs.

Some research, modelling, testing and training facilities are provided through the Australian Maritime Engineering Cooperative Research Centre (CRC) which was formed in 1992. Industry members of the CRC include the Australian Submarine Corporation, BHP Transport and Incat Design.

Defence shipbuilding

This is a major industry. Government policy promotes Australian industry involvement in major Defence contracts. Local content of approximately 70 per cent has been targeted and achieved in recent shipbuilding projects. The most significant of these projects are:

Through the involvement of the Defence Science and Technology Organisation (DSTO) and local industry, many innovative elements of Australian technology have been incorporated into the construction or support aspects of these projects. In many cases the technology transfer between overseas and Australian companies and organisations involved in these projects has been of mutual benefit.

Future prospects: civil and defence

Improved competitiveness and innovation create the potential for significant export sales of goods and services as well as end product. Australian shipbuilders have now established a significant share in niche markets, particularly in the light weight industry. The industry has an international reputation for well designed, quality manufactured and competitive products suited to the tasks required by ship operators. Increased sales of fast ships for passenger and car transport, as well as freight, offer good prospects. The demand for cargo carrying capacity in the next few years will involve the use of high speed vessel technology.

Opportunities for export sales also extend to patrol and surveillance craft as well as luxury motor vessels.

Important issues, particularly for civil shipbuilding, that must be addressed if the industry is to retain competitiveness in niche markets include:

Government policy is to encourage the growth of the industry by creating a competitive environment. It does not mean increased intervention or protection. Government programs support the development of market opportunities and removal of impediments to growth, for example by encouraging greater innovation and improving enterprise performance. The umbrella for the delivery of this wide range of programs is AusIndustry.

Austrade provides strong export marketing support for the industry while the Export Finance Insurance Corporation (EFIC) plays a key role offering finance and insurance support.

Recent Government initiatives relevant to the shipbuilding industry include:

The Asia Pacific Economic Cooperation (APEC) process is potentially important for shipbuilders. A Working Party on Transportation has been established to identify needs for transportation infrastructure in the Asia-Pacific region and to consider trade barriers. Fast cargo vessels and systems are likely to be identified as a priority.

Shipping transport

The Australian shipping industry represents a national investment of about $2.5 billion in assets. It directly employs some 3 550 Australians - 2 900 at sea and 650 onshore. It supports a number of service industries including ship repair, shipbuilding, marine insurance, ship brokerage and shipping agencies.

The Australian trading fleet comprises 68 vessels in excess of 2 000 dead weight tonnage - 22 tankers, 28 dry bulk carriers and 18 general cargo ships. Some 41 vessels operate in coastal trade only, 18 trade exclusively internationally and nine are involved in both coastal and international trades.

Shipping

Around 45 million tonnes of cargo are shipped on the Australian coast each year with an estimated freight bill of $600 million.

Bulk cargo dominates the coastal trade, comprising 92 per cent of the trade by weight. About 90 per cent of coastal bulk cargo is carried for companies which later process that cargo. Most of this volume is carried by vertically integrated businesses, with their shipping operations virtually representing a feedstock 'pipeline' for the steel, aluminium and petroleum industries. The remaining 8 per cent of coastal trade is non-bulk cargoes, mostly involving the Bass Strait general cargo trade.

International trade

Australian flag ships carry about 12 million tonnes per annum which represents 4 per cent of Australia's international trade by volume, and $1 612 million, or 16 per cent, of Australia's total freight bill.

Bulk cargo also dominates the international shipping task of Australian flag ships, reflecting Australia's position as a major raw material supplier. Australian ships carry exports of coal, liquefied natural gas (LNG), general cargo and imports of crude oil.

Federal Government shipping reform policy

Since the early 1980s, the Government has developed, in consultation with the shipping industry, a series of reform programs aimed at improving the competitiveness and efficiency of Australian flag shipping.

The primary focus has been on reducing crew sizes and modernising the trading fleet with technologically advanced and efficient ships. Since 1983, the average crew size has fallen by 45 per cent from 33 to 18 members. In the last five years one third of the fleet has been replaced by modern tonnage.

In the past, the Government has underpinned these reforms with investment incentives for ship modernisation and contributions to training and redundancy programs.

In partnership with the shipping industry, the Government intends to examine the option of a 'second register' for ships.

Coastal shipping policy

Since the early 1920s, successive Federal Governments have maintained a cabotage policy which requires coastal cargoes to be carried in Australian licenced ships, whenever possible. Virtually all major maritime nations reserve coastal trade for their flag ships.

The coasting trade provisions of the Navigation Act 1912 prohibit ships, other than those which are licensed or granted a coastal voyage permit under the Act, from engaging in Australia's coastal trade.

The Government has announced its intention to wind back cabotage in accordance with a plan to be prepared after consultation with industry. The Shipping Industry Reform Group has been established to advise the government of options in this area as well as options for a second register.

Offshore oil and gas industry, including offshore engineering

The offshore oil and gas exploration, development and production industry is substantial. It requires capital intensive engineering investments which provide major opportunities for the supplier industry.

Offshore oil and gas production is one of Australia's largest marine industries. It is a significant contributor to Australia's economic performance, with an estimated value of production of about $8 billion, with exports close to $2.5 billion a year. Just as importantly, it is a significant import replacement industry. It is estimated that around 90 per cent of Australia's petroleum and petroleum products can be attributed to offshore production.

Australian offshore oil and gas production is sourced from a number of regions, including the Gippsland Basin in Bass Strait, the Carnarvon Basin which includes the North West Shelf project, and the Browse Basin. The Bonaparte Basin, which includes the Timor Gap region, has considerable potential but is relatively unexplored.

The rules governing access to offshore acreage by the industry involve both the Commonwealth and States. Exploration areas are released to the industry by the Commonwealth Minister for Resources and Energy, supported by Department of Primary Industries and Energy (DPIE). In determining areas to release, the Minister consults with State and Territory Mines Departments and considers industry interest as well as prospectivity. Companies bid for exploration acreage, generally on the basis of a planned program of work. State Governments act as 'designated authorities' in jointly managing offshore petroleum activities.

Future prospects for the petroleum industry in Australia are very good. Continuing commercial discoveries of oil and gas, particularly off the north west coast of Western Australia have considerable potential for further development.

The oil and gas industry is made up of overseas owned multinational firms as well as major Australian participants such as BHP Petroleum, Ampolex, Santos, Woodside Petroleum, and Western Mining Corporation.

The oil and gas exploration and production industry also relies on an extensive supplier network. An inquiry by the House of Representatives Committee on Industry, Science and Technology began in 1995 on the benefits accruing to Australian supplier firms from involvement in the North West Shelf, along with that from Australian involvement in major projects more generally. The new government formed following the March 1996 election has renewed this inquiry and has reviewed the terms of reference.

Evidence collected by oil and gas developers shows a level of Australian content in projects typically between 70 and 90 per cent. Future development opportunities are notified in advance through an annual publication produced by the Australian Petroleum Production and Exploration Association on forthcoming projects in the industry. The publication is circulated widely to interested parties in Australia, including Industrial Supplies Offices.

Austrade commissioned a study of the potential for Australian suppliers to export to world markets. The report found many segments of the industry were highly developed and internationally competitive. It noted a promising international outlook well into the future for demand in the supply of goods and services in this area. However, according to the study, current exporting activity is probably underdeveloped.

From the engineering perspective, the major goal is to build production facilities, pipelines or other structures that will function safely at reasonable cost. The two inputs are:

Marine tourism

Tourism is a very substantial marine industry in terms of dollar value, although the value is only an estimate based on the value of tourism as a whole. The industry, especially the overseas visitor component, is growing rapidly.

The industry is very diverse. It includes accommodation providers, transport firms, tour operators, and a myriad of support industries and businesses. Many of these support firms may not be directly focussed on tourism, although it forms a part of their business. Such firms include boat builders and car hire firms.

Data is available on some segments of marine tourism. One of these is recreational and sports fishing. The Australian Recreational and Sports Fishing Confederation estimates the value at more than $3 billion a year with direct employment of 80 000 people.

The success of the industry is likely to continue. It is based on an excellent primary resource: a long and diverse coastline in a relatively undisturbed condition in many locations and including world class features such as the Great Barrier Reef.

Future development will be influenced by the ongoing availability of high quality sites for tourism as well as a supportive business development environment. Major issues specific to marine tourism are:

These issues are obviously related.

The Great Barrier Reef is an example of an area with a relatively well-developed management structure. Tourism and other activities are controlled by the Great Barrier Reef Marine Park Authority (GBRMPA) in partnership with the Queensland Government. Management is based on inputs from industry, researchers, governments and the community.

An interesting development is the creation of the Cooperative Research Centre for Ecologically Sustainable Development of the Great Barrier Reef. It involves the tourism industry, the Australian Institute of Marine Science, GBRMPA, James Cook University and the Queensland Government. The tourism industry's involvement is significant. Tourism operators stand to benefit considerably through more effective targeting of research.

Management of coastal zone development is not as well developed in most other parts of Australia. In a 1993 report, the Resource Assessment Commission (RAC) highlighted inadequate coastal zone management. Much of the problem is the result of fragmented responsibility among different agencies and different levels of government. The report also comments on a 'tyranny of many small decisions' which together produce serious impact or degradation.

Much responsibility for coastal zone management lies at local and state government levels. The Commonwealth Government also plays a role. It released the Commonwealth Coastal Policy and associated initiatives in May 1995 in response to the 1993 RAC Inquiry.

There is a wide range of opportunities for further development of marine tourism. International cruise shipping is one area that has been considered by the Government. Increased visits to Australia by cruise ships can provide substantial returns because of the rapid growth being experienced in this segment of the industry.

Seafood industry

The seafood industry covers extraction, processing and on-selling of seafood products. It comprises around 1182 establishments licensed to extract and process seafood and employs 19 000 people.

By world standards, the Australian industry is not large, especially given the size of the Australian Fishing Zone which is larger than the Australian continent. Australian waters are relatively unproductive due to the pattern of ocean currents, at least in temperate and cold waters (our tropical waters are highly productive). Nevertheless, what Australia does produce and export is generally of high value.

The main single-fisheries export items for 1995-96: rock lobsters (nearly all exported) at $416 million, abalone at $148 million and prawns at $223 million. In that year Australia imported $590 million worth of seafood mainly from New Zealand and Thailand.

Aquaculture is a significant and rapidly growing contributor to seafood production. Aquaculture is important because of the growing pressure, and in some cases over-exploitation, of wild capture fisheries. The most prominent aquaculture products are pearl oysters, salmon, tuna, trout and edible oysters. Much production is exported. There are good export prospects for prawns and some finfish species.

Significant issues facing the industry include:

Both the wild capture and aquaculture industries are made up mostly of relatively small operators. Some of the larger seafood firms include Kailis & France, A Raptis & Sons, Geraldton Fisheries Co-operative, Dover Fisheries, M G Kailis and Tassal. Some of these larger firms show a degree of vertical integration. In the case of wild capture fisheries, some operators have formed regional cooperatives.

The fragmented industry structure has contributed to difficulties in regulation and management of fisheries resources. The Australian Seafood Industry Council (ASIC) is the peak body for wild capture fisheries. The aquaculture industry is now also represented through ASIC.

Profitability in the seafood industry is expected to come from aquaculture and greater value adding to products of wild fisheries. Both will require an ongoing commitment to development of new technologies and support services such as fast freight.

The CSIRO and the Australian Institute of Marine Science (AIMS) both have aquaculture research programs. The Fisheries Research and Development Corporation (FRDC) is the major source of competitive funding for fisheries research. The 1995-96 FRDC expenditure on research was $10.8 million. In 1994-95, it spent $3.3 million on aquaculture research (aquaculture expenditure figures are not available for 1995-96).

A Cooperative Research Centre (CRC) for Aquaculture was formally launched in February 1995. Many State Governments also have research programs supporting key fisheries and aquaculture interests.

Marine biotechnology and chemicals

This industry includes any business activity which uses marine organisms in either natural or manipulated form as a source of specialised fine or bulk chemicals. It also includes the manipulation of marine organisms using biotechnology to improve or alter them for some purpose, such as fish or shellfish aquaculture. The aquaculture work is largely in the research stage at present.

Worldwide, the sector covers quite a diverse range of business activity although the range is limited in Australia. Data on the size and performance of the sector in Australia is not available.

Only a relatively small number of firms or research organisations are involved in marine biotechnology in Australia. Many are still in the research stage and have some way to go before commercial production. This can be seen in the pharmaceutical industry. AMRAD Corporation is working closely with the Australian Institute of Marine Science (AIMS) in Townsville to screen and isolate bioactive compounds with human or veterinary pharmaceutical potential. AIMS has previously had some success in this area by isolating a new highly effective sunscreen from coral.

Another area of activity is algal biotechnology. Western Biotechnology commercially produces the chemical beta carotene which is used as a food colouring and vitamin from aquacultured algae. In fact, Australia is the world's largest producer of natural beta carotene. Western Biotechnology in Western Australia and Betatene in South Australia together had sales of around $10 million in 1995-96, nearly all of which was exported. Both companies are increasing production capacity. New competitors are emerging overseas.

The potential of this industry is very promising, especially in the mid to longer term. Opportunities include:

Marine biotechnology has not been the focus of as much attention to date as biotechnology based on terrestrial organisms. However, there is potentially even greater prospects for new products and processes. Marine biodiversity - the number and variation in species - greatly exceeds terrestrial biodiversity. This biodiversity represents a vast, relatively untapped source of new materials, compounds and organisms which may well overtake the use of terrestrial organisms for biotechnology in the coming decades.

Important issues facing marine biotechnology are similar to those in many emerging high-technology sectors. They include:

Capital availability is a particular problem because of the very lengthy lead times for the development of new products and processes.

Specific areas where research and data are needed include:

Marine service industries

Marine service, engineering and environmental consultancy industries are difficult to analyse, and quantitative data is not readily available. Part of the reason is that the firms involved often don't specialise in the marine area. They provide services to a wide range of clients, both on land and in the water. Such firms may have little interest in distinguishing between their terrestrial and marine work.

There is also a definition problem, specifically in the coastal zone where there is a high level of human activity and consequently a substantial demand for services. The question arises of which services in the coastal zone are marine and which are terrestrial. While this may seem trivial, it is likely to have a negative impact on recognition of these industries as specialist areas, with special data and other needs. Such specialist needs are less likely to be serviced if they are not recognised and do not have champions. The problem is exacerbated in the marine data area because of the enormous size and the large variability of Australia's marine areas.

In spite of the difficulties, Australian marine service industries including engineering and environmental services have developed to a high standard. This has been driven in part by a demand for a high standard of engineering and environmental protection. Evidence of our high standards can be found in the range of firms or organisations which already successfully export their skills regionally and internationally. They include the large consulting houses, many of which have substantial Asia-Pacific regional office networks.

Private sector capability is supported by strong pockets of expertise in the public education and research system. Examples include the Australian Maritime College, the various marine Cooperative Research Centres, the Australian Institute of Marine Science and the CSIRO Division of Marine Research, universities and a number of state institutions and agencies such as the Victorian Institute of Marine Science.

There is great potential to build on our existing exports and skill levels, especially since Australia is one of the few developed nations with tropical waters and reefs in its EEZ. Our expertise in tropical research and our proximity to Asia mean we are well placed to expand the export of services to the rapidly growing economies of the region.

More generally, Australia's service industries are a major component of the economy, and larger than many people realise. However, export activity is not as strong as in manufacturing. This might suggest considerable unrealised potential. The table below provides an overview.

Summary of Australia's manufacturing and service industries 1993-94
Production Exports Imports
Manufacturing 61.8b 38.8b 61.0b
Services 261.9b 18.3b 19.7b

Engineering services - general

There is likely to be substantial growth in demand for marine engineering services in the medium and longer term. Demand will be driven by growing population pressure in coastal regions as well as more specialised and sophisticated needs in areas such as offshore oil and gas. In the latter case, there will be a need for new platforms and engineering solutions to develop deep water deposits.

Marine engineering is a specialist area. The technical requirements are quite different from terrestrial engineering. The differences result from the unique properties of water, its marine life and the salts and other inorganic constituents. For example biofouling - the growth of organisms on structures - is an important issue in marine engineering as it affects hydrodynamic performance and stresses but has no equivalent in terrestrial engineering.

Another important difference between the land and the sea is simply the fluidity and density of water itself which exerts force on structures in a unique and powerful way. Hence marine engineering has substantially different data requirements to engineering on land. In many cases this data is difficult or expensive to collect because of the cost of placing and maintaining instruments and the long time series of measurements often required.

The dynamic nature of the marine environment leads to other complexities, for example in engineering seawalls, groynes etc. The impact of such structures on sand and sediment movement may be dramatic over time, but difficult to predict.

Coastal engineering and management

Population pressures in the coastal zone and the activities located in it such as ports create significant activity in coastal engineering and management. Coastal zone management has often been contentious. It is the subject of numerous reports, most recently the Coastal Zone Inquiry report by the Resource Assessment Commission (RAC). Australia has developed very good capability in this area and is exporting this. However, there is much more work to be done domestically.

Australia's coastal zone is an extremely valuable resource, in terms of trade, tourism, transportation, social and recreational activities. Our coastal areas are also ecologically important.

Coastal management and coastal engineering provide the policy and practical tools for regulating and understanding the physical and biological coastal systems, so that development can be achieved without unacceptably damaging the natural coastal behaviour. This requires a multi-disciplinary approach in diverse fields, ranging from data collection, investigation, modelling and analysis to design and implementation of built and non-built solutions along the coast, within estuaries, coastal rivers and in the coastal catchments.

The juxtaposition of residential, industrial and recreational activities within the coastal zone has caused environmental problems such as:

An important indicator of coastal zone management is the level and nature of government expenditure. In November 1993, the RAC Coastal Zone Inquiry reported that the total expenditure by the three spheres of government on resource management in the coastal zone (policy, planning, marine, coastal infrastructure, marine research and geoscience) was approximately $1500 million in 1991-92. This does not include expenditure by the private sector on coastal zone management issues, and by community groups or individuals on local projects or activities. There is no data on the income earned by private and public sector agencies on coastal zone management projects.

Regulatory responsibility for management of coastal zone resources lies primarily with State and local governments. The number of agencies involved is large and coordination is a problem. The Federal Government also plays a role in providing leadership and coordination in some areas.

The Federal Government responded to the RAC Inquiry with the Commonwealth Coastal Policy and associated initiatives announced in the 1995-96 budget.

In summary, recent major developments, Government policy announcements and initiatives include:

In October 1994 the National Committee on Coastal and Ocean Engineering (NCCOE) of the Institution of Engineers, Australia convened a priority setting workshop to report on coastal zone management research needs. The workshop prepared a draft list of major conclusions and recommendations. In summary, these included:

The need for a framework and coordination: The group recognised the need for some type of overall framework and coordination of coastal zone management at a national level, as a precursor to any real and permanent progress in addressing a wide range of R&D, information and education matters;

The need for long term funding: Many of the issues raised in the workshop were seen to rely on long term funding because of the long term nature of the activity, for example baseline data collection. It was also noted that the majority of State funded public interest investigations, such as storm surge and coastal flooding analysis, had been curtailed and cancelled in the past decade;

The need for specific high priority studies: The group identified a series of high priority/high return specific research and development topics; and

The need for professional management: Reflecting the principal focus of turning scientific developments into practical applications, the group saw the need for a professional approach to managing coastal zone research.

Environmental services

Domestic and export prospects in the environmental services area are also good. In the medium and longer term, opportunities will be driven by:

Like marine engineering services, marine environmental services are also specialised as a result of the unique characteristics of marine ecosystems. Both the organisms and the physical properties of the environment are different to land-based systems. Physical properties are significant in marine ecosystems as they influence the mobility and level of interaction that is possible between organisms and other components in the system. They also affect interaction with, and dispersal of, introduced substances such as pollutants.

A lack of understanding about how marine ecosystems operate and deficiencies in baseline data on such systems limits the application of marine environmental services. There are areas where there has been significant effort to rectify the deficiencies, for example the Great Barrier Reef.