THE Morrison Government’s arrangement to store Australia’s emergency fuel reserves in the United States is nothing more than an accounting trick that will do nothing to ensure the country’s resilience to a global crisis that disrupts fuel supplies, the Maritime Union of Australia has warned.

Energy Minister Angus Taylor announced the signing of an agreement to allow Australia to lease storage space in the US Strategic Petroleum Reserve, using that oil stored on the other side of the world to technically meet the International Energy Agency’s minimum 90-day fuel stockholding obligation.

The arrangement has provided no details of how that oil stockpile would assist Australia in a genuine crisis, how long it would take to bring to Australia, or how it would be transported when there are no Australian-owned oil tankers.

MUA Assistant National Secretary Ian Bray said the IEA requirement for minimum fuel reserves — which Australia has been in breach of since 2012 — were about ensuring adequate reserves were available to address potential shipping disruptions caused by military conflicts, economic crisis, or natural disasters.

“More than 90 percent of Australia’s fuel is imported, all on foreign tankers, yet in recent years the country has regularly had just a few weeks of fuel available, putting the economy at risk of grinding to a halt if any major incident cut those supplies,” Mr Bray said.

“To claim that storing Australian-owned oil in the US Strategic Petroleum Reserve will somehow solve this is fanciful, especially as the Morrison Government has provided no information on how it would transport those fuel supplies during a crisis.

“This agreement with the US is nothing more than an accounting trick that aims to placate the International Energy Agency while doing absolutely nothing to deliver fuel security for Australia.”

Mr Bray said the Morrison Government should take advantage of a collapse in global oil prices to construct a domestic fuel reserve, ensuring the products needed for transport, aviation and industry were on Australian soil and ready to use during any future crisis.

“The US has had a Strategic Petroleum Reserve for decades, which they consider a critical asset for their energy and national security,” he said.

“Rather than look to accounting tricks, the Morrison Government should emulate that model and construct a domestic fuel reserve that ensures adequate supplies of fuel are always available to address potential shipping disruptions caused by military conflicts, economic crisis, or natural disasters.

“Given it takes a supply chain of approximately 60 full-time fuel import tankers to supply petrol, diesel and jet fuel to Australia, and Australia has no ownership or control of any part of that supply chain, the Australian Government should also look to develop a strategic fleet that includes Australian-owned oil tankers to ensure supplies can continue during times of crisis.

“Given the short timeframes involved during the kind of emergencies where fuel supplies might be threatened, the Morrison Government’s solution of storing emergency fuel halfway around the world is not only fanciful, its recklessness puts the Australian economy at genuine risk.

“With the growing coronavirus pandemic already causing problems with supply, and businesses and households facing shortages of some products, it would be in the national interest if fuel wasn’t added to that list.

“A cut to fuel supplies wouldn’t just impact the transport sector, it would jeopardise our national food security and devastate local manufacturing, including some pharmaceuticals.”

THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the Federal Government’s announcement today of a new $10,000 grant and simplified access to existing loans for small businesses impacted by the recent bushfires.

“It’s great to see both the Federal and NSW governments recognise the problems small businesses are experiencing during the bushfire recovery process,” Ms Carnell said.

“The excessive red tape and unnecessary bureaucracy standing in the way of small business owners getting the loans or grants they are entitled to, is counterproductive.

“The announcement today of the $10,000 grant will help businesses affected by the bushfires to stay afloat and keep their staff.

“This money can be used in a variety of ways so I urge small businesses to see their local financial advisor to put together a plan to get through the next six to 12 months.

“The announcement also outlines a reduction in bureaucratic requirements for eligibility for low-interest loans which will make it easier for small businesses to apply," Ms Carnell said.

 “We understand that many small business owners are not confident enough to apply for loans, but for those who have decided to continue on with their business, these loans are a good option to help businesses get back on their feet.”

Further details are available on the National Bushfire Recovery Agency website at www.bushfirerecovery.gov.au/recovery-assistance/small-business.

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INSURANCE law firm, Maurice Blackburn has called out the life insurance industry’s failure to meaningfully reform its claims assessment culture and processes in the wake of a highly critical independent report showing widespread non-compliance with its Code of Practice.

An investigation by the administrator of the Code, the Life Code Compliance Committee (LCCC) found many insurers breached their commitment to process insurance claims and requests for reviews within certain timeframes.

The investigation was sparked by a bulk complaint lodged by Maurice Blackburn in early 2018 which alleged more than 700 instances of breaches of the insurers’ industry code within a six month period in 2017.

Maurice Blackburn Principal, Josh Mennen said today’s findings by the LCCC lend weight to the view that many insurers failed to sign up to the Code of Practice in good faith and with due preparations but rather in an attempt to rebuild their public image after damning media stories at the time.

“Today’s report suggests that despite all the rhetoric and promises to do better before and after the Hayne Royal Commission, many insurers have treated their own code as a paper tiger and this casts doubt on the industry’s ability to rebuild public trust," Mr Mennen said.

“I applaud the LCCC for taking these breaches seriously and for using them to identify the continuing systemic problems within the industry. These hundreds of confirmed breaches are merely the tip of the iceberg because no doubt many more have gone undiscovered since I lodged this complaint with the LCCC two years ago.

“Given all these breaches of the Code relate to delays in the processing of consumers’ claims, the insurers should take immediate action to pay compensation, including penalty interest,” Mr Mennen said.

“We look forward to hearing a proposal for compensation from each of the insurers.”

In investigating the bulk complaint, the LCCC sampled a small number of alleged breaches and identified the systemic issues which caused the unreasonable delays and then tasked the insurers to apply those gaps and inadequacies across the affected consumers’ cases.

“So the finding that 315 breach notices were upheld is the number that the insurers were willing to accept were indeed unreasonable delays,” Mr Mennen said.

“And while Maurice Blackburn remains firmly of the belief that all 700 breach notices were genuine, we accept that the LCCC doesn’t have the resources or the mandate to investigate every single one.

“We continue to see unreasonable delay and poor communication by some insurers, however it is pleasing to see the LCCC was able to use a sample of our bulk complaint to identify the systemic and cultural problems still plaguing the industry, with a view improving the industry’s treatment of its customers” Mr Mennen said.

“It defies belief that almost four years after the code commenced, insurers are still yet to implement appropriate training and documents management systems to ensure compliance with their own code.”

The LCCC also criticised the insurers for failing to respond and cooperate with the LCCC in a timely manner.

“Clearly, many of the insurers must see the administrator of the Code as a toothless tiger when they take over a year to respond to its requests," Mr Mennen said.

“Despite the LCCC’s best endeavours, this attitude is unlikely to change until the Code of Practice is given teeth through regulatory oversight by ASIC and meaningful sanctions for any breaches,” he said.

“Furthermore, it’s very disappointing that the LCCC lacks the power to identify the worst offending insurers because it hasn’t been built into its charter.

“This is a level of transparency that is employed to the industry ombudsman, AFCA and the same authority should be given to the LCCC,” Mr Mennen said.

“We know there is a vast discrepancy between the insurers in terms of effort to address these systemic problems and de-identifying the worst performers unfairly tarnishes the others.

“Had the Code had real teeth as we have been calling for several years, our clients’ cases would not have been impacted with significant delays and would instead have been dealt with in a timely fashion. “

www.mauriceblackburn.com.au

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THE Queensland Resources Council (QRC) has welcomed the collaborative approach to the supply of domestic gas with the granting of a petroleum lease to joint venture partners Australian Pacific LNG and Armour Energy near Chinchilla. 

The project is an Australian-first whereby gas will be directed towards Australian manufacturers to support local industries.

“Queensland has worked hard to become the East Coast’s most reliable producer of gas, but that advantage will be eroded without continued planning and investment in new exploration and new projects,” QRC chief execuitive Ian Macfarlane said.

“At the moment, Queensland can rightly claim the title as the heavy lifter in the East Coast gas market. We are the only East Coast state where the gas industry has been developed in recent years and jobs created, and it has been done within a robust environmental and approvals framework.

“We can see the benefit of that forward thinking through the investment and jobs in the gas industry which will now translate to support for investment and jobs in Australian manufacturing.

“Queensland has the resources to continue to lead the pack on gas project investment, jobs, and support for other industries.  But Queensland can’t afford to rest on its laurels," he said.

“The projects and jobs which are now a reality are the result of careful planning to attract investment. We must have the investment framework in place to give confidence to the next round of projects.

“QRC is particularly concerned about a Palaszczuk Government proposal for a significant expansion to the area of land locked up from gas projects in Western Queensland," Mr Macfarlane said.

“Queensland must ensure the framework is right for new opportunities for well-regulated gas development in the Lake Eyre Basin, which will benefit local communities and create local jobs including for Traditional Owners.

“Without proper planning Queensland will throw away its advantage as an East Coast gas powerhouse.

“The industry will continue to consult with the Queensland Government on this issue and will work constructively with the Opposition and cross bench in the lead up to the state election to ensure the Queensland gas industry continues to lead the East Coast.”

www.qrc.org.au

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