This Output covers:

• the provision of air and sea based civil maritime surveillance and response services to a number of government agencies
• the detection, reporting and response to potential or actual non-compliance with relevant laws in coastal offshore regions and the Australian Exclusive Economic Zone
• Coastwatch aerial surveillance capabilities delivered through Border Protection Command
• the protection of Australia's offshore oil and gas facilities
• offshore interdiction of ships
• the detection and response to any terrorist threat to Australia's maritime assets and coastline.

Note: the operations of the Customs National Marine Unit and the Maritime Patrol and Response Unit; and onshore processing facilities for illegal foreign fishers are contained in Output 2.

PERFORMANCE AGAINST TARGETS

Figure 43: Performance against targets set in the 2006-07 Portfolio Budget Statements for Output 4^<>

<sub><> Reference to augmented security patrols and marine surveillance and response (sea days), included in the 2006-07 Portfolio Budget Statements (PBS), have been omitted from this table. Further information in relation to all Defence's operational contributions to marine surveillance and response under Operation Resolute are published by the Department of Defence.
* Targets may be performance targets, service level targets or estimates.
** Performance targets cannot be estimated through any reliable statistical or other method.
+ Total number of interceptions by Customs and the Australian Defence Force (ADF).
^^ Revised forecast provided in the Portfolio Additional Estimates Statements.
# The figure for square nautical miles patrolled is an indicative figure derived from a standard formula that incorporates average speed of advance, time on task and surveillance sweep for each type of aircraft; and the proportion of time on task spent in visual or radar mode; as a factor of the number of hours each aircraft type undertook surveillance during the period.
~ This target was based on a longstanding Defence commitment to Customs that pre-dates the current Border Protection Command joint construct arrangements. The Defence component of civil maritime surveillance and response is currently delivered directly to the Commander, Border Protection Command as assigned assets under Operation Resolute (activated on 17 July 2006). The cost of the Defence commitment under Operation Resolute, formerly accounted under this Output as Resources Received Free of the Charge to Customs, is now forecast in the Department of Defence PBS and reported in the Department of Defence Annual Report.
*** This includes $220m as a notional figure based on Defence's civil maritime surveillance and response effort in 2005-06.</sub>

OUTPUT 4 AT A GLANCE

The following provides a brief summary of Customs performance against Output 4.

• Aerial surveillance coverage of high threat areas in Australia's northern waters in 2006-07 increased by more than eight per cent over the previous year.
• Sightings of motorised foreign fishing vessels in high threat areas in Australia's northern waters decreased by 58 per cent.
• Commensurate with the reduction in foreign fishing vessels sightings, the number of apprehensions fell from 367 in 2005-06 to 216 in 2006-07.
• While there was a significant reduction in the number of apprehensions, the ratio of apprehensions to sightings increased by more than 40 per cent in 2006-07 over the previous year.
• Border Protection Command (BPC) aerial surveillance assets flew a total of 21,197 hours, or 99.8 per cent of the Portfolio Additional Estimates Statements forecast of 21,250 hours.
• The forecast for aircraft surveillance coverage over the totality of Australia's maritime zones was exceeded by more than five per cent, equating to nearly 20 million square nautical miles (13.5 per cent), comprising more surveillance coverage than for 2005-06.
• BPC capability was developed through the permanent presence within the National Surveillance Centre of liaison officers from other agencies including the Australian Fisheries Management Authority, the Department of Agriculture, Fisheries and Forestry and the Australian Quarantine and Inspection Service.
• The design phase of Australian Maritime Identification System was completed and the build phase approved.
• In association with specialist partner agencies, BPC developed a threat assessment process for deployment of its assets and effort to areas of greatest risk.

MAJOR GOVERNMENT INITIATIVES

RENAMING OF JOINT OFFSHORE PROTECTION COMMAND

In October 2006 the government decided that the title 'Joint Offshore Protection Command' did not sufficiently convey the way the program has evolved. In particular, the 2006-07 Budget announcement advised that Joint Offshore Protection Command provide a cohesive, whole-of-government approach across the full spectrum of maritime surveillance, response and interception activities. As a result, in October 2006, the program was re-named Border Protection Command.

MARITIME SECURITY GOVERNANCE

In October 2005, the government directed the Department of the Prime Minister and Cabinet to establish a review of fisheries compliance and maritime enforcement.

Initiatives arising from government consideration of the review recommendations for maritime security governance arrangements are designed to provide a more focused, whole-ofgovernment approach to maritime security. The initiatives provide a greater level of assurance that planning and deployment of assets and resources are coordinated to achieve more cost efficient and effective outcomes.

Key governance initiatives for Border Protection Command (BPC) that were progressed in 2006-07 include:

AUSTRALIAN DEFENCE FORCE CONTRIBUTION

On 17 July 2006, the Australian Defence Force (ADF) combined its maritime border protection operations, namely Cranberry, Relex II, Mistral, Celesta and Estes into a single operation, Operation Resolute. Commander Border Protection Command (BPC), who is a serving Rear Admiral from the Royal Australian Navy, has the ability to deploy military assets assigned to him under Operation Resolute.

When considered in tandem with the Commander's capacity to task Coastwatch aircraft and Customs vessels, Operation Resolute is a significant step in implementing a more effective and efficient response to threats to Australia's civil maritime security. It is also a significant step in the implementation of the government decision under the 2006-07 Budget process that BPC should control and coordinate all 'on the water' operational responses to civil maritime threats.

Armidale class patrol boat fleet recall

During the year, the Navy recalled to port its fleet of Armidale class patrol boats over concerns of an apparent fuel contamination issue.

BPC implemented contingency plans to ensure that sufficient assets were available and that there was no diminution of border protection operations.

The fleet was phased back into operations following modifications to the fuel systems.

ILLEGAL FOREIGN FISHING IN NORTHERN WATERS

Success of whole-of-government initiatives

The whole-of-government effort to counter illegal foreign fishing in Australia's northern waters has made a significant impact on the level of that activity.

During 2006-07 there was a 58 per cent reduction in Border Protection Command (Coastwatch and Australian Defence Force) sightings of motorised fishing vessels in the high-risk areas of Australia's northern waters in the Australian Economic Exclusive Zone (AEEZ) compared with the previous year. At the same time surveillance coverage in that area increased by around eight per cent, and the rate of apprehension of foreign fishing vessels to those sighted increased by more than 40 per cent.

The results in the first six months of 2007 were even more promising with around a 90 per cent reduction in sightings of motorised fishing vessels in northern waters.

Performance against 2006-07 Portfolio Budget Statements

In the 2006-07 Budget, the government provided Customs with additional funding of $197.4m to counter the increased number of illegal foreign fishing vessels entering Australia's northern waters. This funding was part of a whole-of-government initiative that was focused on providing the infrastructure to allow the detection and apprehension of illegal fishing vessels through the alignment of surveillance and response capabilities with improved onshore processing facilities.

Customs set an interim target of 570 foreign fishing vessel apprehensions for 2006-07. This target comprised 175 vessels for the first six months and 395 for the second six months when improved onshore processing facilities would become available and Customs northern response vessel Triton was operational.

From mid-2006, there was a marked reduction in the number of illegal foreign fishing vessels (IFFVs) incursions detected by Customs and Defence surveillance assets, and apprehensions fell just short of the target of 175 for the period from 1 July to 31 December 2006, with 172 vessels apprehended.

The 2006-07 target of 570 vessels was reviewed in the light of the sustained and significant reduction in foreign fishing vessels incursions and a revised projection of 400 apprehensions for 2006-07 (that is, a forecast of 228 apprehensions from 1 January to 30 June 2007) was provided to Parliament during the 2006-07 Portfolio Additional Estimates process. There were 44 apprehensions during this six month period for a total of 216 apprehensions during the year.

A number of factors were involved in the reduction in the number of illegal foreign fishing vessels, including:

• the Australian Government's programs of heightened and effective surveillance and enforcement in Australia's maritime zones
• Australia's efforts in Indonesia to support economic development and alternative livelihoods for fishing communities, combined with in-country programs to highlight the consequences of illegal activity in Australia's waters.

Additional factors included the price and availability of fuel in the Indonesian archipelago, and unusually poor weather and high winds in the archipelago. The Indonesian Government's efforts to reduce illegal fishing in their waters were also assisted by improving the opportunities for its own fishermen.

A significant turnaround arose when Customs established sufficient onshore facilities for holding and processing illegal fishers. This enabled a practice of apprehension and destruction of vessels to be enforced consistently, creating excessive costs for fishers when compared to the potential gains from sale of the catch.

Prior to establishment of these facilities, Customs and Defence vessels had to resort to legislative forfeitures of catch and equipment when sufficient onshore processing facilities were not available.

Figure 44: Month by month comparison of IFFV apprehensions and legislative forfeitures 2004-05 to 2006-07

_{* Three of these were administrative seizures for environment-related offences.}

Foreign fishing vessels continue to operate just beyond the boundaries of the AEEZ and a reduction in our border protection efforts could result in a resurgence of foreign fishing vessel activity in our waters. Therefore border protection operations are continuing in order to provide ongoing strong deterrence to these potential illegal foreign fishing threats.

AUSTRALIAN MARITIME IDENTIFICATION SYSTEM (AMIS)

AMIS will provide a whole-of-government maritime domain awareness by bringing together existing maritime data elements into one system. It will further enhance the government's ability to proactively respond to threats as far from the Australian coast as possible.

In 2006 Customs issued an open request for tender to select a prime systems integrator to undertake a detailed study to design and fully cost the proposed AMIS.

Booz Allen Hamilton was selected as the project business adviser and the Kaz Group was selected as the system integrator. The contracts were let in August 2006.

During 2006-07 activity for AMIS was focused on system design and developing a proof of concept. A submission in this respect was provided to government and funding of $80m was provided as part of the 2007-08 Budget for the development phase.

Under this approved model BPC will develop and operate the AMIS capability in discrete stages over the next four years. Each stage will build upon the preceding stage and closely mirror a similar capability used by the United States. This approach allows for the use of previous designs, and existing commercial and defence technologies.

The Australian Government introduced the Gateway Review Process (Gateway) in 2006 to improve the on-time and on-budget delivery of major projects undertaken by Australian government agencies. Gateway is a project assurance methodology that involves short, intensive reviews at critical points in a project lifecycle by a team of reviewers not associated with the project. This provides an impartial assessment of the project against specified objectives and early identification of areas requiring corrective action. The AMIS Capability Development Program has successfully completed three Gateway reviews receiving a 'green' report on each occasion.

OPERATIONAL PERFORMANCE AND IMPROVEMENT INITIATIVES

COASTWATCH SURVEILLANCE

During 2006-07, Border Protection Command (BPC) aerial surveillance aircraft flew over 21,000 hours and covered more than 161m square nautical miles of Australia's maritime zones. This was nearly 20m square nautical miles (13.5 per cent) more surveillance coverage than the previous year. While the aerial surveillance coverage increased considerably, the number of sightings of motorised foreign fishing vessels decreased by over 58 per cent, demonstrating the effectiveness of the enhanced compliance program.

The original forecast of 171.6m square nautical miles aerial surveillance was based on the expectation that BPC would be able to secure an additional 2,500 hours surveillance provided for in the 2005-06 Budget. The requirement for additional aerial surveillance however, corresponded with the expansion of a number of commercial airline services and also the introduction of the Australian Maritime Safety Authority's (AMSA's) fleet of five Dornier aircraft for search and rescue operations. The worldwide demand for qualified aircrew and the industry shortage impacted on Surveillance Australia Proprietary Limited's (SAPL's) ability to maintain existing aircrew numbers and severely restricted its ability to recruit, train and retain new crews. This came at a time when SAPL was undertaking a comprehensive recruitment and training program for an additional seven aircrews for the new Sentinel contract.

When it became evident that these factors would impact on BPC's ability to provide all of the additional surveillance funded in the Budget, the estimate was revised down to 152.7m square nautical miles.

Factors including the industry-wide shortage of skilled crews, aircraft serviceability issues and crew illnesses impacted on SAPL's ability to provide expected levels of aerial surveillance coverage. The end of financial year result saw SAPL delivering the number of surveillance hours required under the contract for the Dash 8 fleet, but it fell considerably short of the expected outcome for other aircraft. When it became apparent that SAPL would not be able to deliver expected hours across the whole fleet, BPC directed that the effort be concentrated on the Dash 8 aircraft, which can deliver significantly more square nautical mile coverage than the rest of the fleet.

BPC was able to recover the surveillance not achieved by SAPL and also complete a significant amount of additional coverage through the deployment of the Royal Australian Air Force AP-3C Orion aircraft assigned to Operation Resolute, and through the use of AMSA's Dornier aircraft when not required for search and rescue activities. AMSA's flying for civil maritime surveillance is funded by Customs under an arrangement whereby the external contractors, AeroRescue, provide pilots and mission equipment operators and BPC provides a trained Customs Mission Coordinator for every mission.

SUSPECTED ILLEGAL ENTRANT VENTURES

During the year, one suspected illegal entrant ventures (SIEV) carrying 83 suspected unlawful non-citizens (SUNCs) was detected prior to arrival. Three SIEVs carrying a total of 50 SUNCs arrived undetected in August 2006, October 2006, and January 2007.

Figure 45: Summary of suspect illegal entrant vessels and suspect unlawful non-citizens

_{* Figures sourced from Department of Immigration and Citizenship.
^ Three of these SUNCs were charged with people smuggling offences under the Migration Act 1958.
# No vessel was sighted for one of the 51 SUNCs.
~ No vessel was sighted for four of the 7 SUNCs.}

PROJECT SENTINEL

In 2006-07 Customs undertook planning for the transition to two new Coastwatch civil maritime surveillance contracts. The transition phase is called Project Sentinel. During 2006-07, Project Sentinel focused on two streams of activity:

• technical work in relation to delivery of the aircraft
• working with the service providers to deliver the relevant infrastructure and contract
  management arrangements.

Surveillance and response services in the Torres Strait area will be provided by Australian Helicopters Pty Ltd (AHPL) through two helicopters based on Horn Island. This service commences on 1 July 2007. It incorporates upgrades in the surveillance capacity of the existing Bell 412 twin engine helicopter that provides night and day capability, and a new single engine Eurocopter AS 350B3 Squirrel limited to day-time operations.

Fixed wing surveillance will be delivered from 1 January 2008 by a fleet of ten Dash 8 aircraft provided by Surveillance Australia Pty Ltd (SAPL). These aircraft will be based in Broome, Darwin and Cairns. Changes to the fixed wing contract are particularly significant, as they provide an updated single aircraft type fleet of six Dash 8202 series aircraft and four Dash 8315 series aircraft. Three of the 315 series will be new aircraft built by Bombardier Inc in Canada and then modified by Field Aviation Services, also in Canada, to allow installation of the surveillance equipment in Australia. All the Dash 8 aircraft will have common communication and surveillance equipment, new radars, improved electro-optical sensors and updated information transfer systems.

A state of the art surveillance information management (SIM) system will be installed in the aircraft. The system will integrate surveillance and communication equipment, provide near real time communication with the National Surveillance Centre and support high integrity mission records that may be used as evidence in legal proceedings.

Provision of the SIM is subcontracted by SAPL to Galileo Avionica of Italy who will modify its existing SIM to meet Australian requirements. The first SIM is scheduled to be operational in October 2008.

SURVEILLANCE TECHNOLOGY

The government provided $9.0m over two years to evaluate whether the effectiveness of maritime surveillance could be increased by the deployment of a long-range unmanned aerial vehicle (UAV), incorporating a full range of sensors, including radar and electro-optical devices, and satellite communication.

The request for tender for the mid-range UAV was released on 21 August 2006. Following evaluation of the submissions, Customs determined that mandatory conditions for participation, as specified in the request for tender, had not been fully met by any of the tenders.

In accordance with the Commonwealth Procurement Guidelines, Customs terminated the request for tender process. We then commenced negotiations with Israel Aerospace Industries, the tenderer that most closely met the tender requirements.

On 15 May 2007, following the signing of contracts between Customs and Israel Aerospace Industries, the Minister for Justice and Customs announced a 10 week trial of the mid-range Heron UAV.

Border Protection Command is working closely with other government agencies to ensure the trial outcomes can be maximised across government.

Lower overall costs associated with the UAV contract resulted in an underspend for 2006-07 of $2.7m, which was returned to Consolidated Revenue. The project timetable should see the 2007-08 funding being fully utilised.

BUILDING FOR THE FUTURE

The following provides a summary of Customs future plans for Output 4.

• Continue to deliver effective maritime security across prevention, deterrence, surveillance, response, recovery and consequence management operations.
• Continue to establish the operational infrastructure that will underpin effective maritime information, intelligence and targeting capabilities, in particular:
  • further development of the Border Protection Command Intelligence Centre
  • delivery of the new surveillance contracts under Project Sentinel
  • development of AMIS and operation of interim AMIS.
• Progress new accommodation arrangements, including an Integrated Operations Centre that incorporates the National Surveillance Centre, Australian Maritime Information Fusion Centre, and Border Protection Command Intelligence Centre.
• Prepare a Future Operating Concept that will allow Border Protection Command (BPC) to determine its future capability requirements for inclusion in a ten year rolling BPC Capability Plan.
• In conjunction with preparation of the Future Operating Concept, conduct an information management architecture review to identify BPC's information requirements and develop its information system in concert with the Integrated Operations Centre.
• Engage governments, particularly those of Indonesia, Papua New Guinea and France, in support of Australia's efforts in relation to illegal fishing in northern and southern waters. A particular focus will be placed on assisting Papua New Guinea to enhance its border security.
• Develop a comprehensive plan to manage the BPC workforce and identify specific training and skill needs.