Seacare
Jurisdictional
Coverage—
Discussion Paper
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
Contents
Introduction
4
Existing Coverage Provisions
5
Guiding Principles
6
Draft Coverage Provisions
6
Exemptions
9
Feedback
9
Attachment A—Legislative Extracts
10
10
11
13
Seafarers Rehabilitation and Compensation Act 1992
Occupational Health and Safety (Maritime Industry) Act 1993
Navigation Act 1912
Attachment B—Draft decision flowchart
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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Introduction
1. Seacare is a national scheme of occupational health and safety (OHS), workers’ compensation and
rehabilitation arrangements which apply to defined seafaring employees and—in relation to OHS—
defined third parties (ie suppliers, manufacturers and importers).
2. The Seafarers Safety, Rehabilitation and Compensation Authority (Seacare Authority) is responsible for
regulating the Seacare scheme.
3. The jurisdictional coverage of the Seacare scheme is presently established by section 19 of the
Seafarers Rehabilitation and Compensation Act 1992 (the Seafarers Act) and section 6 of the
Occupational Health and Safety (Maritime Industry) Act 1993 (the OHS(MI) Act). Both the Seafarers
Act and the OHS(MI) Act refer to ‘a prescribed ship’ (and ‘prescribed units’ in the case of the OHS(MI)
Act) which are in turn defined as a ship (or offshore mobile unit) to which Part II of the Navigation Act
1912 (Navigation Act) applies. Extracts from the above Acts are at Attachment A.
4. On 5 June 2009, the Minister for Infrastructure and Transport announced that the Navigation Act
would be rewritten as part of the Government’s maritime reform program.
5. Given that the Seacare scheme’s coverage provisions are presently linked to the Navigation Act
by reference to Part II (section 10), the re-write of the Navigation Act necessitates a re-draft of the
Seacare scheme coverage provisions and provides an opportunity to re-define Seacare coverage.
6. This discussion paper is drafted on the basis that the Seacare scheme will be ‘de-linked’ from
the Navigation Act and other legislation to effectively operate independently. This will ensure that
any consideration of coverage will be unfettered by the provisions of the Navigation Act and other
legislation.
7. The Seacare Authority has a role to advise the Minister for Employment and Workplace Relations (the
Minister) on matters relating to the occupational health and safety and workers’ compensation and
rehabilitation of seafarers. In this context, the Seacare Authority is developing its views on its preferred
jurisdictional coverage provisions for the Seacare scheme.
8. To assist in this process the Seacare Authority is seeking the views of stakeholders to help inform
the development of a set of preferred coverage provisions. Once the Authority has agreed to a set of
preferred coverage provisions these will be conveyed to the Minister.
9. This paper provides information on existing coverage provisions and problems associated with these
provisions, some guiding principles to be taken into account in developing a set of preferred coverage
provisions and a draft set of coverage provisions on which feedback is being sought.
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
Existing Coverage Provisions
10. Existing coverage provisions are found in section 19 of the Seafarers Act and section 6 of the OHS(MI)
Act. Both Acts apply to a prescribed ship (or prescribed unit in the case of the OHS(MI) Act) that is
engaged in trade or commerce:
a. between Australia and places outside Australia; or
b. between two places outside Australia; or
c. between the States; or
d. within a Territory, between a State and a Territory or between two Territories.
11. In addition the two Acts apply to:
a. an off-shore industry vessel in relation to which a declaration under subsection 8(A) of the Navigation
Act is in force; or
b. a trading ship in relation to which a declaration under subsection 8AA of the Navigation Act is in force.
12. A prescribed ship (or prescribed unit) is defined as a ship to which Part II of the Navigation Act applies.
Part II (section 10) of the Navigation Act applies to:
a. a ship registered in Australia;
b. a ship (other than a ship registered in Australia) engaged in the coasting trade; or
c. a ship (other than a ship registered in Australia or engaged in the coasting trade) of which the majority
of the crew are residents of Australia and which is operated by any of the following:
i.
a person who is a resident of, or has his principal place of business in, Australia;
ii.
a firm that has its principal place of business in Australia; or
iii. a company that is incorporated or has its principal place of business, in Australia.
13. The Seacare Authority has published coverage guidance notes to assist employers and operators to
determine whether the Seacare scheme applies to their operations. The guidance can be found on the
Seacare Authority’s website.
14. The existing coverage provisions are complex and not readily understood by maritime operators,
employers and employees. The decision on whether a vessel is covered by the scheme is effectively in the
hands of operators to determine based on a series of coverage tests. Some of the difficulties associated
with the existing coverage provisions are outlined below.
•
There are conflicting views on whether references to Part II of the Navigation Act should be read in
conjunction with the application provisions in section 2 of the Navigation Act.
•
Terms are not defined within the legislation, resulting in different interpretations as to their meaning.
•
There is potential for considerable jurisdictional churn as operators can theoretical move in and out of
coverage depending on the nature of each voyage.
•
Intraterritorial voyages are treated differently from intrastate voyages.
•
There is potential for a coverage gap to exist in relation to non-self propelled vessels when declared
under sections 8A or 8AA of the Navigation Act.
15. In addition, the Government’s shipping reform agenda means that changes will need to be made to
the coverage provisions of the scheme to take account of proposals for the creation of an Australian
International Shipping Register (AISR) and changes to the coastal trading licensing regime.
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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Guiding Principles
16. In developing its draft scheme coverage provisions the Seacare Authority has been guided by a set of
principles. It is not the intention of the Seacare Authority for the draft coverage provision to lead to a
dramatic change in the jurisdictional footprint of the existing scheme but rather to provide clarity and
certainty and to address shortcomings in the existing coverage provisions.
17. The following principles have been taken into account:
•
the interests of seafarers are paramount and coverage under the scheme should be available to all
seafarers doing similar work in the same maritime industry sector
•
the coverage provisions should ensure that the same conditions extend to all operators and
employers in the same maritime industry sector
•
the coverage provisions must be consistent with Commonwealth powers under the Constitution and
consistent with Government’s policy
•
the coverage provisions should be clear and concise and remove ambiguities and uncertainties;
•
ideally commonality of coverage provisions should exist between the OHS and workers’
compensation components of the scheme
•
the coverage provisions should address any regulatory gaps and not result in any regulatory overlaps
•
the coverage provisions should be capable of accommodating an expanding maritime industry and
any future changes in the maritime industry
•
the coverage provisions should reduce the potential for jurisdictional churn by allowing for opting in
under certain conditions
•
the coverage provisions should result in scheme of sufficient size to remain viable to scheme
participants
•
the coverage provisions should be acceptable to scheme stakeholders.
Draft Coverage Provisions
18. The Seacare Authority’s draft coverage provisions have been developed with the above guiding principles
in mind. While a large amount of commonality has been achieved in the proposed coverage provisions
for the Seafarers Act and the OHS(MI) Act it has not been possible to develop a common set of coverage
provisions. Existing legislation and Government policy positions particularly in regard to the proposed AISR
have necessitated two sets of coverage provisions.
19. The draft coverage provisions take account of the rewrite of the Navigation Act and the coastal shipping
reforms as outlined in the exposure drafts of the Navigation Bill 2012 and the Coastal Trading Bill 2012
and Coastal Trading (Consequential Amendments and Transitional Provisions) Bill 2012 released by the
Department of Infrastructure and Transport on 19 December 2011.
20. The Seacare Authority notes that the exposure draft for the Australian International Shipping Register
Bill has not yet been released by the Department of Infrastructure and the status of AISR vessels when
engaged in the coastal trade is unclear. As such the draft coverage provisions are silent in this regard.
Similarly the draft coverage provisions do not take a position on foreign registered vessels holding a
Temporary Trading Licence. The Authority notes that Government policy in regard to coverage of these
vessels is not as yet finalised.
21. The main features of the proposed coverage provisions are outlined below.
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
Seafarers Act
22. The main features of the draft coverage provisions of the Seafarers Act are:
•
Employment of seafarers—all seafarers on the vessel are covered regardless of the nature of their
employment contract. A seafarer is defined as an individual employed or engaged on the business of
the ship, excluding pilots and persons temporarily employed on the vessel while the vessel is in port.
•
Declaration by Seacare Authority—a new provision in the Seafarers Act that allows the Seacare
Authority to declare that the Act applies to a vessel on request of the operator under certain
circumstances. This provision enables operators to seek a declaration to cover all vessels in their
fleet to avoid jurisdiction churn and on cost efficiency grounds. The circumstances that the Seacare
Authority would take into account in considering a declaration would be set out in regulations under
the Act.
•
Australian registered commercial vessels (registered under the Shipping Registration Act 1981) which
operate on international voyages or the coastal trade would be covered by the Act.
•
Australian registered commercial vessels that hold an ‘opt in’ declaration under the proposed
Navigation Bill 2012 would be covered by the Act.
•
Foreign registered vessels engaged in coastal trade—these vessels would be covered when holding a
Transitional General Trading Licence.
•
Offshore industry vessels—these vessels would be covered when operated by an Australian
domiciled operator. The definition of Australian domiciled operator is sufficiently broad to capture
operators that have a place of business in Australia. All offshore industry vessels would be covered
regardless of where they operate. Offshore industry vessels are defined as vessels wholly or primarily
engaged in exploiting or exploring the non-living natural resources of the seabed and subsoil of the
seabed.
23. The following vessels or types of operations would not be captured by the draft coverage provisions:
•
Government vessels—currently not covered and status quo to remain
•
Australian Defence Force vessel—currently not covered and status quo to remain
•
Non-commercial vessels—not to be covered, to maintain consistency with the proposed Maritime
Safety Act that only covers commercial vessels.
•
Intrastate voyages—not covered except where the voyage crosses the outer limits of the Exclusive
Economic Zone.
•
Intraterritory voyages—not covered except where they cross the outer limits of the Exclusive
Economic Zone to ensure consistency with intrastate voyages
•
Inland waterway voyages—not covered as outside the Commonwealth’s constitutional powers.
24. Further detail on the draft coverage provisions for the Seafarers Act are shown in the flow chart in
Attachment B.
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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OHS(MI) Act
25. The main features of the draft coverage provisions for the OHS(MI) Act are:
•
Declaration by Australian Maritime Safety Authority (AMSA)—a new provision in the OHS(MI) Act that
allows AMSA to declare that the Act applies to a vessel on request of the operator under certain
circumstances. This provision enables operators to seek a declaration to cover all vessels in their fleet
to avoid jurisdiction churn and on cost efficiency grounds. The circumstances that AMSA would take
into account in considering a declaration would be set out in regulations under the Act.
•
Australian registered commercial vessels (registered under the Shipping Registration Act 1981) which
operate on international voyages or engage in the coastal trade would be covered by the Act.
•
Australian registered commercial vessels that hold an ‘opt in’ declaration under the proposed
Navigation Bill 2012 would be covered by the Act.
•
Vessels registered under the proposed AISR vessel—these vessels would be covered to ensure
appropriate OHS protection for seafarers and for compliance with Australian treaty obligations.
•
Offshore industry vessels—these vessels would be covered when operated by an Australian
domiciled operator. The definition of Australian domiciled operator is sufficiently broad to capture
operators that have a place of business in Australia. All offshore industry vessels would be covered
regardless of where they operate.
26. The following vessels or types of operations would not be captured by the draft coverage provisions:
•
Government vessels—currently not covered and status quo to remain.
•
Australian Defence Force vessel—currently not covered and status quo to remain.
•
Offshore industry vessel when Act disapplied by the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 (OPGGS Act)—the OPGGS Act disapplies the Commonwealth OHS legislation
when the vessel is a facility as defined by the OPGSS Act.
•
Non-commercial vessels—not to be covered, to maintain consistency with the proposed Maritime
Safety Act that only covers commercial vessels.
•
Intrastate voyages—not covered except where the voyage crosses the outer limits of the Exclusive
Economic Zone.
•
Intraterritory voyages—not covered except where the voyage crosses the outer limits of the Exclusive
Economic Zone to ensure consistency with intrastate voyages.
•
Inland waterway voyages—not covered as outside the Commonwealth’s constitutional powers.
27. Further detail on the draft coverage provisions for the OHS(MI) Act are shown in the flow chart in
Attachment B.
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
Exemptions
28. Under the existing legislation, the Authority has the power to grant exemptions from the application of
the Seafarers Act pursuant to s20A of the Act. This provision was introduced in 1997, due partly to the
significant costs associated with obtaining insurance cover under the Seafarers Act for one-off voyages.
29. The Authority developed s20A exemption guidelines which establish the conditions of exemptions from
the Seafarers Act. These guidelines also reflect the 2006 Ministerial Direction which prescribes that
exemptions from the scheme are permitted where workers’ compensation insurance is available under
a State or Territory scheme at a cost lower than that available under the Seacare scheme. The current
Exemption Guidelines are available at the Seacare website.
30. The Authority proposes that under the draft coverage provisions there would still be a need to allow
exemptions from the Seafarers Act in certain prescribed circumstances. However, any exemption process
should not be a vehicle to undermine the integrity of the scheme and would be granted in exceptional
circumstances only. To ensure greater certainty the Authority proposes that the grounds for exemptions
should be prescribed in Regulation.
31. The Authority proposes that the following grounds for the granting of exemptions from the Seafarers Act
are appropriate:
•
Proposed voyage does not constitute a regular trading pattern.
•
Proposed voyage is incidental to the primary operations of the vessel (i.e. relocation, delivery).
•
Proposed voyage is outside Australia for a period of twelve months or more and the majority of crew
are non Australian residents.
•
Vessel is under 500 gross tonnes.
32. The Seacare Authority proposes that the granting of an exemption from the Seafarers Act would flow on
to an exemption of the provisions of the Seafarers Rehabilitation and Compensation Levy Act 1992 and
the Seafarers Rehabilitation and Compensation Levy Collection Act 1992 but not the OHS(MI) Act.
Feedback
33. The Seacare Authority is keen to receive feedback from stakeholders and other interested parties on
the proposed coverage provisions outlined in this paper. Feedback received will be taken into account
in developing the Authority’s final position on scheme coverage. It should be noted that the Seacare
Authority is not responsible for determining policy for the Seacare scheme but can play a role in the
development of that policy by providing constructive and informed advice to the Minister.
34. Feedback on the issues in this paper should be sent to the Seacare Authority by 30 March 2012:
•
email to [email protected] or
•
post to Seacare Authority, GPO Box 9905 Canberra ACT.
35. If you have any questions regarding the issues in this paper please contact Gerard Newman, Director
Seacare Management Team, on (02) 6275 0061 or email [email protected].
Seacare Authority
15 February 2012
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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ATTACHMENT A
Legislative Extracts
Seafarers Rehabilitation and Compensation Act 1992
19 Application of Act
(1) This Act applies to the employment of employees on a prescribed ship that is engaged in trade or
commerce:
(a) between Australia and places outside Australia; or
(aa) between 2 places outside Australia; or
(b) among the States; or
(c) within a Territory, between a State and a Territory or between 2 Territories.
(1A)In addition, this Act applies to the employment of employees on any prescribed ship that is:
(a) an off shore industry vessel in relation to which a declaration under subsection 8A(2) of the Navigation
Act is in force; or
(b) a trading ship in relation to which a declaration under subsection 8AA(2) of that Act is in force.
(2) This Act also has the effect it would have if:
(a) a reference to an employer were limited to a reference to a trading corporation formed within the limits
of the Commonwealth; and
(b) a reference to an employee were limited to a reference to an employee employed by a trading
corporation formed within the limits of the Commonwealth.
(3) This Act also has the effect it would have if:
(a) a reference to an employer were limited to a reference to a financial corporation formed within the
limits of the Commonwealth; and
(b) a reference to an employee were limited to a reference to an employee employed by a financial
corporation formed within the limits of the Commonwealth.
(4) This Act also has the effect it would have if:
(a) a reference to an employer were limited to a reference to a foreign corporation; and
(b) a reference to an employee were limited to a reference to an employee employed by a foreign
corporation.
(5) Subsection (3) does not have the effect of applying this Act with respect to:
(a) State banking that does not extend beyond the limits of the State concerned; or
(b) State insurance that does not so extend.
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
3 General definitions
prescribed ship means a ship to which Part II of the Navigation Act applies but does not include a
Government ship.
Occupational Health and Safety (Maritime Industry) Act 1993
6 Application of Act
(1) This Act applies in relation to a prescribed ship or prescribed unit that is engaged in trade or commerce:
(a) between Australia and places outside Australia; or
(aa) between 2 places outside Australia; or
(b) between the States; or
(c) within a Territory, between a State and a Territory or between 2 Territories.
(2) Without limiting the operation of subsection (1), this Act applies to:
(a) the operator of a prescribed ship or prescribed unit described in subsection (1); and
(b) employees employed on a prescribed ship or prescribed unit described in subsection (1); and
(c) contractors and other persons working on a prescribed ship or prescribed unit described in
subsection (1); and
(d) manufacturers, suppliers and importers of plant used, or substances used or handled, on a
prescribed ship or prescribed unit described in subsection (1).
(3) This Act also applies in relation to:
(a) an offshore industry vessel in relation to which a declaration under subsection 8A(2) of the Navigation
Act 1912 is in force; and
(b) a trading ship in relation to which a declaration under subsection 8AA(2) of that Act is in force.
(4) Without limiting the operation of subsection (3), this Act applies to:
(a) the operator of a vessel or ship described in subsection (3); and
(b) employees employed on a vessel or ship described in subsection (3); and
(c) contractors and other persons working on a vessel or ship described in subsection (3); and
(d) manufacturers, suppliers and importers of plant used, or substances used or handled on, a vessel or
ship described in subsection (3).
(5) Without prejudice to its effect apart from this subsection, this Act also has effect as provided by
subsections (6), (7) and (8).
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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(6) This Act has, by force of this subsection, the effect it would have if:
(a) a reference to an operator were limited to a reference to a trading corporation formed within the limits
of the Commonwealth; and
(b) a reference to an employee were limited to a reference to an employee of a trading corporation
formed within the limits of the Commonwealth; and
(c) a reference to a contractor were limited to a reference to a contractor working for a trading
corporation formed within the limits of the Commonwealth; and
(d) a reference to a manufacturer were limited to a reference to a manufacturer that is a trading
corporation formed within the limits of the Commonwealth; and
(e) a reference to a supplier were limited to a reference to a supplier that is a trading corporation formed
within the limits of the Commonwealth; and
(f) a reference to a person in sections 22, 23 and 24 were limited to a reference to a person working for
a trading corporation formed within the limits of the Commonwealth.
(7) This Act has, by force of this subsection, the effect it would have if:
(a) a reference to an operator were limited to a reference to a financial corporation formed within the
limits of the Commonwealth; and
(b) a reference to an employee were limited to a reference to an employee of a financial corporation
formed within the limits of the Commonwealth; and
(c) a reference to a contractor were limited to a reference to a contractor working for a financial
corporation formed within the limits of the Commonwealth; and
(d) a reference to a person in sections 22, 23 and 24 were limited to a reference to a person working for
a financial corporation formed within the limits of the Commonwealth.
(8) This Act has, by force of this subsection, the effect it would have if:
(a) a reference to an operator were limited to a reference to a foreign corporation; and
(b) a reference to an employee were limited to a reference to an employee of a foreign corporation; and
(c) a reference to a contractor were limited to a reference to a contractor working for a foreign
corporation; and
(d) a reference to a manufacturer were limited to a reference to a manufacturer that is a foreign
corporation; and
(e) a reference to a supplier were limited to a reference to a supplier that is a foreign corporation; and
(f) a reference to a person in sections 22, 23 and 24 were limited to a reference to a person working for
a foreign corporation.
(9) This Act does not apply with respect to:
(a) State banking that does not extend beyond the limits of the State concerned; or
(b) State insurance that does not so extend.
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
Navigation Act 1912
2 Application of Act
(1) Except in so far as the application of this section is expressly excluded by a provision of this Act, this Act
does not apply in relation to:
(a) a trading ship proceeding on a voyage other than an overseas voyage or an inter State voyage;
(b) an Australian fishing vessel proceeding on a voyage other than an overseas voyage;
(ba) a fishing fleet support vessel proceeding on a voyage other than an overseas voyage;
(c) an inland waterways vessel; or
(d) a pleasure craft;
or in relation to its owner, master or crew.
10 Application of Part
Except so far as the contrary intention appears, this Part applies only to:
(a) a ship registered in Australia;
(b) a ship (other than a ship registered in Australia) engaged in the coasting trade; or
(c) a ship (other than a ship registered in Australia or engaged in the coasting trade) of which the majority
of the crew are residents of Australia and which is operated by any of the following (whether or
not in association with any other person, firm or company, being a person, firm or company of any
description), namely:
(i)
a person who is a resident of, or has his or her principal place of business in, Australia;
(ii) a firm that has its principal place of business in Australia; or
(iii) a company that is incorporated, or has its principal place of business, in Australia;
and to the owner, master and crew of such a ship.
Definitions
overseas voyage, in relation to a ship, means a voyage in the course of which the ship travels between:
(a) a port in Australia and a port outside Australia;
(b) a port in Australia and a place in the waters of the sea above the continental shelf of a country other
than Australia;
(c) a port outside Australia and a place in the waters of the sea above the continental shelf of Australia;
(d) a place in the waters of the sea above the continental shelf of Australia and a place in the waters of the
sea above the continental shelf of a country other than Australia;
(e) ports outside Australia; or
(f) places beyond the continental shelf of Australia;
whether or not the ship travels between 2 or more ports in Australia in the course of the voyage
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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ATTACHMENT B
Draft decision flowchart
Seacare Jurisdictional Coverage Provisions
Seacare Rehabilitation and Compensation Act 1992
Does the
Seafarers Act
apply?
YES
Does the ship
hold a Seacare
Authority
certificate?
Is there
employment of
employees?
NO
NO
YES
YES
YES
Does the ship
operate on
international
voyages or
hold a General
Training
Licence?
YES
Is the ship an
SRA commercial
vessel?
NO
Is the ship a
Government ship or an
Australian Defence
Force ship?
YES
NO
Does the ship
hold an ‘opt
in’ declaration
under the
Navigation Act?
Is the ship
listed on the Australia
international Shipping
Register?
NO
YES
NO
YES
NO
YES
Yes, the
Act applies.
Is the ship
foreign registered?
Does the
ship hold a
Transitional
General Trading
Licence?
No, the Act
does not apply.
NO
To be
determined
YES
Does the
ship hold a
temporary
trading licence?
NO
Is the
operator domiciled
in Australia?
YES
YES
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Is the ship an
offshore vessel?
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
NO
NO
ATTACHMENT B
Draft decision flowchart
Seacare Jurisdictional Coverage Provisions
Occupational Health and Safety (Maritime Industry) Act 1993
Does the OHS(MI)
Act apply?
YES
Does the
ship hold an
Australian
Maritime Safety
Authority
certificate?
Is the ship a
Government ship or an
Australian Defence
Force ship?
NO
YES
NO
YES
YES
Does the ship
operate on
international
voyages or
hold a General
Training
Licence?
Is the ship a
commercial ship under
the SRA?
NO
NO
Is the ship
listed on the Australian
International Shipping
Register?
YES
NO
Yes, the
Act applies.
YES
NO
Does the ship
hold an ‘opt
in’ declaration
under the
Navigation Act?
Is the ship
foreign registered?
NO
No, the
Act does not
apply.
YES
YES
Does the
ship hold a
Transitional
Trading
Licence?
NO
Is the
operator domiciled
in Australia?
NO
NO
Does the
ship hold a
temporary
trading licence?
YES
YES
Is the ship an
offshore vessel?
NO
YES
NO
Does the
Offshore Petroleum
and Greenhouse Gas
Storage Act
apply?
YES
SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER
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SEACARE JURISDICTIONAL COVERAGE—DISCUSSION PAPER