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Monday, 21 November 2011
Page: 12952

Mr ZAPPIA (Makin) (15:56): On behalf of the Standing Committee on Climate Change, Environment and the Arts, I present the committee's advisory report on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Significant Incident Directions) Bill 2011 together with the minutes of proceedings.

Ordered that the report be made a parliamentary paper.

Mr ZAPPIA: by leave—The Offshore Petroleum and Greenhouse Gas Storage Amendment (Significant Incident Directions) Bill 2011 was referred to the House of Representatives Standing Committee on Climate Change, Environment and the Arts for inquiry and report on 22 September 2011. The purpose of the bill is to amend the OPGGS Act to specifically enable the regulator to issue a direction to a petroleum titleholder in the event of a significant offshore petroleum incident that has caused or might cause an escape of petroleum.

The OPGGS (Significant Incident Directions) Bill is closely related to a package of bills that were passed by both houses in September this year, led by the OPGGS Amendment (National Regulator) Bill 2011. These bills established the National Offshore Petroleum Safety and Environmental Management Authority, or NOPSEMA, as a national regulator for the offshore petroleum industry. When it begins operating on 1 January 2012, NOPSEMA will largely take over roles previously held by the state and Northern Territory 'designated authorities' with regard to the structural integrity of facilities, environmental management and the day-to-day regulation of offshore petroleum operations.

Amongst the powers given to NOPSEMA by the national regulator bill is the power to issue directions to offshore petroleum titleholders in relation to general operations and also remedial actions for the purpose of restoring any damage to the environment within the title area. The significant incident directions bill before the House will extend this power so that, in the event of a significant offshore petroleum incident occurring within the title area that has caused or might cause an escape of petroleum, NOPSEMA will be able to issue directions that require the titleholder to take remedial actions either within or outside the title area.

As the bill before the House concerns matters closely related to the national regulator package of bills, the committee elected to invite submissions from organisations who had participated in the previous inquiries into those bills by the House of Representatives Standing Committee on Agriculture, Forestry and Fisheries and the Senate Economics Legislation Committee. The committee received two brief submissions: one from the Department of Resources, Energy and Tourism and the other from the Western Australian Department of Mines and Petroleum. The Western Australian submission expressed general support for the intent of the bill; however, it suggested that it may be more appropriate for the direction-giving power to be given to the Commonwealth minister rather than NOPSEMA. It also suggested that, given the significance of offshore petroleum operations to Western Australia's economy and environment, consideration should be given to legislating mandatory consultation with WA in relation to any significant incident directions or, at a minimum, notification once a direction has been issued. The Department of Resources, Energy and Tourism was invited by the committee to respond to the Western Australian concerns. The committee agreed with the department's contention that there is a sufficient level of accountability between NOPSEMA and the Commonwealth minister for the direction-giving power to remain with NOPSEMA. The committee notes that NOPSEMA will have a high level of expertise and understanding of the key regulatory issues that it is being established to oversee, making it ideally placed to issue any significant incident directions that may be required. The committee agreed with Western Australia that the relevant state or territory authorities should be, at a minimum, notified when a significant incident direction has been issued. However, given the importance of a timely response to any such incidents, the committee agreed with the federal department that it would be unwise to formally legislate any consultation or notification processes in the OPGGS Act. The committee suggests that such processes should instead be incorporated into NOPSEMA's internal operating practices.

The committee considers that the Offshore Petroleum and Greenhouse Gas Storage Amendment (Significant Incident Directions) Bill is an important part of the regulatory reforms that were initiated following the Montara Commission of Inquiry. As demonstrated by the 2009 Montara incident off north-west Australia and the more recent Deepwater Horizon incident off the United States, offshore petroleum incidents have the potential to affect very large areas of offshore waters and coastlines, with major economic and environmental consequences. The committee therefore recommends passage of the bill through the House without amendments.