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Wednesday, 6 July 2011
Page: 7733


Mr MARTIN FERGUSON (BatmanMinister for Resources and Energy and Minister for Tourism) (11:23): Obviously I will make some closing comments on each of the offshore petroleum bills before the House and then I will deal with each of them in terms of potential amendments.

The Offshore Petroleum and Greenhouse Gas Storage and Amendment (National Regulator) Bill 2011 amends the Offshore Petroleum and Greenhouse Gas Storage Act to ensure Australia's offshore regulatory regime is robust by reducing unnecessary burden on industry without compromising safety, the environment or resource manage­ment. The bill expands the functions of the Australian National Offshore Petroleum Safety Authority, which becomes the National Offshore Petroleum Safety and Environmental Management Authority. This bill also significantly streamlines the administration of offshore petroleum and greenhouse gas storage titles by establishing the National Offshore Petroleum Titles Administrator.

These amendments go beyond just delivering the Australian government's response to the Productivity Commission's recommendation for the establishment of a national offshore petroleum regulator for Commonwealth waters. Integrating the views gathered from extensive stakeholder consultation over the last 15 months and recognising the outcomes of the Montara Commission of Inquiry report, the Australian government is delivering on its commitment to restoring the Australian community's confidence in the regulation of the offshore petroleum industry. These amendments will help ensure that our regulatory regime and operating standards are the best and safest in the world. These reforms will replace the current inefficient system of seven desig­nated authorities with a national integrated regulatory system, ensuring consistency, efficiency and transparency in Common­wealth waters. Retaining the joint authorities for the Commonwealth minister and the relevant state and territory ministers guarantees that each jurisdiction continues to have a role in decision making on key petroleum titles in Commonwealth waters that could be adjacent to a state or the Northern Territory.

The offshore oil and gas industry is vital to sustaining our country's economic prosperity and security. These reforms streamline Australia's regulatory system, bolstering the nation's position as a world leader in offshore oil and gas regulation. The reforms in this bill, together with other complementary bills, will help deliver on the Australian government's commitment to ens­uring the Australian community's confidence in the regulation of offshore petroleum and reinforce our competitive advantage as a preferred location for investment.

I thank all members for their constructive contribution to what is a complex debate. I will deal with a range of issues raised by members and turn first to the contribution of the member for Groom, the former minister for resources, who had responsibility for this very complex industry. During the course of his contribution he expressed disappointment that the government was proceeding with the bill in the absence of a concluded agreement with the Western Australian government concerning collocation of federal and Western Australian offshore petroleum regulators. In reply, I can simply say the Commonwealth has negotiated in good faith with the state of Western Australia on this proposal.

On behalf of the Commonwealth I have signed a memorandum of understanding detailing the proposed arrangements, which I stand by, agreed by officials from within the Western Australian Department of Mines and Petroleum, my department and the National Offshore Petroleum Safety Auth­ority. I give my commitment to continue to discuss the matter with the Western Australian minister in the hope that he comes to recognise that the legislative regime for the offshore industry proposed by these bills not only is in the best interests of Australia as a whole but is very much in the interests of Western Australia.

It is the government's very firm belief that by locating the headquarters and most operations of NOPSEMA and NOPTA in Perth we are reinforcing the importance of Perth in the world's oil and gas industry. It is also the government's ambition that, because these two regulators will be well resourced and so be able to attract quality staff in what is a high-paying industry, they will be recognised as among the best regulators for this industry in the world, further reinforcing Western Australia's importance in this global industry. In many ways this industry represents a wonderful career opportunity for young Australians.

I must say that negotiation cannot be open ended, and it is critical, given the experience of Montara, that the Commonwealth ensures that it is able to properly regulate oil exploration and production for those waters over which it has exclusive jurisdiction as the Commonwealth. The changes we are proposing are not a question of states' rights being denied but rather of the Common­wealth finally accepting its proper responsibilities in relation to waters over which it has exclusive jurisdiction. Delegat­ing those responsibilities to third parties is no longer a tenable position for the Common­wealth of Australia.

The member for Swan made reference to the Western Australian government not collecting North West Shelf revenues. The House of Representatives Standing Comm­ittee on Agriculture, Resources, Fisheries and Forestry, chaired by the member for Lyons, recommended that this function be retained by the state of Western Australia. The Commonwealth accepts the committee's recommendation and I will be moving appropriate amendments to reflect that. The members for Forrest and Swan both incorrectly stated that under these bills the Commonwealth will not have to notify the state of the award of title in Commonwealth waters offshore of Western Australia. In fact the bill does not change current arrange­ments in this regard. As is presently the case, titles will be awarded by the joint authority of which the state minister is a member. The Western Australian minister will be aware of titles in Commonwealth waters offshore of Western Australia because he or she will participate in their granting. This point illustrates the extent to which I have gone to accommodate Western Australian concerns, and not just in relation to this issue, without compromising the essential aim of improving our national offshore regulatory regime.

The honourable member for Forrest was quite right in asserting that this legislation would have the greatest impact on Western Australia, but she was incorrect to imply that this would be a negative impact. I suggest it will be quite the opposite, and not just for the reasons I have already outlined. It is Western Australia that will benefit the most from the increased community confidence that will flow from the improved regulation of Australia's offshore oil and gas industry that this bill will bring about. It goes to our notion of the social licence to operate in a very important economic area: the further development of our petroleum industry.

Without these reforms it will be difficult to see how this industry will achieve its full potential with full public confidence. It is this legislation that secures the industry's long-term future by ensuring that the community's high expectation of environm­ental and other standards are properly met. It is about ensuring that we meet them in a way in which Australians, wherever they live, can have full confidence, and that is why industry supports these reforms. It sees them as essential to its commercial future and regards them as essential for its social licence to operate in Australian waters.

It is this essential point that Western Australians seem to keep missing: all Australians, not just those who live in the West, have the same interest in ensuring that there are no more Montaras and that this industry is regulated in accordance with the world's best practice. That objective is shared by all members of this House, and appropriately so, and I thank them for their support for that objective.

In conclusion, I take this opportunity to express my appreciation to the members of the Standing Committee on Agriculture, Resources, Fisheries and Forestry for their report on this legislation. I advise the House that it is the government's intention to accept the committee's recommendations. I also take this opportunity to thank members of the Senate Standing Committee for the Scrutiny of Bills, which recommended improvements to the bill that the government will also adopt. I repeat my thanks to honourable members for their contributions to this debate and I commend the bills the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.