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Wednesday, 17 September 2003
Page: 20238


Mr ENTSCH (Parliamentary Secretary to the Minister for Industry, Tourism and Resources) (9:44 AM) —I move:

That this bill be now read a second time.

The Offshore Petroleum (Safety Levies) Bill 2003 is a bill for an act to give effect to the decision of the Commonwealth and the states and the Northern Territory to fully recover the costs of operating the National Offshore Petroleum Safety Authority from industry.

This bill, once enacted, will provide the National Offshore Petroleum Safety Authority with the ability to recover the costs of its regulatory activities through industry levies. A separate bill, the Petroleum (Submerged Lands) Amendment Bill, establishes the authority as the single regulator of safety in Commonwealth, state and Northern Territory coastal waters.

The majority of the authority's resources are to be employed in activities associated with monitoring compliance with approved safety cases, conducting audits of facilities, and reviewing and assessing updates to existing safety cases. The cost of these ongoing activities will be recovered through a safety case levy. This will be payable by all operators of exploration, production and support facilities on an annual basis whilst there is a safety case in force for that facility. It is intended that the safety case levy, which will recover the majority of the authority's annual operating costs, will be calculated based on the type of facility and in such a way as to ensure that any one operator's contribution is in proportion to their level of activity within the offshore petroleum industry.

The costs of monitoring the safety of offshore pipelines will be recovered through an annual pipeline safety management plan levy. Similarly to the safety case levy, it is intended that the pipeline safety management plan levy will be calculated according to the type of pipeline, however it is expected that this levy will recover only a small proportion of the authority's operating costs.

This bill will also authorise the authority to charge a safety investigation levy which will be payable by an operator in the event of a serious accident or dangerous occurrence at the operator's facility which requires the authority to conduct an investigation. The levy will only be charged if the resources required to conduct the investigation exceed a level which will be set by the regulations. The reason for having a separate safety investigation levy is to avoid a situation where all operators may be subsidising the cost of conducting lengthy investigations into incidents involving one or two of the industry's operators.

This bill also makes provision for a penalty to be imposed if a levy payment is significantly late.

While not part of this bill there is one further fee which industry will have to pay for offshore safety regulation. If the company requests the authority to undertake a service for it, for example to assess a safety case, the authority will charge the company for doing that work. This fee will be recovered under the Petroleum (Submerged Lands) Act.

The final level and structure of the fees and levies will be set by regulations before the authority commences operations in 2005. The fees and levies will be designed in accordance with the government's cost recovery plan, and there will be consultation with industry, through the preparation of a cost recovery impact statement.

I commend the bill to the House and I present the explanatory memorandum for the bill.

Debate (on motion by Mr Melham) adjourned.