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Thursday, 9 October 2003
Page: 21090


Mr HATTON (10:26 AM) —I am very happy to be speaking to the Petroleum (Submerged Lands) Amendment Bill 2003 and the Offshore Petroleum (Safety Levies) Bill 2003, which have Labor's full support because they have all the identifiable hallmarks of a piece of Labor legislation. This is about full cooperation between the Commonwealth, the state governments, the Northern Territory and industry. This is a national agency with a national approach. There has been an entire rejection at every level—almost incomprehensible at the Commonwealth level—of privatisation.

There were four possible models put up after 2001. When the Department of Industry, Science and Resources looked into the current safety concerns and regulations in relation to offshore platforms and close inshore platforms, they simply said the current system was inadequate. What we have in this legislation is a very considered set of approaches to fixing the problems and the inadequacies.

Four simple propositions were put up. But the amazing thing is that this government chose not to outsource it all to a private operator—that was option D. They chose not just the increased competency option—which was option B—which just said, `Let's pour some more resources into what is currently there.' The government has been known to do a bit of bandaiding here and there and to not really grapple with the difficulties in relation to this. They did not choose that either, which was passing strange. We also had option C, the cooperative model, and that basically said, `We'll have a single independent national agency but everybody will still sort of operate in much the same way.'

Instead, all levels—Commonwealth, state, territory and industry—said, `Let's have a national agency to deal with this. One single national agency; one single focus'. The cost of that will be in the order of $6.6 million, as currently projected. It is expected that this will start operation on 1 January 2005. The associated legislation in regard to the safety levies, which covers four different levies for four different programs, I will come to shortly. Those consequential arrangements are to be set by regulation but the general parameters in terms of the cost of this have been agreed.

So I congratulate the government for doing this the Labor way; for doing it on the basis of a national agenda; for seeing that these are national industries of national importance to Australia and, for once, not being limited in the approach they have taken. It is my guess that the reason for this is that industry drove most of this; that industry saw that there was no point and purpose to continue to have difficulties in this area.

Since 1975—when we had the constitutional difficulties resolved as to who had jurisdiction in terms of close offshore waters, the Commonwealth or the states—we have had a simplification of the situation. But there has also been increasing complication because of the different bodies—Northern Territory, state and Commonwealth—with legislation in place to attempt to deal with something, as pointed out in the explanatory memorandum over paragraphs 20 to 24. All up, the bill is expected not only to improve occupational health and safety on rigs at sea, on other platforms and in relation to pipelines coming from those to shore but also to ameliorate the problems that have become apparent.

The `why' for this goes back not only to the Department of Industry, Tourism and Resources recognising the current inadequacies but also to a series of other examples that have been alluded to by previous speakers, both from the Labor side and also from the government side. The core of that has been the North Sea disasters, but of course one of these is home grown. I will read the full paragraph from the explanatory memorandum because it adds increased weight and emphasis to just how much is at stake here. Paragraph 144 reads:

Exploitation of offshore hydrocarbons is a very high cost activity but one producing very high returns both for industry and the nation as a whole. From a safety perspective, it is characterised by a relatively low probability of major events but ones which have dramatic effects in terms of loss of life, economic consequences, public aversion and international reputation. The North Sea disasters, Alexander Kielland, (123 dead), Piper Alpha (167 dead), the Brazilian loss of the P36 platform in 2001 and the Longford gas plant explosion all demonstrate (in different proportions) the human and economic consequences of poor safety performance.

So we have the major loss of life and the key question of public aversion pushing back any close consideration—except rather an emotional response—of the fact that our key resource industries can involve the loss of life and danger to the safety of the people working in those industries. We as a country need to support our resource industries and the people who work in them. We also need to utterly ensure their safety in the workplace.

Those examples in the explanatory memorandum are carried into the consequential amendments with regard to the safety levies. What is under consideration when you come to the safety levies—as shown at page 3 of the explanatory memorandum—is the question of open-ended recoupment of moneys from companies that are responsible for any damage. Even though the expectation is that it will cost only $6.6 million a year or so to run all of these different investigations, you must have cover for a major disaster as the costs can be high. It is pointed out in the legislation that, for most routine investigations, there is no charge to industry. What is also pointed out is that it is not a case of everyone having to cough up for the costs of major investigations—the whole of the industry is not going to be put to charge because one or two of the industry's companies do the wrong thing or make mistakes. Why is that so significant and important? I will quote from the explanatory memorandum. It says:

As investigations could become extremely resource intensive (eg in the event of a Royal Commission), it is not intended that there will be any limit on the amount of levy that may apply to any accident or occurrence.

As far as I know, that has not been remarked upon in contributions so far. What is the core of that? We simply have to think of the dimensions of those North Sea events or the dimensions here in terms of the Longford gas plant.

Members from Victoria, Tasmania, me and others in New South Wales—the eastern seaboard—recognised the existence of Longford, its importance in terms of the local industrial capacity and wealth generation in Victoria and the problems associated with the safety at that plant, which all became utterly apparent when that major disaster happened. The cost of the royal commission into that was very high, so it is right and proper—and this bill properly foresees the dimension of this—that there is not any constraint in the proper allocation of costs.

The government is saying that this is not something that should be borne by the people as a whole—whether at Commonwealth, state or territory level—but properly, if a royal commission should find that there was culpability on the part of the operators, the costs should be borne by those operators. This is not only the cost of those people who have been injured, or the families of those who lost their lives, being recompensed but also the costs of the investigation. This is a set of arrangements based on full cost recovery and it can be open-ended in some circumstances that we expect would be extremely rare but that do happen. The core of what is being proposed here is that far-sighted legislation should fix the current inadequacies and move towards solving problems that otherwise would arise.

As I said, this just does not look like a conservative bill—a Liberal and National Party bill—because of the scope and nature, the inventiveness and the innovation and the foresightedness to look at that single national agency. Indeed, if one goes to the second reading speech that was given in relation to this, at both pages 8 and 10 I wondered who was actually in government when the relevant minister or parliamentary secretary was saying—


Mr Sidebottom —Some things rub off.


Mr HATTON —Some things do rub off after good practice and good example. It is almost osmotic, one could argue. At page 8 it says:

Governments will not allow the industry to operate without regulation.

It does not sound like the National Commission of Audit to me.

The regulation is like any other essential input into the industry's offshore petroleum operations. This is a case with clear beneficiaries of a service being provided by the Government and the industry must pay for it.

The last part we could always expect from a Liberal-National government—a cash-and-carry government in terms of the expectation that somebody has to pay and it should not be the Commonwealth government. It can be the states, territories, industry, normal constituents but not the Commonwealth—not us. That is normal, we will take that for granted. But actually moving to a national body that is based on this is almost incomprehensible. And it gets better. At page 10, in the conclusion, the second reading speech says:

The decision to create the Authority, and the development of the legislation, has involved the Ministerial Council on Mineral and Petroleum Resources, a steering committee of Commonwealth and State and Northern Territory officials, industry participants and work force representatives. The role of the working groups comprising members of governments, industry and the workforce has been invaluable.

And what do we end up with?

The offshore petroleum industry and workforce have been strong advocates for the creation of a national safety authority.

So it wasn't the Commonwealth at all. As we guessed, it was the industry which said: `This makes sense. We are willing to pay for it. We want a better regime; we want our workers to be covered. We don't want the prospect of industrial manslaughter laws being passed at Commonwealth, state or territory level. We don't want a situation where there are criminal prosecutions in regard to major breaches of safety on offshore platforms. We don't want a situation anymore where there is vast confusion as to who is responsible for what and where the buck passing can continue,'—something that has happened for more than 100 years. The general purpose, blindingly, is to create greater confidence in the regulation of safety in offshore interests, and that will be performed efficiently and effectively.

Maybe the government are starting to get it. It has taken more than 7½ years, but osmotically they have picked up quite a lot of what our approach has been. I have noted in the past, when we have been dealing with a series of different pieces of legislation, that they have rebadged a great deal but they have also taken the core elements and continued the core elements of our legislation with slight changes. They did not throw the legislation out of the window, because it was good, solid legislation in the national interest—as our government was.

What will the impact of these be on industry? They are willing to take up the costs and charges in regard to this. They are willing to have that national focus. They are willing to take that as part of their normal costs because they know it is a protective benefit to those industries. They know that the public aversion that is there when there is a major and significant impact, as there was with the explosion at Longford, and the disruption to the community as a whole, the disruption to the industry itself and the disruption to a particular company should be avoided as much as possible. The explanatory memorandum on this is, again, very good. Paragraph 142 states:

The impacts on business are predominantly beneficial. At present those petroleum companies operating in more than one State/NT adjacent waters, have to deal with a different regulator for each State/NT who in turn apply their own OHS laws. The complexity of the existing arrangements was discussed ... in paragraphs 20 to 24—

and I alluded to those. It continues:

The replacement of multiple regulators with one, applying a single OHS law rather than three or more, will simplify the regulatory structure without reducing safety outcomes. The advantage in these changes is self-evident and welcomed by industry. However, it has not proved possible to quantify the benefit.

We should see the benefit come to fruition in the ensuing years. But we know that good legislation will fix problems that are apparent. I am very glad to say that the department moved in 2001 to address these problems. As a member of the Standing Committee on Industry, Science and Resources in the last parliament and as a member in this parliament of the Standing Committee on Industry and Resources, I know that there have been a series of areas in which, if the department has moved at all in a forward way, it has been a snail-like progress. However, in this it has done the right thing. It has initiated the right approach and sought to move forward strongly to get the right result. So Australia and all of those people who are dependent on our major resource projects—not only the people who hazard their lives by working on offshore rigs or those people who hazard their lives and safety working on shore, but also those who are affected by the four different levies that we have, dealing with the pipelines, the safety investigation and the major one in terms of the safety cases—will benefit from the fact that there is a new set of arrangements in place.

Part of its newness and uniqueness is also covered by the fact that these bills cover a provision that Labor normally would not support. This is a case where, although people will be employed under the Public Service Act, there are specific provisions to look at what the international market would pay with regard to their work. Their payments will not be regulated by the normal provisions of the Public Service Act; they will be greater than that. They will also not be bound by the normal restrictions in terms of people being able to contest and so on. Why is that the case, and why have Labor said that in this case we will accept this arrangement, while we would not in other cases? It is not just because this bill seeks a full national resolution to these problems, it is because of the specific nature of the problems in the industry. You cannot leave this up to people who are untrained or relatively not very well trained.

As the explanatory memorandum in terms of the levies points out—and I think it is also mentioned in the general background argument—you need very highly skilled people. You need people who are independent of government and industry to have a broad range of capacities and be willing, where necessary, to stand up to industry or the Commonwealth and state governments and say, `No, we're not going to do it.' You need people who are independent enough, well enough remunerated and comfortable enough in the position they are in to say, if necessary, that production needs to stop in order to fix the occupational health and safety problems that are apparent.

This is a clear example of when an exception needs to be made. The disasters in the North Sea and at Longford indicate that the nature of the industries and the dimensions of the problems when things go wrong demand that kind of approach.

This is a strong, positive, straightforward-looking bill that is in the national interest, in the interest of all those entities involved in the industry and of Australian constituents, whether they are in Blaxland, Kalgoorlie, Braddon or wherever.

In conclusion, I will go to the explanatory memorandum and talk about what this bill does. This bill will empower industry and the work force to: identify and report potential hazards; have a regular singular identity with a common culture and philosophy; assess safety cases, investigate incidents and audit in a consistent fashion. It will be the most cost-effective and, therefore, efficient option; have actual and perceived independence from political influence and departmental controls in operational matters but also have an appropriate level of accountability to government and the parliament; be funded by the specific levies; attract quality staff, and so on. I commend this bill. It really is a Labor bill in its design and approach. It is a great thing and we support it fully.