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Thursday, 23 June 2005
Page: 18

Mr ENTSCH (Parliamentary Secretary to the Minister for Industry, Tourism and Resources) (10:08 AM) —I move:

That this bill be now read a second time.

Members would be aware, for instance from information I provided to the House in 2002, that the government has been engaged in a long-term project of rewriting the Petroleum (Submerged Lands) Act 1967 and incorporated acts.

I have pleasure today in presenting the completed product to the House in the form of the Offshore Petroleum Bill 2005 and associated bills on which I shall speak later.

The Petroleum (Submerged Lands) Act has been the primary legislation for the administration of Australia’s offshore petroleum resources. The act is now close to 40 years old and, through age and many amendments, it has become complex and unwieldy.

The government saw the need some years ago to rewrite the act to provide a more user-friendly enactment that will reduce compliance costs for governments and the industry.

This bill is a rewritten and renamed version of the Petroleum (Submerged Lands) Act. This bill proposes conspicuous changes to the structure and style of the legislation but seeks to implement only a modest number of minor policy amendments from the framework set out in the Petroleum (Submerged Lands) Act.

The management regime for offshore petroleum exploration, production, processing and conveyance that is proposed by this bill is unchanged in all its essential features from what is set out in the Petroleum (Submerged Lands) Act.

The bill also includes occupational health and safety provisions and maintains the operation of the National Offshore Petroleum Safety Authority for their administration.

I would now like to summarise the minor policy changes that are proposed in the bill. Time does not permit me to go into a detailed examination of all of them.

The largest category of amendments addresses past drafting omissions, errors and anomalies that have been detected in rewriting the text of the Petroleum (Submerged Lands) Act. An example is the set of amendments designed to make all provisions that apply to state ministers also apply to Northern Territory ministers.

There are also a reasonable number of amendments designed to bring provisions that, on account of their age, are out of line with current Australian government legislative drafting principles into compliance with these principles.

I refer to issues such as establishing more comprehensive and up-to-date provisions about delegations and bringing the enactment into compliance with modern administrative law principles, for instance by explicitly requiring consultation with relevant parties before certain adverse decisions are taken.

I would now like to briefly highlight a few of the policy changes which may be of more general interest. One is the change to the definitions of ‘petroleum’ and ‘exploration’.

For ‘petroleum’, a more lucid definition is proposed than the one appearing in the Petroleum (Submerged Lands) Act, so that it is quite clear that when processed gas is to be conveyed via a pipeline it is classed as petroleum for all purposes under the proposed act.

Second, if gas has been reinjected into a petroleum pool and is later recovered, the new definition eliminates questions that might arise as to whether the mixture of hydrocarbons and gases then produced from the well is ‘naturally occurring’.

The definition of ‘explore’ is made more precise than in the existing act to express with more clarity that its common meaning is extended to include speculative surveys by non-explorers performed with the intention of selling the results to explorers.

The next issue is not about a policy change in an administrative sense; rather, it is a proposal to make explicit in the act a policy that has been adhered to by governments for some time.

It is proposed to make clear that the conditions imposed by the joint authority on the holder of a production licence are not to be prescriptive to the point of requiring the holder to drill a well, to carry out a survey or to spend a specific amount of money on exploration activities.

There will also be a provision that recognises that the production of petroleum involves a substantial and long-term financial commitment by licensees and that, accordingly, continuity and predictability are important features of the regime as it relates to production licences and the conditions applicable to them, particularly when licences come up for renewal.

The bill also includes some changes to the provisions seeking to ensure the safety of offshore petroleum facilities from incidents such as vessel impact. One amendment is to the definition of ‘owner of a vessel’. In most parts of Australia’s marine jurisdiction, if a vessel is involved in a violation of a safety zone and the vessel is leased, the lessee could avoid prosecution but the owner, who could be isolated from the action, could face 10 years imprisonment.

This anomaly is considered unacceptable and the equivalent provision in the bill ensures that an uninvolved owner of a leased vessel would not be guilty of an infringement.

Finally, among the various enhancements and marginal changes to the National Offshore Petroleum Safety Authority and occupational health and safety provisions, I would mention the conferral of new powers on OHS inspectors in relation to offence-related entry, search and seizure. This has been recommended by the Director of Public Prosecutions.

Accordingly, we have a new subdivision in the bill that makes provision for entry by OHS inspectors to facilities, vessels and onshore premises and the conduct of searches for, and seizure of, evidential material. These powers would be exercisable either with consent or with a warrant and draw extensively on relevant model provisions in the Crimes Act 1914.

There will be no effect on the Australian government budget from the purely editorial aspects of rewriting of the Petroleum (Submerged Lands) Act.

The proposed act is to come into effect by proclamation on a date that has been left open. This is because, for technical reasons, the state and Northern Territory governments need to have made certain minimal amendments to their mirror acts before the Commonwealth act can come into force.

The fact that the rewriting process has been an editorially-focused exercise rather than a policy-focused one has meant that a number of other policy issues have been reserved for later consideration and to be possibly the subject of an amendment bill at a future date.

In summary, the government believes the proposed new enactment, as a best practice item of legislation, will be another element that will help ensure Australia remains one of the most attractive places in the world to explore for and develop petroleum resources.

In placing the bill before the House, I am confident that the quality of its drafting and the proposed policy enhancements will speak for themselves.

I commend the bill to honourable members and present the explanatory memorandum.

Debate (on motion by Mr Gavan O’Connor) adjourned.