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Wednesday, 10 February 2010
Page: 935

Mr MARTIN FERGUSON (Minister for Resources and Energy and Minister for Tourism) (10:08 AM) —I move:

That this bill be now read a second time.

This bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the Act). This is a relatively small bill making a number of minor policy and technical amendments.

It is nevertheless an important bill as it progresses the government’s intention to establish a new National Offshore Petroleum Regulator commencing on 1 January 2012.

To this end, the bill introduces a measure by which the Commonwealth will retain the industry fees raised under the Offshore Petroleum and Greenhouse Gas Storage (Registration Fees) Act 2006 in order to use this money for the establishment of a National Offshore Petroleum Regulator.

Until now the registration fees have been redistributed to the states and Northern Territory. The industry fees raised under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and the Offshore Petroleum and Greenhouse Gas Storage (Annual Fees) Act 2006 will continue to be redistributed to the states and the Northern Territory. I will review the fees to be redistributed to the states and the Northern Territory to ensure that they continue to recover their costs of administering petroleum activities in Commonwealth offshore areas pending the establishment of the new regulator. If necessary, I will amend the level of the fees by regulation to ensure this outcome.

I do not expect to introduce legislation amendments for the establishment of a National Offshore Petroleum Regulator until next year as discussions regarding the exact arrangements are ongoing within the Ministerial Council on Mineral and Petroleum Resources; however, I would like to emphasise that this initiative is a key development in the ongoing improvements and streamlining of the national regime for the regulation of petroleum and greenhouse gas activities in Commonwealth waters.

Also of significance in this bill is the augmentation of the existing functions of the National Offshore Petroleum Safety Authority (NOPSA) to include non-occupational health and safety (non-OHS) aspects of structural integrity for facilities, wells and well-related equipment in Commonwealth waters.

Since its establishment on 1 January 2005, NOPSA has had structural integrity functions relevant to occupational health and safety for petroleum facilities, including for pipelines, and associated wells.

The amendments introduced in this bill clarify NOPSA’s role and strengthen their ability to fully carry out their functions in relation to all facilities, wells and well-related equipment, including during the drilling and construction of wells and whether or not wells are associated with a facility.

The augmentation of NOPSA’s functions to include non-occupational health and safety aspects of structural integrity is not to extend NOPSA’s responsibilities into environmental management or resource management regulation but to allow NOPSA to more effectively carry out its responsibilities as an occupational health and safety regulator.

This is particularly the case where a structure used in petroleum operations such as a well or a pipeline is on the sea floor and contact between people and the structure is only occasional.

To a large extent, the structural integrity of a pipeline or a well is an OHS matter as it is central to the safety of operational or maintenance crews whenever they are required to do work on the structure. There will always be some aspects of structural integrity that fall outside this category, however, and it is these that the present amendments seek to address. The amendments will enable NOPSA to take a comprehensive and integrated approach to the integrity of structures, without any question as to the scope of their functional responsibilities.

The government will work with industry and other stakeholders to determine in regulations which matters relating to the structural integrity of pipelines and wells are also resource security or resource management matters. These will continue to be the responsibility of the designated authorities under proposed regulations relating to resource management. There will therefore be an element of overlap between the responsibilities of NOPSA and those of the designated authorities, although they will be performing different functions.

Other minor policy amendments proposed in this bill seek to:

  • Provide a streamlined process for the submission of applications, nominations, requests or notices in relation to a title when that title is jointly owned by two or more titleholders (known as multiple titleholders);
  • Make clear that when the act imposes obligations on a titleholder and where a title is owned by multiple holders, while the obligation is imposed on each and every titleholder that the obligation may be discharged by any one of the titleholders; and
  • Correct a technical problem with the authority of responsible state and Northern Territory ministers to participate in the performance of joint authority functions, and to perform designated authority functions, under the Commonwealth regulations.

On this last matter, existing state and Northern Territory legislation, which corresponds to the act, provides the designated authority (the relevant state or Northern Territory minister) with authority to perform functions and powers under the act, but this does not include the regulations in force under the act. This amendment therefore closes the gap, as many important functions and powers of designated authorities are conferred by the regulations. For consistency, corresponding amendments have also been made to the joint authority provisions.

A further small but important amendment clarifies the duties of titleholders under the occupational health and safety provisions of this act. This amendment narrows the titleholder’s duties in the current clause 13A of schedule 3 of the act from facilities generally to wells and well related equipment, specifically in new clauses 13A and 13B.

As it stands the clause can be read as imposing a duty of care on a titleholder in relation to the design of facilities, such as drilling rigs, which the titleholder could not reasonably be expected to have any control over.

Therefore this duty of care has been recast so that it applies to all aspects of wells from design through to operation and closing off. Consequential amendments have been made to allow OHS inspectors to monitor compliance and investigate possible contraventions.

Technical amendments in this bill include changes to offence provisions that relate to titleholders, where the offence consists only of a physical element. These amendments provide that offences under these provisions are made provisions of strict liability, which removes the need to prove intent.

Given the geographically remote nature of offshore petroleum and greenhouse gas activities it is not possible for regulatory staff to be constantly monitoring titleholder activities, so they are reliant on accurate reporting by titleholders to inform them that directions and requirements in the act have been complied with.

Where the offences relate to doing or not doing an act, proving the intent of a titleholder is very difficult. In these circumstances making the offences ones of strict liability is justified.

This application of strict liability is consistent with government policy on the application of strict liability and is to provide a regulatory regime that is effective and enforceable. These amendments do not increase any penalties on titleholders, in fact in some instances removing imprisonment as a penalty and instead replacing with penalty units.

Further technical amendments in the bill correct a referencing error and update the listed OHS laws set out in the act to take into account recent changes to safety regulations.

In summary, through a range of measures including:

  • retaining some of the money raised through industry fees to fund the establishment of a National Offshore Petroleum Regulator;
  • strengthening the functions of NOPSA;
  • increasing the effectiveness of compliance through the application of strict liability to appropriate offences;
  • clarifying the application of titleholder provisions in the act in relation to multiple titleholders; and
  • setting out that a titleholder’s duty of care under OHS provisions of the act relates specifically to wells;

this bill underscores the government’s commitment to the maintenance and continuing improvement of a strong, effective framework for the regulation of offshore petroleum and greenhouse gas activities. I therefore commend the bill to the House.

Debate (on motion by Mr Billson) adjourned.