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Thursday, 12 May 1994
Page: 715


Senator FAULKNER (Minister for the Environment, Sport and Territories) (10.01 a.m.) —I move:

  That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

  Leave granted.

  The speeches read as follows

PETROLEUM (SUBMERGED LANDS) LEGISLATION AMENDMENT BILL 1994

Mr President, this bill is part of the package of legislation to implement the 1993-94 budget decision to impose a charge on industry to support the continental margins program conducted by the Australian Geological Survey Organisation (AGSO).

The charge, which will be imposed on petroleum and minerals exploration permits and retention leases offshore under Commonwealth jurisdiction, will recover approximately one half of the cost of the program.

This bill will enable charges to be appropriated from the consolidated revenue fund to support the program. Consistent with the existing provision allowing cancellation of titles if titleholders do not pay outstanding fees within three months of their due date, the bill will allow cancellation for non payment of the charge.

The government commissioned an independent review of AGSO in 1992 led by Dr Max Richards (the Richards Review) to enhance Australia's geoscience effort. The review panel, which included senior members of the petroleum and minerals industries, carefully examined AGSO's operations.

The review's report contained a wide range of recommendations which have been carefully considered by the government. The continental margins program was identified by the review as essential.

The objectives of the continental margins program are to provide geoscientific information and advice in order to improve offshore petroleum and mineral exploration efficiency and effectiveness. The program also supports government decision making on offshore petroleum and mineral exploration and development. Other objectives of the program are to sustain Australia's legal continental shelf claim and to support inter-governmental negotiations on the delineation of sea-bed boundaries.

The Richards Review argued that geoscientific work undertaken by AGSO through the continental margins program should be fully funded by government. The government's view is that where there are community benefits, the community should pay. Where the industry benefits, the industry should pay. Where benefits are shared, costs should be shared.

The government's decision to raise approximately $10 million from the offshore exploration industry to fund about half the cost of the continental margin program, commencing in 1994-95, is based on the principle that the program benefits both the industry and the community. Therefore, both should contribute to its funding.

The data and ideas flowing from the program have been of benefit to companies in their exploration programs. The charge will be applied to exploration permits and retention leases.

To date the continental margins program has focused on activities related to petroleum. Hence the charge will initially be levied only on the petroleum industry. Based on the current number of permits and leases, a charge of around $100,000 per title will be applied.

Should the program, after consultation with industry, be extended to research of interest to the minerals industry, a charge will be applied to minerals exploration and retention licences.

The government is committed to ensuring that the work of AGSO, including this program, remains relevant to both industry and community needs. AGSO has thus been directed to consult fully with the industry in the development of, and reporting on, its programs. This will enable industry priorities to be taken into account.

The program will be subject of evaluation in 1996-97. This bill will also make a number of miscellaneous amendments to the Petroleum (Submerged Lands) Act 1967 to improve efficiency in administration.

The bill will also repeal four acts which provide for the charging of fees to cover costs of administering offshore petroleum titles. A separate bill will create a consolidated fees act to replace these four acts.

Mr speaker, I will now briefly refer to these miscellaneous amendments.

The bill will ensure that the outer territorial sea boundary adjacent to Western Australia and the Northern Territory will remain at three nautical miles for the purposes of this act. This amendment rectifies an inconsistency created when the Australia-Indonesia zone of cooperation in the Timor gap was excised from the act in 1990.

An amendment is being made to ensure that joint delegations of routine joint authority powers to officials can be made to nominated positions rather than named persons. This amendment will avoid the need to issue a revised delegation instrument each time a different person holds a nominated position.

The bill will remove the need for the designated authority to consult titleholders affected by an access authority application where the applicant has obtained prior written agreement from relevant titleholders to the access authority. This amendment will streamline procedures for access authorities without affecting the rights of other parties.

The bill also clarifies that the companies rather than the regulatory authorities should accept ultimate liability for their operations.

This decision will encourage companies to use their management skills to ensure that safety and environmental objectives are effectively met.

The bill will repeal the Petroleum (Submerged Lands) (Exploration Permit Fees) Act 1967, the Petroleum (Submerged Lands) (Production Licence Fees) Act 1967, the Petroleum (Submerged Lands) (Pipeline Licence Fees) Act 1967, and the Petroleum (Submerged Lands) (Retention Lease Fees) Act 1985. This will allow the consolidation of these acts into a single fees act. This proposed act forms the basis of a separate bill.

The amendments allowing the appropriation of charges to partly fund the continental margins program, have a financial impact. They will allow the $10 million expected to be raised each financial year, commencing in 1994-95, to be allocated to this program. None of the other amendments have any significant financial impact.

I commend the bill to the honourable senators, and present the explanatory memorandum to this bill.

PETROLEUM (SUBMERGED LANDS) FEES BILL 1994

Mr President, this bill is part of the package of offshore petroleum and minerals bills. This bill will establish the Petroleum (Submerged Lands) Fees Act 1994 (The Fees Act). This act will replace and consolidate the Petroleum (Submerged Lands) (Exploration Permit Fees) Act 1967, the Petroleum (Submerged Lands) (Production Licence Fees) Act 1967, the Petroleum (Submerged Lands) (Pipeline Licence Fees) Act 1967, and the Petroleum (Submerged Lands) (Retention Lease Fees) Act 1985.

The consolidation of these four acts into a single fees act will reduce the quantity of legislation administering the offshore petroleum industry. The provisions of the fees act are equivalent to those of the four acts it replaces.

The move to a single fees act will not have any significant financial impact.

I commend the bill to the honourable senators, and I present the explanatory memorandum to this bill.

  Debate (on motion by Senator Panizza) adjourned.