Senator FORSHAW (3:43 PM) —by leave—Before the sitting was suspended for lunch, I indicated that the opposition was opposed to those sections of the Primary Industries and Energy Legislation Amendment Bill (No. 3) 1997 that would reduce the funding available for 1997-98 for the Fisheries Research and Development Corporation. We believe that this is an unfair penalty on the body, given that the basis upon which these funds are to be recovered by the government is that, in their words, the corporation has demonstrated prudent financial management. To some extent, it is a victim of its own success.

We believe that the move is short-sighted. It has the potential to damage long-term research and development work within the fisheries industry. We will be opposing those measures, and an amendment has been circulated to that effect. I know that my colleague Senator O'Brien, who has participated in the proceedings of the Senate Rural and Regional Affairs and Transport Legislation Committee when it dealt with this issue, will have a lot more to say about it.

I will now turn to some other aspects of the legislation relating to amendments to the Petroleum (Submerged Lands) Act. Firstly, at proposed sections 40 and 41 of the bill there are amendments which I could describe in general terms as being related to the setting of seabed boundaries agreed between the Australian government and the Indonesian government by way of treaty. As honourable senators are aware, there are certain treaties in force between Australia and Indonesia relating to exploration and seismic work for petroleum and similar resources within the territory or, as it is referred to, exclusive economic zone.

When the bill was debated in the House, my colleague the shadow minister, the honourable member for Perth, Mr Stephen Smith, raised certain legal issues and sought clarification on just what would be the impact upon Australia of these changes and, in particular, with respect to the operation of the United Nations Convention on the Law of the Sea provisions. That convention, as I am advised, can result in a country being required to make available to the other treaty nation marine scientific research that may have been gathered in relation to the seabed within the water column.

The concerns that my colleague Mr Smith raised were that, whilst we may be carrying out research on the seabed in relation to petroleum, gas or other resources found beneath the seabed for the purposes of petroleum exploration and production, we may also gather other scientific research and whether we would be obliged to make it available to the other treaty nation, being Indonesia.

Mr Smith, the shadow minister, advises me that he has now, after seeking this information, received appropriate advice from the government. Accordingly, I will put these comments into the record. The shadow minister has been provided with a copy of the Commonwealth's legal advice on this point. The conclusion of that advice is that seismic research carried out pursuant to a permit under the Petroleum (Submerged Lands) Act for petroleum exploration and exploitation is not subject to the marine scientific research provisions of the United Nations Convention on the Law of the Sea or the 1997 treaty. Consequently, the provisions of this legal advice, as provided by the government, meet the central point raised by the shadow minister, the member for Perth, Mr Smith. On that basis, we do not seek to take the matter any further in these deliberations within the Senate. The shadow minister has indicated that he may wish to make some further comments at another stage on this issue, particularly when the bill returns to the other place.

The second issue that I raise on behalf of the opposition relates to the subsequent extensive set of amendments that will be moved by the government to this legislation which have been circulated in the chamber. I am advised that these substantial and detailed amendments were provided to the shadow minister for resources and energy only on Wednesday last week, not yesterday. On that basis, we on the opposition side have had limited opportunity to consider the amendments and not much opportunity for anything more than a cursory consultation with the relevant industry associations and individual members of the industry itself. It is fair and true to say that, on the basis of our consultations, industry supports these measures and supports their passage at this time.

The urgency suggested by the government in respect of these matters is said to be based on proposed new projects and the possible expansion of the existing project which forms Australia's liquefied natural gas industry. The shadow minister and the opposition generally have made it clear that we support that expansion. The current regrettable aspect from our national point of view is that these expansions or new projects now seem further away as a result of the Asian economic difficulties. On that basis, we would have thought that this was precisely an area where detailed consultation with the opposition could and should have occurred in the run-up to the introduction of these amendments. It is a matter of considerable regret that this has not occurred.

Frankly, given the current Asian economic climate, the argument as to urgency is tenuous. If this amendment is passed today, for instance, will the Japanese wish to offer the piece of paper that they could not offer at LNG12 recently in respect of the North West Shelf project? Will the Koreans produce a piece of paper for the Gorgon project? We think not. On the same basis, if the amendment is not passed this week or next, will the Japanese or the Koreans say that the failure to pass was the fatal straw that broke the expansion or the new project's back? Again, we think not. It is, however, fair to say that this is one of the issues that will fall for relevant consideration by the customers in the context of these LNG expansions or new projects.

There is an issue here which we are happy to address at this point of time: the opposition certainly supports the notion or the principle that there should be secure title over gas resources to support long-term LNG contracts. We have no difficulty in the principle of an LNG supplier's production licence remaining in force at the very least until the expiry of the LNG contract. This principle is sensible, is important to the industry in the long term and is one which we support.

Whether the detail of the amendments effect that in the best way or whether there are alternative ways of achieving that are questions that would have been helped by the presence of some sensible consultation, to which I have already referred. For example, there may be legitimate reservations about the notion of an indefinite production licence period, particularly given that the amendments apply across the board and not just in respect of LNG projects.

What domestic implications, if any, does this have in the new era of competitive gas arrangements? There may be a structure available, for example, where the production licence period is a definite period but longer than the longest long-term LNG contract in that production area.

It is, of course, acknowledged that sections 105 and 106 of the act which relate to cancellation of a licence remain in place. These do give protection if the conditions of production are not met. My colleague the shadow minister will no doubt pursue these and other technical matters in the other place in due course.

We support the expansion of Australia's LNG industry, we support the principle that these amendments reflect and, in the context of limited consultation, we support the passage of these amendments. In conclusion, we support the bill as it has been presented, with the exception of the amendment the opposition will be moving in respect of the fisheries research and development issue. We will express our view on the amendments to be moved by Senator Murray later in the committee stage.