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Tuesday, 22 March 2011
Page: 1458


Senator FEENEY (Parliamentary Secretary for Defence) (5:14 PM) —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—

Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Bill 2011

This bill amends the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 (the Safety Levies Act) to impose levies on offshore petroleum titleholders to enable the National Offshore Petroleum Safety Authority (NOPSA) to recover the costs associated with undertaking the regulatory functions in relation to the integrity and safety of wells and well operations conferred on NOPSA by a combination of amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the OPGGS Act), which came into force in November 2010, and regulations made under the Act.

Honourable members will recall that last year Parliament passed legislation augmenting NOPSA’s functions to include the functions conferred by the OPGGS Act and its associated regulations with respect to non-occupational health and safety structural integrity for facilities, wells and well-related equipment. The amendments gave NOPSA regulatory responsibility for all aspects of structural integrity of petroleum facilities, wells and well-related equipment. The amendments also clarified that an occupational health and safety duty of care applies to titleholders in relation to wells and well-related equipment. NOPSA has responsibility for monitoring and enforcing this titleholder duty of care.

Following on from the legislative changes to NOPSA’s functions and responsibilities, Part 5 of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations will give full effect to these changes by transferring regulatory functions and powers relating to management of well integrity and well operations to NOPSA.

NOPSA is funded on a full cost-recovery basis with levies raised from the offshore petroleum industry. It is crucial that NOPSA is resourced adequately to undertake its functions. The uncontrolled release of hydrocarbons from the Montara platform in August 2009 demonstrated that the regulator of offshore wells and well operations must have sufficiently skilled and experienced staff available to effectively and diligently discharge their regulatory responsibility wherever well operations are taking place.

The levies that are currently imposed by the Safety Levies Act are facility-based, payable by the facility operator and confined to occupational health and safety. These levies do not extend to funding NOPSA’s regulation of wells and well operations of titleholders under the OPGGS Act and Part 5 of the Resource Management and Administration Regulations.

These new levies imposed by this Bill will ensure that NOPSA is able to recover costs associated with undertaking the extension of its regulatory functions.

Three new well-related levies, an annual well levy, a well activity levy and a well investigation levy are imposed by this Bill.

  • The annual well levy will recover NOPSA’s general regulatory costs associated with undertaking its functions in relation to the integrity of wells and well-related equipment. It will also cover NOPSA’s general costs associated with monitoring and enforcing compliance with the titleholder OHS duty of care in relation to wells.
  • The well activity levy will recover NOPSA’s costs associated with the assessment and approval of specific well activities under Part 5 of the Resource Management and Administration Regulations.
  • The well investigation levy will cover excessive regulatory costs reasonably incurred by NOPSA in investigating well-related incidents. It will only apply where NOPSA’s costs, when conducting an inspection in relation to a breach or suspected breach of the titleholder duty of care in relation to wells, exceeds $30,000.

In light of the issues arising from the Montara incident, the Australian Government is committed to ensuring that NOPSA has sufficient powers and capability to effectively regulate all aspects of well integrity and well operations, pending the establishment of a single National Offshore Petroleum regulator. Collection of these levies from titleholders who carry out well operations will ensure that NOPSA is adequately resourced to fulfil its well-related responsibilities under the OPGGS Act and associated regulations.

The title of the Safety Levies Act will change to the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003, to reflect the expansion of its content to include levies relating to wells.


Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies (Consequential Amendments) Bill 2011

This bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the OPGGS Act) to deal with consequential matters arising from the enactment of the Offshore Petroleum and Greenhouse Gas Storage Regulatory Levies Legislation Amendment (2011 Measures No. 1) Bill 2011 (Regulatory Levies Amendment Bill).

The Regulatory Levies Amendment Bill amends the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 to impose levies on titleholders to allow NOPSA to recover costs associated with undertaking its augmented regulatory functions in relation to wells and well-related equipment.  The consequential amendments to the OPGGS Act in this Bill will enable effective calculation and collection of the new well levies.

In particular, the Bill provides for application of a late payment penalty where either a well investigation levy, annual well levy or well activity levy remains wholly or partly unpaid after the day it becomes due and payable.

This penalty is designed to ensure that levies are paid on time.  Given the importance of NOPSA’s function in regulating safety and integrity matters for the offshore oil and gas industry and the fact it is funded through levies, it is critical that it is adequately resourced through the timely payment of levies by industry.


Personal Property Securities (Corporations and Other Amendments) Bill 2011

The Personal Property Securities (Corporations and Other Amendments) Bill 2011 is the final set of amendments to the Personal Property Securities Act (PPS Act) and consequential amendments prior to the Personal Property Securities (PPS) regime coming into effect this year.

The PPS Act, which was passed by the Parliament in 2009, created one national law with one set of rules governing interests in property other than land that secure debts or other obligations.

The effect of the PPS Act is to simplify over 70 Commonwealth, State and Territory laws, common law and the rules of equity, which govern security interests in personal property. It will also replace the many registers of personal property security interests that complement these State and Territory Acts, with the PPS Register.

PPS reform is a significant part of COAG’s deregulation agenda. The reform will deliver major benefits for business and consumers by reducing transaction costs, making lenders more willing to accept different kinds of personal property as security for loans and facilitating the extension of credit to borrowers.

Two sets of amendments to the PPS Act and consequential amendments to the Corporations Act have been passed since the PPS Act was enacted in 2009. The regime now requires some further amendments to take into account the practical realities of commercial practice, before the reforms take effect in October 2011.

The purpose of the Bill is to make amendments which have been raised by stakeholders and practitioners to ensure that all aspects of the regime are appropriate for users and take into account of their particular business practices.

The Bill makes a number of minor and technical amendments, including:

  • clarifying certain definitions
  • correcting drafting errors
  • inserting operational provisions about the use of the PPS Register
  • clarifying that the intention of the regime is not to interfere with existing rights under the Corporations Act.

The Bill also introduces certain practical measures to ensure that the regime is appropriate for users, including amendments to facilitate consumer access to data held on other databases to confirm whether a motor vehicle is stolen or written off.

The Bill also provides an additional method for states that have not yet referred power to the Commonwealth with respect to PPS to be able to ‘adopt’ the relevant version of the PPS Act and refer power to the Commonwealth to make subsequent amendments to the PPS Act.

Conclusion

A comprehensive and consistent national PPS system will benefit many sectors in the Australian economy. These reforms will streamline the way in which lenders conduct their businesses, facilitate the extension of credit to borrowers and reduce borrowing costs. I am pleased that this last set of amendments necessary to effect PPS reform has been prepared so that the regime can take effect in October of this year.

These proposed amendments have been the subject of detailed consultation with stakeholders through the Committee process and I would also like to thank the individuals and organisations who participated in the consultation process. I note that these amendments have also been agreed to by States and Territories, through the Ministerial Council for Corporations and the Standing Commission of Attorneys General, in accordance with the Personal Property Securities Inter-Governmental Agreement.

Ordered that further consideration of the second reading of these bills be adjourned to the first sitting day of the next period of  sittings, in acordance with standing order 111.

Ordered that the Personal Properties Security (Corporations and Other Amendments) Bill 2011 be listed on the Notice Paper as one order of the day, and the two remaining bills be listed as separate orders of the day.