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Thursday, 16 May 2013
Page: 2770

Senator CONROY (VictoriaLeader of the Government in the Senate, Minister for Broadband, Communications and the Digital Economy and Minister Assisting the Prime Minister on Digital Productivity) (13:42): I move:

That this bill be now read a second time.

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

Leave granted.


The tragic deaths of two employees following an incident on the Stena Clyde rig in Bass Strait last year, the uncontrolled release of hydrocarbons from the Montara Wellhead Platform off the northern coast of Western Australia in August 2009 and the explosion of the Deepwater Horizon in the Gulf of Mexico on 20 April 2010 - all serve to represent unfortunate examples of the serious and inherent risks associated with the offshore petroleum industry.

Collectively these events demonstrate and emphasise the need for a strong, effective and properly resourced offshore petroleum regulatory regime to safeguard human health and safety and the Australian marine environment.

The amendments contained in this bill largely continue the Australian Government's work of implementing its response to the Report of the Montara Commission of Inquiry, building as they do, on the previous compliance themed legislative package I introduced in November 2012 and which completed its passage through the Parliament last sitting fortnight.

This bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to clarify and strengthen the compliance, monitoring, investigation and enforcement powers of the national offshore petroleum regulator.

As a result, there will be a range of graduated enforcement measures available to the regulator to appropriately and proportionately address different contraventions of the act.

Compliance measures contained in the amended bill will include:

A range of alternative enforcement mechanisms, such as infringement notices, adverse publicity orders and continuing penalties;

The agreed recommendations from the whole-of-Government 'polluter pays' report, including an express polluter pays obligation and an associated third party cost recovery mechanism;

Clarifying insurance requirements to ensure that maintenance of sufficient financial assurance is compulsory without a direction being given, and to clarify the compliance role of the regulator;

Enabling NOPSEMA inspectors to issue environmental prohibition and improvement notices to require petroleum titleholders to take action removing significant threats to the environment; and

Requiring the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to publish OHS and environment improvement notices and prohibition notices on its website.

The bill amends the act by introducing continuing penalties, infringement notices, adverse publicity orders and injunctions .

These tools will enable the regulator to select and apply an appropriate and proportionate regulatory response, depending upon the nature and relative seriousness of the breach that has occurred given the overall set of circumstances.

This range of graduated enforcement tools supplement, but do not replace, existing criminal penalties.

Provisions of the bill also strengthen and clarify the application of the 'polluter pays' principle in the act.

In the event there is an escape of petroleum as a result of operations within a title area, operators will be required to stop, contain, control and clean up the spill, as well as remediate the environment and carry out appropriate environmental monitoring.

In the event that the titleholder fails to comply with these requirements following a spill, the 'polluter pays' provisions will also enable the regulator (NOPSEMA or the Commonwealth Minister) to recover from the titleholder the costs incurred by them carrying out remediation activities.

While recognising that titleholders are operating within the Commonwealth's exclusive jurisdiction, the Australian Government recognises that, should an incident occur, there may be potentially serious environmental consequences in adjacent State and Northern Territory jurisdictions.

Acknowledging this risk, this bill also provides a statutory course of action for State and Northern Territory governments to recoup the costs, from the responsible titleholder, of cleaning up the escaped petroleum and remediating the damage to the environment.

The bill clarifies existing insurance provisions, ensuring that it is compulsory for a titleholder to maintain sufficient financial assurance to meet any expenses or liabilities arising in connection with work done under the title following an escape of petroleum and also with other extraordinary regulatory costs they might incur. Financial assurance is required to deal with extraordinary costs, expenses and liabilities that a titleholder might not have the capacity to meet. It is not expected to cover ordinary expenses of a titleholder in meeting ordinary operating costs, such as the costs of compliance with title conditions.

The polluter pays and financial assurance amendments collectively implement and address the matters raised in Recommendations 95 and 96 of the Report of the Montara Commission of Inquiry.

Finally, the bill implements a number of miscellaneous technical and minor policy measures, including:

Enabling the electronic service of documents under the act or legislative instruments to be provided for in regulations under the act; and

Enabling administrative arrangements for taking eligible voluntary actions, when there is more than one registered holder of a title, to be carried through into legislative instruments under the act.

This current set of amendments makes further strides towards addressing issues identified as arising from the Montara incident in August 2009 and underscores the Government's commitment to the maintenance and continuing improvement of a strong, effective framework for the regulation of offshore petroleum activities.

I commend the bill to the Senate.