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2019-2020-2021

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

OFFSHORE ELECTRICITY INFRASTRUCTURE BILL 2021

 

 

EXPLANATORY MEMORANDUM

 

 

 

Circulated by authority of the Minister for Energy and Emissions Reduction, the Honourable Angus Taylor, MP



 

TABLE OF CONTENTS

GLOSSARY .. iii

OUTLINE .. 1

KEY ELEMENTS OF THE BILL .. 2

FINANCIAL IMPACT STATEMENT .. 8

REGULATION IMPACT STATEMENT .. 9

CONSULTATION .. 9

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS . 11

NOTES ON CLAUSES . 17

CHAPTER 1—PRELIMINARY .. 17

CHAPTER 2—REGULATION OF OFFSHORE INFRASTRUCTURE ACTIVITIES . 26

CHAPTER 3—LICENSING .. 36

CHAPTER 4—MANAGEMENT AND PROTECTION OF INFRASTRUCTURE .. 107

CHAPTER 5—ADMINISTRATION .. 151

CHAPTER 6—APPLICATION OF WORK HEALTH AND SAFETY LAWS AND OTHER LAWS   218

CHAPTER 7—INFORMATION RELATING TO OFFSHORE INFRASTRUCTURE .. 233

CHAPTER 8—MISCELLANEOUS . 250

REGULATION IMPACT STATEMENT                                ANNEXURE A



 

GLOSSARY

Abbreviation

Definition

AIA

Acts Interpretation Act 1901

ADJR Act

Administrative Decisions (Judicial Review) Act 1977

Bill

Offshore Electricity Infrastructure Bill 2021

CA

Corporations Act 2001

Commonwealth offshore area

The following areas, and the seabed and subsoil beneath those areas:

a)       the territorial sea of Australia; and

b)       the exclusive economic zone; but does not include the coastal waters of a State or the Northern Territory

Crimes Act

Crimes Act 1914

Criminal Code

Criminal Code Act 1995

EPBC Act

Environment Protection and Biodiversity Conservation Act 1999

External territories

·          Coral Sea Islands Territory Norfolk Island

·          Territory of Ashmore and Cartier Islands

·          Territory of Christmas Island

·          Territory of Cocos (Keeling) Islands

·          Territory of Heard Island and McDonald Islands

FATA

Foreign Acquisitions and Takeovers Act 1975

Guide to Framing Commonwealth Offences

Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers

ICCPR

International Convention on Civil and Political Rights

LAA

Lands Acquisition Act 1989

NOPSEMA

National Offshore Petroleum Safety and Environmental Management Authority

NOPTA

National Offshore Petroleum Titles Administrator

NT

Northern Territory

OEI

Offshore Electricity Infrastructure: this term covers OREI and OETI

OETI

Offshore Electricity Transmission Infrastructure: fixed or tethered infrastructure that has the primary purpose of storing, transmitting or conveying electricity (whether or not the electricity is generated from a renewable energy resource)

Offshore infrastructure activities

Constructing, installing, commissioning, operating, maintaining or decommissioning Offshore Electricity Infrastructure

Offshore infrastructure project

In relation to a licence, means all of the following:

a)    the offshore renewable energy infrastructure or offshore electricity transmission infrastructure that is, or is to be, constructed, installed, commissioned, operated, maintained or decommissioned under the licence;

b)    any activities that are, or are to be, carried out under the licence in the licence area by or on behalf of the licence holder;

c)    any activities that this Act requires to be carried out in the licence area by or on behalf of the licence holder

OPGGS Act

Offshore Petroleum and Greenhouse Gas Storage Act 2006

OREI

Offshore Renewable Energy Infrastructure: fixed or tethered infrastructure that has the primary purpose of engaging in any of the following activities:

a)    exploring for one or more renewable energy resources;

b)    assessing the feasibility of exploiting a renewable energy resource;

c)    exploiting a renewable energy resource;

d)   storing, transmitting or conveying a renewable energy product

Privacy Act

Privacy Act 1988

Registrar

Offshore Infrastructure Registrar (the Minister may appoint NOPTA under the Bill)

Regulator

Offshore Infrastructure Regulator (NOPSEMA)

Responsible Commonwealth Minister or the Minister

The Minister responsible for the administration of the Bill

Responsible State Minister

The State Minister responsible for administration of laws of the State that correspond to the Bill

RPA

Regulatory Powers (Standard Provisions) Act 2014

State/NT coastal waters

Waters of the sea that extend to 3 nautical miles from the territorial sea baseline, and any waters that are on the landward side of the territorial sea baseline but not within the limits of the State or the NT

TA

Telecommunications Act 1997

WHS Act

Work Health and Safety Act 2011

 



OFFSHORE ELECTRICITY INFRASTRUCTURE BILL 2021

OUTLINE

The Offshore Electricity Infrastructure Bill 2021 (the Bill) establishes a regulatory framework to enable the construction, installation, commissioning, operation, maintenance, and decommissioning of offshore electricity infrastructure (collectively, offshore infrastructure activities) in the Commonwealth offshore area.

The Bill provides a robust framework for granting licences to undertake offshore infrastructure activities in the Commonwealth offshore area, while providing for the safety of workers and the protection of Offshore Electricity Infrastructure (OEI) . Regulatory certainty will allow investors to move their projects forward, enabling a new offshore industry to develop in Australia.

The establishment of an offshore electricity industry in Australia supports the Australian Government’s objective to deliver a reliable, secure and affordable energy system by:

·          facilitating the growth of new sources of energy supply;

·          delivering reliability and improved grid security; and

·          ensuring the energy sector is well regulated.

The development of the offshore electricity industry offers additional benefits in Australia’s national interest, including the creation of new jobs, regional development, and significant investment in Australia’s coastal economies.

The Australian Government manages the marine environment in recognition of all users and seeks to balance competing interests. Under this framework, offshore infrastructure activities must be done in a way that does not adversely impinge on existing marine users. This Bill ensures co-users are consulted ahead of any construction. Projects will only proceed if impacts can be appropriately managed.

Specifically this Bill:

·          Places a prohibition on offshore infrastructure activities in the Commonwealth offshore area without a licence.

·          Empowers the Minister to declare specified areas suitable for offshore infrastructure activities.

·          Empowers the Minister to g rant licences allowing proponents to undertake offshore infrastructure activities in specified areas.

·          Provides for protection of OEI in the Commonwealth offshore area.

·          Establishes the statutory authorities to administer and regulate the framework.

·          Provides for compliance and enforcement of the regulatory framework.

·          Provides for the protection of worker safety through modified application of the Work Health and Safety Act 2011 (WHS Act) .

KEY ELEMENTS OF THE BILL

Enabling the industry - offshore infrastructure activities permitted in the Commonwealth offshore area

The Bill will allow licence holders to undertake offshore infrastructure activities within the Commonwealth offshore area. The Commonwealth offshore area is defined as the waters beyond three nautical miles, to the outer edge of Australia’s Exclusive Economic Zone .

Declared areas

This Bill empowers the Minister to declare a specified area suitable for offshore infrastructure activities. In determining whether an area is suitable, the Minister will consider the existing uses of the area and seek to identify where potential interactions between offshore infrastructure activities and other marine uses may occur. Areas will be excluded where uses are considered incompatible. The responsibility for managing interactions in a declared area rests with any future licence holders, consistent with the principle of shared use of the marine environment.

Licensing scheme

The framework implements a licensing scheme to allow for offshore infrastructure activities and for research and demonstration of emerging offshore electricity generation technologies.

There are three licence streams. Applications submitted under all streams must be made in a form approved by the Offshore Infrastructure Registrar (the Registrar). An applicant must demonstrate they satisfy prescribed suitability and merit criteria in order to be granted a licence.

1.       Commercial

This stream is intended for commercial-scale projects intending to generate electricity through Offshore Renewable Energy Infrastructure (OREI). To obtain a commercial licence, a feasibility licence must first be obtained. The Minister will issue a public invitation to industry to apply for feasibility licences in respect of all or part of a declared area. A feasibility licence allows the licence holder to undertake scoping activities within the prescribed licence area for a period of up to seven years. Feasibility licence areas cannot overlap. The licensing scheme may allow for a financial offer to be considered in the circumstance where applications for the same licence area are similarly meritorious. Once feasibility work is completed, the licence holder can apply for the grant of a commercial licence which has a duration of up to 40 years.

A commercial licence authorises the holder to carry out an offshore electricity generation project in the licence area, and to undertake offshore infrastructure activities for the purpose of the project. The holder of a feasibility licence or a commercial licence may apply for an extension of the licence where certain criteria are met.

2.       Research and demonstration

This stream is intended for small-scale projects to undertake research, or to test and demonstrate emerging technologies (such as wave, tidal or ocean thermal electricity generation). All infrastructure installed under this licence must be removed by the end of the licence period. Research and demonstration licences are granted for a maximum of 10 years, with the possibility of extension, and do not lead to the issue of commercial licences (only holders of feasibility licences can apply for commercial licences). Research and demonstration licences are granted through direct application and can overlap other licence areas provided impacts on existing uses and users of the area are managed.

3.       Transmission and infrastructure

Transmission and infrastructure licences will allow the licence holder to construct and operate infrastructure that will store, transmit or convey electricity or a renewable energy product, including within or through a licence area. These licences will allow electricity generated offshore to connect to onshore grid infrastructure or other end users. Transmission and infrastructure licences can overlap other licence areas provided impacts on existing uses and users of the area are managed. The licences can be issued for the term of the asset life. A declaration is not required to grant a transmission and infrastructure licence, and a licence can be granted within and/or outside a declared area.

Licences under this framework are limited to the Commonwealth offshore area. There may be additional state/territory requirements for licensing of infrastructure in coastal waters, connection to onshore transmission/distribution infrastructure and participation in the National Electricity Market.

All licence holders will be required to have an approved management plan in place and to provide appropriate financial security before any OEI can be installed.

Financial security

Licence holders will be required to provide financial security that covers the cost of decommissioning all proposed infrastructure. Appropriate financial security will need to be agreed by the Offshore Infrastructure Regulator (the Regulator) and in place before any infrastructure can be installed. The financial security required will be sufficient to pay the estimated cost for Government to decommission the infrastructure installed. This approach ensures taxpayers are not left to pay for the removal of infrastructure in the event that the licence holder is unable or unwilling to do so.

Regulations may specify that financial security will be required to be provided in a form acceptable to the Regulator. The security amounts required and the timing of securities will vary and will be assessed by the Regulator on a case-by-case basis taking into account the specific project or activity.

In the event a licence is transferred to another eligible person, the transferor and the transferee may both be required to comply with the financial security arrangements in relation to the licence. It is intended that securities should only be relinquished to the transferor where the transferee has provided appropriate financial security to the satisfaction of the Regulator.

Management plans

Management plans will describe how a licence holder intends to provide for the OEI and manage the potential impacts and risks of offshore infrastructure activities that are to be carried out under a licence. Management plans will cover environmental management (including compliance with obligations and the outcomes of any assessment under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act)) , work health and safety, infrastructure integrity, emergency management, consultation and financial security arrangements. A management plan must be approved by the Regulator before any infrastructure can be installed.

For the commercial stream, the Minister may only grant a commercial licence if there is an approved management plan in place. Approval of the management plan can be sought during the feasibility licence stage for a commercial project.

Safety zones and protection zones

The Bill provides for safety zones and protection zones to be established to assure the safety of offshore workers and other users of the marine environment, and to protect OEI from damage that may be caused by the actions of other marine users. It is intended that access to and transit through OEI project locations by other marine users would not be restricted any more than is necessary to ensure safety of navigation and operations, and the protection of assets. This is consistent with the principle of shared use of the marine environment.

Safety zones are temporary, specified areas, extending up to 500 metres around eligible infrastructure. Eligible infrastructure is OREI or Offshore Electricity Transmission Infrastructure (OETI) other than a cable that rests on the sea bed to transmit electricity outside of the licence area. Safety zones are intended to prohibit either all vessels, all vessels other than specified vessels, or all vessels other than the vessels included in a specified class of vessels, from entering or being present in a specified area surrounding eligible infrastructure without the written consent of the Regulator. Safety zones can be established as a result of a successful application to the Regulator, or where an application is not received, established by the Regulator.

Protection zones are longer term, specified areas, surrounding OEI (including OETI) where certain activities can be prohibited from being undertaken. Protection zones will protect OEI which may be vulnerable to damage from activities such as anchoring or trawling. Protection zones established under this Bill are distinct from protection zones under the Telecommunications Act 1997 (TA).

The Registrar and Regulator

The Bill establishes the Registrar to administer the framework. The National Offshore Petroleum Titles Administrator (NOPTA) may be appointed as the Registrar. The Registrar’s principal functions will be to administer the licensing scheme, including maintaining a register of licences and managing the licence application process.

The Bill also identifies the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) as the Regulator. The principal functions of the Regulator will relate to work health and safety, OEI integrity, environmental management and regulation of day-to-day operations. In addition, the Regulator will provide advice and support to the Minister and the Registrar in administration of the framework as well as providing advice to industry on compliance.

Costs associated with the Regulator and Registrar’s functions under the framework will be recovered through a combination of fees and levies imposed on regulated entities. Levies will be collected through a separate regulatory levies scheme to be introduced at a later date following enactment of this Bill.

Directions powers

To support the administration and integrity of the licensing scheme, the Bill provides the Regulator and the Minister with a range of powers of directions in respect of the licence holder. Part 2 of Chapter 4 provides the Regulator with a general directions power to ensure that licence holders comply with the requirements of the Bill, including work health and safety provisions, the conditions of the licence or its management plan, and to set out how offshore infrastructure activities can be carried out under the licence. These include the power to issue a direction that another person carry out offshore infrastructure activities on behalf of the licence holder. A breach of such direction may carry a criminal or civil penalty, as specified under the Bill.

Remedial directions powers are also provided, including for the Minister and in regard to surrendered or cancelled licences. Remedial directions can include a direction to make good any damage to the seabed or subsoil or any other environmental damage in the Commonwealth offshore area, which may require assessment and monitoring of environmentally sensitive areas and providing reports on specified matters, as well as directions to remove property.

These directions powers are intended to ensure the integrity of the licensing scheme and regulatory functions under the Bill.

Compliance and enforcement

The Bill provides a suite of powers to the Regulator and its inspectors to monitor and enforce compliance with the requirements of the framework. This includes the health and safety of offshore workers, OEI integrity and compliance with environmental management obligations, including any requirements imposed under the EPBC Act in relation to activities to be carried out under a licence.

The Regulator will appoint and deploy inspectors with both broad and specific compliance monitoring and investigation powers. The Bill sets out a range of specific compliance monitoring powers, while general monitoring and investigation powers under the Regulatory Powers (Standard Provisions) Act 2014 (RPA) will apply.

To ensure the Regulator is appropriately equipped to monitor and enforce compliance with the requirements of the framework, the Regulator will have access to a suite of graduated enforcement tools. These tools include powers to issue a range of notices, issue infringements, enter into enforceable undertakings, issue directions, and seek prosecutions for offences against legislative requirements. In a number of areas, relevant powers, penalties and approaches have been implemented consistent with the OPGGS Act because of the similarities with the issues that are likely to arise.

Managing work health & safety

The framework has a strong focus on the protection of the workforce and aligns with Australia’s model work health and safety laws by adopting the WHS Act, with some modifications to make the laws fit for purpose for the offshore environment. For example, Part 7 of the WHS Act ( Workplace entry by WHS entry permit holders ) is not applied to a workplace in the Commonwealth offshore area, given significant safety, security and logistical issues associated with accessing extremely hazardous and high risk remote offshore sites. However, WHS permit holders, as defined in the WHS Act (noting the modification to the definition made by clause 237 of this Bill), can access related onshore premises to inquire into suspected contraventions of WHS requirements and to engage with the workforce.

The framework will not apply to vessels or structures that are being navigated or towed through a Commonwealth offshore area that have not reached the site where offshore infrastructure activities are to be undertaken, such as transporting supplies or persons to the workplace. These vessels or structures will be covered by applicable maritime safety regimes including the Navigation Act 2012 and the Occupational Health and Safety (Maritime Industry) Act 1993 .

Workplace health and safety provisions will cease to apply once regulated offshore activities cease, and the vehicle, vessel, aircraft or other mobile structure is returned to a form in which it can be moved to another place.

Modified application of the WHS Act through the Bill will allow for consistency with State and Territory jurisdictions that have adopted the model laws.

FINANCIAL IMPACT STATEMENT

The Bill is expected to have nil financial impact. The fees collected through the Bill, as well as the levies collected through the Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021 once enacted, will ensure the functions of the Registrar and the Regulator are fully cost recovered.

As part of the 2020/21 Budget process, the Government invested $4.8 million over two years to develop the offshore electricity infrastructure regulatory regime, including preparing the legislative framework and setting up administrative systems and processes. These funds have been distributed between the Department of Industry, Science, Energy and Resources, NOPTA, NOPSEMA and Geoscience Australia for these preparatory purposes.

REGULATION IMPACT STATEMENT

A Regulation Impact Statement (RIS) was prepared in April 2021 (reference number: 42703). The RIS is attached in full at the end of this Explanatory Memorandum (Annexure A).

CONSULTATION

In developing the Bill, consultation was undertaken with relevant Departments and agencies across the Commonwealth, including:

·          Attorney-General’s Department

·          Australian Communications and Media Authority

·          Australian Fisheries Management Authority

·          Australian Maritime Safety Authority

·          Australian Public Service Commission

·          Department of Agriculture, Water and the Environment

·          Department of Defence

·          Department of Finance

·          Department of Home Affairs

·          Department of Infrastructure, Transport, Regional Development and Communications

·          Department of the Prime Minister and Cabinet

·          Geoscience Australia

·          NOPSEMA

·          NOPTA

·          The Treasury

A public consultation process was held from 3 January 2020 to 28 February 2020. During this period o ver 40 submissions were received from industry, non-government organisations, academia and the community. In addition, around 250 people attended public consultation workshops in Perth and Melbourne. The submissions received were generally supportive of the design and principles of the framework and the matters raised have been taken into account in the Bill.



 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights

(Parliamentary Scrutiny) Act 2011.

 

Offshore Electricity Infrastructure Bill 2021

The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the

Human Rights (Parliamentary Scrutiny) Act 2011.

 

Human rights implications

This Bill engages the following human rights:

-          right to an adequate standard of living;

-          right to privacy and reputation;

-          the right to be presumed innocent until proved guilty according to law;

-          the right to minimum guarantees in criminal proceedings.

A discussion of how the Bill engages each of these rights is outlined below.

Right to an adequate standard of living

Article 11 of the  International Covenant on Economic, Social and Cultural Rights sets out the right to an adequate standard of living.

The Bill engages positively with this right as investments in OEI will improve affordability for energy users, including residential households, businesses and industries, as well as deliver new reliable generation into the market to ensure a secure and stable energy supply to Australians.

Right to privacy and reputation

Article 17 of the International Covenant on Civil and Political Rights prohibits arbitrary or unlawful interference with an individual’s privacy, family, home or correspondence, and protects a person’s honour and reputation from unlawful attacks. This right may be subject to permissible limitations where those limitations are provided by law and are non-arbitrary. In order for limitations not to be arbitrary, they must be aimed at a legitimate objective and be reasonable, necessary and proportionate to that objective.

The Bill contains some limitations on this right, set out below. These limitations have been established to support the regulatory functions under the regime, intended to ensure the safety of infrastructure within the Commonwealth offshore area and the health and safety of workers at these sites. These adjustments to the operation of this right are considered integral to the effective administration and operation of activities authorised under the Bill and, therefore, not arbitrary.

Compliance monitoring and enforcement powers

Chapter 5, Part 4 of the Bill provides for OEI inspectors to carry out inspections and investigations to determine whether the licence holder is complying with the requirements of the framework. In particular, clause 198 provides powers for inspectors to undertake warrant-free monitoring and investigation activities on premises located in the Commonwealth offshore area in urgent circumstances.

It is considered appropriate to provide warrant free access for inspectors to offshore premises in these circumstances to ensure that the Regulator can rapidly respond to significant offshore incidents which may involve serious injuries and fatalities. Timely regulatory response is considered essential in these situations to ensure that evidence of potential contraventions and the ongoing safety of persons interacting with OEI is appropriately protected.

Using and sharing of OEI information

Chapter 7, Part 4 of the Bill provides for the use and making available of certain information, documents and things obtained for the purposes of administering the OEI framework. Information, documents or things may be used by the Regulator for the purpose of exercising its powers or performing its functions under the Bill. Information may also be shared between the Minister, the Secretary, the Regulator and the Registrar and certain other agencies, including law enforcement and State and Territory Government agencies where the information will assist those agencies to exercise their powers or functions.

The ability to share information is discretionary and its use can only be for lawful purposes. The person in possession of the information will be able to specifically consider the type of information to be shared and the rationale for sharing that information in each circumstance. Further, the information-sharing provisions are subject to the Privacy Act 1988 (Privacy Act) and require parties to de-identify personal information wherever possible (where the sharing of specific personal information is not necessary). This means that any effect on privacy will be lawful.

Ability to retain possession of documents

Chapter 7 of the Bill will enable the Registrar or an OEI inspector to take possession of a document produced by a person and retain it for as long as reasonably necessary.

Clause 269 will enable the Registrar and the Regulator, through inspectors, to require a person to provide information or a document if it is believed on reasonable grounds that the person has information or a document that is relevant to activities carried out under the framework.

The purpose of the provision is to enable the Registrar or Regulator and inspectors to obtain information about offshore infrastructure activities in the Commonwealth offshore area, for the purposes of exercising powers and functions in relation to licence holders.

Once a document is produced, it may be necessary for the Registrar or an OEI inspector to be able to retain the document in order to fully consider the information when exercising relevant powers and functions related to offshore infrastructure activities. The Bill provides for the document to only be held for as long as reasonably necessary. The person otherwise entitled to possession of the document would be provided with a certified true copy, which has the same status as the original in all courts and tribunals. Until that copy is provided, the person will have reasonable access to the original document.

The right to be presumed innocent until proved guilty according to law

Article 14(2) of the International Covenant on Civil and Political Rights provides that everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law. This article imposes on the prosecution the burden of proving the charge and guarantees that no guilt can be presumed until the charge has been proven beyond reasonable doubt. For the charge to be proven beyond reasonable doubt, the legal and evidential burden is on the prosecution.

The Bill creates various offences, some of which are of strict liability. The imposition of strict liability is a departure from the common law principle that a criminal offence must include a mens rea (guilty mind) element, which avoids the evidential burden on the prosecution. Strict liability offences engage the presumption of innocence through the imposition of liability without the need to prove fault. A strict liability offence will not unequivocally limit the right to the presumption of innocence if the reason for the offence is to achieve a legitimate aim and is reasonable, necessary, and proportionate to that aim. [1]

Nature of strict liability provisions

Offences of strict liability are provided for in the Bill for the following types of actions:

-         actions that are not-authorised by a licence;

-         actions that interfere with the activities of a licence holder;

-         tampering with notices issued by the Regulator or non-compliance with licence holder notification requirements;

-         non-compliance with data management directions;

-         non-compliance with other directions issued by the Regulator or the Minister (relating to removal of property, other general or remedial directions, other directions to a licence holder);

-         unauthorised entry into a safety zone or failing to comply with requirements in a protection zone.

For these offences, the penalty is imposed by way of penalty units.

Reasonableness, necessity and proportionality

The strict liability offences in this Bill are considered reasonable, necessary, and proportionate to the objective of ensuring the safety of the offshore workforce, the protection of OEI and the integrity of the licensing scheme. This will strengthen the regulatory functions under the Bill in the Commonwealth offshore area. The offences that carry strict liability are intended to compel reasonable compliance with requirements in relation to activities that are regulated under the Bill that would otherwise be intrinsically or potentially unsafe unless high standards of compliance are met. The removal of the requirement to prove fault in the relevant circumstances aims to provide a strong deterrent. They are consistent with other contemporary robust regulatory regimes such as the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) and do not unreasonably or impermissibly limit the presumption of innocence. The offences are designed to ensure offshore infrastructure activities are carried out in a safe and responsible manner. The offences are also consistent with the guidance set out in A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011 (which is a freely available policy document, available at https://www.ag.gov.au/legal-system/publications/guide-framing-commonwealth-offences-infringement-notices-and-enforcement-powers ) . The strict liability offences have available the defence of honest and reasonable mistake.

The right to minimum guarantees in criminal proceedings

Article 14(3) of the International Covenant on Civil and Political Rights establishes a number of guarantees that must be observed in criminal proceedings including, as set out in Article 14(3)(g), the right to be free from self-incrimination.

This right may be subject to permissible limitations, where those limitations are provided by law and non-arbitrary. In order for limitations not to be arbitrary, they must be aimed at a legitimate objective and be reasonable, necessary and proportionate to that objective.

Chapter 7 of the Bill will enable the Registrar or OEI Inspector to require a person to provide information or a document if the Registrar or OEI inspector believes on reasonable grounds that the person has information or a document that is relevant to activities carried out under this Bill.

Clause 273 abrogates the privilege against self-incrimination, but also provides an immunity against use of the information or document in civil or criminal proceedings other than for specified offences. The clause ensures that powers are sufficiently broad to establish facts, while protecting individuals from proceedings on the basis of providing the information. This safeguard ensures that the clause is reasonable and proportionate to meeting this objective, and therefore the provision meets Australia’s human rights obligations to afford minimum guarantees in criminal proceedings.

This partial immunity from legal consequences has the benefit that it increases the likelihood of obtaining information. This is particularly important where the Registrar or Regulator may have no other avenue to obtain the information. Maintaining a privilege against self-incrimination would significantly hamper the Registrar and Regulator’s ability to monitor a licence holder’s compliance with applicable requirements.

The ‘use’ immunity is restricted only to individuals. This ensures continuing protection of the human rights of the individual, and is consistent with other Commonwealth legislation, such as the WHS Act and the TA.

Conclusion

The Bill is compatible with human rights and it promotes the right of everyone to an adequate standard of living. To the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

 



 

OFFSHORE ELECTRICITY INFRASTRUCTURE BILL 2021

NOTES ON CLAUSES

CHAPTER 1—PRELIMINARY

Part 1—Introduction

Division 1—Preliminary

Clause 1 - Short title

1.                   This is a formal provision specifying the short title of this Bill when it becomes law. It specifies that the Act shall be known as the Offshore Electricity Infrastructure Act 2021 .

Clause 2 - Commencement

2.                   The table in this clause is a standard provision which sets out the commencement date for when the provisions of the Bill commence.

3.                   The Bill will commence on a day fixed by proclamation. If the Bill does not commence within 6 months from the day the Offshore Electricity Infrastructure Act 2021 receives Royal Assent, the whole of the Bill will commence on the day after the end of that 6 month period.

4.                   This commencement by proclamation will allow the requisite regulations, statutory appointments and administrative arrangements to be put in place in order to effect the operation of the legislative framework.

5.                   No provisions in this Bill will apply retrospectively.

Clause 3 - Object of this Act

6.                   This clause sets out the object of this legislation. The object is to provide an effective regulatory framework for offshore renewable energy infrastructure (OREI) and offshore electricity transmission infrastructure (OETI) (collectively, offshore electricity infrastructure (OEI)).

Clause 4 - Simplified outline of this Act

7.                   Clause 4 provides a simplified outline of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.

Clause 5 - External Territories

8.       This clause sets out the external territories of the Commonwealth to which the proposed Act would apply. These include:

-          Norfolk Island;

-          the Coral Sea Islands Territory;

-          the Territory of Ashmore and Cartier Islands;

-          the Territory of Christmas Island;

-          the Territory of Cocos (Keeling) Islands;

-         the Territory of Heard Island and McDonald Islands.

9.                   The Commonwealth offshore area under the Bill includes the territorial sea, and the exclusive economic zone, surrounding each of the se external territories.

10.               In keeping with the ambit of other related legislation, the Bill would have no application to the Australian Antarctic Territory.

Clause 6 - Crown to be bound

11.               The purpose of subclause (1) is to bind the Crown. It clarifies that the Bill applies to the Crown in right of the Commonwealth as well as the States and Territories. The Bill must apply to the Crown in all its capacities to ensure that the regulatory framework operates effectively.

12.               Subclause (2) provides an exemption stating that the Bill does not make the Crown liable to a pecuniary penalty or to be prosecuted for an offence. It should be noted however the intention is that subclause 6(2) does not apply in relation to the workplace health and safety provisions as a result of the application of the WHS Act by Chapter 6 of the Bill, and section 10 of that Act as applied.

13.               Subclause (3) clarifies that the protection against a pecuniary penalty or prosecution for an offence does not apply to an authority of the Crown.

Clause 7 - Provisions to apply to certain offshore electricity transmission infrastructure subject to international obligations

14.               This clause deals with how the Bill will apply to OETI for the transmission of electricity to, or from, a place beyond the outer limits of the Commonwealth offshore area. The intention is that the legislation will have effect in relation to OETI according to its terms.

15.               Subclause (2) specifies the provisions are subject to Australia’s obligations under international law, including obligations under any agreement between Australia and any foreign country or countries.

Part 2—Definitions

Clause 8 - Definitions

16.               This clause sets out definitions applying to the key terms used in the Bill.

17.               A number of definitions are signpost definitions which refer the reader to where the term is defined in detail later in the Bill. Examples include “approval period”, “authorised safety zone official” and “controls”. A number of terms are also defined by reference to other legislation, such as “premises” and “civil penalty provision”.

18.               Other key terms include:

“applied work health and safety provisions” are defined in relation to the provisions of the Work Health and Safety Act (see clause 226), and the regulations made under that Act, as applied by Part 1 of Chapter 6 of this Bill, subject to clause 243 of this Bill.

Australia is defined to include the external Territories to which this Bill extends, see clause 5.

“Australian vessel” is defined to have the same meaning as the term “ Australian ship” has in the Customs Act 1901 .

“CEO” means the Chief Executive Officer of NOPSEMA, the Regulator under the Bill.

“coastal waters” is defined consistently with other Commonwealth legislation so that:

(a)  in relation to a State—means that part of the sea that is included in the coastal waters of the State within the meaning of the Coastal Waters (State Powers) Act 1980 and includes the airspace over, and the sea-bed and subsoil beneath, that part of that sea; and

(b)  in relation to the Northern Territory—means that part of the sea that is included in the coastal waters of the Territory within the meaning of the Coastal Waters (Northern Territory Powers) Act 1980 and includes the airspace over, and the sea-bed and subsoil beneath, that part of that sea.

“Commonwealth offshore area” is defined consistently with other Commonwealth legislation to mean the territorial sea and exclusive economic zone (and the seabed and subsoil beneath those areas).

However, it does not include the coastal waters of a State or the Northern Territory.

“eligible person” means:

(a)  a body corporate that has a registered office (within the meaning of the CA) in Australia; or

(b)  a body corporate established for a public purpose by or under a law of the Commonwealth or a State or Territory (such as a statutory corporation).

“exploit” , in relation to a renewable energy resource, is defined to include:

(a)   generating or obtaining a renewable energy product from the renewable energy resource; and

(b)   storing, transmitting or otherwise conveying a renewable energy product generated or obtained from the renewable energy resource.

“fixed or tethered infrastructure” is defined broadly to be any infrastructure, structure or installation that:

(a)   rests on the seabed; or

(b)   is fixed or connected to the seabed (whether or not the infrastructure, structure or installation is floating); or

(c)   is attached or tethered to any other fixed or tethered infrastructure (including other fixed or tethered infrastructure covered by this paragraph);

However, it does not include a vessel that is temporarily moored or anchored to the seabed.

“holder” , in relation to a licence, means an eligible person to whom a licence has been granted or transferred so long as it is not cancelled, surrendered or transferred to another.

“infrastructure integrity” is defined to consist of the following:

(a)   the ability of licence infrastructure to perform in accordance with its intended purpose; and

(b)   the structural soundness, strength and stability of licence infrastructure; and

(c)   the mechanical integrity and systems integrity (including the integrity of electrical, hydraulic and other systems) of licence infrastructure.

“licence” is defined to mean a feasibility licence, a commercial licence, a research and demonstration licence or a transmission and infrastructure licence.

“licence area” is defined as the area in respect of which the licence is granted, but does not include a vacated area.

“licence infrastructure” is defined to mean the offshore renewable energy infrastructure or offshore electricity transmission infrastructure that is, or is to be, constructed, installed, commissioned, operated, maintained or decommissioned in accordance with the licence.

“management plan” for a licence is defined to a management plan approved for the licence by the Regulator under the licensing scheme.

“master” , is the person having command or charge of the vessel.

“OEI inspection” means an inspection conducted by an OEI inspector in the exercise of the inspector’s powers under Part 2 or 3 of the Regulatory Powers Act, as it applies under Division 3 of Part 4 of Chapter 5 of this Bill.

“offshore infrastructure activity” is defined broadly to be the construction, installation, commissioning, operation, maintenance or decommissioning of offshore renewable energy infrastructure or offshore electricity transmission infrastructure.

“offshore infrastructure project” is defined broadly to consist of the offshore renewable energy infrastructure or offshore electricity transmission infrastructure that is, or is to be, constructed, installed, commissioned, operated, maintained or decommissioned under the licence. It also includes any activities that are, or are to be, carried out under the licence in the licence area by or on behalf of the licence holder and any activities that this Bill requires to be carried out in the licence area by or on behalf of the licence holder.

“offshore premises” is defined to be offshore renewable energy infrastructure in the Commonwealth offshore area and offshore electricity transmission infrastructure in the Commonwealth offshore area. It also includes any vessel, or other premises, in the Commonwealth offshore area that is being used or is to be used, or that has been used, for carrying out an activity in connection with the exercise of a licence holder’s rights, or the performance of a licence holder’s obligations, under this Bill or the licence.

“own” is defined to include own jointly or own in part.

“Register” means the Register of Offshore Infrastructure Licences kept under clause 162.

“Registrar” means the Offshore Infrastructure Registrar, see clause 153.

“Regulator ” is defined to mean NOPSEMA in accordance with clause 175.

“renewable energy product” is defined to mean either:

(a)   electricity generated or obtained from one or more renewable energy resources; or

(b)   anything that embodies or contains energy that was generated or obtained from one or more renewable energy resources, for the purpose of storing, transmitting or using the energy.

“vacated area” is defined to mean any area that was at any time part of the licence area and is no longer part of the licence area. In relation to a commercial licence that was granted on the basis of a particular feasibility licence, it includes an area that is a vacated area in relation to the feasibility licence and is not part of the licence area of the commercial licence.

“vessel” is defined broadly to be any kind of vessel used in navigation by water, however propelled or moved.

Clause 9 - Datum provisions

19.               Subclause (1) refers to the different positioning on the surface of the earth as a point, line or area to be determined by reference to a geodetic datum. Subclause (1) also allows for the application of the Australian Geodetic Datum as defined in Gazette No. 84 of 6 October 1966, and available at legislation.gov.au (AGD66 geodetic data set), subject to any regulation in subclause (2), which may update the Australian Geodetic Datum referenced.

20.               Despite subclause 9(1), subclause (2) provides that the method of referencing a spatial position, and which geodetic datum is utilised to determine spatial position, can be provided for by regulations. The AGD66 geodetic data set is a well-known and utilised datum, which is able to be utilised at passage of the Bill. However, geodetic datums are updated frequently as continents shift. This means that, over time, the AGD66 geodetic data set may become less suitable to use to determine spatial positioning as shifting land mass makes the datum less accurate. Instead, a new datum is likely to be more appropriate for use in future. Updating the spatial positioning determination process through regulations allows for more complex, fit for purpose mapping processes (e.g. depth) to be used in the administration of the framework as the relevant technology advances.

21.               Subclause (3) clarifies that the regulations cannot change the location of a point, line or area on the surface of the Earth. They are concerned with the process of determining the position of the line, point or area. This does not prevent a particular point being identified by a coordinate determined by reference to a particular datum. The use of a different datum will result in the same point being identified by a different coordinate.

22.               Subclause (4) clarifies that regulations made under subclause (2) may apply, adopt or incorporate matters that are contained in an instrument, or other written materials at a particular time or as in force from time to time. This is to ensure that the regulations can utilise a range of written materials in order to provide how a spatial position is to be determined. It is appropriate that regulations made under subclause (2) could apply, adopt or incorporate such written materials, so as to ensure that spatial positions are specified as accurately as possible for the purposes of administering the framework.

Clause 10 - Meaning of offshore renewable energy infrastructure

23.               This clause sets out the meaning of OREI. It refers to fixed or tethered infrastructure that has the primary purpose of engaging in exploring, assessing the feasibility of exploiting, or exploiting a renewable energy resource, or otherwise storing, transmitting or conveying a renewable energy product. Renewable energy resource is defined in clause 13.

24.               Subclause (2) clarifies that OREI also includes infrastructure that meets the above definition and:

-          is being constructed, installed or decommissioned; or

-          has temporarily or accidentally ceased to be fixed or tethered.

25.               Subclause (3) sets out exclusions to the definition of OREI. The following are not OREI for the purposes of the Bill:

-          an infrastructure facility within the meaning of the OPGGS Act;

-          a facility within the meaning of Schedule 3 to the OPGGS Act;

-          fixed or tethered infrastructure for the purpose of exploring for minerals (within the meaning of the Offshore Minerals Act 1994 ) or recovery of minerals (within the meaning of that Act);

-          a cable:

§   that is laid on or beneath the seabed that lies beneath the Commonwealth offshore area; and

§   that is not connected to any place in Australia; and

§   that is not connected to anything else in, or inside the inner limits of, the Commonwealth offshore area.

 

Clause 11 - Meaning of offshore electricity transmission infrastructure

26.               This clause provides a definition of OETI. Infrastructure that is either fixed or tethered, but will have the primary purpose of storing, transmitting or otherwise conveying electricity, is OETI for the purposes of the Bill.

27.               Subclause (1) clarifies that this definition will apply whether or not the electricity is generated from a renewable energy resource.

28.               Subclause (2) clarifies that OETI also includes infrastructure that meets the above definition and:

-          is being constructed, installed or decommissioned; or

-         has temporarily or accidentally ceased to be fixed or tethered.

29.               Subclause (3) sets out exclusions to the definition of OETI. The following are not OETI for the purposes of the Bill:

-          an infrastructure facility within the meaning of the OPGGS Act;

-          a facility within the meaning of Schedule 3 of the OPGGS Act;

-          fixed or tethered infrastructure for the purpose of exploring for minerals (within the meaning of the Offshore Minerals Act 1994 ) or recovery of minerals (within the meaning of that Act); or

-          a cable:

§   that is laid on or beneath the seabed that lies beneath the Commonwealth offshore area; and

§   that is not connected to any place in Australia; and

§   that is not connected to anything else in, or inside the inner limits of, the Commonwealth offshore area.

Clause 12 - Offshore renewable energy infrastructure and offshore electricity transmission infrastructure

30.               This provision is inserted to clarify that a single piece of infrastructure may be both OREI and OETI.

Clause 13 - Meaning of renewable energy resource

31.               This clause outlines what is meant by a renewable energy resource under the Bill. It specifies that this phrase encapsulates any of the following from which energy may be obtained.

-          wind and air flow;

-          wind-generated waves;

-          tides;

-          ocean currents;

-          light or heat from the sun;

-          rain;

-          geothermal heat;

-          a resource, event or circumstance prescribed by the regulations for the purposes of this paragraph.

32.               Subclause (2) provides that the regulations may provide that a resource, event or circumstance referred to in subclause (1) has the meaning prescribed by the regulations. Subclause (3) provides that the regulations may provide for and in relation to limiting the meaning of a resource, event or circumstance referred to in subclause (1).

33.               The regulation making powers in subclauses (2) and (3) are essential, and will allow the framework established by this Bill to adapt to changing renewable energy technologies. Building in adaptability will ensure the framework remains fit for purpose as the offshore industry develops. The regulation making powers will also allow for clarification of types of renewable resources that are suitable under this regime. For example, future regulations may clarify that certain activities such as aquaculture are not considered renewable energy resources.

CHAPTER 2—REGULATION OF OFFSHORE INFRASTRUCTURE ACTIVITIES

Part 1— Prohibition of unauthorised offshore infrastructure activities

Clause 14 - Simplified outline of this Part

34.               Clause 14 provides a simplified outline of Part 1 of Chapter 1 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill. 

Clause 15 - Prohibition of unauthorised offshore infrastructure activities in the Commonwealth offshore area

35.               Subclause (1) is the touchstone provision underpinning the regulation of offshore infrastructure activities under the Bill. It provides the circumstances where an activity in the Commonwealth offshore area is unauthorised. It provides that a person contravenes the subclause if they construct, install, commission, operate, maintain or decommission fixed or tethered OREI in the Commonwealth offshore area.

36.               Subclause (2) provides that the prohibition in subclause (1) does not apply if the conduct is authorised by a licence or is otherwise authorised or required by this Bill.

37.               An example of conduct that is otherwise authorised is that the Bill will not prevent the carrying out of activities in the Commonwealth offshore area that are necessary for complying with the requirements of the EPBC Act (for example, conducting biological surveys to determine environmental impact levels of a proposed project). However, activities directly related to the development of OEI technology or resource exploitation (for example, exploration activities to measure offshore wind resources) must occur under the licensing scheme. As well, the Bill will not limit existing use of the marine environment that may be occurring under separate legislation - for example, fishing activities authorised under the Fisheries Management Act 1991 or the maintenance of submarine cables regulated under the TA.

38.               There is a note which provides that the defendant bears an evidential burden in relation to the exception created by subclause (2). This is in accordance with subsection 13.3(3) of the Criminal Code Act 1995 . The fact that the defendant bears an evidential burden in relation to subclause (2) means that the person or company has the burden of adducing or pointing to evidence that suggests a reasonable possibility that the defendant is authorised to construct, install, commission, operate, maintain or decommission fixed or tethered OREI in the Commonwealth offshore area.

39.               The reason for placing this burden of proof on the defendant is because it is peculiarly within the knowledge of the defendant, ie. the defendant is in a position to confirm whether or not a licence or other authorisation has been obtained prior to the relevant regulated activity.

40.               Subclause (3) provides that a person commits an offence if they contravene subclause (1). The penalty for this offence is imprisonment for 5 years.

41.               The offence provision in this clause does not specify a fault element. Under section 5.6 of the Criminal Code, if an offence provision does not specify a fault element and if the physical element of the offence consists only of conduct, the fault element is intention. In other words, for a person to be found guilty of contravening this clause, the prosecution would have to prove intent to contravene.

42.               Subclause (4) provides that a person is liable for a civil penalty if the person contravenes subclause (1).

Part 2—Declaring areas for offshore renewable energy infrastructure

Division 1—Introduction

Clause 16 - Simplified outline of this Part

43.               Clause 16 provides a simplified outline of Part 2 of Chapter 1 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill. 

Division 2—Declared areas

Clause 17 - Declared areas

44.               This provision addresses the creation of declared areas . For the purposes of this Bill, the Minister may declare a specified area in the Commonwealth offshore area. This is the mechanism by which areas in the Commonwealth offshore area are determined to be suitable for licensing under the Bill.

45.               Subclause (1) empowers the Minister to declare an area. The declaration is to be by legislative instrument. Subclause (2) provides that this area is known as a declared area under the Bill.

46.               Subclause (3) requires the Minister to follow a specific process before declaring an area. It provides that the Minister may only declare an area if:

-          a notice proposing to declare the area, required under clause 18, has been published; and

-          the day which public submissions in relation to the proposed declared area may be made by, as specified in paragraph 18(d), has passed; and

-          the Minister has consulted with the following persons:

§   the Defence Minister; and

§   the Minister administering section 1 of the Navigation Act 2012 ; and

-          the Minister is satisfied that the area is suitable for OREI.

47.               The Minister is not limited to consulting only the persons listed in subclause (3) and may decide to consult other relevant people in considering whether an area is suitable for OREI. For example, the Minister may decide to consult the Minister administering the EBPC Act.

48.               In deciding if an area is suitable, the Minister must have regard to the factors in subclauses 19(1) and (2).

49.               Subclause (4) provides that a declared area:

-          does not need to be continuous; and

-          may be all, or part, of the area that is specified, in accordance with paragraph 18(a), in the notice published under clause 18.

50.               The declaration notice must set out the parameters of the declared area and any conditions attached to the declaration.

51.               Subclause (6) clarifies that subsection 33(3) of the Acts Interpretation Act 1901 (AIA) (which provides that a power to make an instrument includes the power to vary or revoke the instrument) does not apply in relation to a declaration. Revocation and variation powers with respect to a declaration are addressed in further provisions in the Bill (see clauses 22 - 26).

Clause 18 - Notice of proposal to declare an area

52.               Clause 18 sets out requirements which apply in circumstances where the Minister proposes to declare an area. The Minister must publish the notice on the Department’s website.

53.               The notice must address the following:

-          the proposed declaration area; and

-          an invitation for submissions from the public on the proposed declaration area; and

-          details on how submissions may be made; and

-          the day by which submissions may be made (this must be at least 60 days after the day of publication of the notice).

54.               The notice may include any other information that the Minister considers appropriate.

Clause 19 - Making a decision

55.               Clause 19 addresses the decision making process and the matters which the Minister will have regard to in the course of assessing whether an area is suitable for OREI and making a declaration.

56.               In deciding whether an area is suitable for OREI, the Minister must consider:

-          the potential impacts of the construction, installation, commissioning, operation, maintenance or decommissioning of OREI in the area on other marine users and interests;

-          any submissions received in accordance with the notice issued under clause 18;

-          any advice received as a result of the consultation mentioned in paragraph 17(3)(c);

-          Australia’s international obligations in relation to the area.

57.               In making this decision, the Minister may also have regard to other matters that the Minister considers relevant. As an example, these may be environmental matters.

58.               Subclause (3) sets out the process to follow where the Minister is not satisfied the declared area is suitable for all kinds of OREI. It provides that the Minister may either decide not to make a declaration. Alternatively, the Minister may declare a part of the area as suitable for OREI, or declare the area subject to such conditions as the Minister considers will make the area, or part of the area, suitable for OREI.

Clause 20 - Conditions that apply to a declaration

59.               This clause sets out the conditions that the Minister may attach to a declaration under subclause 17(1). It allows the Minister to control the kinds of offshore infrastructure activities permitted in a declared area and what if any licences can be granted in it under the Bill.

60.               Subclause (2) provides that the declaration may specify that certain licence types may not be granted with respect to the declared area. This applies to feasibility licences, commercial licences, or research and demonstration licences (see Part 1 of Chapter 3).

61.               Subclause (2) does not extend to transmission and infrastructure licences due to the different nature of this type of licence. A declaration will not be required prior to an application for a transmission and infrastructure licence due to the length of areas that may be covered by OETI and the lower impact these projects would have on other marine users. In lieu of the declaration, due diligence through assessment against merit criteria listed in clause 62 will be undertaken as part of a licence application assessment. Conditions placed on the transmission and infrastructure licences are intended to provide any necessary restrictions on the operation of associated OETI.

62.               Subclause (3) provides that the declaration may provide that a licence, or a specified kind of licence, which is granted in respect of the declared area, may not authorise specified kinds of offshore infrastructure activities.

63.               Subclause (4) provides that the declaration may provide that a licence, or a specified kind of licence, granted in respect of the area must be subject to conditions specified in the declaration, for example a condition that a management plan for a licence must address matters specified in the declaration.

64.               Subclause (5) makes it clear that subclauses (3) and (4) do not apply to transmission and infrastructure licences. This is for the same reasons as specified above in relation to subclause (2).

65.               Subclause (6) allows the Minister to include in the declaration circumstances in which they may revoke the declaration under clause 26.

Clause 21 - Period for which a declaration remains in force

66.               The purpose of this clause is to set out the period for which a declaration remains in force. Unless it contains a cessation date specified pursuant to subclause (2), the declaration is to remain in force until it is revoked in accordance with clause 26.

67.               If a cessation date is not specified, then as a disallowable legislative instrument a declaration will ordinarily sunset on the first 1 April or 1 October falling on or after the tenth anniversary of the registration of the declaration (see subsection 50(1) of the Legislation Act 2003 ).

68.               A declaration can be extended, under clause 22, prior to the day the declaration ceases to have effect (being either the sunsetting date for the declaration or the day specified in accordance with subclause 22(2)).

69.               Subclause (3) addresses the effect of cessation or revocation of an existing licence. It provides that the cessation or revocation of a declaration does not cause a licence which is currently in force in respect of the declared area to cease to be in force.

70.               There is a note to subclause (3) which explains that the end day of a licence (other than a transmission and infrastructure licence) may not be extended in respect of any area that is not a declared area at the time the extension is made. It directs the reader to clause 37 (extending the term of a feasibility licence), clause 47 (extending the term of a commercial licence) and clause 56 (extending the term of a research and demonstration licence).

71.               A second explanatory note states that the granting of a commercial licence in relation to a feasibility licence also requires a declaration to be in force (see paragraph 42(1)(c)).



 

72.               Subclause (4) is an avoidance of doubt provision. It states that nothing in clause 21, or clause 22, affects the operation of Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003 . The purpose is to ensure that there is no confusion in the operation of the sunsetting arrangements.

Division 3—Varying a declaration

Clause 22 - Variation to extend period or increase declared area

73.               Subclause (1) provides that the Minister may vary a declaration to extend the period for which the declaration is to be in force or to increase the area by adding an area or areas. The variation is to be made by legislative instrument.

74.               Subclause (2) provides that the Minister may only make a declaration under subclause (1) if a notice setting out the proposal to vary the declaration has been published in accordance with clause 24 and the day specified in the notice for submissions has passed. In addition, the Minister must be satisfied that the area in question is suitable for OREI. The Minister must also consult with the following persons:

-          the Defence Minister; and

-          the Minister administering section 1 of the Navigation Act 2012 .

75.               As with subclause 17(3), the Minister is not limited to consulting only the persons listed in subclause (2), and may decide to consult other people, including other Ministers.

76.               Subclause (3) sets out the considerations which the Minister must have regard to in satisfying themselves that the area is suitable for OREI for the purposes of considering whether or not to make the variation. These include: any submissions received in accordance with the notice issued under clause 24, any advice received as a result of the consultation with the Defence Minister and the Minister administering section 1 of the Navigation Act 2012 , and the potential impacts of the construction, installation, commissioning, operation, maintenance or de-commissioning of OREI in the area on other marine users and interests.

77.               Subclause (4) provides that in deciding whether to make a variation the Minister may also have regard to any other matters that the Minister considers relevant.

Clause 23 - Variation of conditions, or to reduce declared area

78.               This clause sets out the requirements for varying a declaration where the area is to be reduced or conditions applying to the declared area are varied. The Minister may vary the declaration by legislative instrument.

79.               Subclause (1) sets out that the variation to the declaration can be made to: remove part of the declared area, to make the declaration subject to the conditions in clause 20, or to vary or omit a condition that the declaration is subject to under clause 20. Varying a declaration in this way is subject to any of the conditions set out by the Minister.

80.               Subclause (2) provides that the Minister may only make a variation under subclause (1) if certain requirements are satisfied as follows :

-          the notice proposing the changes must be published according to clause 24 of this Bill;

-          the day for submissions must be specified in the notice has passed;

-          the Minister has consulted with:

§   the Defence Minister; and

§   the Minister administering section 1 of the Navigation Act 2012 ; and

-          the Minister is satisfied that the declaration area would be suitable for OREI if the variation were made.

81.               As with subclause 17(3), the Minister is not limited to consulting only the persons listed in subclause (2), and may decide to consult other people, including other Ministers.

82.               Subclause (3) sets out the decision making criteria that the Minister should have regard to in order to satisfy themselves that the area is suitable for OREI (paragraph 23(2)(d)). This includes the following:

-          the potential impacts of the construction, installation, commissioning, operation, maintenance or decommissioning of OREI in the area on other marine users and interests;

-          any submissions received in accordance with the notice under clause 24;

-          any advice received as a result of the consultation mentioned in paragraph (2)(c) of this clause; and

-          Australia’s international obligations in relation to the area.

83.               Subclause (4) allows the Minister to have regard to other matters in relation to varying a declaration if considered relevant. These may include information provided to the Minister by the Regulator, Register or Departmental Secretary, or if the Minister becomes aware of circumstances that justify a variation in another manner.

84.               Subclause (5) provides that a variation of a declaration under this clause does not apply to a licence in force, at the time the variation is made, in respect of an area that is, or was, the declared area or a part of the declared area (a pre-existing licence).

85.               Subclause (6) sets out some qualifications regarding the effect of the variation. It provides that the:

-          the variation applies to an extension of the end day of a pre-existing licence in the same way as it applies to the granting of a licence; and

-          the variation applies in relation to the granting, after the variation is made, of a commercial licence in respect of a feasibility licence that is a pre-existing licence; and

-          subclause (5) does not prevent the Minister from varying a pre-existing licence under a provision of Chapter 3 of this Bill to impose, vary or revoke a condition of the licence in a way that is consistent with the variation of the declaration.

86.               The note to paragraph (6)(c) refers readers to other licence term extension mechanisms in Chapter 3 of the Bill: ie, clause 37 (extending the term of a feasibility licence), clause 47 (extending the term of a commercial licence) and clause 56 (extending the term of a research and demonstration licence).

87.               There is a second explanatory note to direct the reader to other variation mechanisms in clauses 38 (varying a feasibility licence), 48 (varying a commercial licence) and 57 (varying a research and demonstration licence).

Clause 24 - Consultation on proposed variation

88.               This clause sets out the consultation process involved in the case where a declaration is to be varied.

89.               Under subclause 24(1), the Minister must publish a notice on the Department’s website. The notice must:

-          identify the declaration proposed to be varied;

-          specify the proposed variation;

-          invite submissions from the public on the proposal;

-          specify how submissions may be made;

-          specify the day the submission may be made by (at least 30 days after the day the notice is published); and

-          include other information the Minister considers appropriate.

90.               Subclause (2) requires the Minister to give a copy of the notice to the holder of any licence (other than a transmission and infrastructure licence) that has a licence area that covers any part of the declared area.

Clause 25 - Varying a declaration to make minor and technical corrections

91.               Clause 25 provides that the Minister may vary a declaration to make a minor change to that declaration. This includes the correction of a minor or technical error. The variation must be effected by legislative instrument.

Division 4—Revoking a declaration

Clause 26 - Revoking a declaration

92.               This clause enables the Minister to revoke a declaration by legislative instrument.

93.               The circumstances which allow for the Minister to revoke a declaration are set out in subclause (2). These are:

-          a notice proposing to revoke the declaration has been published in accordance with clause 27 of this Bill;

-          the day which the notice specifies as they day which submissions may be made by has passed; and

-          in addition, one or more of the following must apply:

§   the Minister is aware of circumstances justifying the revocation;

§   the Minister is satisfied the declared area is no longer suitable for OREI, and could not be made suitable by a variation under clause 23;

§   the Minister is satisfied that circumstances specified in the declaration under subclause 20(6) apply.

94.               Subclause (3) provides for matters that the Minister must have regard to in deciding whether to revoke a declaration under subclause (1). These are as follows:

-          any submissions received in accordance with the notice; and

-          Australia’s international obligations regarding the declared area.

95.               The Minister may also have regard to any other matters that the Minister considers relevant.

Clause 27 - Revoking a declaration—consultation

96.               This clause provides for the consultation process which is required when making a decision to revoke a declaration.

97.               Under subclause 27(1), the Minister must, in accordance with paragraph 26(2)(a), publish a notice on the Department’s website. The notice must:

-          identify the declaration that is proposed to be revoked; and

-          invite submissions from the public on the proposal; and

-          specify how submissions may be made; and

-          specify the day by which the submission may be made (this must be at least 30 days from publication of the notice); and

-          include any other information that the Minister considers appropriate.

98.               Subclause (2) specifies that the Minister must give a copy of the notice to the holder of any licence (other than a transmission and infrastructure licence) that has a licence area in the declared area.

CHAPTER 3— LICENSING

Part 1—Licences

Division 1—Introduction

99.               This Part provides for a licensing scheme with three streams: commercial (including feasibility); transmission; and research and demonstration. This is intended to accommodate the types of projects that are anticipated to require approval under the legislation. The scheme contains provisions for the application, grant, extension and variation, and condition-making powers for licences.

100.           The Bill provides that further aspects of the licensing scheme will be set out in regulations. Important matters such as licence types, transfers, cancellations and other requirements and rights are set out in the Bill. Regulations are considered necessary as an appropriate and flexible way of setting out the detailed provisions of the scheme, allowing for the scheme to accommodate the development of a new industry, for example, to accommodate procedures for the administration of licences.

101.           As the licensing scheme will be set out in a disallowable legislative instrument (regulations), the Senate will have an opportunity to scrutinise its details, and licensing decisions are to be reviewable on their merits in accordance with clause 297.

Clause 28 - Simplified outline of this Part

102.           Clause 28 provides a simplified outline of Part 1 of Chapter 3 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.

Clause 29 - Licensing scheme

103.           The purpose of this clause is to set up the framework for the licensing scheme which applies in relation to offshore electricity infrastructure licences.

104.           Subclause (1) specifies that there is to be a licensing scheme which is to be prescribed by the regulations. This is to set out details in relation to:

-         applications for licences;

-         the offering and granting of licences;

-         transfers of licences;

-         changes in control of licence holders;

-         management plans; and

-         any other matters that the Bill provides for the licensing scheme to cover.

105.           Subclause (2) provides that the licensing scheme may also include any other provision that may, under this Bill, be included in the regulations.

106.           There are two explanatory notes relating to subclause (2). The first note provides an example of other provisions that may be included in the licensing scheme: it may include provisions about fees and levies of the kind mentioned in Part 3 of Chapter 5. The second note provides a further example, which is that under subsections 189(5) and 190(8) the regulations may provide that an application under this Bill is taken to have been made only if a fee or levy has been paid.

Division 2—Feasibility licences

107.           In order to obtain a commercial licence, a feasibility licence must first be granted. A feasibility licence allows for scoping and exploratory activities to be undertaken within the prescribed area. A feasibility licence is granted for a period of no more than 7 years. However, the licensing scheme may allow for the term to be extended in certain circumstances.

108.           Once the Minister declares an area as suitable for development, the Minister will issue a notification inviting eligible persons to apply for feasibility licences in respect of all or part of the declared area. It is intended for this to be a competitive process where applications will be assessed against suitability and merit criteria. This is because a feasibility licence cannot overlap another feasibility licence or commercial licence. The detail of the application process will be prescribed in the licensing scheme. The licensing scheme may allow for a financial offer to be considered in circumstances where applications for the same licence area are similarly meritorious.

109.           The feasibility licence holder will need an approved management plan and to provide financial security before any OEI can be installed. Numerous feasibility licences can be granted within a declared area provided the licence areas do not overlap and each application meets the legislative criteria.

110.           Once preparatory works have been completed under a feasibility licence, the licence holder can apply for a commercial licence to move the project forward to construction. Application for a commercial licence will not be a competitive process as only the holder of the feasibility licence can apply.

111.           The applicant will need to have an approved management plan, provide financial security and meet the merit criteria before the Minister will grant a commercial licence. A commercial licence will have a term of no more than 40 years subject to the licence holder continuing to meet the requirements of this Bill, and can be extended. All OEI must be decommissioned and removed at the end of the licence term.

112.           It is understood that in the course of assessing the feasibility of a commercial project, it may be necessary to make modifications to the proposed commercial project to ensure its viability. For a commercial licence to be granted, the project needs to be substantially similar to the project proposed under the feasibility licence, or if it is different the Minister will consider whether the proposed changes are appropriate and justified. Examples of substantial changes would include, changing the type of generation from fixed monopole wind to floating solar. If the Minister decides not to grant a commercial licence, the feasibility licence will remain in place until it reaches its end date, is surrendered by the licence holder, or is cancelled by the Minister (if there are grounds for cancellation). If the area is no longer covered by a feasibility licence, the Minister can issue a notification inviting eligible persons to apply for feasibility licences in respect of the area.

Clause 30 - Purpose of a feasibility licence

113.           This clause sets out the purpose of a feasibility licence. Paragraph (a) specifies that a feasibility licence is to provide for the licence holder to assess the feasibility of an OEI project under a commercial licence (termed the proposed commercial offshore infrastructure project) and, if they choose to do so, subsequently apply for a commercial licence.

114.           The intention is that feasibility studies would inform the design of a proposed OEI project and provide an overall assessment of whether a proposed OEI project would be feasible. If the feasibility studies indicate that a proposed OEI project is considered likely to be viable from a commercial point of view, then the licence holder can apply for a commercial licence.

Clause 31 - Activities authorised by a feasibility licence

115.           Subclause (1) provides that a feasibility licence authorises the licence holder to construct, install, commission, operate, maintain and decommission OREI in the licence area, so long as:

-         there is a management plan for the licence; and

-         the construction, installation, commissioning, operation, maintenance or decommissioning is carried out in accordance with the management plan and the conditions of the licence; and

-         the licence holder is in compliance with clause 117 and clause 118 (financial security).

116.           Providing for installation of infrastructure is intended to allow for constructing and operating testing equipment such as a wind monitoring station, but not a wind farm. This should allow for exploration, but not exploitation, of a wind resource.

117.           Subclause (2) provides that the rights conferred on the licence holder by this clause are subject to this Bill.

Clause 32 - Applications for feasibility licences

118.           This sets out the process for the licensing scheme, which applies in relation to the issuing of a feasibility licence .

119.       Subclause (1) outlines that the licensing scheme must prescribe procedures for:

-         eligible persons to be invited to apply for feasibility licences; and

-         eligible persons to apply for feasibility licences; and

-         applications for feasibility licences to be considered; and

-         the Minister to offer to grant feasibility licences.

120.           It is important to note that only eligible persons may apply for a feasibility licence. The definition of ‘eligible persons’ is provided for in the clause 8.

121.           Subclause (2) makes clear that an application for a feasibility licence is required and that an application for a feasibility licence should provide an outline of the proposed commercial project under consideration.

122.           Subclause (3) sets out circumstances when financial offers may be required. The Minister may invite eligible persons to submit financial offers in relation to their applications for feasibility licences. This is an additional requirement which may or may not be required depending on the Minister’s discretion. There may be a number of interested parties wanting to develop in the same location, however only one feasibility licence can be issued for an area. A mechanism to allow the Minister to distinguish between similarly meritorious applications has been included, by way of financial offer. That is, where there are several feasibility licence applications submitted in relation to the same area with similar merits or for similar projects, financial offers will be available to allow the Minister to decide which application should be prioritised.

123.           The specifics of a financial offer process are to be provided for in the licensing scheme, which will be set out in regulations.

124.           The intention is that this is to be an additional tool for the Minister to make a decision in cases where there are multiple applications that are similarly meritorious against the merit criteria.

125.           The Minister may decide whether to grant a licence based on the financial offer submitted. The licence would only be granted once the financial offer is paid to the Commonwealth. 

Clause 33 - Grant of a feasibility licence

126.           This clause outlines the provisions which apply to the granting of a feasibility licence.

127.           Subclause (1) specifies that the Minister may grant a feasibility licence in respect of an area (the licence area ) to an eligible person. This must be done by written notice.

128.           There are certain criteria and necessary steps for the grant of the licence. These are that:

-         an application must be made by an eligible person;

-         the area is a declared area or part of a declared area under a declaration at the time that the licence is granted;

-         the Minister needs to be satisfied that the grant is consistent with any conditions applying to the declaration;

-         the area meets the requirements in subclause (4);

-         the Minister is satisfied that the licence meets the merit criteria; and

-         any other requirements prescribed by the licensing scheme are met.

129.           Subclause (2) provides a description of the licence area. It clarifies that the licence area of a feasibility licence is the area in respect of which the licence is granted (other than any part of that area that becomes a vacated area). Vacated area is defined in clause 8.

130.           Subclause (3) addresses the notice of the grant for a feasibility licence. It requires the notice to specify the following information:

-         the licence area;

-         the day on which the licence comes into force;

-         state the end day of the licence;

-         the day on which the licence ends;

-         the conditions to apply; and

-         any other matters prescribed by the licensing scheme.

131.           The notice must be given in accordance with the licensing scheme.

132.           Subclause (4) addresses the nature of the licence area. It must:

-         be continuous;

-         not include any part of the licence area of any other feasibility licence or commercial licence; and

-         not exceed the maximum area prescribed by the licensing scheme; and

-         be entirely within the Commonwealth offshore area at the time the licence is granted.

EXAMPLE: Granting a Feasibility licence

The Minister declares an area as suitable for offshore electricity infrastructure. Eligible persons are invited to apply for a feasibility licence. Company A and Company B both apply for a feasibility licence to assess the feasibility of constructing a 2GW floating windfarm to connect to the National Electricity Market. Company A and B propose the same licence area. Company A has secured financial funding for its project, while Company B is still in negotiation with investors. Both Company A and Company B have met the merit criteria to varying degrees. The Minister decides to grant the licence to Company A as the applicant demonstrated secured funding to meet the merit criteria of having the financial capability to carry out the project. Company A is awarded a feasibility licence for a term of 7 years. Company A receives approval under the EPBC Act and submits its management plan to the Regulator. The Regulator is satisfied that the management plan meets the criteria for acceptance and approves the management plan. The Minister invites applications for feasibility licences for an area adjacent to Company A’s licence area. Company B applies and is granted a feasibility licence.

Clause 34 - Merit criteria for a feasibility licence

133.           This clause sets out the merit criteria for a feasibility licence. It clarifies the necessary requirements in order to meet the criteria. All requirements must be met as specified below:

-         the eligible person is likely to have, or be able to arrange to have, the technical and financial capability to carry out the proposed commercial offshore infrastructure project for the feasibility licence; and

-         the proposed commercial offshore infrastructure project is likely to be viable; and

-         the eligible person is suitable to hold the licence; and

-         any criteria prescribed by the licensing scheme are satisfied.

134.           Subclause (2) explains that the licensing scheme may provide for:

-         matters that may or must be considered in any decision under this Bill about whether a feasibility licence meets the merit criteria;

-         the suitability of an eligible person to hold a feasibility licence to be assessed with regard to the suitability of other persons; and

-         procedures for making decisions under this Bill about whether a feasibility licence meets the merit criteria.

Clause 35 - Conditions that apply to a feasibility licence

135.           Clause 35 provides that a licence holder must comply with certain conditions that apply to a feasibility licence.

136.           Subclause (1) sets out the conditions that apply:

-         a condition that the licence holder must comply with any requirement to pay an amount of offshore electricity infrastructure levy;

-         any conditions set out in the declaration for the licence area;

-         any conditions prescribed by the licensing scheme;

-         a condition that the licence holder and anyone carrying out activities on their behalf in the licence area must comply with any management plan for the licence; and

-         any other conditions imposed on the licence under this Part of this Bill.

137.           In addition, subclause (2) enables the Minister, when granting a feasibility licence, to impose such conditions on the licence as the Minister thinks fit.

138.           Subclause (3) clarifies that the Minister may impose conditions on a feasibility licence that relate to the commercial licence that may be granted in relation to the feasibility licence.

139.           Subclause (4) provides that the holder of a feasibility licence must comply with the conditions of the licence.

Clause 36 - Term of a feasibility licence

140.           Clause 36 sets out the term of a feasibility licence.

141.           Subclause (1) confirms that the Minister must determine the end day of the licence before it is granted.

142.           Subclause (2) specifies that the ‘end day’ of a feasibility licence must not be later than the day after the period of 7 years. The ‘end day’ is where the licence ceases to authorise most offshore infrastructure activities not related to decommissioning of infrastructure, but the licence remains in force until it is cancelled or surrendered. This is to ensure a licence holder is still subject to licence conditions and regulatory powers, but is not incentivised to delay decommissioning as they will lose authorisation for ongoing operations regardless within the end of their period, and will still be subject to the regulatory regime. The licence term begins on the day the licence is granted, or alternatively it may begin on a later day specified in the notice which states these details about the licence.

143.           Subclause (3) sets out that the licensing scheme may provide for how the end day is to be determined.

144.           Subclause (4) addresses circumstances when transitioning from a feasibility licence to the commercial licence. If a commercial licence is granted in respect of the whole feasibility licence area, the feasibility licence ceases to have effect in the following cases:

-         when the commercial licence takes effect; or

-         in any other case—the end day of the feasibility licence is on the day the commercial licence comes into force.

145.           This applies to the whole of the licence area of the feasibility licence.

146.           There is an explanatory note to state that the feasibility licence remains in effect and may be surrendered if the conditions for surrender are satisfied.

147.           Subclause (5) makes clear that subclause (4) has effect despite any extension of the feasibility licence under clause 37. Subclause (6) further provides that if there are different end days in respect to different parts of the licence area, then subclause (4) does not affect the end day that is before the day the commercial licence comes into force.

148.           There is an explanatory note to state that there may be different end days for different parts of the licence area as a result of extensions to the term of a feasibility licence.

149.           Subclause (7) clarifies the effect of the end day. It specifies that on or after the end day, the feasibility licence ceases to authorise most offshore infrastructure activities, not related to decommissioning of infrastructure, but the licence remains in force until it is cancelled or surrendered. This is to ensure a licence holder is still subject to licence conditions and regulatory powers, but is not incentivised to delay decommissioning as they will lose authorisation for constructing and operating equipment. A note is provided to clarify that the licence remains in force until cancelled or surrendered in accordance with this Bill.

Clause 37 - Extending the term of a feasibility licence

150.           This clause provides for the extension of the term of a feasibility licence. The licensing scheme may provide for the Minister to extend the end day of a feasibility licence.

151.           This may occur on application of the licence holder, or on the Minister’s own initiative. The extension may be in respect of only part of the licence area (as long as this does not result in the part that has not reached the end day being non-continuous)..

152.           There is an explanatory note in relation to a declaration. It provides that if the declaration that applies to the licence area has been varied, the variation may affect an extension of the end day of the licence (see clause 23).

153.           The second explanatory note directs the reader to clause 297 for review of decisions.

154.           Subclause (2) specifies that an extension for a feasibility licence can only be allowed for a period of no more than 7 years after the extension is made, and subclause (3) specifies that an extension must not apply to any part of a licence area that is not a declared area at the time the extension is granted. Limiting the term of an extension to a feasibility licence incentivises a licence holder to progress to installation of their OEI and not restrict other proposed OEI projects from emerging in that area, which would require a licence under this framework.

155.           Subclause (4) provides that if an extension results in there being different end days for different parts of a licence area, subclause 36(7) applies separately in respect of each such part.

Clause 38 - Varying a feasibility licence

156.           This clause outlines the process for varying feasibility licences.

157.           Subclause (1) provides that the Minister may vary the licence in order to impose a condition on the licence or amend or revoke a condition on the licence; or remove one or more areas from the licence area. This must be done by providing written notice to the holder of a feasibility licence.

158.           Subclause (2) specifies how a variation may be made. This may be done on the application of the holder of the licence in accordance with the licensing scheme.

159.           Subclause (3) qualifies the circumstances where the variation may also be made on the Minister’s own initiative. It specifies that a variation may only be made on the Minister’s own initiative if one of the following apply:

-         the variation is made at the same time as:

§   the Minister extends the end day of the licence on application by the licence holder; or

§   the Minister makes a decision to transfer the licence; or

§   the Minister makes another variation on application by the licence holder; or

-         the Minister becomes aware of a change in control and that variation is made in connection with that change in control.

160.           Subclause (4) states that an area may be removed from the licence area only if:

-         the licence holder has not carried out any offshore infrastructure activities in the area; and

-         the Minister is satisfied that the licence holder does not intend to carry out any offshore infrastructure activities in the area; and

-         the removal does not result in the remaining licence area being non-continuous.

Division 3—Commercial licences

161.           This Division sets out the purpose, process and other procedures in relation to commercial licences.

Clause 39 - Purpose of a commercial licence

162.           This clause sets out the purpose of a commercial licence, which is to allow the holder of a commercial licence to carry out an offshore infrastructure project within the licence that exploits renewable energy resources.

Clause 40 - Activities authorised by a commercial licence

163.           Subclause (1)   specifies that a commercial licence authorises the licence holder to construct, install, commission, operate, maintain and decommission OREI in the licence area, so long as:

-         there is a management plan for the licence; and

-         the construction, installation, commissioning, operation, maintenance or decommissioning is carried out in accordance with the management plan and the conditions of the licence; and

-         the licence holder is in compliance with clause 117 and clause 118 (financial security).

164.           Subclause (2) provides that a commercial licence does not authorise the licence holder to construct, install, commission, operate or maintain OETI that is not also OREI.

165.           Subclause (3) provides that the rights conferred on the licence holder by this clause are subject to this Bill.

Clause 41 - Applications for commercial licences

166.           This item sets out the details required in making an application for a commercial licence .

167.           Subclause (1) specifies that an eligible person holding a feasibility licence may apply for the Minister for the grant of a commercial licence.

168.           Subclause (2) states that the licensing scheme may prescribe procedures for a commercial licence application and the requirements for consideration of that application. It also provides that the Minister may offer to grant a commercial licence in response to such an application.

169.           Subclause (3) specifies that the licensing scheme must require an application for a commercial licence to set out the offshore infrastructure project to be carried out under the licence.

Clause 42 - Grant of a commercial licence

170.           This item outlines the process for the grant of a commercial licence .

171.           Subclause (1) outlines that the Minister may, by written notice, grant a commercial licence in respect of an area, to an eligible person. The following initial requirements must be met:

-         the eligible person holds a feasibility licence; and

-         the eligible person applies for the commercial licence under the licensing scheme, and

-         the area is a declared area, or part of a declared area, under a declaration at the time the licence is granted, and

-         the area meets the requirements in subclause (4).

172.           The Regulator must have approved a management plan for the commercial licence.

173.           The Minister must also be satisfied of the following:

-         granting the licence would be consistent with any conditions that apply to the declaration of the declared area;

-         the licence meets the merit criteria;

-         the Minister is satisfied that granting the licence would be consistent with any conditions of the feasibility licence that relate to the granting of a commercial licence;

-         the offshore infrastructure project to be carried out under the licence is substantially similar to the proposed commercial offshore infrastructure project described, under subclause 32(2), or is appropriate, having regard to the matters in subsection (5);

-         the licence meets the merit criteria; and

-         any other requirements prescribed by the licensing scheme are met.

174.           An explanatory note the subclause directs the reader to clause 297 for review of decisions.

175.           Subclause (2) provides a description of the licence area . The licence area of a commercial licence is the area initially granted, minus, any vacated area.

176.           An explanatory note to the clause directs the reader to the definition of vacated area in clause 8.

177.           Subclause (3) provides that the notice of grant of a commercial licence must:

-         specify the licence area;

-         state the day on which the licence comes into force;

-         state the end day of the licence;

-         specify the conditions that are to apply to the licence;

-         include any other matters prescribed by the licensing scheme; and

-         be given in accordance with the licensing scheme.

178.           Subclause (4) provides that the licence area must:

-         be continuous;

-         not include any part of the licence area of any other commercial licence or feasibility licence;

-         not exceed the maximum area prescribed by the licensing scheme;

-         be entirely within the Commonwealth offshore area at the time the licence is granted; and

-         consist of, or be entirely within, the licence area of the feasibility licence referred to in paragraph (1)(a).

179.           Subclause (5) provides that for subparagraph (1)(h)(ii), where a proposed commercial offshore infrastructure project is not substantially similar to the project described in the application for the feasibility licence, the Minister must have regard to the following:

-         the nature and scale of the offshore infrastructure project to be carried out under the licence;

-         any other activities that could be carried out in the licence area if the licence was not granted;

-         any matters prescribed by the licensing scheme; and

-         any other matters the Minister considers relevant.

Clause 43 - Minister may require applicant to consult etc.

180.           The purpose of clause 43 is to allow the Minister to require an applicant to undertake actions to address any concerns that the Minister may have in relation to the granting of the commercial licence.

181.           Subclause (1) provides that the Minister may require an eligible person to carry out consultation if it holds a feasibility licence and has applied for a commercial licence, and the Minister is considering whether or not to grant the licence.

182.           Subclause (2) sets out the process by which the Minister can require the applicant for the commercial licence to do certain things. The Minister may require the eligible person to do any of the following:

-         conduct specified consultations;

-         prepare a revised management plan for the commercial licence and apply to the Regulator to approve the revised management plan;

-         anything else in relation to the application that the Minister thinks fit.

183.           Subclause (3) specifies that the Minister may cease considerations in relation to the licence grant until the requirement is complied with.

184.           Subclauses (4), (5) and (6) address notice arrangements. The notice under subclause (2) is not a legislative instrument. The Minister must provide a copy of the notice to the Registrar who must include the notice in the Register in relation to the feasibility licence and any commercial licence granted as a result of the application.

Clause 44 - Merit criteria for a commercial licence

185.           This clause sets out the merit criteria for a commercial licence. Subclause (1) outlines that a commercial licence held or applied for by an eligible person must meet the merit criteria. 

186.           They do so if the following requirements are met:

-         the eligible person has the technical and financial capability to carry out the offshore renewable energy project that is to be carried out under the licence; and

-         the offshore infrastructure project is viable; and

-         the licence holder is suitable to hold the licence; and

-         any criteria prescribed by the licensing scheme are satisfied.

187.           Subclause (2) specifies that the licensing scheme may provide for further matters for consideration, licence holder suitability, making merit decisions for commercial licences, and how merit criteria will be applied to ongoing projects.

Clause 45 - Conditions that apply to a commercial licence

188.           Subclause (1) provides that the licence holder must comply with the following conditions of this Bill:

-         a condition that the licence holder must comply with any requirement to pay an amount of offshore electricity infrastructure levy;

-         if the declaration that applies to the licence area requires the licence to be subject to conditions—those conditions;

-         any conditions prescribed by the licensing scheme;

-         a condition that the following people must comply with the management plan for the licence:

§   the licence holder;

§   any other person carrying out activities under the Bill or the licence on behalf of the licence holder;

-         any conditions imposed on the licence under:

§   subclause (2); or

§   subclause 48(1).

189.           Subclause (2) allows the Minister, when granting a commercial licence, to impose such conditions on the licence as the Minister thinks fit.

190.           Subclause (3) requires the holder of a commercial licence to comply with the conditions of the licence.

Clause 46 - Term of a commercial licence

191.           This provision sets out the term of a commercial licence.

192.           Subclause (1) requires the Minister to determine the end day of the licence before granting it.

193.           According to subclause (2) the end day of the term is a day no later than 40 years after:

-         the day on which the licence was granted; or

-         if a later day was specified—that late day.

194.           Subclause (3) provides for the licensing scheme to specify how the end day for commercial licences is determined.

195.           The effect of the end day is set out in subclause (4). On or after the end day of a commercial licence, the licence will no longer authorise the construction, installation, operation or maintenance of OREI, except to the extent necessary for decommissioning.

196.           The note to this subclause clarifies that the licence remains in force until cancelled or surrendered under this Bill.

Clause 47 - Extending the term of a commercial licence

197.           This clause sets out the arrangements for extending the term of a commercial licence . The scheme may provide for the following:

-         the holder of a commercial licence to apply to the Minister to extend the end day of the licence;

-         procedures for the Minister to decide whether or not to grant an extension;

-         an extension to be granted for the whole or part of a licence area (provided this does not cause the licence area that has not reached the end day to be non-continuous);

-         more than one such extension to be granted in respect of a particular licence.

198.           An explanatory note to the subclause explains that if the declaration that applies to the licence area has been varied, the variation may affect an extension of the end day of the licence (see clause 23). There is a second explanatory note referring the reader to clause 297 for review of decisions.

199.           Subclause (2) provides that an application for extension made under the licensing scheme may only be made at least 5 years before the end day of the licence.

200.           Subclause (3) sets out that an extension must not result in the end day of a commercial licence being beyond the end of 40 years after the extension is made.

201.           Subclause (4) sets out that an extension must not apply to any part of a licence area that is not a declared area at the time the extension is granted.

202.           Subclause (5) explains that if an extension results in there being different end days for different parts of a licence area, the restrictions on use of the area in subclause 46(4) apply separately in respect of each part.

Clause 48 - Varying a commercial licence

203.           This clause sets out the process to be applied in the varying of conditions of a commercial licence.

204.           Subclause (1) enables the Minister to vary a commercial licence to impose a condition on the licence; or amend or revoke a condition imposed on the licence; or remove one or more areas from the licence area. A variation to licence conditions may be required to ensure that the activities carried out under the licence remain appropriate with respect to the project and interactions with other marine users are appropriate. For example, a licence condition may include consultation requirements. The proposed variation is to be provided to the licence holder by written notice.

205.           Subclause (2) specifies that a variation under subclause (1) may be made on the application of the holder of the licence, in accordance with the licensing scheme. Subclause (1) allows for the Minister to consider the variation application and decide to impose new licence conditions; revoke or vary existing conditions; or remove an area as appropriate.

206.           Subclause (3) provides that a variation under subclause (1) may also be made on the Minister’s initiative. However that may only occur if:

-         the variation is made at the same time as the Minister:

§   extends the end day of the licence as a result of an application by the licence holder; or

§   makes a decision to transfer the licence; or

§   makes another variation on the application of the licence holder; or

-         the Minister becomes aware that there has been a change in control of the licence holder, and the variation is made in connection with that change in control.

207.           Subclause (4) specifies that an area may be removed only if:

-         the licence holder has not carried out any offshore infrastructure activities in the area; and

-         the Minister is satisfied the licence holder does not intend to carry out any offshore infrastructure activities in the area; and

-         the removal does not result in the remaining licence area being non-continuous.

EXAMPLE: Transitioning to a commercial licence

Company A undertakes feasibility work in its licence area over a period of five years and is ready to apply for a commercial licence. It has concluded the project would only be financially and technically viable with changes to its initial project concept. It proposes using larger turbines to generate electricity more efficiently given recent technological advancements. The project would be undertaken in a smaller project area as less turbines are required. Company A notifies the Regulator of its design change and develops its management plan accordingly. The management plan is approved by the Regulator. Company A submits its commercial licence application, under the licensing scheme to the Registrar and pays all fees associated with its application. The Minister determines that the proposed changes to the project are appropriate and grants Company A a commercial licence. Construction can now commence. The licence area is smaller than what was granted under a feasibility licence. Company A decides to surrender its feasibility licence covering the area that is not covered by the commercial licence, allowing for the Minister to invite new applications for feasibility licences in the vacated area.

Division 4—Research and demonstration licences

208.           Research and demonstration licences are intended for smaller-scale pilot projects to undertake research, or to test and demonstrate emerging technologies that are not yet commercial (such as wave, tidal or thermal electricity generation).

209.           The duration of a research and demonstration licence is no more than 10 years, and these licences cannot directly lead to the grant of commercial licence without first obtaining a feasibility licence. Research and demonstration licences are granted through direct application and are subject to merit criteria.

210.           A research and demonstration licence may overlap other licences if the Minister is satisfied the activities can coexist. The term of the licence can be extended. All OEI must be decommissioned and by the end of the licence term, prior to the end day.

Clause 49 - Purpose of a research and demonstration licence

211.           This provision outlines the purpose of a research and demonstration licence. A research and demonstration licence enables the licence holder to carry out an offshore infrastructure project for any of the following purposes:

-         to conduct research relating to the feasibility or capabilities of a technology, system or process;

-         to demonstrate the capabilities of a technology, system or process;

-         to conduct research relating to the exploitation of, or exploration for, renewable energy resources.

Clause 50 - Activities authorised by a research and demonstration licence

212.           This provision authorises the licence holder to construct, install, commission, operate, maintain and decommission OREI in the licence area. This must be in accordance with the management plan for that licence and the conditions of that licence.

213.           Subclause (1) provides that a research and demonstration licence authorises holders to construct, install, commission, operate, maintain and decommission OREI or OETI in the licence area, so long as:

-         there is a management plan for the licence; and

-         the construction, installation, commissioning, operation, maintenance or decommissioning is carried out in accordance with the management plan and the conditions of the licence; and

-         the licence holder is in compliance with clauses 117 and 118 (financial security).

214.           Subclause (2) provides that the rights conferred on the licence holder are subject to this Bill

215.           Subclause (3) is a clarifying provision to state that electricity stored, transmitted or conveyed under a research and demonstration licence need not be a renewable energy product.

Clause 51 - Applications for research and demonstration licences

216.           This item sets out the details required in making an application for a research and demonstration licence.

217.           Subclause (1) specifies that the licensing scheme must prescribe procedures for eligible persons to apply for research and demonstration licences and for those applications for research and demonstration licences to be considered. It must also prescribe procedures for the Minister to offer the licences.

218.           Subclause (2) states that the licensing scheme must require an application for a research and demonstration licence to set out the offshore infrastructure project to be carried out under the licence.

Clause 52 - Grant of a research and demonstration licence

219.           This item sets out the process for the grant of a research and demonstration licence. The grant is to be made by written notice.

220.           Subclause (1) provides that the Minister may grant a research and demonstration licence in respect of an area to an eligible person if all of the following elements are met:

-         the eligible person applies for the licence under the licensing scheme; and

-         the licence area is a declared area, or part of a declared area, under declaration at the time the licence is granted; and

-         the Minister is satisfied that granting the licence would be consistent with any conditions that apply to the declaration of the declared area; and

-         the area meets the requirements of subclause (4); and

-         if the area includes any part of the licence area under another licence—the Minister is satisfied that any activities carried within the proposed licence would not unduly interfere with activities of the holder of the other licence; and

-         the Minister is satisfied that the licence meets the merit criteria; and

-         any other requirements prescribed by the licensing scheme are met.

221.           A note to this subclause directs the reader to clause 297 for review of decisions.

222.           Subclause (2) specifies that the licence area of a research and demonstration licence is the area in respect of which the licence is granted (other than any part of that area that becomes a vacated area).

223.           A note to this subclause directs the reader to the definition of vacated area in clause 8.

224.           Subclause (3) states that the notice of grant of a research and demonstration licence must:

-         specify the licence area; and

-         state the day on which the licence comes into force; and

-         specify the conditions that are to apply to the licence; and

-         include any other matters prescribed by the licensing scheme; and

-         be given in accordance with the licensing scheme.

225.           Subclause (4) specifies that the licence area:

-         must be continuous; and

-         must be entirely within the Commonwealth offshore area at the time the licence is granted.

Clause 53 - Merit criteria for a research and demonstration licence

226.           This provision sets out the m erit criteria for a research and demonstration licence.

227.           Subclause (1) provides that a research and demonstration licence held or applied for by an eligible person will satisfy the merit criteria if all of the following matters are met:

-         the eligible person has the technical and financial capability to carry out the offshore infrastructure project proposed; and

-         the offshore infrastructure project is likely to be viable; and

-         the eligible person is suitable to hold the licence; and

-         any criteria prescribed by the licensing scheme are satisfied.

228.           Subclause (2) enables the licensing scheme to set out how the Minister is to decide whether a research and demonstration licence meets the merit criteria. The scheme may provide for:

-         matters that may or must be considered in any decision about whether a research and demonstration licence meets the merit criteria; and

-         the suitability of an eligible person to hold a research and demonstration licence is to be assessed with regard to the suitability of other persons (including another person that controls the eligible person); and

-         procedures for making decisions about whether a research and demonstration licence meets the merit criteria; and

-         how subclause (1) is to be applied to an offshore infrastructure project that has begun to be, or is being, carried out.

Clause 54 - Conditions that apply to a research and demonstration licence

229.           Subclause (1) provides that a research and demonstration licence is subject to the following conditions:

-         the licence holder must comply with any requirement to pay an amount of offshore electricity infrastructure levy;

-         if the declaration that applies to the licence area requires conditions to be imposed on the licence—those conditions;

-         any conditions prescribed by the licensing scheme;

-         a condition that the licence holder or another person carrying out activities under this Bill must comply with the management plan for the licence, if there is a management plan; and

-         any conditions imposed on the licence under subclause (2) or subclause 57(1).

230.           Subclause (2) provides that the Minister may impose such conditions on the licence as the Minister thinks fit when granting a research and demonstration licence.

Licence holder must comply with licence conditions

231.           Subclause (3) provides that the holder of a research and demonstration licence must comply with the conditions of the licence.

Clause 55 - Term of a research and demonstration licence

232.           Subclause (1) stipulates that before grant of a research and demonstration licence the Minister must determine the end day.

233.           Subclause (2) provides i n establishing this time frame, the end day of a research and demonstration licence must not be later than the day after the period of 10 years beginning the day on when the licence is granted or if a later day is specified as the commencement date—that later day.

234.           Subclause (3) provides that the licensing scheme may provide for the way the end day is determined.

235.           Subclause (4) sets out the effect of the end day. It specifies that on or after the end day of a research and demonstration licence, the licence will no longer authorise the construction, installation, operation or maintenance of OREI or OETI except to the extent necessary to decommission infrastructure.

236.           There is an explanatory note to also clarify that the licence remains in force until cancelled under clause 73 or surrendered under clause 74.

Clause 56 - Extending the term of a research and demonstration licence

237.           This item provides for extending the term of a research and demonstration licence .

238.           Subclause (1) outlines what the licensing scheme may provide for in relation to extensions of this type of licence. It may provide for the Minister to extend the end day either on the application of the licence holder, or on the Minister’s own initiative. It may provide that an extensions in relation to only part of the licence area (provided that this does not result in the part of the licence area that has not reached the end day being non-continuous). It may also provide for more than one such extension to be granted in respect of a particular licence.

239.           There is a note to state that if the declaration that applies to the licence area has been varied (see clause 23), the variation may affect an extension of the end day of the licence. There is also a note directing the reader to clause 297 in relation to review of decisions.

240.           Subclause (2) provides that an extension must not result in the end day of a research and demonstration licence being later than the day after the end of 10 years after the extension is made.

241.           Subclause (3) provides that an extension must not apply to any part of a licence area that is not a declared area when the extension is granted.

242.           Subclause (4) clarifies that if an extension results in there being different end days for different parts of a licence area, then subclause 55(4) applies separately in respect of each such part.

Clause 57 - Varying a research and demonstration licence

243.           This item addresses varying a research and demonstration licence .

244.           Subclause (1) states that the Minister may vary the licence. This is to be done by written notice to the holder of a research and demonstration licence. The purpose of the variation may be to:

-         impose a condition on the licence; or

-         amend or revoke a condition imposed on the licence, or

-         remove one or more areas from the licence area.

245.           Subclause (2) provides that a variation may be made on the application of the holder of the licence, in accordance with the licensing scheme.

246.           Subclause (3) provides that a variation may also be made on the Minister’s own initiative but only if:

-         the variation is made at the same time as:

§   the Minister extends the end day of the licence under a provision of the licensing scheme if the extension is made on application by the licence holder; or

§   the Minister makes a decision to transfer the licence; or

§   the Minister makes another variation as a result of an application by the licence holder; or

-         the Minister becomes aware that there has been a change in control of the licence holder, and the variation is made in connection with that change in control.

247.           Subclause (4) provides that an area may be removed under this clause only if:

-         the licence holder has not carried out any offshore infrastructure activities in the area; and

-         the Minister is satisfied that the licence holder does not intend to carry out any offshore infrastructure activities in the area; and

-         the removal does not result in the remaining licence area being non-continuous.

EXAMPLE: Granting a Research and demonstration licence and Transmission and infrastructure licence

Company A would like to undertake a demonstration wave power project in Commonwealth waters adjacent to Perth. Company A anticipates the project could generate 3MW of electricity and plans to connect it to the grid. Company A has been granted approval under the EPBC Act. The Minister has declared the area as suitable for undertaking offshore electricity infrastructure projects. There are no conditions on the declaration that would limit the licence types that can be issued in the area. Company A submits an application for a research and demonstration licence to demonstrate the technology. Company A also makes an application for a transmission and infrastructure licence and pays the required fees. The Minister is satisfied the applications meet the requirements of the licensing scheme and grants Company A a research and demonstration licence and a transmission infrastructure licence. As Company A intends to install infrastructure in the licence area the licence holder submits a management plan to the Regulator for assessment. The management plan includes detail on how financial security will be provided. The management plan is approved and financial security is provided, allowing the licence holder to commence installation activities. The technology is subsequently proven in 6 years. This is within the 10 year licence term. Company A decommissions all infrastructure in line with its management plan. Company A applies to surrender its licences. The Minister grants the surrender and the financial security is returned. Company B would like to use this technology on a commercial scale. It may apply for a feasibility licence.

Division 5—Transmission and infrastructure licences

248.           Transmission and infrastructure licences allow a licence holder to construct and operate OETI that will store, transmit or convey electricity or a renewable energy product, including within or through a licence area. These licences will allow offshore electricity generators to build transmission infrastructure up to the limits of the Commonwealth offshore area, necessary to connect to onshore grid infrastructure. Transmission and infrastructure licences can be issued for the term of the asset life and be extended if required. A declaration is not required to grant a transmission and infrastructure licence and the infrastructure can extend outside a declared area.

249.           Transmission and infrastructure licences may overlap, but only if the Minister is satisfied that the activities undertaken under each licence will not interfere with each other.

Clause 58 - Purpose of a transmission and infrastructure

250.           Subclause (1) outlines that a transmission and infrastructure licence enables the licence holder to carry out an offshore infrastructure project for any of the following purposes:

-         to assess the feasibility of storing, transmitting or conveying electricity or a renewable energy product in the Commonwealth offshore area ;

-         to store, transmit or convey electricity or a renewable energy product  in the Commonwealth offshore area.

Clause 59 - Activities authorised by a transmission and infrastructure licence

251.           Subclause (1) provides that a transmission and infrastructure licence authorises the licence holder to construct, install, commission, operate, maintain and decommission offshore renewable energy infrastructure or offshore electricity transmission infrastructure in the licence area, provided:

-         there is an approved management plan for the infrastructure; and

-         the activities comply with the management plan and any licence conditions; and

-         the licence holder meets the financial security requirements in 117 and 118.

252.           Subclause (2) specifies that the rights conferred on the licence holder are subject to this Bill.

253.           Subclause (3) is an avoidance of doubt provision in relation to the meaning of the phrase renewable energy product . It makes clear that electricity stored, transmitted or conveyed under a transmission and infrastructure licence need not be a renewable energy product.

Clause 60 - Application for transmission and infrastructure licence

254.           Subclause (1) provides that the licensing scheme must prescribe procedures for:

-         eligible persons to apply for transmission and infrastructure licences; and

-         applications for transmission and infrastructure licences to be considered; and

-         the Minister to offer to grant transmission and infrastructure licences.

255.           Subclause (2) states that the licensing scheme must require an application for a transmission and infrastructure licence to describe the offshore infrastructure project to be carried out under the licence.

Clause 61 - Grant of a transmission and infrastructure licence

256.           This item provides for the grant of transmission and infrastructure licence.

257.           Subclause (1) provides that the Minister may, by written notice, grant a transmission and infrastructure licence to an eligible person if all of the following are met:

-         the eligible person applies for the licence under the licensing scheme; and

-         if the licence would authorise activities in any part of the licence area of another licence—the Minister is satisfied that any activities carried out in accordance with the proposed licence would not unduly interfere with the activities of the holder of the other licence; and

-         the Minister is satisfied that the licence meets the merit criteria; and

-         any other requirements prescribed by the licensing scheme are met.

258.           There is a note to the subclause in relation to review of decisions, directing the reader to clause 297.

259.           Subclause (2) provides that a transmission and infrastructure licence may be granted in respect of one or more areas (which need not be continuous) within the Commonwealth offshore area at the time that the licence is granted.

260.           There is a clarifying note at the end of this provision to state that the licence area of a transmission and infrastructure licence is not required to be within a declared area.

261.           Subclause (3) states that the licence area of a transmission and infrastructure licence consists of the area or areas mentioned in subclause (2) other than any part of those areas that becomes a vacated area.

262.           An explanatory note to the subclause refers to the definition of vacated area in clause 8.

263.           Subclause (4) outlines that the notice of grant of a transmission and infrastructure licence must include all of the following:

-         specify the licence area;

-         state the day on which the licence comes into force;

-         state the end day of the licence for the purposes of subclause 64(1);

-         specify the conditions that are to apply to the licence;

-         include any other matters prescribed by the licensing scheme; and

-         be given in accordance with the licensing scheme.

Clause 62 - Merit criteria for a transmission and infrastructure licence

264.           This item sets out the merit criteria for a transmission and infrastructure licence.

265.           Subclause (1) provides that for the purposes of this Bill, a transmission and infrastructure licence held or applied for by an eligible person meets the merit criteria if they meet all of the following:

-         the eligible person has the technical and financial capability to carry out the offshore infrastructure project that is proposed to be carried out under the licence;

-         the offshore infrastructure project is likely to be viable;

-         the licence holder is suitable to hold the licence; and

-         criteria prescribed by the licensing scheme are satisfied.

266.           Subclause (2) specifies that the licensing scheme may provide for how the Minister is to decide whether a transmission and infrastructure licence meets the merit criteria. The scheme may provide for the suitability of an eligible person to hold a licence to be assessed with regard to the suitability of other persons, including another person that controls the eligible person. The scheme may also provide for procedures for making decisions about whether a licence meets the merit criteria and how subclause (1) applies to ongoing offshore infrastructure projects.

Clause 63 - Conditions that apply to a transmission and infrastructure licence

267.           This item specifies the conditions that apply to a transmission and infrastructure licence.

268.           Subclause (1) provides that the licence has the following conditions:

-         a condition that the licence holder must comply with any requirement to pay an amount of offshore electricity infrastructure levy;

-         any conditions prescribed by the licensing scheme;

-         a condition that the licence holder or any other person carrying out activities under the Bill must comply with the management plan for the licence, if there is a management plan;

-         any conditions imposed on the licence under subclause (2) or subclause 66(1).

269.           Subclause (2) gives the Minister the power to impose conditions when granting a transmission and infrastructure licence, as the Minister thinks fit.

270.           Subclause (3) requires the hold of a licence to comply with the conditions of the licence.

Clause 64 - Term of a transmission and infrastructure licence

271.           This item sets out the term of a transmission and infrastructure licence.

272.           Subclause (1) specifies the end day of a transmission and infrastructure licence. This is the day stated in the licence under paragraph 61(4)(c).

273.           Subclause (2) provides that the licensing scheme may provide for the way an end day of a transmission and infrastructure licence is to be determined. Transmission and infrastructure licences may be granted for the life of the asset, which may vary from project to project, rather than a fixed term. Setting out in the licensing scheme the procedure for determining the end day will ensure the scheme is responsive to improvements in technology.

274.           Subclause (3) outlines the effect of the end day. It provides that on or after the end day of a transmission and infrastructure licence, the licence no longer authorises specified activities. These activities are: the construction, installation, operation or maintenance of OREI or OETI. An exception is provided for decommissioning infrastructure.

275.           A note to this clause clarifies that the licence remains in force until cancelled under clause 73 or surrendered under clause 74.

Clause 65 - Extending the term of a transmission and infrastructure licence

276.           This provision sets out the arrangements for extending the term of a transmission and infrastructure licence .

277.           Subclause (1) provides that the licensing scheme may provide for the process to be followed for extending the term of the licence and the requirements and in particular permits the licensing scheme to provide for:

-         the holder of a transmission and infrastructure licence to apply to the Minister to extend the end day of the licence;

-         procedures for the Minister to decide whether or not to grant such an extension;

-         such an extension to be granted in respect of the whole licence area, or a part of a licence area;

-         more than one such extension to be granted in respect of a particular licence.

278.           There is a note in relation to review of decisions, directing the reader to clause 297.

279.           Subclause (2) makes clear that an extension must not apply to any part of a licence area that is not a Commonwealth offshore area at the time the extension is granted.

280.           Subclause (3) states that if an extension results in there being different end days for different parts of a licence area, subclause 63(3) applies separately in respect of each such part.

Clause 66 - Varying a transmission and infrastructure licence

281.           Subclause (1) states that the Minister may, by written notice to the holder of a transmission and infrastructure licence, vary the licence to:

-         impose a condition on the licence; or

-         amend or revoke a condition imposed on the licence; or

-         remove one or more areas from the licence area.

282.           A variation to licence conditions may be required to ensure that the activities carried out under the licence remain appropriate with respect to the project and interactions with other marine users are appropriate. For example, a licence condition may include consultation requirements. The proposed variation is to be provided to the licence holder by written notice.

283.           Subclause (2) provides that a variation under subclause (1) may be made on the application of the holder of the licence, which must be made in accordance with the licensing scheme.

284.           Subclause (3) provides that a variation may also be made on the Minister’s own initiative but only if:

-         the variation is made at the same time as:

§   the Minister extends the end day of the licence under a provision of the licensing scheme if the extension is made on application by the licence holder; or

§   the Minister makes a decision to transfer the licence; or

§   the Minister makes another variation as a result of an application by the licence holder; or

-         the Minister becomes aware that there has been a change in control of the licence holder, and the variation is made in connection with that change in control.

285.           Subclause (4) states that an area may be removed from the licence area only if:

-         the licence holder has not carried out any offshore infrastructure activities in the area; and

-         the Minister is satisfied that the licence holder does not intend to carry out any offshore infrastructure activities in the area; and

-         the removal does not result in the remaining licence area being non-continuous.

Part 2—General provisions about licences

Division 1—Introduction

Clause 67 - Simplified outline of this Part

286.           Clause 67 provides a simplified outline of Part 2 of Chapter 3 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.

Division 2—Licence transfers

Clause 68 - Licences to be transferred only under this Division

287.           This Division addresses the transfer arrangements for licences. It makes clear that a licence may only be transferred in accordance with this Division.

Clause 69 - Application for transfer

288.           Subclause (1) addresses the arrangements for the approval of a transfer. It will apply in the case where a licence holder (the transferor ) proposes to transfer the licence to another eligible person (the transferee ).

289.           Subclause (2) specifies that the transferor or the transferee may apply to the Registrar for the licence to be transferred from the transferor to the transferee.

290.           Subclause (3) provides that the licensing scheme must prescribe procedures for how an application is to be made and for the Minister to consider the application.

291.           Subclause (4) states that the transferor may only make an application under subclause (2) with the agreement of the transferee.

292.           Subclause (5) provides that the transferee may only make an application under subclause (2) with the agreement of the transferor.

Clause 70 - Minister may transfer licence

293.           Subclause (1)   specifies that the Minister may transfer a licence held by a transferor to the transferee if all of the able are met:

-         an application for the transfer is made under clause 69;

-         the Minister is satisfied that the licence would meet the merit criteria if it were held by the transferee;

-         the Minister is satisfied the transferee will be able to comply with financial security requirements for the licence with clauses 117 and 118 (financial security), subject to clause 72, in relation to the licence; and

-         any other requirements prescribed by the licensing scheme are satisfied.

294.           An explanatory note to the subclause refers the clause 297 for review of decisions.

295.           Subclause (2) provides that the Minister must give written notice of a decision to transfer a licence to the transferor and the transferee.

296.           Subclause (3) states that a transfer of a licence takes effect at the time specified in the notice. It clarifies that at that time:

-         the transferor ceases to be the holder of the licence; and

-         the transferee begins to be the holder of the licence.

Clause 71 - Licence transfer does not affect conditions or end day

297.           Clause 71 addresses the conditions that apply when the transfer of licence takes effect.

298.           Subclause (1) makes clear that the transfer of a licence does not affect any conditions that apply to the licence.

299.           An explanatory note to the subclause clarifies that the Minister may amend or revoke the conditions that apply to a licence that is transferred, or impose further conditions—see clauses 38 (varying a feasibility licence), 48 (varying a commercial licence), 57 (varying a research and demonstration licence) and 66 (varying a transmission and infrastructure licence).

300.           Subclause (2) provides that the transfer of a licence does not affect the end day of the licence.

Clause 72 - Financial security for a transferred licence

301.           Clause 72 addresses the financial security arrangements for a transferred licence.

302.           Subclause (1) outlines that this clause applies to a licence if:

-         there is a management plan for the licence; and

-         an application has been made under clause 69 for the licence to be transferred from the transferor to the transferee;

-         any of the following apply:

§   the Minister is considering whether to approve the transfer;

§   the Minister has approved the transfer;

§   the transfer has occurred.

303.           Subclause (2) specifies that the licensing scheme may require both the transferor and the transferee to comply with clauses 117 and 118 in relation to the licence.

304.           Subclause (3) specifies that the licensing scheme may provide for the transferor’s obligations under clauses 117 and 118:

-         to cease, in whole or part, after the transferee has complied with equivalent obligations; or

-         to continue, in whole or part, for any period during which the licence remains in force (including as a result of an extension of the end day of the licence under this Chapter).

Division 3—Cancelling and surrendering licences

Clause 73 - Cancellation of licence

305.           Clause 73 addresses the circumstances when a licence may be cancelled. It deals with the actions and omissions of the licence holder that can lead to cancellation of a licence.

306.           Cancellation is one of the sanctions available to the Minister - other sanctions could include criminal prosecution, or refusal to renew the licence if and when it reaches the end day.

307.           The grounds for cancellation arise when the Minister is satisfied that:

-         the licence holder has failed to comply with licence conditions;

-         the licence holder has contravened a provision of this Bill, such as the applied work health and safety provisions;

-         the licence does not meet the merit criteria;

-         the licence holder has failed to commence licence activities within a reasonable time;

-         the licence holder is not an eligible person; or

-         a person has contravened subclause 91(1) (notification of change in circumstances), 95(1) (change in control must be approved by Registrar), 96(1) (notification of change in control without approval) or 108(1) (avoidance of change in control provisions) in relation to the licence.

308.           There is an explanatory note directing the reader to clause 297 of this Bill which addresses review of decision provisions.

Consultation

309.           Subclause (2) addresses the requirement of consultation. It provides that before deciding to cancel a licence under subclause (1), the Minister must:

-         by written notice to the licence holder, give at least 30 days notice of the Minister’s intention to make the decision; and

-         give a copy of the notice to such other persons (if any) as the Minister thinks fit.

310.           Subclause (3) outlines that notice must be given in the event of a proposed cancellation. The notice must set out the grounds for cancelling the licence and invite the affected person to make a written submission to the Minister about the proposal. A time limit must be specified for making that submission.

311.           The notice requirements and consultation procedure must be undertaken before a licence may be cancelled. The third parties to whom the Minister may give a copy of the notice could include, for example, a contractor of the licence holder who has been involved in operations under the licence. Submissions from such parties could, in some cases, cause the Minister to come to a different view of whether the licence should be cancelled.

Making a decision on cancellation

312.           Subclause (4) sets out the steps necessary in making a decision on whether to cancel a licence. The Minister must take into account any action taken by the licence holder to address the circumstances that give rise to the grounds for cancelling the licence or to prevent the recurrence of similar circumstances and any submissions made as mentioned in paragraph (3)(b).

Notice and effect of cancellation

313.           Subclause (5) provides that the Registrar must, by notifiable instrument, give notice of the cancellation. The licence ceases to be in force when the notice under this subclause is registered on the Federal Register of Legislation.

314.           There is an explanatory note in relation to remedial directions (including in relation to a licence that has been cancelled). The reader is directed to see clauses 126 and 127.

315.           A notifiable instrument has been selected as the mechanism for the notice of cancellation rather than the use of a legislative one. In this case, the cancellation notification is applying a law made in exercise of a power which is given under this Bill. Cancellation of a licence will not determine or alter the content of the law. This bill provides for various non-legislative notifiable instruments as well as legislative instruments. In relation to this selection, due consideration has been made at the time of drafting on which is the more applicable instrument form based on the circumstances. Under clause 217 the decision under clause 73 to cancel a licence is merits reviewable.

316.           It is recognised that notifiable instruments are administrative in character (rather than legislative in character). Although they will not be registered as legislative instruments, public access and centralised management will still be made available through registration on the Federal Register of Legislation.

Clause 74 - Surrender of licence

317.           Clause 74 sets out the arrangements for the surrender of a licence.

318.           Subclause (1) provides that a licence holder may apply to the Minister to surrender a licence. The application must be in writing. The Minister’s consent is required before the surrender takes effect. The surrendered area may relate to either a whole or a part of the licence area.

319.           There is an explanatory note to state that the licence may or may not have reached the end day of the licence.

320.           Subclause (2) requires the application to specify the surrender area. This must set out the reasons for the surrender and how each of the requirements in subclause (3) have been met.

321.           Subclause (3) states that the Minister must, by written notice to the licence holder, consent to the surrender if:

-         the licence holder has paid all fees and amounts payable under the Bill or the Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021 once enacted, or has made arrangements for the payment of those fees and amounts that are satisfactory to:

§   for a fee charged by the Regulator on behalf of the Commonwealth—the Regulator; or

§   for any other amount—the Registrar; and

-         the licence holder is in compliance with all of the conditions of the licence area; and

-         the licence holder is in compliance with any obligations under this Bill in relation to the licence or the surrender area; and

-         if there is a management plan for the licence—the licence holder is in compliance with any requirements that, under the management plan, must be complied with for the licence to be surrendered; and

-         the licence holder has either:

§   to the satisfaction of the Regulator, removed all equipment or other property in the surrender area by any person engaged or concerned in the activities authorised by the licence; or

§   made arrangements that are satisfactory to the Regulator for in relation to the equipment or property; and

-         the Regulator is satisfied that the licence holder has made good any damage to the seabed or subsoil or any other environmental damage in the Commonwealth offshore area (whether inside or outside the surrender area) caused by any person engaged or concerned in the activities authorised by the licence; and

-         if the surrender area is a part of the licence area, and the licence is not a transmission and infrastructure licence—the remaining licence area would be continuous.

322.           There is an explanatory note directing the reader to clause 297 of this Bill for review of decision provisions.

323.           Subclause (4) states that if the Minister gives consent to the surrender, the licence holder may surrender the licence in respect of the surrender area. This needs to be done by written notice to the Registrar accompanied by the notice of the Minister’s consent.

324.           Subclause (5) provides that the Registrar must give notice of the surrender. This must be done by notifiable instrument. The surrender takes effect when the notice under this subclause is registered on the Federal Register of Legislation.

325.           Subclause (6) addresses the timing of the surrender and when this takes effect. This can relate to either a whole or a part of the licence area. The surrendered area will be that area as described and set out in the notice.

326.           There is an explanatory note directing the reader in relation to remedial directions, (including in relation to a licence that has been surrendered), to refer to clauses 126 and 127.

Division 4—Other general provisions about licences

Clause 75 - False or misleading information

327.           Clause 75 addresses the subject of false or misleading information. It provides that a person commits an offence if they give information in connection with an application under specified provisions in the Bill. There is a requirement that the person commits this offence knowing that the information is false or misleading in a material particular or if they omit any matter which would result in the information being misleading in a material particular.

328.           There is a clarifying note to state that the same conduct may be an offence against both this clause and section 137.1 of the Criminal Code.

329.           The penalty for this offence is 100 penalty units or imprisonment for 12 months, or both.

Clause 76 - False or misleading documents

330.           Clause 76 provides that a person commits an offence if they produce a false or misleading document in connection with an application under this Bill or in relation to the requirement in the licensing scheme. There is a requirement of intention in that the person must do so knowing that the document is false or misleading in a material particular.

331.           A note clarifies that the same conduct may be an offence against both this clause and section 137.2 of the Criminal Code.

332.           The penalty for this offence is 100 penalty units or imprisonment for 12 months, or both.

Clause 77 - Interference with other activities by licence holder

333.           Clause 77 creates an offence where the licence holder interferes with other activities.

334.           Subclause (1) describes the nature of the offence. It occurs where a licence holder carries out activities in the Commonwealth offshore area under or for the purposes of the licence and those activities interfere with any of the following:

-         navigation;

-         exercise of native title rights and interests (under the Native Title Act 1993 );

-         fishing;

-         conservation of resources of the sea or the seabed;

-         activities that are being carried out in accordance with the OPGGS Act; or

-         activities that someone else is lawfully carrying out,

and that interference is greater than is necessary for the reasonable exercise of their rights or obligations under the licence.

335.           Subclause (2) sets out a strict liability offence with a penalty of 100 penalty units. Subclause (3) provides that a person is liable for a civil penalty if the person contravenes subclause (1). In that case, the civil penalty is 265 penalty units.

336.           These penalties are based on section 280 of the OPGGS Act. They are considered to be ‘like’ offences to those detailed under that Act, due to the similar nature types of offences for infrastructure in dangerous marine environment, with similar marine users, similar harms and interests. The unusual and difficult circumstances which often present in enforcing offshore activities and the consequent risk to OEI or harm to lives is considered to warrant the higher penalties than would usually apply onshore.

337.           The strict liability offence is appropriate to ensure the highest level of compliance with this obligation given the potential harm that might be caused by the conduct.

338.           The justification for this approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

Clause 78 - Interference with other activities by other person carrying out activities under licence

339.           Clause 78 creates an offence where a person (other than the licence holder) interferes with other activities under the licence.

340.           Interference arises when another person carries out activities on a licence holder’s behalf  which interferes with:  

-         navigation;

-         exercise of native title rights and interests (under the Native Title Act 1993 );

-         fishing;

-         conservation of the resources of the sea or the seabed;

-         any activities being carried on by another person in accordance with the OPGGS Act; or

-         any activities that someone else is lawfully carrying out.

341.           To meet the offence criteria, there is the added requirement that the interference must be greater than is necessary for the reasonable exercise of the first person’s rights or obligations under the licence under the licence or Bill.

342.           Subclause (2) provides that a strict liability offence is committed if a person contravenes subclause (1). This attracts a penalty of 100 penalty units. Subclause (3) provides a civil penalty for the offence in subclause (1). In these circumstances a contravention will attract a civil penalty of 265 penalty units. It is considered appropriate that a contravention of subclause 78(1) is a strict liability offence given the seriousness of the interference with the activities of third parties. The nature of the offence will act to deter interference with activities of third parties which is greater than necessary to exercise a licence holder’s rights or obligations under the Bill. Further, the seriousness of these kinds of interferences, combined with the potential harm that may result as a consequence of the contravention of 78(1), justify the amount of penalty units specified in the provisions.

343.           The justification for the strict liability approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

Clause 79 - No conditions about payment of money

344.           This clause provides a qualification that the conditions on a licence must not include a condition requiring the payment of money to the Regulator, the Registrar or the Commonwealth.

345.           Subclause (2) makes clear that the above provision does not apply to a payment made in accordance with:

-         feasibility licences - requirement to pay an offshore electricity infrastructure levy;

-         commercial licences - requirement to pay an offshore electricity infrastructure levy;

-         research and demonstration licences - requirement to pay an offshore electricity infrastructure levy; or

-         transmission and infrastructure licences - requirement to pay an offshore electricity infrastructure levy.

346.           Subclause (3) makes clear that the above provision does not apply to a payment made in accordance with:

-         clause 117 or 119 (which addresses financial security) or regulations made for the purposes of those provisions;

-         a provision of a management plan that relates to the obligations of a licence holder under clause 117 or 118 or 119; or

-         a provision of the licensing scheme made for the purposes of subclause 32(3) (financial offers for feasibility licences).

Clause 80 - Basis on which licences granted

347.           This clause sets out the basis on which licences are granted. It provides the conditions and specifies that the licence may be cancelled, revoked, varied or terminated under the Bill or by or under later legislation. In addition, it makes clear that no compensation is payable if the licence is cancelled, revoked, terminated or varied.

Clause 81 - Changes to the boundaries of the Commonwealth offshore area

348.           This clause addresses the addresses the circumstances where there are changes to the boundaries of the Commonwealth offshore area.

349.           Subclause (1) provides that if there is a change to the boundary of the original area (described as the first area ) where the licence has been granted, and this area ceases to be within the Commonwealth offshore area. If this area is now within the coastal waters of a State or Territory, then this Bill continues to apply as if the first area is still within the Commonwealth offshore area. This has the effect of keeping the status quo in terms of the original position at the time of the licence grant.

350.           Subclause (2) makes clear that this applies in relation to the first area only and does not apply to any extension of the end day of the licence. In addition, if the licence is a feasibility licence, it does not apply in relation to an application for a commercial licence in that licence area.

Clause 82 - Licences etc. are not personal property for the purposes of the Personal Property Securities Act 2009

351.           This clause provides that the following are not personal property for the purposes of the Personal Property Securities Act 2009 :

-         a licence;

-         any interest or right in, or in relation to, a licence.

352.           There is an explanatory note directing the reader to paragraph 8(1)(k) of the Personal Property Securities Act 2009 .

353.           The effect of this provision is to clarify beyond doubt that both licences and interests in licences are not in any way captured by other legislation where they may be considered as a property right.

Part 3—Change in Control of a licence holder

354.           This Part requires persons who propose to begin or cease control of a licence holder to obtain approval from the Registrar, and creates offences and civil penalties for persons who begin or cease control of a licence holder without approval. This Part is crucial for the Registrar to be able to oversee transactions proposing to effect a change in control of a licence holder, in order to ensure that the licence holder’s ability to comply with its obligations under the Bill will not be adversely impacted.

355.           A person contracts a licence holder if the person (whether alone or together with one or more other persons with whom the person acts jointly with) either:

-         holds the power to exercise, or control the exercise of, 20% or more of the voting rights in the licence holder; or

-         holds, or holds an interest in, 20% or more of the issued securities in the licence holder.

356.           The terms ‘voting rights’ and ‘issued securities’ are not defined, which means the ordinary meaning of these terms apply. These terms reflect, but do not necessarily rely on, similar concepts in other Commonwealth laws, notably:

-         the definitions of ‘voting power’ in a body corporate in section 610 of the Corporations Act 2001 (CA) and ‘voting power’ in an entity or unincorporated limited partnership in section 22 of the Foreign Acquisitions and Takeovers Act 1975 (FATA), which means a percentage of votes that might be cast at a general meeting of the entity or partnership;

-         the definition of ‘control’ in relation to control of the voting power in an entity in section 23 of the FATA, which applies whether the power is direct or indirect, and whether it is as a result or by means of agreements or practices that have legal or equitable force, or are based on legal or equitable rights; and

-         the definition of ‘securities’ in section 92 of the CA, which includes shares in a body corporate.

357.           The definition of control incorporates two key concepts: control and ownership. A change in control of a licence holder occurs not only when persons propose to be in a position to gain or relinquish control or influence over the licence holder, but also when persons propose to gain or relinquish a substantial interest in the licence holder but may not be able to exercise such control or influence.

358.           For example, a person might propose to acquire 50% or more of the shares in a licence holder and thereby become a significant source of the financial resources available to the licence holder. However, the person may be unable to exercise control or influence over the licence holder because of the nature of those shares (that is, if those shares do not confer voting rights on the holder and therefore do not entitle them to exercise, or control the exercise of, a right to vote at a meeting of the shareholders and other members of the licence holder).

359.           The 20% control threshold is consistent with similar acquisition thresholds in other Commonwealth laws, including:

-         the ‘20% rule’ for takeovers under Chapter 6 of the CA, which applies to the acquisition of a relevant interest in the voting power in a company that increases a person’s voting power in the company from 20% or below to more than 20% (see sections 606, 608 and 609); and

-         the definition of a ‘substantial interest’ (which is an interest of at least 20%) in an Australian entity in relation to a ‘change in control’ of the entity under section 54 of the FATA, which applies to an interest (including an interest in a ‘security’ or a share or shares in the corporation that is the Australian entity) regardless of whether the interest confers voting power on the holder of the interest (see section 4 for the definitions of ‘interest’, ‘security’ and ‘share’ and section 9 for an ‘interest’ in a security.

360.           A person may act alone or jointly with one or more other persons to control a licence holder. A person acts jointly with another person if the person acts, or is accustomed to acting, in agreement or accordance with the wishes of the other person.

361.           This captures agreements or practices in which a person acts jointly or in concert with other persons to control a licence holder. Such agreements or practices might include, for example, two or more related bodies corporate or joint venture partners acquiring or disposing of voting rights or issued securities in relation to a licence that, when taken collectively, trigger the definition of change in control of the licence holder, even if each body or partner individually holds or will hold a percentage of the voting rights or issued securities that is less than 20%.

362.           A change in control of a licence holder occurs if one or more persons (described as an original controller) control the licence holder at a particular time and, after that time, either:

-         one or more other persons begin to control the licence holder, which would involve the acquisition of voting rights or issued securities in the licence holder so that the person or persons (either alone or acting jointly) will begin to hold at least 20% of the voting rights or issued securities; or

-         the original controller ceases to control the licence holder, which would involve the disposal of voting rights or issued securities in the licence holder so that the person or persons will cease to hold at least 20% of the voting rights or issued securities.

Division 1 — Introduction

Clause 83 - Simplified outline of this Part

363.           Clause 83 provides a simplified outline of Part 3 of Chapter 3 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.

Clause 84 - Meaning of control and change in control of licence holder

364.           Subclause (1) defines when a person controls a licence holder. It provides that a person controls a licence holder if the person (whether alone or together with one or more other persons with whom the person acts jointly), either:

-         holds the power to exercise, or control the exercise of, 20% or more of the voting rights in the licence holder; or

-         holds, or holds an interest in, 20% or more of the issued securities in the licence holder.

365.           Subclause (2) provides that a person acts jointly with another person if the person acts or is accustomed to acting in agreement with, or in accordance with the wishes of, the other person. This is intended to capture persons who act jointly by agreement or practice, such a related bodies corporate or joint venture partners.

366.           Subclause (3) provides a power to prescribe in the licensing scheme a different percentage, or different percentages, to the percentage specified in subclause (1).

367.           Subclause (4) outlines the circumstances where a change in control of a licence holder is taken to have occurred. These circumstances are where:

-         one or more persons (an original controller) control the licence holder at a particular time; and either:

§   one or more other persons begin to control the licence holder (whether alone or together with one or more other persons the person acts jointly with) after that time; or

§   an original controller (whether alone or together with one or more other persons the person acts jointly with) ceases to control the licence holder after that time.

Clause 85 - Meaning of approval period

368.           Clause 85 defines what the approval period is for the purposes of this Bill. This has implications for the application of the offence and civil penalty provisions in this Part. The clause defines the approval period as being the period:

-         starting on the day the notice of approval for the change in control is given; and

-         ending at the earliest of the following:

§   immediately after the change in control takes effect;

§   if the approval of a change in control is revoked—when the notice of revocation is given;

§   9 months after the day the notice of approval is given.

Division 2—Application and approval of change in control of a licence holder

Clause 86 - Application for approval

369.           Clause 86 provides that a person who proposes to begin to control a licence holder; or proposes to cease to control a licence holder may apply to the Registrar for approval of a change in control of the licence holder.

370.           A note clarifies that a person who begins to control, or ceases to control, a licence holder where the change in control has not been approved may commit an offence or be liable to a civil penalty (see clause 95).

Clause 87 - Registrar must decide whether to approve change in control

Scope

371.           Subclause (1) clarifies that this clause applies if an application is made for approval of a change in control of a licence holder under clause 86.

Decision

372.           Subclause (2) specifies that the Registrar must decide:

-         to approve the change in control; or

-         to refuse to approve the change in control.

373.           A note clarifies that the applicant must be notified of the decision (see clause 88).

374.           Subclause (3) provides that before deciding whether to approve or refuse to approve a change in control, the Registrar may consult with:

-         the Regulator; or

-         the Minister.

375.           Subclause (4) provides that in deciding whether to approve or refuse to approve a change in control, the Registrar:

-         must have regard to whether the licence would, if the change in control occurred, meet the merit criteria;

-         must have regard to any matters prescribed by the licensing scheme; and

-         may have regard to the following matters:

§   matters raised in consultations (if any) under subclause (3);

§   any other matters the Registrar considers relevant.

376.           Providing for the matters to which the Registrar must have regard to be prescribed in regulation will provide the Commonwealth with the flexibility to provide for other matters that may be necessary and appropriate for the Registrar to consider. Any additional matters prescribed in the licensing scheme will be subject to appropriate scrutiny through the regulation-making process, which includes consultation as required by the Legislation Act 2003 , parliamentary tabling, scrutiny and potential disallowance.

Clause 88 - Notice of decision

Notice of approval

377.           Subclause (1) provides that if the Registrar approves a change in control of a licence holder, the Registrar must give the applicant written notice of the approval.

Notice of refusal

378.           Subclause (2) provides that if the Registrar refuses to approve the change in control of a licence holder, the Registrar must give the applicant written notice of the refusal.

Clause 89 - Retention and return of instrument

379.           Clause 89 provides that if an application under clause 86 was accompanied by the original instrument or proposed instrument effecting a change in control of a licence holder, the Registrar must, after making a decision under subclause 87(2):

-         make and retain a copy of the instrument or proposed instrument; and

-         return the original instrument or proposed instrument to the applicant.

Clause 90 - Limit of effect of approval

380.           Clause 90 clarifies that the approval of a change in control of a licence holder does not give the transaction or proposed transaction effecting the change in control any force, effect or validity that the transaction would not have had if this Part had not been enacted.

Clause 91 - Notification of change in circumstances before or during approval period

381.           Subclause (1) provides that a person contravenes this subclause if:

-         an application is made for approval of a change in control of a licence holder under clause 86; and

-         the person proposes to:

§   begin to control the licence holder; or

§   cease to control the licence holder; and

-         there is a change in circumstances in relation to the person that materially affects any of the matters the Registrar must have regard to under subclause 87(4); and

-         the change in circumstances occurs either:

§   before the Registrar has made a decision to approve or refuse the change in control under subclause 87(2); or

§   if the change in control is approved, during the approval period for the change in control; and

-         the person does not notify the Registrar of the change in circumstances as soon as practicable after the change in circumstances occurs.

382.           The purpose of this subclause is to require persons, in relation to whom a change in circumstances occurs, to notify the Registrar of the change in circumstances as soon as practicable. It applies when the change of circumstances occurs while the Registrar is considering an application for approval of a change in control or has approved a change in control but it is still during the approval period for the change in control, and the change in circumstances would materially affect the matters the Registrar must have regard to when deciding to approve or reject the application for approval of a change in control.

383.           Note 1 clarifies that under subclause 87(4), the Registrar must have regard to various matters when deciding whether to approve or refuse to approve a change in control of a licence holder.

384.           Note 2 clarifies that a contravention of this subclause is also a ground for cancellation of a licence. It refers to subclause 73(1)(f).

Civil penalty provision

385.           Subclause (2) provides that a person is liable to a civil penalty if the person contravenes subclause (1). The civil penalty is 480 penalty units.

Clause 92 - Revocation of approval

Revocation

386.           Subclause (1) provides that the Registrar may revoke an approval of a change in control of a licence holder in the approval period for thechange in control. This applies where:

-         there is a change in the circumstances of a person who is approved to begin to control the licence holder or cease to control the licence holder; and

-         the Registrar considers it appropriate to revoke the approval.

Notice of revocation

387.           Subclause (2) provides that if the Registrar revokes an approval of a change in control, the Registrar must give written notice of the revocation to the person given notice of the approval of the change in control.

Clause 93 - Notification of change in control

388.           Subclause (1) provides that a person contravenes this subclause if:

-         the Registrar approves a change in control of a licence holder; and

-         the change in control takes effect within the approval period for the change in control; and

-         the person given notice of the approval of the change in control does not notify the Registrar of the matter in subclause (b) within 10 days after the end of the approval period.

Civil penalty provision

389.           Subclause (2) provides that a person is liable to a civil penalty if the person contravenes subclause (1). This carries a civil penalty of 480 penalty units.

390.           Subclause (3) provides that the maximum civil penalty for each day that a contravention of subclause (2) continues is 10% of the maximum civil penalty that can be imposed in respect of that contravention.

391.           There is a note which clarifies that subclause (2) is a continuing civil penalty provision under section 93 of the RPA.

Clause 94 - Change in control information to be entered in Register

392.           Subclause (1) provides that if the Registrar is notified of a change in control of a licence holder, the Registrar must make a notation of the matters set out in subclause (2) in the Register in the record for the licence.

393.           Subclause (2) provides that the matters which the Registrar must take into account are the following:

-         the date of any application made under clause 86;

-         the date of any decision made under subclause 87(2);

-         the date the change in control took effect.

394.           Subclause (3) provides that the Registrar may make such other notation in the Register as the Registrar considers appropriate.

EXAMPLE: A transaction proposing to effect a change in control

A change of control licence holder may involve persons either beginning or ceasing to control a licence holder, or both. For example:

·          Entity A holds 100% of the shares in a licence holder, but transfers all of its shares to Entity B. Entity A ceases to control the licence holder and Entity B begins to control the licence holder.

·          Entity A holds 100% of the shares in a licence holder and wishes to retain control of the licence holder, but transfers 50% of its shares to Entity B. Entity A neither begins nor ceases to control the licence holder for the purposes of Chapter 2 (Entity A retains control), but Entity B begins to control the licence holder.

·          Entity A and Entity B each hold 50% of the shares in a licence holder. Entity A transfers all of its shares to Entity B. Entity A ceases to control the licence holder, and Entity B retains control.

If a person controls a licence holder (for example, the person holds 20% or more of the shares in the licence holder) and proposes to increase its shareholding, the person will not be required to apply to the Regulator for approval of that increase.

This is because the person already controls the licence holder and therefore there will be no change in control. Similarly, a person who controls a licence holder may dispose of its shares in the licence holder without approval, provided that the person does not cease to control the licence holder by decreasing its shareholding to less than 20%.

Division 3—Change in control must be approved

Clause 95 - Change in control must be approved by Registrar

395.           Subclause (1) provides that change in control must be approved by the Registrar. A person contravenes this subclause if the following provisions apply.

396.           There is a change in control of a licence holder and the person begins to control the licence holder or ceases to control it; and either:

-         the Registrar has not approved the change in control; or

-         the Registrar has approved the change in control, but the change in control took effect after the end of the approval period for the change in control.

397.           There is a note which clarifies that contravention of this subclause is also a ground for cancellation of a licence (see paragraph 73(1)(f)).

Fault-based offence

398.           Subclause (2) provides that a person commits an offence if the person contravenes subclause (1). This carries a penalty of imprisonment for 5 years or 1,200 penalty units, or both.

Civil penalty provision

399.           Subclause (3) provides that a person is liable to a civil penalty if the person contravenes subclause (1). This carries a civil penalty of 2,400 penalty units.

400.           Subclause (4) provides that subclause (2) does not apply if the person did not know, and could not reasonably be expected to have known, that the person has begun to control, or ceased to control, the licence holder.

401.           There is a note which clarifies that a defendant bears an evidential burden in relation to the matter in this subclause (section 96, RPA).

Clause 96 - Notification of change in control that takes effect without approval

402.           Subclause (1) provides that a person contravenes this subclause if there is a change in control of a licence holder and the person either begins to control the licence holder or ceases to control the licence holder, and

-         the Registrar has not approved the change in control; or

-         the Registrar has approved the change in control, but the change in control took effect after the end of the approval period for the change in control; and

-         the person does not notify the Registrar of the change in control within 30 days of the change taking effect.

403.           There is a note which clarifies that contravention of this subclause is also a ground for cancellation of a licence (see clause 73(1)(f)).

Civil penalty provision

404.           Subclause (2) provides that a person is liable to a civil penalty if the person contravenes subclause (1). This carries a civil penalty of 480 penalty units.

405.           Subclause (3) provides that the maximum civil penalty for each day that a contravention of subclause (2) continues is 10% of the maximum civil penalty that can be imposed in respect of that contravention.

406.           There is a note which clarifies that subclause (2) is a continuing civil penalty provision under section 93 of the RPA.

407.           Subclause (4) provides that subclause (2) does not apply if the person did not know, and could not reasonably be expected to have known, the person has begun to control, or ceased to control, the licence holder.

408.           A note clarifies that a defendant bears an evidential burden in relation to the matter in this subclause (see section 96 of the RPA).

Clause 97 - Notification of change in control by licence holder

409.           Subclause (1) provides that a person contravenes this clause if the person is a licence holder and there is a change in control of the licence holder and either of the following apply:

-         the Registrar has not approved the change in control; or

-         the Registrar has approved the change in control, but the change in control took effect after the end of the approval period for the change in control.

410.           In addition, there is the requirement that the licence holder knows or ought reasonably to know the change in control has taken effect and the licence holder does not notify the Registrar of the change in control within 30 days of the change taking effect.

Civil penalty provision

411.           Subclause (2) provides that a person is liable to a civil penalty if the person contravenes subclause (1). This carries a civil penalty of 480 penalty units.

412.           Subclause (3) provides that section 93(2) of the RPA does not apply in relation to a contravention of subclause (2).

Division 4—Information gathering powers

Clause 98 - Registrar may obtain information and documents

Scope

413.           This provision enables the Registrar to obtain information and documents in the following circumstances where:

-         the Registrar believes on reasonable grounds that there has been or will be a change in control of a licence holder;

-         an application is made for approval of a change in control of a licence holder;

-         the approval period for the change in control of a licence holder has not ended and the Registrar believes on reasonable grounds that there has been, or will be, a change in the circumstances of a person approved to begin to control the licence holder or cease to control the licence holder; and

-         the Registrar believes on reasonable grounds that a person has information or a document, or is capable of giving evidence that is relevant to the matter above.

Requirement

414.           Subclause (2) provides that the Registrar may give written notice to require a person to do the following:

-         give the Registrar information in the notice in the period and manner specified;

-         produce to the Registrar such documents within the period and manner specified;

-         if the person is an individual—to appear before the Registrar at a time and place specified in the notice to give evidence or produce documents;

-         if the person is a body corporate—to cause a competent officer of the body to appear before the Registrar at a time and place specified in the notice give evidence, either orally or in writing and produce any such documents.

415.           Subclauses (3) and (4) set minimum time limits for the compliance with the notice. It provides that the period specified must not be shorter than 14 days after the notice is given. The purpose is to ensure that reasonable time is provided for that person to either produce the information or documents required or to attend in person to give evidence either orally or in writing.

416.           Subclause (5) provides a notice under subclause (2) must set out the effect of the following provisions:

-         clause 99 (about compliance with the notice);

-         clause 104 (about giving false or misleading information);

-         clause 105 (about giving false or misleading documents);

-         clause 106 (about giving false or misleading evidence).

Clause 99 - Complying with information-gathering notice

417.           This provision addresses the requirement to comply with an information gathering notice.  If a person is given a notice and engages in conduct which breaches the notice they contravene the provision.

Fault based offence

418.           Subclause (2) provides that a person commits an offence if the person contravenes subclause (1). This attracts a penalty of 100 penalty units.

Civil penalty provision

419.           Subclause (3) also sets out a civil penalty provision for a person who contravenes subsection (1). This attracts a civil penalty of 150 penalty units.

Continuing offences and continuing contraventions of civil penalty provisions

420.           Subclause (4) provides for continuing offences and contraventions of the civil penalty provisions. The maximum penalty for each day that an offence under subclause (1) continues is 10% of the maximum penalty that can be imposed in respect of that offence.

421.           There is an explanatory note to state that to the extent that subclause (6) provides, subclause (2) is a continuing offence under section 4K of the Crimes Act.

422.           Subclause (5) provides that the maximum civil penalty for each day that a contravention of subclause (7) continues is 10% of the maximum civil penalty that can be imposed in respect of that contravention.

423.           There is a note which clarifies that to the extent that subclause (6) provides, subclause (3) is a continuing civil penalty provision under section 93 of the RPA.

424.           Subclause (6) provides that subclauses (4) and (5) apply only in relation to a contravention of a requirement to which subclause 98(2)(a) or (b) applies.

Clause 100 - Power to examine on oath or affirmation

425.           This clause provides that when a person is required to appear before the Registrar, the Registrar may administer an oath or affirmation. In addition, the Registrar may examine that person on oath or affirmation.

Clause 101 - Self-incrimination

426.           Subclause (1) provides that an individual is not excused from giving information or evidence or producing a document under clause 98 on the ground that the information or evidence or the production of the document might tend to incriminate the individual in relation to an offence.

427.           The effect is to provide that a person is not excused from giving information or evidence or producing a document on the ground that the information or evidence or the production of the document might tend to incriminate the person in relation to an offence. It mirrors the provisions in clause 566T of the OPGGS Titles Administration Bill 2021 currently before the Parliament and sections 702 and 728 of the OPGGS Act.

428.           A note clarifies that a body corporate is not entitled to claim the privilege against self-incrimination.

429.           Subclause (2) provides that certain things are not admissible in evidence against the individual in any criminal proceedings other than proceedings for an offence against subclause 99(2) or clauses 104, 105 or 106 or proceedings for an offence against section 137.1 or 137.2 of the Criminal Code that relates to this Division. The things that are not admissible in evidence against the individual in any criminal proceedings are:

-         the information or evidence given or the document produced;

-         the giving of the information or evidence or the production of the document;

-         any information, document or thing obtained as a direct or indirect consequence of the giving of the information or evidence or the production of the document.

430.           In effect, this means that the information or evidence given or document produced, the fact of giving or producing the information, evidence or document, or any information, document or thing obtained as a direct or indirect consequence of the giving or production, is not admissible in evidence against the person in any criminal proceedings, other than a proceeding in relation to an offence for the provision of false or misleading information, documents or evidence.

431.           Subclause (3) provides that if, at general law, an individual would otherwise be able to claim the privilege against self-exposure to a penalty (other than a penalty for an offence) in relation to giving information or evidence or producing a document under clause 98, the individual is not excused from giving the information or evidence or producing the document under those provisions on that ground.

432.           A note clarifies that a body corporate is not entitled to claim the privilege against self-exposure to a penalty.

433.           The objective of these provisions is to ensure the Registrar can call on information or documents relevant to the proper administration of this Chapter. Where matters relating to the effective oversight of changes in control are concerned, it may occasionally be more important to establish the facts rather than to be able to use the facts in the prosecution of an offence. Maintaining a privilege against self-incrimination may significantly hamper the Registrar’s ability to administer provisions relating to the oversight of changes in control of a licence holder, and thereby seriously undermine the effectiveness of the offshore regime.

434.           Although this provision abrogates the privilege against self-incrimination, it also provides an immunity against the use or derivative use of the information, documents or evidence given in criminal proceedings, other than a proceeding in relation to an offence for the provision of false or misleading information, documents or evidence.

435.           This ensures the Registrar has sufficiently broad information-gathering powers to establish facts, while protecting individuals from proceedings on the basis of providing the information evidence or documents. This safeguard ensures that this provision is reasonable and proportionate to meeting this objective, and therefore the provision meet Australia’s human rights obligations to afford minimum guarantees in criminal proceedings.

Clause 102 - Copies of documents

436.           The Registrar may inspect a document produced under this Division and may make and retain copies of, or take and retain extracts from, such a document.

437.           This clause provides that, if a person is required to produce documents under this Part, including in relation to complying with a notice that requires the person to produce a document, the Registrar is able to inspect the document, and make and retain copies of, or extracts from, such a document. This clause mirrors sections 703 and 729 of the OPGGS Act, and supports the proper administration of this Chapter by enabling the Registrar to make and retain copies of relevant documents for further consideration

Clause 103 - Registrar may retain documents

438.           Subclause (1) provides that the Registrar may take possession of a document produced under this Division, and retain it for as long as is reasonably necessary.

439.           Subclause (2) provides that the person otherwise entitled to possession of the document is entitled to be supplied, as soon as practicable, with a copy certified by the Registrar to be a true copy.

440.           Subclause (3) provides that the certified copy must be received in all courts and tribunals as evidence as if it were the original.

441.           Subclause (4) provides that until a certified copy is supplied, the Registrar must provide the person otherwise entitled to possession of the document, or a person authorised by that person, reasonable access to the document for the purposes of inspecting and making copies of, or taking extracts from, the document.

442.           If a person is required to produce a document under this Part, including complying with a notice that requires the person to produce a document, the Registrar is able to take possession of the document and retain it for as long as is reasonably necessary. This clause supports the proper administration of this Chapter by enabling the Registrar to possess and retain relevant documents for further consideration.

443.           The intention in the above paragraphs is that where the Registrar takes possession of a document produced and a person is otherwise entitled to possession of the document, that the person is entitled to be supplied, as soon as reasonably practicable, with a copy certified by the Registrar to be a true copy. Until the certified copy is supplied, the Registrar must provide the person who is otherwise entitled to possession of the document, or persons authorised by that person, reasonable access to the document for the purposes of inspecting and making copies of, or taking extracts from, the document.

Clause 104 - False or misleading information

444.           This clause addresses false or misleading information. It makes it an offence if a person knowingly provides false or misleading information. The intention of the provision is to deter persons so acting. Specifically, a person commits an office if they give information in compliance or purported compliance with these provisions but does so knowing that the information:

-         is false or misleading in a material particular; or

-         omits any matter or thing without which the information is misleading in a material particular.

445.           A note clarifies that the same conduct may be an offence against both this clause and section 137.1 of the Criminal Code.

446.           Committing an offence under this provision attracts a penalty of 100 penalty units. This penalty mirrors those provided in the OPGGS Titles Administration Bill 2021 that is currently before Parliament, and the similar offence provisions elsewhere in this Part.

Clause 105 - False or misleading documents

447.           This clause makes it an offence to knowingly produce a false or misleading document in relation to a notice given to produce that information. It provides that a person commits an offence if the person produces a document in compliance or purported compliance with subclause 98(2); and the person does so knowing that the document is false or misleading in a material particular.

448.           A note clarifies that the same conduct may be an offence against both this clause and section 137.2 of the Criminal Code.

449.           Committing an offence under this provision attracts a penalty of 100 penalty units. This mirrors the offence provisions in section 706 of the OPGGS Act.

Clause 106 - False or misleading evidence

450.           This clause makes it an offence to knowingly give false or misleading evidence in relation to complying with a notice that requires the person to give evidence under subclause 98(2). This clause is intended to deter the giving of false or misleading evidence in relation to changes in control of licence holders, including possible changes in control.

451.           Specifically, a person commits an offence if:

-         the person gives evidence in compliance or purported compliance with subclause 98(2); and

-         the person does so knowing that the evidence is false or misleading in a material particular.

452.           If a person is found guilty of the offence, the maximum criminal penalty will be 12 months imprisonment for an individual. This penalty mirrors section 707 of the OPGGS Act.

Division 5—Tracing and anti-avoidance

453.           Proposed Division 5 introduces tracing and anti-avoidance provisions which are ‘designed to catch changes of control ‘up the chain’ of ownership’.

Clause 107 - Tracing

454.           Clause 107 establishes a tracing regime, which allows for a change in control of a licence holder to be traced to a change in control of the companies, trusts or partnerships which control the licence holder.

455.           There are two purposes for the tracing regime:

-         it is intended to provide for government oversight of changes in control of licence holders that involve a change to the ‘real owners’ of licence holders, which may be companies or other types of entities that are not an immediate holder of the licence (such as an immediate holding company);

-         it also aims to prevent perverse behaviours as a consequence of only providing for oversight of changes in relation to the immediate holders of the licence holder, including, for example, setting up a shell company or companies to avoid the increased government oversight provided for in Chapter 3, Part 3 - Change in control of a licence holder.

456.           Subclause (1) provides that the tracing regime applies in various circumstances discussed below and is applicable to a person who is either acting alone or jointly together with one or more other persons.

457.           These circumstances arise where the person or persons:

-         hold the power to exercise, or control the exercise of, 20% or more of the voting rights in a corporation (higher party) or a partnership (a general partner of which is a higher party); or

-         holds, or holds an interest in, 20% or more of the issued securities in a corporation (higher party); or

-         holds 20% or more of the interests in a trust (a trustee of which is a higher party) or a partnership (a general partner of which is a higher party);

-         including because of one or more applications of this clause.

458.           In addition, there is a requirement where:

-         the higher party (whether alone or acts jointly with) holds the power to exercise, or control the exercise of, 20% or more of the voting rights in a corporation (lower party) or a partnership (lower party); or

-         the higher party holds an interest in, 20% or more of the issued securities in a corporation (lower party); or

-        the higher party holds 20% or more of the interests in a trust (lower party) or partnership (lower party).

459.           The tracing provision may be applied multiple times so that a change in control of a licence holder may be traced to a change in control of a higher party, regardless of how ‘high up’ in the corporate group the higher party is (see the wording in subclauses (1) after subparagraph (1)(c)(ii)).

460.           The terms ‘voting rights’ and ‘issued securities’ are not defined, which means the ordinary meaning of these terms apply. Despite this, these terms reflect, but do not necessarily rely on, similar concepts in other Commonwealth laws, notably:

-         the definitions of ‘voting power’ in a body corporate in section 610 of the CA and ‘voting power’ in an entity or unincorporated limited partnership in section 22 of the FATA, which means a percentage of votes that might be cast at a general meeting of the entity or partnership;

-         the definition of ‘control’ in relation to control of the voting power in an entity in section 23 of the FATA, which applies whether the power is direct or indirect, and whether it is as a result or by means of agreements or practices that have legal or equitable force, or are based on legal or equitable rights; and

-         the definition of ‘securities’ in section 92 of the CA, which includes shares in a body corporate.

461.           Subclause (2) clarifies what is meant by a person holding 20% or more of the interests in a trust (as described in subparagraphs (1)(c)(i) and (f)(i)), that is if the person holds 20% or more of:

-         the beneficial interest in the income or property of the trust;

-         the interest in units in a unit trust; or

-         This definition mirrors the definition of an ‘interest’ in a trust under section 11 of the FATA.

462.           Subclause (3) provides that a person holds 20% or more of the interests in a partnership (as described in subparagraphs (1)(c)(ii) and (f)(ii)), if the person is entitled to 20% or more of any of the distributions of capital, assets or profits of the partnership, either on dissolution of the partnership or otherwise. This definition mirrors the definition of an ‘interest’ in an unincorporated limited partnership under section 11A of the FATA.

463.           Subclause (4) provides for the purposes of this Part. It specifies that:

-         if paragraph (1)(d) applies, the person is taken to hold the power to exercise, or control the exercise of the voting rights in the lower party that the higher party holds the power to exercise or control; or

-         if paragraph (1)(e) applies, the person is taken to hold, or hold an interest in, the issued securities in the lower party that the higher party holds or holds an interest in; or

-         if paragraph (1)(f) applies, the person is taken to hold the interests in the lower party that the higher party holds.

464.           Subclause (5) confers a power to prescribe in regulations a different percentage, or different percentages, to the percentage specified in the above provisions (1)(a) to (f) and subclause (2) or (3), which essentially provide for a 20% control threshold for the tracing provision. This power is commonly referred to as a ‘Henry VIII clause’ because it allows delegated legislation to modify the operation of an Act.

465.           Exercising this power would entail a minor or technical modification to ensure that the control threshold for the tracing provision (along with the control threshold specified in subclause 84(1) (meaning of control and change in control of licence holder) remains up to date, particularly if the percentage of what is considered to amount to effective control of a corporation, trust or partnership (including a licence holder that is a corporation) changes, or similar acquisition thresholds in other Commonwealth laws change.

466.           This power will likely be exercised rarely and sparingly. Any such modification will also be subject to appropriate scrutiny through the regulation-making process, which includes parliamentary tabling, scrutiny and potential disallowance. The industry will also be notified of any such modification before it commences to reduce any potential increase in legislative complexity in having to understand and comply with a modified control threshold for the tracing provision that has been prescribed in the regulations.

467.           This power will provide greater flexibility in addressing any potential over- or under-regulation of transactions that practically amount to a change in control of a licence holder, compared to pursuing a change to the 20% control threshold through an amendment to this Bill. Prescribing a different percentage or different percentages in the regulations will ensure a modification to the control threshold may be made in a timely, efficient and responsive manner, likely in a significantly shorter timeframe compared with making the changes within this Bill.

468.           Subclause (6) provides a definition in this clause which means that general partner means a partner of a partnership whose liability in relation to the partnership is not limited. This definition mirrors the definition of a ‘general partner’ under section 4 of the FATA.

Clause 108 - Anti-avoidance

469.           This clause provides for an anti-avoidance provision, which provides that a person commits an offence and is liable to a civil penalty if the person enters into or carries out a scheme to avoid the application of the penalty provisions in Division 3 (Change in control must be approved) of Chapter 3. Contravention of this clause is also a ground for cancellation of the licence or licences held by the licence holder.

470.           The purpose of these sanctions is to deter perverse behaviours in relation to avoiding the application of the penalty provisions in Division 3 (Change in control must be approved) of Chapter 3 and thereby ensure (to the extent possible) that transactions proposing to effect a change in control of a licence holder are subject to government oversight.

471.           Subclause (1) provides that a person contravenes this subclause if:

-         the person, either alone or with one or more other persons, enters into, begins to carry out or carries out a scheme; and

-         the person does so for the sole or dominant purpose of avoiding the application of Division 3 in relation to any person or persons (whether or not those persons are the same persons mentioned in paragraph (a)); and

-         as a result of that scheme or part of that scheme, a person avoided the application of Division 3.

472.           A note clarifies that contravention of this subclause is also a ground for cancellation of a licence (see paragraph 73(1)(f)).

Fault-based offence

473.           Subclause (2) provides that, if a person contravenes subclause (1), the person will commit a fault-based offence. The offence is subject to a maximum criminal penalty of 1,200 penalty units for an individual.

474.           The maximum criminal penalty for a body corporate will be a fine of 6,000 penalty units because of the body corporate multiplier rule for an offence that imposes a pecuniary penalty in subsection 4B(3) of the Crimes Act.

475.           The physical elements of the offence do not specify fault elements, which means that the default fault elements under section 5.6 of the Criminal Code apply.

Civil penalty provision

476.           Subclause (3) provides that, if a person contravenes subclause (1), the person will be liable to a civil penalty. The maximum civil penalty for an individual will be a fine of 2,400 penalty units.

477.           The maximum civil penalty for a body corporate will be a fine of 12,000 penalty units because of the body corporate multiplier rule in paragraph 82(5)(a) of the RPA. The rationale for the amount of these penalties includes:

-         The maximum criminal penalty of a fine of 6,000 penalty units for a body corporate is the same penalty for a corporation for an unauthorised takeover under subsection 606(4A) of the CA;

-         The maximum civil penalties of a fine of 2,400 penalty units for an individual and a fine of 12,000 penalty units for a body corporate are double the amount of the maximum criminal penalties. This is to ensure that the penalties act as a deterrent for non-compliance, particularly for companies; and recognises that being found liable to a civil penalty does not attract imprisonment or a criminal conviction.

478.           The penalties for the fault-based offence and the civil penalty provision reflect the consequences that beginning or ceasing to control a licence holder (as a consequence of entering into or carrying out a scheme to avoid the application of the penalty provisions in Division 3) may have on the suitability of the licence holder to operate in the offshore resources regime, and therefore the severity of these penalties (along with the grounds to cancel the licence or licences held by the licence holder) aims to deter non-compliance with subclause (1).

479.           These consequences may include a potential adverse impact on the technical advice or financial resources available to the licence holder to carry out its activities in the licence area or areas and comply with legislative requirements, including decommissioning.

480.           Conduct that contravenes these penalty provisions may cause the licence holder to experience significant financial distress and, as a consequence, result in the licence holder becoming insolvent and abandoning its licence or licences. This in turn may cascade into other adverse impacts, particularly in increasing the risks that abandoning the management or control of offshore electricity infrastructure poses to the safety of its workers and the surrounding marine environment.

481.           While the severity of these penalties reflects the seriousness of any potential non-compliance, these amounts are lower than the highest penalty provided for in the OPGGS Act, which is a fine of 3,500 penalty units for an individual, and 17,500 penalty units for a body corporate, for recklessly breaching an occupational health and safety duty (see section 16B of Schedule 3 to the OPGGS Act).

482.           Subclause (4) defines the term scheme for the purposes of this clause, which is intended to capture any way a person may intend to avoid the application of the penalty provisions in Division 3 and may include:

-         any agreement, arrangement, understanding, promise or undertaking, whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings; and

-         any scheme, plan, proposal, action, course of action or course or conduct, whether unilateral or otherwise.

Division 6—Other provisions

Clause 109 - Registrar etc. not concerned with the effect of instrument lodged under this Part

483.           Clause 109 clarifies that none of the parties listed in the clause are concerned with the effect in law (for example, in contract law) of an instrument lodged under this Part which may include, for example, an instrument or proposed instrument effecting a change in control of a licence holder.

484.           The purpose is intended to relieve the Minister and the Registrar and any person acting under their direction or authority of any responsibility for verifying that the instrument has the effect in law that it purports to have.

485.           It may be necessary for the Registrar to enquire into the legal effect of such an instrument to determine its effect in relation to a change in control of a licence holder. However, the legal effect of any particular instrument is a matter for the relevant court, and not for these parties to determine.

486.           This clause mirrors sections 511 and 560 in the OPGGS Act in relation to the administration of transfers of and dealings in petroleum and GHG titles respectively.

Clause 110 - Falsified documents

487.           This clause makes it an offence to produce or tender in evidence a document that falsely purposes to be a copy of, or an extract from, an instrument given to the Registrar. This clause is intended to deter the production of, or use in evidence, of forged or counterfeit documents in relation to changes in control of licence holders, including possible changes in control.

488.           Specifically, a person commits an offence if the person produces or tenders in evidence a document and the document falsely purports to be a copy of extract from an instrument given to the Registrar.

489.           The note included in this clause clarifies that the same conduct may be an offence against both this clause and section 137.2 of the Criminal Code.

490.           If a person is found guilty of the offence, the maximum criminal penalty will be a fine of 50 penalty units.

Clause 111 - Inspection of instruments

491.           This provision addresses the inspection process for instruments. It clarifies that the Registrar must ensure that all instruments, or copies of instruments which are to inspection are to be open for inspection at all convenient times.

492.           It provides for access to all instruments, or copies of instrument, that are subject to inspection under this Chapter. The Registrar must ensure that all of these types of instruments are open for inspection at all convenient times by any person on payment of a fee calculated under the regulations.

493.           The inspection is available to any person on payment of a fee calculated under the regulations. The applicable fee (if any) will enable the Registrar, as a fully cost-recovered entity, to recover the costs that it will incur in relation to enabling public access to the relevant instrument.

Clause 112 - Evidentiary provisions

494.           This clause addresses evidentiary provisions. It facilitates proof of certain types of matters in relation to changes in control of licence holders, including possible changes in control, by enabling certain parties to proceedings to provide the relevant court with specified documents as evidence in relation to those matters.

495.           Subclause (1) provides that the Registrar may, on payment of a fee calculated under the regulations, supply a copy of or extract from such an instrument, certified by the Registrar to be a true copy or true extract. Practically, certified copies will typically be photocopies, and certified extracts may include segments of text kept in an electronic form that are able to be printed.

496.           The applicable fee will enable the Registrar, as a fully cost-recovered entity, to recover the costs that it will incur in relation to supplying and certifying the relevant copy or extract may, on payment of a fee calculated under the regulations, supply a copy of or extract from such an instrument, certified by the Registrar to be a true copy or true extract. Practically, certified copies will typically be photocopies, and certified extracts may include segments of text kept in an electronic form that are able to be printed.

497.           Subclause (2) provides that the certified copy or extract is admissible in evidence in all courts and proceedings without further proof or production of the original.

498.           Subclauses (3) to (8) apply to evidentiary certificates prepared and issued under this clause. The purpose of evidentiary certificates is to settle formal or technical matters of fact that would be difficult to prove by adducing admissible evidence. Evidentiary certificates promote efficiency by removing delays arising from obtaining evidence with more traditional methods, freeing up the court’s time to consider the more serious issues related to the offence. The use of an evidentiary certificate for a ‘formal’ matter may include, for example, that an application made for the approval of a change in control of a licence holder has been made, including the date on which it was lodged with the Registrar.

499.           Subclause (3) provides that the Registrar may issue a written certificate. The certificate should state that an entry, matter or thing that is required or permitted by or under this Part to be made or done, has been made or done. In addition, where something is required not to be made or done, it may state that that an entry, matter or thing has not been made or done.

500.           Such a certificate may only be issued by the Registrar, or a person acting under their direction or authority who will be independent of the prosecution in any proceedings for an offence.

501.           The applicable fee (if any) will only serve to enable the Registrar, as a fully cost-recovered entity, to recover the costs that it will incur in relation to preparing and issuing the relevant evidentiary certificate.

502.           Subclause (4) provides that the certificate is to be received in all courts and proceedings as prima facie evidence of the statements in the certificate, meaning that any such certificate will establish prima facie evidence of the matters contained in the certificate, as opposed to conclusive evidence. As such, the certificate creates a rebuttable presumption of the facts that the defendant may challenge during proceedings for an offence.

503.           Subclause (5) addresses the evidentiary requirements for certificates in criminal proceedings. It makes clear that a certificate must not be admitted in evidence in an offence unless the person charged or their acting legal representative has at least 14 days before the certificate is sought to be admitted, been given a copy of the certificate. This must also be accompanied with notice of the intention to produce the certificate as evidence in the proceedings.

504.           Subclause (6) provides that the person signing the certificate may be called to give evidence in the case where a certificate is so admitted. They may be called as a witness for the prosecution; and cross-examined as if the person who signed the certificate had given evidence of the matters stated in the certificate.

505.           Subclause (7) gives a proviso. It does not entitle the person charged to require the person who signed the certificate to be called as a witness for the prosecution unless the following apply:

-         the prosecutor has been given at least 4 days’ notice of the person’s intention to require the person who signed the certificate to be called; or

-         the court, by order, allows the person charged to require the person who signed the certificate to be called.

506.           Evidence in support, or in rebuttal, of matters in certificate to be considered on its merits.

507.           Subclause (8) provides that any evidence given in support, or in rebuttal, of a matter stated in a certificate must be considered on its merits, and the credibility and probative value of such evidence must be neither increased nor diminished by reason of this clause.

508.           Additionally, subclause (8) clarifies that any evidence given in support, or in rebuttal, of a matter stated in an evidentiary certificate must be considered on its merits, and the credibility and probative value of such evidence must be neither increased nor diminished by reason of this clause.

509.           This clause therefore provides an opportunity for evidence of contrary matters to be adduced in any proceedings for an offence, and allows the matters stated in the certificate to be tested through cross-examination and rebutted by the defendant (see subclauses (6) and (7)).

510.           To provide defendants with a reasonable opportunity to offer evidence of contrary matters in any proceedings for an offence, subclause (5) sets out the procedure to be followed before admitting an evidentiary certificate. This subclause provides that an evidentiary certificate must not be admitted in evidence in such proceedings unless:

-         the person charged with the offence; or

-         a barrister or solicitor who has appeared for the person in those proceedings;

-         has, at least 14 days before the certificate is sought to be admitted, been given a copy of the certificate together with notice of the intention to produce the certificate as evidence in the proceedings.

511.           If the defendant, or a barrister or solicitor who is appearing for the defendant, is not provided with a copy of the certificate as required by subclause (5), the matters contained in the evidentiary certificate may not be treated as prima facie evidence and the person signing the certificate may need to give direct evidence of the matters that would otherwise have been covered in the certificate.

512.           Subclause (6) provides that the person signing an evidentiary certificate may be called to give evidence as a witness for the prosecution and be cross-examined. This subclause provides that, if, under subclause (4), an evidentiary certificate is admitted in evidence in proceedings for an offence, the person charged with the offence may require the person who signed the certificate to be called as a witness for the prosecution and cross-examined as if the person who signed the certificate had given evidence of the matters stated in the certificate.

513.           Subclause (7) clarifies that subclause (6) does not entitle the person charged with the offence to require the person who signed the certificate to be called as a witness for the prosecution, unless the prosecutor has been given at least four days’ notice of the person’s intention to require the person who signed the certificate to be so called, or the court makes an order allowing the person charged with the offence to require the person who signed the certificate to be so called.

CHAPTER 4— MANAGEMENT AND PROTECTION OF INFRASTRUCTURE

Part 1—Management and operation of infrastructure

Division 1—Introduction

Clause 113 - Simplified outline of this Part

514.           Clause 113 provides a simplified outline of Part 1 of Chapter 4 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.

Division 2—Management plans

515.           Management plans will be prepared and submitted by an offshore renewable energy licence holder or a person authorised by a licence holder and will address the following matters;

-         work health and safety including workforce participation;

-         environmental management;

-         OEI integrity;

-         plans for decommissioning;

-         calculation of decommissioning financial security and how this will be provided;

-         consultation requirements with other marine users;

-         implementation strategy including monitoring, audit, management and review; and

-         emergency management.

516.           Management plans will be assessed by the Regulator and a determination made on the acceptability of a management plan or otherwise. The requirements are intended to be objective-based and focussed on the highest order impacts and risks of offshore infrastructure activities. The onus will be placed on the licence holder to appropriately identify the impacts and risks of their activities, to evaluate these and, where significant, to put in place measures to reduce impacts and risks to as low as reasonably practicable.

517.           A management plan will describe the safety and environmental management system that will be implemented to allow impacts and risks to be continuously identified and reduced over the life of an offshore infrastructure activity and for continuous improvement in management of the activity to be achieved.

518.           Management plans are intended to be flexible in that they may cover one or multiple activities across one or multiple licences provided these licences are held by the same licence holder. They may be required across all licence types and must be in force prior to the commencement of any offshore infrastructure activity under a licence.

Clause 114 - Licensing scheme must provide for management plans

519.           Clause 114 addresses the requirement for management plans. They form an integral part of the requirements to be placed on licence holders. This will be set out in the licensing scheme.

520.           Subclause (1) provides that the licensing scheme must require the licence holder to prepare a plan in relation to offshore infrastructure activities and other activities that are to be carried out under licences. The scheme must also provide for procedures for a licence holder to apply for the Regulator to approve a management plan, and procedures or the Regulator to approve or refuse to approve such an application.

521.           Feasibility, transmission and infrastructure and research and demonstration licences are able to be granted without first having to have a management plan accepted by the Regulator. However, a licence holder will not be permitted to construct or install OEI until the Regulator has approved the management plan for offshore infrastructure activities to be carried out under the licence.

522.           A commercial licence may only be granted if the Regulator has approved a management plan for the commercial licence. A licence holder will be required to set out in the management plan the construction, installation, commissioning, operation, maintenance and decommissioning activities to be carried out under the licence. Depending on the nature and scale of an offshore electricity project all of the technical and operational details of the project, sufficient to comprehensively identify, assess and control impacts and risks, may not be known prior to the grant of a commercial licence. For this reason flexibility will be built into the management plan process to allow for projects to be approved in a phased manner.

523.           An explanatory note to subclause (1) explains that a plan for a licence approved by the Regulator under the licensing scheme is a ‘ management plan’ for the licence. There is a second note to state that the holder of a licence must have a management plan for the licence in order to carry out offshore infrastructure activities under the licence.

524.           Subclause (2) sets out that the licensing scheme may provide for any of the following:

-         matters to which the Regulator may or must have regard when considering whether to approve a management plan;

-         the revision of management plans, including requirements for a licence holder to revise a management plan and procedures for the Regulator to approve a revised management plan;

-         requirements for consultation in relation to an application for approval of a management plan or a revised management plan;

-         requirements for a licence holder to give notifications to the Regulator in relation to the design of OREI and OETI;

-         the holder of a feasibility licence to apply for the Regulator to approve a management plan for a commercial licence that the holder has applied for, or proposes to apply for;

-         requirements that the licence holder must comply with for the licence to be surrendered.

525.           The above provisions are designed to set out procedures to ensure procedural fairness to licence holders and transparency to stakeholders on the management planning process and decision making.

526.           Subclause (3) allows the licence scheme to provide for a management plan to provide for a matter by incorporating by reference any matter contained in an instrument or other writing as in force or existing from time to time. This is despite section 46AA of the AIA which addresses the issue of prescribing matters by reference to other instruments. In this case, the intention is that the management plan will be able to incorporate a range of external documents, and continue to adopt them as they change from time to time.

527.           Management plans will be technical documents that will rely on external documents such as domestic and international standards to demonstrate compliance with regulatory requirements. For this reason it is considered imperative that management plans are able to refer to external sources of information and to ensure that changes to these external sources can be appropriately carried through to management of activities under a management plan on an ongoing basis.

528.           The incorporation of matters by reference to the management plan is an integral part of the licensing scheme, as the management plan is intended to be a living document which will contain content such as a list of workers, subject to rapid change, and not suitable for legislative processes. Material, such as OEI condition and references to technical standards reports that may be incorporated, would be technical material, changing from time to time, but which management plans would need to refer to as in force for the regulatory scheme to work. There would not be sufficient functionality were this process be required to go through the legislation-making process for current information to be referenced. Where relevant, external information referred to would be readily ascertainable for a licence holder.

529.           There is no requirement for management plans to be made public. However, it is intended the regulations will allow for publication of details within a management plan to enable public comment. This will facilitate transparency, compliance with conditions and stakeholder concerns, protecting any sensitive or personal information.

530.           The Regulator will invite comments on the management plan during the period in relation to its content and relevant to any impacts of the proposed activity on stakeholders and the environment. Any comments received during the comment period will be provided to the licence holder for consideration and appropriate amendments to the management plan made before resubmission to the Regulator for assessment.

531.           Subclause (4) states that a management plan is not a legislative instrument. The Regulator’s decisions in relation to management plans will be subject to review under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act). However, it is proposed that the Regulator’s decision to accept or refuse to accept a management plan will not be subject to merits review as these decisions are to be automatic or mandatory in nature. It is proposed that in relation to management plans the licensing scheme will set out criteria against which a management plan must be assessed by the Regulator. These licensing scheme regulations will provide that where these criteria are met the Regulator must accept the management plan and where the criteria are not met the Regulator must refuse to accept the management plan.

532.           Further information on the operation of these provisions and their interaction with merits review processes will be provided in the explanatory statement to regulations that prescribe the scheme. This approach is consistent with the guidance of the former Administrative Review Council and with analogous processes under the OPGGS Act and related regulations. 

Clause 115 - Matters that a management plan must address

533.           Clause 115 outlines what a management plan must address.

534.           Subclause (1) sets out the matters that must be covered. The plan must address:

-         how the licence holder is to carry out offshore infrastructure activities and other activities under the licence;

-         any matters that the conditions of the licence require to be addressed in the plan;

-         environmental management, including how the licence holder is to comply with EPBC Act obligations in relation to the licence activities;

-         how the licence holder is complying with, or is to comply with, section 116 of the Bill (maintenance and removal of property etc.)

-         how the licence holder is complying with, or is to comply with, clause 117 and 118 (financial security);

-         other matters that this Bill requires to be addressed in a management plan;

-         requirement to keep certain records;

-         other matters prescribed by the licensing scheme; and

-         other matters required by the Regulator under subclause (3) of this clause.

535.           Subclause (2) sets out various important elements that the licensing scheme may require a management plan to cover. The scheme may require the plan to address any of the following:

-         the design, integrity and maintenance of licence OEI;

-         work health and safety;

-         emergency management;

-         the making and keeping of records;

-         requirements to consultant with any person that may be affected by activities carried out under the licence, and the outcomes of any such consultation;

-         monitoring, auditing, managing and reviewing the management plan and the licence holder’s compliance with the management plan.

536.           Subclause (3) provides that the Regulator may require a management plan for a licence to make any reasonable provision for any matters, or impose any reasonable requirements on the licence holder, in relation to the activities to be carried out under the licence, that the Regulator considers appropriate.

537.           As set out above, management plans under the framework are intended to cover multiple issues - these are the core elements and any matters that are identified as appropriate and reasonable by the Regulator. Further details relating to elements of a management plan that the licensing scheme is expected to address are discussed in further detail below.

Design and Infrastructure integrity and maintenance

538.           The Bill includes provisions requiring licence holders to ensure that OEI is appropriately maintained over its operational life. Once it is no longer in use, the OEI is either to be removed, or alternative arrangements for the OEI are to be made to the satisfaction of the Regulator.

539.           It is anticipated that through the licensing scheme, a management plan will be required to demonstrate that appropriate measures are in place for the inspection, maintenance and repair of OEI to ensure that the integrity of the OEI is maintained in good order and such that it can perform its intended function.

540.           The management plan will also need to set out how the licence holder intends to provide financial security to provide for the cost of decommissioning.

Work Health and Safety

541.           It is anticipated that through the licensing scheme, the management plan will require a demonstration from the licence holder as to how safety risks to the workforce will be managed and how the workforce will be appropriately informed of hazards and risks to health and safety. Management plans will require licence holders to undertake a formal assessment of safety hazards where those hazards may present significant risks and how they will be suitably addressed. Other health and safety risks would be required to be addressed through a comprehensive safety management system documented under the management plan.

Emergency management

542.           It is anticipated that through the licensing scheme, a management plan will need to set out how the licence holder intends to reduce the risk of emergency situations occurring and if an emergency was to arise, how it would be responded to.

Environmental management

543.           Environmental approval for offshore electricity infrastructure projects are to be undertaken through the approvals and assessment processes under the EPBC Act.

544.           The management plan will provide for licence holders to demonstrate how conditions of approval and environmental obligations set under the EPBC Act will be met and comply with other Bill provisions and any other additional environmental management requirements (e.g. remediation).

Consultation with other marine users and management of socioeconomic impacts

545.           Consultation provisions are expected to be addressed in the development of a management plan to ensure that other users of the area in which an offshore infrastructure activity is to be undertaken have been appropriately considered and that these concerns have been taken into account.

Division 3—Operations

Clause 116 - Maintenance and removal of property etc. by licence holder

Maintenance of property etc.

546.           This provision addresses the issues of maintenance and property held by the licence holder.

547.           Subclause (1) provides that the holder of a licence must maintain in good condition and repair all structures and all equipment and other property in the licence area that is used in connection with the activities authorised by the licence.

Removal of property etc.

548.           Subclause (2) addresses the requirement to remove property. This places an obligation on the licence holder to remove all structures, equipment and other property from the licence area that is not used, nor to be used, in connection with the licence activities.

Exception

549.           Subclause (3) provides an exception to the above requirements. Those provisions do not apply in relation to any structure, equipment or other property where it has not been brought into the licence area by or with the authority of the licence holder.

550.           There is a note to state that the defendant bears an evidential burden in relation to the matters mentioned in this subclause. The reader is directed to subsection 13.3(3) of the Criminal Code and section 96 of the RPA.

Strict liability offence

551.           Subclause (4) creates a strict liability offence in relation to a failure to comply with subclauses (1) or (2). In this case, a person commits an offence of strict liability if they are subject to a requirement as above and fails to comply with the requirement. It is intended that the offence will deter licence holders from:

-         failing to maintain structures, equipment and property used in connection with OEI activities; and

-         leaving structure, equipment and other property that is not connected with the licence holder’s activities in the Commonwealth offshore area.

 

552.           To ensure the safety of sites within the Commonwealth offshore area, it is considered appropriate for a contravention of subclauses (1) or (2) to be a strict liability offence. The justification for this approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

553.           There is a specified maximum penalty of 100 penalty units for this offence.

Civil penalty provision

554.           Subclause (5) creates a civil penalty for contravening the clause. The specified maximum civil penalty is 525 penalty units.

Section has effect subject to other provisions etc

555.           Subclause (6) provides that this clause has effect subject to other provisions and matters under the Bill. The specified provisions and matters are:

-         any other provision of the Bill;

-         general directions given by the Regulator;

-         remedial directions given by the Regulator or the Minister;

-         the management plan for the licence, if there is one; and

-         any other law.

Division 4—Financial security

Clause 117 - Requirement to provide financial security

556.           These provisions have been developed taking into account approaches for financial security in the offshore electricity industry in leading international jurisdictions such as the United Kingdom. In addition learnings from the domestic offshore oil and gas sector have been considered to ensure that the financial security regime under the Bill is fit for purpose to effectively mitigate the risk that costs, expenses and liabilities associated with the activities of licence holders fall on the Australian taxpayer.

557.           Reforms to enhance decommissioning requirements for offshore petroleum are being progressed but take into account the existing structure of the legislative regime under the OPPGS Act including the current mechanisms for financial assurances. As a new legislative regime, the drafted provisions are intended to simplify and enhance requirements for financial security to align with leading practice.

558.           Subclause (1) provides that where there is a management plan, the holder of a licence must at all times provide the Commonwealth with financial security sufficient to pay any costs, expenses and liabilities that may arise in connection with the decommissioning of licensed OEI, including the removal of equipment and other property from the licence area or a vacated area, and remediation of the licence area and vacated areas.

559.           Appropriate financial security will need to be agreed by the Regulator and in place before any OEI can be installed. The financial security required will be equal to the cost for Government to decommission the OEI installed, remove equipment and property and remediate affected areas. This approach ensures taxpayers are not left to pay for the removal of OEI and associated costs in the event that the licence holder is unable or unwilling to do so.

560.           There is an explanatory note to state that for the purposes for which the financial security may be used are not limited to the matters in paragraphs (a), (b) and (c). The reader is directed to subclause 117(2).

561.           Subclause (2) provides for regulations which allow the Regulator to refuse to approve either a management plan or a revised management plan unless the licence holder has provided the financial security required.

562.           Subclause (3) provides for regulations to set out the details of the financial security arrangements. The regulations may set out how the financial security is to be provided in a form acceptable to the Regulator, and for it to be required at different times for particular licence infrastructure so long as the financial security is provided before that OEI is constructed or installed in the licence area. A range of financial instruments such as bonds, letters of credit, bank guarantees and other mechanisms may be considered appropriate to meet financial security requirements. The security amounts required and the timing of securities will vary and will be assessed by the Regulator on a case-by-case basis taking into account the specific project or activity.

563.           In addition the regulations may provide for the financial security to cease to be required. This would occur in circumstances where the Regulator is satisfied that no further costs, expenses or liabilities are likely to arise in relation to that OEI or property or those activities.

564.           Subclause (4) allows for regulations to prescribe all of the following:

-         arrangements that may be treated, and are not to be treated, as financial security for the purposes of this clause;

-         methods for working out the financial security a licence holder must provide - (which may take into account costs, expenses and liabilities that might arise from emergencies or unexpected circumstances); and

-         circumstances the Regulator may accept a reduced amount of financial security.

Clause 118 - Contravention of requirement to provide financial security

565.           Subclause (1) states that a person contravenes this clause if the person is required to provide the Commonwealth with financial security in accordance with the provision and the person does not comply with the requirement. This is a fault-based offence.

566.           Subclause (2) states that a person commits an offence if the person contravenes the above provision. There is a maximum penalty of 300 penalty units.

567.           Subclause (3) provides for a civil penalty for contravening subclause (1). In that case, a person is liable to a civil penalty if the person contravenes the above provision. The specified maximum civil penalty is 480 penalty units.

Clause 119 - Recovery and application of financial security

568.           Subclause (1) provides that the regulations may provide for specified kinds of costs, expenses and liabilities incurred by the Commonwealth or the Regulator in relation to a licence, or debts owed by a licence holder to the Commonwealth or the Regulator under this Bill, to be recovered by the Commonwealth from a financial security provided by the licence holder.

569.           Subclause (2), which is included for the avoidance of doubt, clarifies that the costs, expenses and liabilities mentioned in subclause (1) are not limited to the costs, expenses and liabilities mentioned in subclause 117(1). It may include amounts of offshore electricity infrastructure levy that are due and payable to the Commonwealth by the licence holder.

570.           Subclause (3) stipulates that an amount received or recovered under this clause is to be credited to the Offshore Infrastructure Registrar Special Account established under clause 171.

571.           Subclause (4) provides that any credits received or recovered in relation to financial security under subclause (3) must be:

-         applied to any cost, expense or liability incurred by the Commonwealth or debt owed to the Commonwealth, that may be recovered from the financial security as specified in the regulations; or

-         paid to the Regulator for the purposes of:

§   applying the amount to any cost, expense or liability incurred by the Regulator, or debt owed to the Regulator, that may be recovered from the financial security under regulations made for the purposes of subclause (1); or

§   to the extent that the Regulator is satisfied the amount is no longer required—refunding the amount; or

-         to the extent that the Regulator is satisfied that the amount is no longer required—refunded by the Commonwealth; or

-         if none of the above—retained by the Commonwealth until it is:

§   applied as mentioned in paragraph (a); or

§   paid to the Regulator as mentioned in paragraph (b); or

§   refunded as mentioned in paragraph (c).

Part 2—Directions powers

Division 1—Introduction

Clause 120 - Simplified outline of this Part

572.           Clause 120 provides a simplified outline of Part 2 of Chapter 4 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.

Division 2—General power to give directions

Clause 121 - General power to give directions—Regulator

Direction to licence holder

573.           Subclause (1) provides that the Regulator may give a direction to a licence holder relating to

-         how the licence holder is complying with any provision of the Bill, the applied work health and safety provisions, the conditions of licence or the management plan for the licence (if there is a plan).

-         how offshore infrastructure activities are to be carried out under the licence;

-         anything that, under the Bill or licensing scheme, a management plan may or must address.

574.           Notices under subclause (1) must be given in writing.

575.           An explanatory note to this subclause explains that a breach of a direction may attract a criminal or civil penalty under clause 123.

576.           Subclause (2) sets out that the types of directions that may be given include directions:

-         to carry out offshore infrastructure activities under the licence in a particular way;

-         to make arrangements for another person to carry out offshore infrastructure activities under the licence on behalf of the licence holder;

-         as to how the licence holder is to comply with a requirement under this Bill, the applied work health and safety provisions, the licence or any management plan for the licence;

-         to require the licence holder to ensure that a requirement under this Bill, the applied work health and safety provisions, the licence or any management plan for the licence is not contravened;

-         to require the licence holder to comply with this Bill, the applied work health and safety provisions, the licence or any management plan for the licence in a specified manner or within a specified time;

-         to require the licence holder to cease carrying out activities under the licence until a requirement under this Bill, the applied work health and safety provisions, the licence or any management plan for the licence is complied with.

 

Extended application of direction

577.           Subclause (3) provides for an extended application of the direction to specified persons. It may be extended in certain circumstances and apply to the following two groups:

-         a specified class of persons who are employees or agents of, the licence holder or performing work for the licence holder; or

-         any person other than the licence holder who is:

§   in the offshore area for any reason touching, concerning, arising out of, or connected with, offshore infrastructure activities;

§   in, above, below or in the vicinity of a vessel, aircraft, structure or installation, or equipment or other property in the Commonwealth offshore area for a reason of that kind.

 

578.           Subclause (4) provides that if a direction is given under subclause (3), it may be expressed to apply to each person in the specified class mentioned in paragraph (3)(a), or to each of the other persons mentioned in paragraph (3)(b), as the case may be.

Additional matters

579.           Subclause (5) provides that a direction under this clause has effect, and must be complied with, despite any previous direction or anything in the regulations or the applied State and Territory provisions.

580.           There is an explanatory note for the applied State and Territory provisions directing the reader to subclause 248(2).

581.           Subclause (6) provides that a direction may unconditionally or conditionally prohibit the doing of an act or thing. If conditions apply to the prohibition, they can include requiring the consent or approval of a person specified in the direction.

Revocation of direction

582.           Subclause (6) addresses the revocation of a direction. It specifies that the Regulator must revoke the direction if the Regulator is satisfied that the direction is no longer required. That may occur because the direction has been complied with, or for any other reason. The revocation must be in writing and provided to the licence holder.

583.           Subclause (7) makes clear that the revocation provisions in subclause (6) do not limit subsection 33(3) of the AIA, which also deals with revocation of instruments. That provision of the AIA provides that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character the power includes a power to repeal, rescind, revoke and amend that instrument which is exercisable in the same manner and subject to the same conditions.

Status of directions and notices

584.           Subclause (8) addresses the status of directions and notices. It states that if paragraph (3)(b) applies to a direction under this clause then the direction and notice revoking the instrument is a legislative instrument. This is because the group of persons are not licence holders but are in some way less directly connected with offshore activities than the persons in paragraph (3)(b) (for example, they may be persons in, above, below or in the vicinity of a vessel, aircraft or other installation for a reason connected with offshore infrastructure activities). As the direction applies generally, it can be better characterised as being a rule of general application, and therefore more appropriately made by way of a legislative instrument.

585.           Subclause (9) states that if paragraph (3)(b) does not apply to a direction under this clause then the direction and notice revoking the direction is not a legislative instrument. This is because the class of persons envisaged in paragraph (3)(a) are either a licence holder or persons connected with the licence holder. This direction does not have a general application, but relates only to the licence holder and others closely associated with the licence holder. The making of the direction is therefore more akin to an administrative decision that is not of legislative character.

Clause 122 - Directions under clause 121 may extend outside of licence area

586.           Subclause (1) provides that directions may extend outside the licence area. A direction may require the licence holder to take an action or not anywhere in the Commonwealth offshore area, whether within or outside the licence area.

587.           Subclause (2) provides that if a direction requires the holder to take an action in relation a related licence in another area, then the Regulator must give a copy of the direction to the holder of that related licence as soon as practicable after the first direction is given.

Clause 123 - Directions under clause 121—compliance

588.           Clause 123 specifies consequences for breach of a direction issued under clause 121 by the Regulator. It is similar to section 576 of the OPGGS Act.

589.           Subclause (1) provides that a person contravenes the clause if they are subject to a direction and engage in conduct that breaches the direction.

Fault-based offence

590.           Subclause (2) creates a fault based offence. It provides that a person commits an offence if they contravene subclause (1). As this is not expressed to be a strict liability offence, it involves a fault element.

591.           The offence attracts a maximum penalty of 5 years imprisonment or 2,000 penalty units, or both.

Strict liability offence

592.           Subclause (3) creates a strict liability offence. It provides that a person commits an offence of strict liability if they contravene subclause (1).

593.           A maximum penalty of 100 penalty units applies to this offence.

594.           The strict liability offence is appropriate to ensure the highest level of compliance with directions given the potential harm that might be caused by the conduct in breach of directions. The justification for this approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

Civil penalty provision

595.           Subclause (4) creates a civil penalty provision. It states that a person is liable to a civil penalty if they are subject to a direction under clause 183 and do not comply with that direction. Where this occurs, the person is liable to a civil penalty of up to 525 penalty units.

Defences—breach of direction by person other than a licence holder

596.           Subclause (5) provides for a defence where there is a breach of a direction under clause 121 by a person other than the licence holder. It applies if:

-         a licence holder and another person are subject to a direction; and

-         the other person is prosecuted or subject to civil penalty action; and

-         the other person gives evidence that they did not know, and could not reasonably be expected to have known, of the existence of the direction.

 

597.           Subclause (6) provides that in the circumstances covered by subclause (5), unless it is proved that the other person knew, or could reasonably be expected to have known, of the existence of the direction, then they are not to be convicted of an offence or made subject to a civil penalty under the provisions of this clause.

Continuing offences and continuing contraventions of civil penalty provisions

598.           Subclause (7) establishes an offence for continuing breaches of a direction. It provides that a person who commits an offence against subclauses (2) or (3) commits a separate offence each day during which that the offence continues.

599.           Subclause (8) sets the maximum penalty for each day for a continuing offence at 10% of the maximum penalty for that offence.

600.           Subclause (9) provides that a person who contravenes subsection (4) commits a separate contravention each day during which the contravention continues.

601.           Subclause (10) provides a maximum civil penalty for each day of the continuing contravention, being 10% of the maximum civil penalty that can be imposed in respect of that contravention.

Clause 124 - Regulator may take action if there is a breach of a direction under clause 121

602.           Subclause (1) enables the Regulator to take action in the event of a breach of direction. It applies in the case where a person who is subject to that direction does not comply with the direction.

603.           Subclause (2) gives the Regulator the authority to undertake any necessary action as required by the direction.

604.           Subclause (3) enables the Regulator to recover any costs or expenses incurred in relation to the action. It becomes a debt due which is recoverable in a relevant court.

Exception—direction that has an extended application

605.           Subclause (4) provides an exception to extend the application of the direction. It applies where a direction under clause 121 applies to a licence holder and another person.

606.           If action to recover costs under subclause (3) is brought against the other person and they adduce evidence that they did not know and could not reasonably be expected know about the direction, they are not liable. The onus is on the plaintiff to prove that the other person knew or could reasonably be expected to have known, of the existence of the direction.

Division 3—Remedial directions

607.           Under this Division, powers are provided to the Regulator and Minister to issue remedial directions similar to Part 6.4 of the OPGGS Act.

Clause 125 - Remedial directions—power to issue directions under different provisions

608.           This clause addresses how the power to issue remedial directions under this Division affects the power of the Regulator or Minister to issue other directions.

609.           It provides that the power to give a remedial direction does not limit the ability of the Regulator or the Minister to give a remedial direction to the person in relation to the same (or a different) matter. It also provides that the power to give a remedial direction does not limit the Regulator’s power to give the person a direction in relation to the same (or a different) matter under section 121 (general power to give directions).

Clause 126 - Remedial directions by the Regulator

610.           This clause provides for the Regulator to issue remedial directions which can require a person to carry out a range of actions.

611.           Subclause (1) provides that the provisions apply to a person who is a licence holders or who held a licence immediately before it was surrendered or cancelled.

612.           Subclause (2) provides that the Regulator may issue a written notice directing a person mentioned in subclause (1) to undertake any of the actions specified in paragraphs (a)-(d).

Conservation and protection of natural resources and making good of environmental damage

613.           Under paragraph (2)(a) the Regulator may direct the person to do, before a specified time and to the satisfaction of the Regulator, any or all of the following:

-         provide for the conservation and protection of the natural resources in the area, or vacated area;

-         make good any damage to the seabed or subsoil, or any other environmental damage, in the Commonwealth offshore area (whether inside or outside of the licence area or vacated area) caused by any person engaged or concerned in activities authorised by the licence.

Environmentally sensitive areas and other matters in vacated areas

614.           Under paragraph (2)(b) the Regulator may direct the person to do, until a specified time, any or all of the following in relation to a vacated area in relation to a licence:

-         assess and monitor environmentally sensitive areas within the area;

-         give reports to the Regulator in relation to specified matters.

 

Licence holder obligations under Act, licence and management plan

615.           Under paragraph (2)(c) the Regulator may direct a person that holds a licence to do any or all of the following things before the time specified in the notice:

-         comply with any obligation of the licence holder under this Bill or the licence in connection with an offshore infrastructure activity;

-         if there is a management plan for the licence—carry out any obligation of the licence holder under the management plan;

-         make arrangements that are satisfactory to the Regulator in relation to an obligation referred to above.

Suspended or cancelled licences

616.           Under paragraph (2)(d) if a licence has been cancelled or surrendered the Regulator may direct a person to do any or all of the following things before the time specified in the notice:

-         comply with any obligation of the licence holder under this Bill or the licence, as the licence was immediately before it was cancelled or surrendered, in connection with an offshore infrastructure activity;

-         if there was a management plan for the licence immediately before the licence was cancelled or surrendered—carry out any obligation of the licence holder under the management plan;

-         make arrangements that are satisfactory to the Regulator in relation to an obligation referred to.

617.           There is an explanatory note to provide that a direction under this clause has no effect to the extent of any inconsistency with a direction under clause 127. The reader is directed to subclause 127(5).

618.           Subclause (3) provides that the time specified in the direction must be reasonable.

619.           Subclause (4) provides that the person must comply with the direction.

Clause 127 - Remedial directions by the Minister

620.           This clause provides for the Minister to issue remedial directions which can require a person to carry out a range of actions.

621.           Subclause (1) provides that the provisions apply to a person who is a licence holders or who held a licence immediately before it was surrendered or cancelled.

622.           Subclause (2) provides that the Minister may issue a written notice directing a person mentioned in subclause (1) to undertake any of the actions specified in paragraphs (a)-(d).

623.           The actions that the Minister may direct a person to carry out under subclause (2) are the same as the actions that the Regulator can direct under subclause 126(2).

624.           Subclause (3) provides that the time specified in the direction must be reasonable.

625.           Subclause (4) provides that the person must comply with the direction.

626.           Subclause 5 deals with inconsistency between remedial directions issued by the Minister and the Regulator. It provides that in the event of inconsistency, the direction by the Regulator has no effect to the extent of the inconsistency.

Clause 128 - Remedial directions—compliance

627.           Clause 128 provides compliance provisions in relation to operation or remedial directions given to a person who fails to comply with those directions.

628.           The provisions provide for civil penalties which have been aligned with the provisions in the OPGGS Act, see section 587B in particular. These accord with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide to Framing Commonwealth Offences).

629.           Subclause (1) provides that the clause is contravened if a person is subject to a direction by the Regulator or Minister and engages in conduct which breaches the direction.

630.           Subclause (2) creates a fault-based offence for contravening subclause (1). In that case there is a specified maximum penalty of 5 years imprisonment or 2,000 penalty units, or both.

631.           Subclause (3) provides for a strict liability offence for contravening subclause (1). It specifies a penalty of up to 100 penalty units.

632.           It is considered appropriate for a contravention of subclause (1) to be a strict liability offence in order to deter persons from failing to undertake remedial actions in relation to that person’s offshore infrastructure activities under this Bill. The requirement for remedial action is considered appropriate in light of the potential harm or other consequences that could result to the relevant area subject to a direction under clauses 126 and 127. The justification for this approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

633.           Subclause (4) provides for a civil penalty for contravening subclause (1). A person who contravenes subclause (1) is liable to a civil penalty of 525 penalty units.

634.           Subclause (5) sets out the penalty provisions for continuing offences In this case, the maximum penalty for each day that an offence under subclauses (2) or (3) continues is 10% of the maximum penalty that can be imposed in respect of that offence.

635.           There is an explanatory note to explain that subclauses (2) and (3) are continuing offences under section 4K of the Crimes Act.

636.           Subclause (6) sets out the maximum civil penalty for each day that a contravention of subclause (4) continues. This is set at 10% of the maximum civil penalty that can be imposed in respect of that contravention.

637.           There is an explanatory note to indicate that clause (4) is a continuing civil penalty provision under section 93 of the RPA.

Daily Penalty - continuing offences

638.           The purpose of introducing daily penalties for continuing contraventions of this Bill is to encourage persons to promptly rectify breaches and return to a position of compliance with their regulatory obligations. Given the high investment costs and potential profits associated with offshore operations, strong financial penalties are likely to be one of the most significant methods to deter non-compliance with this Bill. Where daily penalties are applied to continuing offences or civil penalty provisions, the cumulative impact of those penalties will provide an additional incentive for companies to comply with those provisions, and to quickly remedy any non-compliance. This in turn will reduce the potential safety, environmental or resource risks that may be associated with the particular conduct.

639.           Certain offence provisions in this Bill are automatically deemed to be continuing offences due to the operation and application of section 4K of the Crimes Act, which provides that where a person refuses or fails to comply with something that is required to be done within a particular period or before a particular time, the person is guilty of an offence in respect of each day during which the person continues to fail or refuse to comply with that requirement. A similar provision is included in section 96 of the RPA, in relation to continuing contraventions of civil penalty provisions. Where an offence or civil penalty provision in relation to which a daily penalty will be applied by this Bill is automatically a continuing offence or continuing civil penalty provision, this is made clear in notes inserted against those provisions by this Bill.

640.           In some cases, provisions that are not automatically continuing offences by virtue of the Crimes Act or continuing civil penalty provisions by virtue of the RPA are specified to be continuing offences or continuing civil penalty provisions by the amendments in this Bill for the purpose of applying a daily penalty for continuing contraventions. These provisions are discussed further in the notes on items below.

641.           A daily penalty of 10% of the global maximum is inserted by this Bill in relation to each continuing offence and continuing civil penalty provision. This is in accordance with the Guide to Framing Commonwealth Offences , which states that daily penalties for continuing offences should be significantly lower to reflect that a person may be liable for multiple contraventions. This is also in line with the daily penalties applied in the TA, which was considered during the development of this Bill.

642.           It is acknowledged that that the Guide to Framing Commonwealth Offences recommends a 60 penalty unit maximum for strict liability offences in primary legislation or 50 penalty unit maximum for strict liability offences in regulations. With the application of a continuing offence provision to a number of existing strict liability offences in this item, an offender may conceivably face an amalgamated penalty which totals more than 60 penalty units in the Bill or more than 50 penalty units in the regulations.

643.           Should the offence continue for a certain number of days, we consider that this is justified. Following the Guide to Framing Commonwealth Offences , in a high hazard regime such as this, the conduct and consequences associated with the offence are potentially extremely serious, particularly when related to work health and safety or environmental matters, and therefore warrant application of a penalty high enough to provide sufficient incentive to secure a swift return to compliance.

Clause 129 - Regulator may take action if a direction breached or arrangement not carried out

644.           Clause 129 provides that the Regulator may take action if a direction has been breached.

645.           Subclause (1) describes the circumstances in which this may occur. These are if a direction is given to a person, and the person does not comply with the direction. Alternatively the provision applies where a person makes an arrangement with the Regulator as mentioned in paragraphs 126(2)(c) and (d) and does not carry out the arrangement. In these circumstances the Regulator may undertake the action required by the direction or the arrangement.

646.           Subclause (2) addresses the issue of reimbursement for work done by the Regulator. If the Regulator incurs costs or expenses in relation to the action taken in this subclause, these costs or expenses are a debt due by the person to the Regulator and recoverable in a relevant court.

647.           Subclause (3) enables the Regulator to give a direction to the licence holder to remove any property. It arises where property has been brought into a vacated area by any person engaged in authorised activities. If the property is not removed as required by the direction or an arrangement made, the Regulator may direct the owner to remove or dispose of the property from the vacated area. This direction must be given in writing. The removal must be to the satisfaction of the Regulator and before the time specified in the instrument.

648.           There is an explanatory note directing the reader to the provision on sanctions at clause 130.

649.           Subclause (4) requires the time specified in the instrument to be reasonable.

650.           Subclause (5) requires the Regulator to give a copy of the direction to each person whom the Regulator believes to be an owner of any part of the property.

Clause 130 - Removal, disposal or sale of property by Regulator—breach of direction

651.           This clause addresses the circumstances where there is a breach of a direction of the requirement to remove, dispose of, or sell property.

652.           Subclause (1) provides that if a direction under subclause 129(3) has been breached, the Regulator may do any or all of the following in the manner the Regulator sees fit:

-         remove the property from the vacated area concerned;

-         dispose of any or all of the property;

-         sell any or all of the property that the Regulator believes to belong to a person to whom the Regulator has given a notice under subclause 129(5), by public auction or otherwise.

653.           Subclause (2) allows for further deductions of costs and expenses from proceeds of sale of property. The Regulator may, on behalf of the Commonwealth, deduct from the proceeds:

-         any costs and expenses incurred by the Regulator in carrying out the actions under subclause (1) in relation to the property;

-         any costs and expenses incurred by the Regulator in relation to the doing of any thing required by a direction under clause 126 to be done by the owner of the property; and

-         fees or amounts payable by the owner of the property to the Regulator under the Bill.

654.           Subclause (3) provides that the Regulator may deduct from the proceeds of sale any fees or amounts due and payable by the owner of the property to the Commonwealth under the Bill. The Regulator may also deduct any amounts of offshore electricity infrastructure levy of a kind prescribed in the regulations for the purposes of paragraph (3)(b).

655.           Subclause (4) provides that if the Regulator deducts an amount payable to the Commonwealth this must be remitted to the Commonwealth.

656.           Subclause (5) addresses how the balance of proceeds of sale is to be treated. It is to be paid to owner of property less any deductions above.

657.           Subclause (6) provides that if the Regulator incurs any costs or expenses in relation to the removal, disposal or sale of property, they are a debt due by the owner of the property to the Regulator. To the extent that the costs and expenses are not deducted from proceeds of sale in accordance with this clause, they are recoverable in a relevant court.

658.           Subclause (7) states that if the Regulator incurs costs or expenses that are not otherwise recoverable above in relation to the doing of anything required by a remedial direction under clause 126 to be done by the holder of a licence, then the costs or expenses are a debt due licence holder to the Regulator and are recoverable in a relevant court.

Clause 131 - Removal, disposal or sale of property—limitation of action etc.

659.           Clause 131 addresses the limitation of a person taking legal action where there has been a removal or disposal or sale of property. It refers to property that is removed, disposed of or sold by the Regulator where the licence holder has failed to meet their obligations to remove the property. This clause is intended to enable the removal of such property from the offshore area and to protect the Regulator from legal action for removing the property and other things done in conjunction with it. This provision is one that commonly appears in legislation relating to the functioning of a statutory authority.

660.           Subclause (1) specifies that except as provided for by subclause 130(6) or clause 302, no action, suit or proceeding lies in relation to the removal, disposal or sale, or the purported removal, disposal or sale, of property under clause 130. This is a special provision, intended to prevail to the exclusion of the general provisions dealing with the liability of various office-holders for acts and omissions.

661.           Subclause (2) provides that section 301 (which protects various officers and persons from liability for acts and omissions) does not apply to an act or matter to the extent to which subclause (1) of this clause applies to the act or matter. This gives effect to the intention, that the limitation of action in this clause is intended to govern these circumstances entirely.

662.           Subclause (3) makes clear that this clause does not affect any rights conferred on a person by the ADJR Act to apply to a court in relation to a decision, conduct or failure to make a decision or any other rights that a person has to seek a review by a court or tribunal in that regard. It thereby preserves rights to administrative review of decisions. This means that if, for example, the owner of the property had information that the Regulator was preparing to remove and sell the property, the owner could seek review of that decision under the ADJR Act. Under section 16 of that Act, the Federal Court or the Federal Magistrates Court could make various orders about the case, for example an order to the Regulator to reconsider the matter.

663.           Subclause (4) makes clear that expressions used in subclause (3) have the same meaning as in section 10 of the ADJR Act.

Clause 132 - Minister may take action if a direction breached or arrangement not carried out

664.           Subclause (1) sets out that a Minister may take action in the event that a remedial direction has been breached or an arrangement between a person and the Minister under paragraph 127(2)(c) or (d) is not carried out. In such a case, the Minister, or a person engaged to act on their behalf, may do all or any of the actions required in that direction or arrangement.

665.           Subclause (2) provides that if the Commonwealth incurs costs or expenses in relation to this rectification required above, then the costs or expenses are a debt due by the person to the Commonwealth and are recoverable in a relevant court.

Division 4—Defence of taking reasonable steps to comply with a direction

Clause 133 - Defence of tak ing reasonable steps to comply with a direction

666.           This provides for a defence in the case of a prosecution for failing to comply with a direction that may be given to a person by the Minister or the Regulator under a number of provisions. It operates where that person has taken reasonable steps to comply with a direction.

667.           Subclause (1) specifies that it is a defence in a prosecution for an offence, or in proceedings for a civil penalty order, for a breach of a direction in the case where the defendant is able to establish that they took all reasonable steps to comply with the direction.

668.           The explanatory note makes clear that the onus is on the defendant to establish this. The defendant bears a legal burden in a prosecution or proceedings for a civil penalty. The reader is directed to section 13.4 of the Criminal Code.

669.           Subclause (2) addresses the directions which are covered. These are:

-         a direction given by the Regulator under:

§   a general direction; or

§   a remedial direction; or

§   a provision of the regulations; or

-         a remedial direction given by the Minister.

Part 3—Protection of infrastructure

670.           This Part provides for the protection of OEI. The intent is to provide for the protection of infrastructure, the safety of offshore workers and other marine users. This has been addressed by adopting measures to:

-         minimise the risk of damage to infrastructure; and

-         minimise the risk of harm to the workers for those engaged in offshore infrastructure activities and other users of the marine area.

671.           This will be achieved through the creation of offences for interfering with infrastructure (Division 2) and the establishment of safety zones (Division 3) and protection zones (Division 4). Both are established by the making of a determination on the Regulator’s initiative or in response to request.

672.           There is a distinction between the role of a safety zone and a protection zone - each serving a different purpose and as a consequence attracting different methods for their establishment: 

-         a ‘safety zone’ prohibits entry to the specified area. This is done by notifiable instrument. The parameters for the creation of a ‘safety zone’ are clearly set out in the Bill enabling it to be created by notifiable instrument.  

-         a ‘protection zone’ will operate to limit or control activities in an area but not prohibit access. The intention is to provide a flexible alternative to a safety zone where a general prohibition is not required. It would allow certain activities to continue in the area although they may be of a limited nature. This is to be done by legislative instrument, the reasons for which are explained below.

673.           It will be an offence for a person to enter either a safety or protection zone unless they are authorised. The offence and penalty provisions are separately addressed in their respective subdivision. Separate offences and penalties apply in relation to the fault elements of intention, recklessness, negligence and strict liability. These offences will carry both criminal and civil penalties as appropriate. Exemptions will operate in relation to both safety and protection zones to provide access for the entry of specified vessels (e.g. emergency vessels, police, border protection, etc.).

674.           These offences and penalties have been modelled off sections 616, 619 and 620 of the OPGGS Act and clause 40-41 of Schedule 3A of the TA. The rationale in keeping like offences and penalties in line with already existing legislation is that it would provide for consistency in this regime across activities in the offshore area.

Division 1— Introduction

Clause 134 - Simplified outline of this Part

675.           Clause 134 provides a simplified outline of Part 3 of Chapter 4 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.  

Division 2—Offence of interfering with infrastructure

Clause 135 - Interfering with infrastructure

676.           This provision is based on section 603 of the OPGGS Act and addresses the offence of interfering with infrastructure.

677.           Subclause (1) provides that a person commits an offence if they engage in conduct which results in damage or interference to the following:

-         OREI or OETI in the Commonwealth offshore area;

-         any structure or vessel in the Commonwealth offshore area that is, or is to be, used in offshore infrastructure activities;

-         any equipment on, or attached to, such a structure or vessel; or

-         any operations or activities being carried out, or any works in connection with, such a structure or vessel.

678.           There is a maximum penalty of imprisonment for 10 years.

679.           Subclause (2) provides a definition of ‘structure’ for the purposes of subclause (1), to mean any fixed, moveable or floating structure or installation.

Division 3—Safety zones

680.           The intention of this Division is to provide for the establishment of safety zones which are intended to assure the safety of offshore workers and also to protect eligible safety zone infrastructure from potential damage caused by the actions of other marine users.

681.           This will be achieved by prohibiting vessels or classes of vessels from entering or being present in a defined area for a period of time, minimising the risk of a vessel collision to ensure the safety of navigation and operations and the protection of assets (safety zones). However, the intent is that measures for the protection of offshore renewable energy projects should not restrict freedom of navigation more than necessary.

Subdivision A—Safety zones

682.           This subdivision sets out the arrangements in relation to the operation of safety zones.

683.           In order to minimise the risk to the safety of workers undertaking offshore infrastructure activities, it is intended that the Regulator be able to establish a ‘safety zone’. A safety zone would prohibit, by written notice, certain vessels from entering or being present in a specified area surrounding specified infrastructure without written consent of the Regulator. The notice may prohibit access by all vessels, all vessels other than specified vessels, or all vessels other than the vessels included in a specified class of vessels.

684.           A safety zone should encompass an area of water around the infrastructure. Infrastructure would include renewable energy installations, fixed structures or cables running between other items of infrastructure. To clarify, the intent here is that safety zones should be able to be declared in respect of infrastructure comprising installations, structures, or cables running between other items of infrastructure.

685.           A safety zone will extend up to a 500 metre radius from the outer edge of that installation of the infrastructure at sea level. In addition to fixed infrastructure, there are circumstances where protection may be required for rolling/mobile safety zones around a vessel or group of vessels that are progressively working on installing infrastructure like a cable.

686.           While safety zones have the beneficial effect of protecting OREI, they can have an adverse effect on other marine uses and users. For safety zones around OREI, where the safety zone will be fixed for some period of time and more readily ascertainable, the advantages of safety zones outweigh the disadvantages.

Clause 136 - Safety zones

Eligible safety zone infrastructure

687.           Subclause (1) provides a definition of eligible safety zone infrastructure to mean any of the following:

-         OREI (other than a cable resting on the seabed);

-         OETI (other than a cable resting on the seabed);

-         a cable resting on the seabed that :

§   is OREI or OETI; and

§   connects two or more pieces of OREI all within the same licence area; and

§   that meets any requirements in relation to the length of the cable or the distance between points connected by the cable that are prescribed by the regulations for the purposes of the provisions.

688.           The power to prescribe requirements for cables is intended to manage the eligibility of certain cables within a licence area, which may be protected under a safety zone. Safety zones exclude vessels from entering or transiting through specified areas in order to protect infrastructure. However, to be consistent with international obligations, safety zones should not unnecessarily impede freedom of navigation. Therefore, it is necessary to ensure that the regulations can place appropriate limitations on the length of cables that may fall within the definition of eligible safety zone infrastructure to ensure offshore infrastructure is appropriately protected without unreasonably restricting the movements of transiting vessels.

689.           The explanatory note clarifies what is not regarded as eligible safety zone infrastructure, i.e. a cable that transmits electricity from OREI to the shore, or between the shore and a place outside the Commonwealth offshore area, or between different licence areas. This underlines the intention to avoid safety zones unreasonably impeding freedom of navigation.

Determination

690.           Subclause (2) provides that a determination may be made for the purpose of protecting eligible safety zone infrastructure. The Regulator may determine that a specified area surrounding the eligible safety zone infrastructure is a safety zone .

691.           The establishment of a safety zone is to be done by notifiable instrument. The reason for this is that the parameters for the creation of a safety zone are clearly set out in the Bill, which satisfies the requirement for it to be created as a notifiable instrument. The determination is not legislative in character, and as such, need not be made subject to Parliamentary scrutiny or sunsetting. The Bill, in clause 139, creates offences of being present in a safety zone. A determination under clause 136, by specifying that a specified area is a safety zone, determines the particular circumstances in which the law as set out in clause 136 is to apply.

692.           A determination under clause 136 cannot itself determine the law nor alter its content. However, public accessibility and centralised management of determinations of safety zones is desirable, given their effect on other marine users, and hence the Bill provides that they are notifiable instruments.

693.           In addition, it is important for the Regulator to be able to declare a safety zone and do so quickly such that the safety of people can be protected by prohibiting vessels from entering a particular area in an emergency. A notifiable instrument enables the process to be swiftly implemented without a lengthier process requiring legislative scrutiny or being subject to disallowance.

694.           Subclause (3) specifies the requirements of the determination. It must state that all vessels are prohibited from entering or being present in the safety zone without the written consent of the Regulator unless they are specified vessels or vessels included in specified classes of vessels.

695.           Subclause (4) provides that the determination must also include any other information prescribed by the regulations.

696.           Subclause (5) gives the details of the safety zone limits. This is described as a distance of 500 metres around the eligible safety zone infrastructure. The distance is measured from each point of the outer edge of the infrastructure and must be entirely within the Commonwealth offshore area. These limits are consistent with international obligations under the United Nations Convention on the Law of the Sea .

Clause 137 - Determination on Regulator’s initiative or in response to application

697.           This clause addresses the way a determination in relation to a safety zone may be made.

698.           Subclause (1) specifies that a determination may be made on the Regulator’s own initiative or at the request of a person under regulations made for these purposes as described below.

699.           Subclause (2) sets out that the regulations may prescribe procedures in relation to the making of a determination regarding a safety zone. A person will be able to make a request to the Regulator who should then consider the request, require further information if necessary, and then make or refuse to make a determination.

700.           Regulations made under this provision will provide the necessary flexibility for the details of the scheme that is outlined in the Bill. It is appropriate that such details be prescribed by regulation, rather than set out in full in primary legislation because:

-         this is a new field of regulation, and it is not possible to predict with certainty all new issues that the regulatory scheme might face over time;

-         this is a new technological field, and it is not possible to predict with confidence at this stage what kinds of OEI might be used, and what safety issues it might give rise to;

-         matters such as safety zones might need to be dealt with relatively urgently, therefore it is appropriate to have a power to make regulation amendments to respond as quickly as possible to issues as they arise.

Clause 138 - When a determination takes effect

701.           Subclause (1) clarifies that a determination takes effect at the time specified in the Determination.

702.           Subclause (2) provides that where infrastructure is not yet installed, the Regulator must not specify a time before the time that the regulator is satisfied installation of the relevant infrastructure will commence.

Clause 139 - Offences of entering or being present in a safety zone

703.           This item addresses offences of entering or being present in a safety zone. The fault elements are different in each case and this is reflected by the penalty that applies.

704.           Subclauses (1) and (3) create offence provisions with the same physical elements, in relation to a person who, being the owner or master of vessel, is subject to a determination and breaches that determination. The breach of the determination occurs if that vessel enters or is present in the safety zone specified in the determination.

Offence - intentional breach

705.           For an offence under subclause (1), where the fault element is intention, the maximum penalty is imprisonment for 15 years.

Offence - reckless breach

706.           For an offence under subclause (3), where the fault element above is recklessness, the maximum penalty is imprisonment for 12.5 years.

707.           These penalties align with sections 616 and 617 of the OPGGS Act. In the main, these require a strong fault element - hence the offences of intention and reckless breach, attracting higher penalties commensurate with the risk and danger that could arise.

Offence - negligent breach

708.           There may also be a case where a person who breaches a determination was not aware of relevant risks or circumstances and therefore does not fall within these categories. As such, the fault element of negligence may be a suitable standard in these circumstances. While this is less serious than the above offences, it is nonetheless conduct carrying culpability, and considerable harm and risk to life could result from a failure to comply of this kind. Criminal consequences are therefore appropriate.

709.           Accordingly, subclause (5) creates an offence provision for negligent breach. It creates an offence in relation to a person who, being the owner or master of vessel, is subject to a determination and breaches that determination. The breach of the determination occurs if that vessel enters or is present in the safety zone specified in the determination. Subclause (6) provides that where the fault element for the physical element of breach of the determination is negligence, the maximum penalty is imprisonment for 10 years.

710.           The fault element of negligence has been employed in the above provisions. In providing for this offence and penalty where the fault element is negligence, the Guide to Framing Commonwealth Offences has been considered, and also the policy as expressed in the explanatory memorandum to the original Offshore Petroleum Bill 2005. The fault element of negligence for this physical element is appropriate in this instance for the following reasons:

-         negligence has become a well-established indication of liability in an offence of this nature. For example, there are similar provisions in sections 616 and 617 of the OPGGS Act, which deal with petroleum safety zones and greenhouse gas safety zones respectively. Those provisions have offences with this fault element for a similar physical element, and with a similar maximum penalty. Further, this offence provision is directed towards protecting the safety of workers who are in a safety zone. Workplace health and safety legislation is a category for which it is acknowledged that negligence is a well-established fault element for offence provisions;

-         due to the serious and considerable harm and risk to life and property that could result from contravention of the physical elements of this offence, it should be possible to find a person criminally liable even in circumstances where intention or recklessness cannot be made out. Third, this fault element is important to deter persons from committing acts of negligent navigation which could place at risk the lives of persons working on infrastructure in a safety zone, and could place at risk the infrastructure itself.

711.           The Guide to Framing Commonwealth Offences provides that where negligence is specified it should be applied to a ‘circumstance’ or ‘result’ rather than to ‘conduct’. The considerations as set out in the guide have been applied in determining whether negligence is a suitable fault element. In particular, WHS is a context where negligence is a well-established indication of liability which supports its use. In the above circumstances, entering or being present in a safety zone create considerable potential for harm to a worker. 

Offence - strict liability

712.           Subclause (7) creates an offence of strict liability. It creates an offence in relation to a person who, being the owner or master of vessel, is subject to a determination and breaches that determination. The breach of the determination occurs if that vessel enters or is present in the safety zone specified in the determination. The specified maximum penalty is imprisonment for 5 years.

713.           This penalty is relatively high for a strict liability offence. However, this is in the context of the seriousness of the breach and also the much higher penalties that would apply where there is a fault element attached.

714.           The justification for the strict liability approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

Defence

715.           Subclause (8)   provides a defence in a prosecution for an offence against subclauses (1), (3), (5) or (7).

716.       In these circumstances, it is a defence if the defendant proves that:

-         an unforeseen emergency rendered it necessary for the vessel to enter or be present in the safety zone in order to attempt to secure the safety of:

§   a vessel, offshore renewable energy or electricity transmission infrastructure or any other structure or equipment or human life; or

§   the vessel entered or was present in the safety zone in circumstances not under the control of the person who was in charge of the navigational watch of the vessel.

 

717.           An explanatory note to this subclause explains that a defendant bears a legal burden in relation to the matter in subclause (8). The reader is referred to section 13.4 of the Criminal Code.

718.           The reason that there is a burden placed on the defendant in this matter is because the prosecution would not be in a position to know if there is an unforeseen emergency which has caused the person to need to enter the safety zone - i.e. either to secure the safety of a vessel or to preserve human life.

Subdivision B—Authorised safety zone officials and powers in relation to safety zones

Clause 140 - Authorised safety zone officials

719.           This clause provides a definition of an authorised safety zone official for the purposes of this Bill. It is:

-         a member or special member of the Australian Federal Police; or

-         a member of the Defence Force; or

-         an officer of Customs within the meaning of the Customs Act 1901 ; or

-         a person who is an authorised person because of a declaration under subclause (2).

720.           The term authorised safety zone official has been used to avoid confusion with other uses of the term “authorised person” in the provisions applying the RPA.

721.           Subclause (2) enables the Regulator, by notifiable instrument determine that a person, or a person included in a specified class of persons, is an authorised safety zone official for the purposes of this Bill.

State and Territory officials

722.           Subclause (3) provides that an employee of a State or Territory must not be determined to be an authorised safety zone official under subclause (2) without the agreement of the State or Territory.

723.           These decisions are considered to be of an administrative character, as the authorisation instrument does not determine the content of the law, but rather, merely indicates who the law applies to, by reference to a class of persons, and is more in the nature of an appointment

Clause 141 - Requirement to move vessel etc.

724.           Clause 141 provides that an authorised safety zone official may require the movement of a vessel. The requirement to move a vessel away from a safety zone is based on section 620 of the OPGGS Act.

725.           Subclause (1) specifies that an authorised person may require the master of a vessel to take the vessel outside the safety zone. The vessel must satisfy all of the following conditions:

-         the vessel is in the safety zone;

-         it is not vessel specified in the determination of the safety zone;

-         it is not in a class of vessels specified in the determination of the safety zone;

-         no written consent of the Regulator is in force in relation to the safety zone which allows the vessel to be in the zone and the vessel.

726.           In addition, the authorised person may require the master of a disabled vessel to permit the vessel to be towed away from the safety zone, or to accept the giving of such other assistance to the vessel as the authorised safety zone official considers necessary, where the vessel satisfies any of the following conditions:

-         the vessel is in a safety zone; or

-         the authorised safety zone official has reasonably believes that the vessel is likely to cause damage to any OREI, OETI, structure or equipment in a safety zone.

727.           In terms of international law obligations, this provision is only intended to apply to foreign vessels when the vessels are used in the carrying out of a licence holder’s rights or obligations. It is not intended that these laws apply to ships engaged in innocent passage through Australia’s Exclusive Economic Zone.

728.           Subclause (2) provides that a person contravenes this subclause if:

-         the person is subject to a requirement under subclause (1); and

-         the person engages in conduct; and

-         the conduct breaches the requirement.

729.           Subclause (3) provides that a person contravenes this subclause if:

-         the person engages in conduct; and

-         the conduct obstructs or hinders an authorised person who is acting under subclause (1).

Offences - fault-based

730.           Subclause (4) specifies that a person commits an offence if they contravene subsection (2). In that case, the offence attracts a maximum penalty of 50 penalty units.

731.           Subclause (5) provides that a person commits an offence if they contravene subsection (3).

732.           There is an explanatory note to state that the same conduct may be an offence against both subclause (5) of this clause and section 149.1 of the Criminal Code . This provision addresses the offence of obstruction of Commonwealth officials in the course of carrying out their functions and it carries a penalty of imprisonment of 2 years.

733.           The specified maximum penalty is 50 penalty units.

Civil penalty provision

734.           Subclause (6) specifies that a person is liable to a civil penalty if the person contravenes a requirement under subclause (2). In that case, a civil penalty of up to 350 penalty units will apply.

735.           Subclause (7) provides that a person is liable to a civil penalty if the person obstructs or hinders an authorised person who is acting under subclause (3). In that case, a maximum civil penalty of 350 penalty units shall apply.

Division 4—Protection zones

Subdivision A— Determinations

736.           This Division provides for the determination of protection zones . A protection zone is different from a safety zone, as it is of a more permanent nature. A safety zone is created to manage interactions between OEI and vessels on a shorter term basis, for example by preventing entry during construction activities or to prevent entry to address an urgent safety issue, ie: fallen or broken OEI likely to cause a hazard. In contrast, a protection zone addresses issues that are more long term in nature by prohibiting or restricting vessels from conducting certain activities which may result in the risk of damage to OEI.

Clause 142 - Regulator may determine a protection zone

737.           Subclause (1) provides that the Regulator may, by legislative instrument, determine that a specified area in the Commonwealth offshore area is a protection zone in relation to OREI or OETI that is, or is proposed to be, installed in the area under a specified licence.

738.           Unlike a determination that a specified area is a safety zone, a determination that a specified area is a protection zone must be made by legislative instrument. This is because a determination that a specified area is a protection zone is able to set out the activities that are prohibited in the protection zone, and the restrictions that apply to specified activities in the protection zone (clause 145). Accordingly, such a determination alters the content of the law, and is therefore of legislative character. It is therefore appropriate that it be subject to Parliamentary scrutiny, disallowance and sunsetting. The lengthier process for making a legislative instrument as compared to a notifiable instrument will limit the Regulator’s flexibility in an emergency situation. However, it is appropriate that the determination of a protection zone will attract the rigour of Parliamentary scrutiny.

739.           Subclause (2) sets out the circumstances for making a determination. It provides that the Regulator may make a determination under subclause (1) if the Regulator is satisfied that there is a risk to human safety or to OREI in the protection zone. A determination may be made where there is a likelihood of risk if such activities were carried out in the protection zone in accordance with an approved management plan from the Regulator. The Regulator must also be satisfied that the determination would avoid or reduce that risk.

740.           Subclause (3) states that a determination of a protection zone must identify the area covered by the protection zone, which will be in accordance with regulations made for this purpose. The determination must also include any other prescribed information.

741.           Subclause (4) specifies that a determination of a protection zone may set out the activities that are prohibited and the restrictions that apply to specified activities in the protection zone.

Clause 143 - Determination on Regulator’s initiative or in response to application

742.           Subclause (1) specifies that a determination of a protection zone may be made on the Regulator’s own initiative or at the request of a person as prescribed under regulations.

743.           Subclause (2) enables the regulations to prescribe procedures for a person to make a request for the Regulator to determine a protection zone. The Regulator may consider the request, require further information in relation to the request and then make, or refuse to make, a determination in relation to the request.

Clause 144 - Prohibited activities

744.           Subclause (1) describes the activities that may be prohibited in a protection zone for the purposes of making a determination under clause 142. They are:

-         any activity that involves a serious risk to human safety; or

-         any activity that involves a serious risk of damaging OREI or OETI; or

-         an activity specified in the regulations.

745.           Although the activities are not outlined specifically, the types of prohibited activities would be those of a kind that are likely to cause serious risk of damage or injury and thereby justify the taking of necessary action to avoid that risk.

746.           Subclause (2) specifies that the regulations may prescribe activities that may not be prohibited in a determination of a protection zone.

Clause 145 - Restricted activities

747.           Subclause (1) specifies that activities on which restrictions may be imposed in a determination of a protection zone comprise the following:

-         any activity that involves a serious risk to human safety; or

-         any activity that involves a serious risk of damaging OREI or OETI; or

-         an activity specified in the regulations.

748.           As is the case with prohibited activities, the criteria for restricted activities is the same, ie. the key determinant would be whether they are of a kind that is likely to cause serious risk of damage or injury and thereby justifying the taking of necessary action to avoid that risk.

749.           Subclause (2) provides for the regulations to prescribe activities on which restrictions may not be imposed in a protection zone.

Clause 146 - When a determination takes effect

750.           Subclause (1) clarifies that a determination of a protection zone takes effect at the time specified by the Regulator. This is a departure from the default rule for commencement of legislative instruments (ie. the day after registration) set out in section 12 of the Legislation Act 2003 . However it is subject to the limitation in subclause (2).

751.           Subclause (2) places restrictions on the Regulator specifying a time that a determination comes into effect. It provides for the case where OREI or OETI is not yet installed. The Regulator must not specify a time before the time that the Regulator is satisfied that installation of the infrastructure will begin.

Clause 147 - D etermination continues in effect even if infrastructure ceases to operate

752.           Subclause (1) addresses the time frame for the duration of a determination. It specifies that it remains in effect until it is revoked.

753.           There is an explanatory note that refers the reader to subsection 33(3)AIA, which pertains to revocation.

754.           There is a second explanatory note providing that the determination may also be repealed under Part 4 of Chapter 3 (sunsetting) of the Legislation Act 2003.

755.           Subclause (2) is an avoidance of doubt provision, which provides that a determination continues in effect even if the OREI or OETI in the protection zone has ceased to operate. This is to ensure that the protections continue to apply until the reasons for the determination of the protection zone, including any serious risks, no longer exist.

Subdivision B—Offences in relation to protection zone s

756.           This Subdivision addresses offences in relation to protection zones.

757.           The offences and penalties applicable have been considered taking into account like provisions and the defences in sections 616, 619 and 620 of the OPGGS Act and clause 40-41 of Schedule 3A of the TA. The rationale in keeping like offences and penalties in line with already existing legislation is that it would provide for consistency in this regime across activities in the offshore area.

758.           The nature and severity of these offences have similar outcomes. The intent is to create consistency across both regimes, also taking into account that the Regulator will be enforcing the scheme.

Clause 148 - Engaging in prohibited or restricted activities

759.           Clause (1) provides for the offence of engaging in prohibited or restricted activities. An offence is committed by a person in the following circumstances if:

-         the person engages in conduct;

-         the conduct occurs in the protection zone; and

-         the conduct is either;

§   prohibited in the protection zone; or

§   it contravenes a restriction imposed on an activity in the protection zone; and

-         the conduct is not engaged in by either a licence holder, or a person acting on behalf of a licence holder according to the licence or a management plan.

760.           In the above circumstances, the maximum penalty for such offence is imprisonment for 5 years or 300 penalty units, or both.

Clause 149 - Defences to offence of engaging in prohibited or restricted activities

761.           This clause provides defences which apply in relation to the offence of engaging in prohibited or restricted activities.

762.           It provides a defence, making clear that the offence provision does not apply if the conduct was necessary to save a life or vessel, or prevent pollution, or the defendant took all reasonable steps to avoid engaging in the conduct.

763.           There is an explanatory note for the reader that the defendant bears an evidential burden in relation to the matters in this clause. A cross-reference is made to subsection 13.3(3) of the Criminal Code. This relates to evidentiary burden that must be borne by the defendant in these circumstances.

Clause 150 - Master or owner of vessel used in offence of engaging in prohibited or restricted activities

764.           This item addresses the position of the owner or master of a vessel where a vessel is used in prohibited or restricted activities.

765.           Subclause (1)   provides that the owner or master of a vessel commits an offence if they permit another person to use the vessel, that other person commits an offence under clause 148, and the vessel is used in committing the offence. There is also a requirement that the owner or master is reckless as to that fact that the vessel is used in the offence. The maximum penalty is imprisonment for 5 years or 300 penalty units, or both.

766.           Subclause (2) provides that strict liability applies for one aspect of this offence, namely whether the other person has committed an offence against section 148. Strict liability is appropriate in relation to this aspect to ensure the highest level of compliance with this obligation given the potential harm that might be caused by the conduct. The justification for this approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

Clause 151 - Foreign nationals and foreign vessels

Foreign nationals - no involvement of vessel

767.           Subclause (1) makes clear that Subdivision B (Offences in relation to protection zones) does not apply to anything done, or omitted to be done, in the following circumstances.

-         the thing is done, or omitted to be done, by a foreign national; and

-         the thing is done, or omitted to be done in, on, or beneath the seabed that lies beneath the waters of the Exclusive Economic Zone; and

-         the thing done, or omitted does not involve a vessel;

unless it concerns, touches, concerns, arises out of or is connected with:

-         the exploration of the continental shelf of Australia; or

-         the exploitation of the resources of the continental shelf of Australia (including the exploitation of the resources of the waters of the Exclusive Economic Zone); or

-         the operations of artificial islands, installations or structures that are under Australia’s jurisdiction.

Foreign nationals - involvement of foreign vessel

768.           Subclause (2) provides that Subdivision B does not apply to anything done, or omitted to be done, if:

-         the thing is done, or omitted to be done, by a foreign national; and

-         the thing is done, or omitted to be done, in the waters of the Exclusive Economic Zone; and

-         the thing done, or omitted involves a foreign vessel;

unless the thing done, or omitted to be done, touches, concerns, arises out of or is connected with:

-         the exploration of the continental shelf of Australia; or

-         the exploitation of the resources of the continental shelf of Australia (including the exploitation of the resources of the waters of the Exclusive Economic Zone); or

-         the operations of artificial islands, installations or structures that are under Australia’s jurisdiction.

CHAPTER 5—ADMINISTRATION

Part 1—Offshore Infrastructure Registrar

Division 1—Introduction

Clause 152 - Simplified outline

769.           Clause 152 provides a simplified outline of Part 1 of Chapter 5 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.  

Division 2—Offshore Infrastructure Registrar

Clause 153 - Offshore Infrastructure Registrar

770.           This clause provides for the establishment of the Offshore Infrastructure Registrar.

771.           Subclause (1) establishes the Offshore Infrastructure Registrar (referred to as the Registrar ).

772.           Subclause (2) provides that the Registrar is to be a person who is:

-         an SES employee in the Department; and

-         appointed in a written instrument made by the Secretary.

773.           Subclause (3) provides that the Secretary may appoint the National Offshore Petroleum Titles Administrator (established by section 695A of the OPGGS Act) to be the Registrar.

774.           Subclause (4) provides that if the Secretary appoints the National Offshore Petroleum Titles Administrator as the Registrar, the functions or powers of the National Offshore Petroleum Titles Administrator under the OPGGS Act do not include the functions or powers of the Registrar. Also, the functions or powers of the Registrar under this Bill do not include the functions or powers of the National Offshore Petroleum Titles Administrator.  

Clause 154 - Functions of the Registrar

775.           This clause sets out the functions of the Registrar under the Bill.

776.           The Registrar has the following functions:

-         to provide information, assessments, analysis, reports, advice and recommendations to the Minister regarding the performance of the Minister’s functions or the exercise of the Minister’s powers under the Bill;

-         to cooperate with the Regulator in regard to the administration and enforcement of the Bill and the applied work health and safety provisions;

-         to cooperate with other Commonwealth agencies and authorities having functions in relation to the regulation of offshore infrastructure activities;

-         such other functions conferred on the Registrar by or under the Bill; and

-         to do anything incidental to or conductive to the performance of any of the above functions.

Clause 155 - Powers of the Registrar

777.           This clause sets out the powers of the Registrar under the Bill.

778.           The Registrar has the power to do all things necessary or convenient to be done for or in connection with the performance of the Registrar’s functions.

Clause 156 - Delegation by the Registrar

779.           Subclause (1) provides that the Registrar may delegate all or any of the Registrar’s functions or powers to:

-         an SES employee, or acting SES employee, in the Department; or

-         an APS employee who holds or performs the duties of an Executive Level 2 position, or an equivalent position or higher position, in the Department; or

-         a person prescribed by the regulations.

780.           This provision is similar to section 695D of the OPGGS Act and reflects an intention to maintain a consistent approach between the framework in the Bill and the OPGGS framework, where appropriate.

781.           Subclause (2) provides that the delegate must comply with any written directions of the Registrar.

782.           Subclause (3) provides that the Register cannot delegate the  power to make, vary or revoke a legislative instrument.

Clause 157 - Consultants

783.           Subclause (1) provides that the Registrar may engage consultants to assist in the performance of the Registrar’s functions.

784.           Subclause (2) provides that consultants are to be engaged on the terms and conditions determined by the Registrar in writing.

Clause 158 - Registrar to be assisted by APS employees in the Department

785.           The Registrar is to be assisted by APS employees in the Department who are made available by the Secretary.

Clause 159 - Annual report

786.           This clause provides for the Registrar to provide an annual report to the Minister after the end of each financial year for presentation to the Parliament, detailing the Registrar’s activities under this Bill during  that year.

Clause 160 - Reviews of activities of Registrar

787.           This clause provides for the Minister to cause certain reviews of the activities undertaken by the Registrar to be conducted. These reviews of activities will consider the Registrar’s performance of its functions under this Bill over a certain time interval, and may provide information on whether these functions remain relevant and appropriate. It may provide information on the cost recovery outcomes of the Registrar, resourcing and effectiveness of the Registrar’s functions under this Act.

788.           Subclause (1) requires the Minister to cause to be conducted various reviews of the activities of the Registrar.

789.           Subclause (2) provides that the Minister must cause a report of a review conducted under subclause (1) to be prepared.

790.           Subclause (3) provides that the Minister must cause copies of each report to be tabled in each House of the Parliament within 15 sitting days of that House after the report is made available to the Minister.

791.           Subclause (4) provides for the first review. This is to relate to the 3-year period beginning on the commencement of this clause. The review is to be completed and the report given to the Minister within 6 months, or such longer period as the Minister allows, after the end of that 3-year period.

792.           Subclause (5) provides for subsequent reviews relating to successive 5-year periods. The reviews are to be completed and reports provided to the Minister within 6 months, or such longer period as the Minister allows, after the end of the 5-year period to which each review relates.

Clause 161 - Judicial notice of signature of the Registrar

793.           Subclause (1) provides that all courts take judicial notice of:

-         the signature of a person who is, or has been, the Registrar or a delegate of the Registrar; and

-         the fact that a person is, or was at a particular time, the Register or a delegate of the Registrar.

794.           Subclause (2) provides that, for the purposes of clause 161, the word ‘court’ includes a person authorised to receive evidence by law, or by consent of the parties.

Division 3—The Register of Offshore Infrastructure Licences

Clause 162 - Register to be kept

795.           Subclause (1) provides that the Registrar must keep a Register of Offshore Infrastructure Licences for the purposes of this Bill.

796.       Subclause (2) provides that the Register is to be available for public inspection on the internet.  

797.       Subclause (3) provides that the Register is not a legislative instrument.

Clause 163 - Records to be made in Register

798.           Subclause (1) provides that the Registrar must enter a record in the Register for each licence granted under this Bill.

799.           Subclause (2) provides that a record for a licence must include the information set out in a table in subclause 163(2) to this Bill. The following details of the licence holder are required to be included in a record:

-         name;

-         if the licence holder has an ACN (within the meaning of the CA)—the ACN; and

-         if the licence holder has an ARBN (within the meaning of the CA) the ARBN.

800.           Details in relation to the licence are also required. A record must state whether the licence is:

-         a feasibility licence; or

-         a commercial licence; or

-         a research and demonstration licence; or

-         a transmission and infrastructure licence.

801.       Other details to be included in a record include:

-         details of the licence area (it may include a map);

-         the day on which the licence was granted;

-         the day on which the licence comes into force;

-         the end day of the licence or, if there are different end days for different parts of the licence area, each such end day and details of each such part of the licence area (which may include a map);

-         conditions that apply to the licence;

-         any other matters that the Registrar thinks appropriate; and

-         any other matters prescribed by the regulations.

Clause 164 - Entry in Register—events affecting a licence

802.           This clause provides that the Registrar must record in the record for a licence in the Register certain events affecting the licence. These are as listed in a table in subclause (1).

803.           Subclause (1) sets out a list of events which if they occur in relation to a licence must be recorded, including:  

-         the licence is varied;

-         the licence is transferred;

-         the name of the licence holder changes;

-         the Registrar is required by subclause 43(6) to include a notice under subclause 43(2) (requirements relating to applications for commercial licences) in the Register in relation to the licence;

-         the Registrar is required by subclause 94(1) (change in control of licence holder) to make a notation in the Register in relation to the licence;

-         the licence reaches the end day in respect of the whole or part of the licence area;

-         the end day of the licence is extended in respect of the whole of a part of the licence area;

-         the licence is surrendered in respect of the whole or a part of the licence area; and

-         the licence is cancelled.

804.           Subclause (2) provides that the regulations may prescribe details that must be included in the record in the Register.

805.           Subclause (3) provides that the record for a licence is to remain on the Register. This is the case even if the licence has been surrendered or cancelled, or has otherwise ceased to be in effect.

Clause 165 - Other instruments or notices to be included in register

806.           This clause provides that the regulations may require copies of specified kinds of notices or instruments which affect a licence or a licence holder to be included in the record for the licence.

Clause 166 - Notation in Register—applicable datum

807.           The clause provides that the Registrar may make a notation in the Register about the applicable datum for a licence, notice or instrument. Clause 9 deals with datum.

Clause 167 - Material that must not be included in a record for a licence

808.           Clause 167 provides that the regulations may prescribe information that must not be included in a record for a licence. This may be done despite anything in Division 3 of Part 1 of Chapter 5 of the Bill. This clause is intended to permit regulations to be made to protect the interests of licence holders or other marine users, where publishing certain details may have a detrimental effect.

Clause 168 - Notification requirements—licence holder

809.           This clause deals with the notification requirements for a licence holder.

810.           Subclause (1) provides that the licence holder is required to give the Registrar written notice of a change in any of the following matters before the end of 30 days after the change occurs:

-         a detail mentioned in item 1 of the table in subclause 163(2);

-         the address of:

§   if the licence holder has a registered office (within the meaning of the CA)—the registered office; or

§   otherwise—the head office or principal office of the licence holder;

-         the licence holder’s telephone number;

-         the licence holder’s fax number (if the licence holder has a fax number);

-         the licence holder’s email address.

811.           There are both criminal and civil sanctions that can apply if a person fails to comply with the notice requirements in subclause (1).

812.           Subclauses (2) creates an offence of strict liability if a person fails to give notice as required under subclause (1).

813.           Subclause (3) provides that a person is liable to a civil penalty if a person fails to give notice as required under subclause (1).

814.           Subclause (4) provides that the maximum penalty for each day that an offence under subclause (2) continues is 10% of the maximum penalty for that offence.

815.           Subclause (5) provides that the maximum civil penalty for each day that a contravention under subclause (3) continues is 10% of the maximum civil penalty for that contravention.

816.           It is considered reasonable and appropriate to prescribe non-compliance with subclause 168(1) as a strict liability offence. This is because the matters a licence holder is required to notify the Registrar of under that subclause go to the effective administration of the licencing scheme and, in particular, to ensure the safety of sites within the Commonwealth offshore area. The Registrar, or other persons performing functions or exercising powers under the Bill, will need to be able to contact licence holders using the correct contact information, in particular, if a site within the Commonwealth offshore area is unmanned, in order to limit any safety risks or generally to ensure incidents are immediately dealt with.

817.           Accordingly, the strict liability offence will act to deter licence holders from not updating their contact details, and ensure that the scheme can be administered using the current contact information. The justification for this approach in the Bill is set out further in the Statement of Compatibility with Human Rights.

Clause 169 - Evidentiary provisions

818.           This clause addresses the evidentiary provisions associated with the Register.

819.           Subclause (1) provides that the Register is to be received in all courts as prima facie evidence of all matters required or authorised by this Part/Bill to be entered in the Register.

820.           Subclause (2) addresses the issue of certified copies and extracts. It provides that the Registrar may, supply to a person:

-         a copy of or extract from a record in the Register; or

-         a copy of or extract from any instrument lodged with the Registrar under this Act.

821.           The copy or extract is to be certified by the Registrar to be a true copy or true extract, as the case may be.

822.           Subclause (3) provides that the certified copy or extract is admissible in evidence in all courts and proceedings without further proof or production of the original.

Clause 170 - Corrections of clerical errors or obvious defects

823.           This clause provides that the Registrar may alter the Register for the purposes of correcting a clerical error or an obvious defect in the Register. This is to ensure the integrity of the Register, particularly given the long duration of licences.

Division 4—Offshore Infrastructure Registrar Special Account

Clause 171 - Offshore Infrastructure Registrar Special Account

824.           This Division provides for the establishment of the Offshore Infrastructure Registrar Special Account.

825.           Fees, levies, financial offers, and financial securities collected through the licensing scheme will be deposited into the special account. These funds will be used to pay for the Commonwealth’s costs associated with administering this Bill and the regulations. This includes remuneration for staff and consultants. The special account also allows for funds to be debited to refund financial securities after decommissioning work is completed or to fund decommissioning work where the licence holder is unable or unwilling to complete decommissioning works. The special account will also allow for refunding amounts deposited in error.

826.           Subclause (1) establishes the Offshore Infrastructure Registrar Special Account.

827.           Subclause (2) provides that the Offshore Infrastructure Registrar Special Account is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013 .

Clause 172 - Credits to the Offshore Infrastructure Registrar Special Account

828.           Subclause (1) provides for amounts that must be credited to the Offshore Infrastructure Registrar Special Account. It specifies that there must be credited to the account amounts equal to the following:

-         fees paid to the Registrar under this Act;

-         offshore electricity infrastructure levy amounts paid to the Registrar;

-         late payment penalties, subclause 190(3), paid to the Registrar;

-         financial security amounts received, or financial security amounts recovered, required to be credited under subclause 119(3); and

-         any other amounts paid to the Registrar under this Act.

829.           Subclause (2) provides that certain amounts are not to be credited to the special account, namely an amount of a financial offer paid in accordance with a provision of a licencing scheme made for the purposes of subclause 32(3) (financial offers for feasibility licence applications).

Clause 173 - Purposes of the Offshore Infrastructure Registrar Special Account

830.           This clause sets out the purposes of the Offshore Infrastructure Registrar Special Account:

-         paying or reimbursing the Commonwealth’s costs associated with the administration of this Bill and the applied work health and safety provisions;

-         paying any remuneration or allowances payable to the Registrar, APS employees assisting the Registrar under clause 158 or consultants engaged under clause 157;

-         paying amounts in respects of financial securities to the Regulator under paragraph 119(4)(b), for the purposes of applying those amounts to the costs, expenses, liabilities or debts referred to in that paragraph;

-         refunding amounts in respects of financial securities under paragraph 119(4)(c);

-         refunding an amount received by the Commonwealth as mentioned in clause 172 and credited to the special account, to the extent that the refund is required or permitted:

§   by and order of a court; or

§   by an order under an Act.

Part 2—Offshore Infrastructure Regulator

Division 1—Introduction

Clause 174 - Simplified outline of this Part

831.           Clause 174 provides a simplified outline of Part 2 of Chapter 5 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.  

Division 2—The Regulator

Clause 175 - The Regulator

832.           Subclause (1) addresses the office of the Regulator. It provides that a reference in this Bill to the Regulator is a reference to NOPSEMA.

833.           NOPSEMA has significant experience and specialist expertise in regulating a similar offshore licensing and infrastructure regime for the petroleum and greenhouse gas injection and storage industries. Leveraging NOPSEMA’s existing expertise, systems and capabilities will offer significant cost and time efficiencies.

Clause 176 - The CEO of the Regulator

834.           Subclause (1) provides that a reference in this Bill to the CEO is a reference to the Chief Executive Officer of NOPSEMA.

835.           Subclause (2) states that anything done by the CEO in the name of the Regulator or on the Regulator’s behalf is taken to have been done by the Regulator.

Clause 177 - Functions of the Regulator

836.           Subclause (1) sets out the functions of the Regulator. The Regulator has the following functions:

-         to promote the work health and safety of persons engaged in offshore infrastructure activities;

-         to develop and implement effective monitoring and enforcement strategies ensuring compliance with obligations under this Bill and regulations in relation to work health and safety, environment management, and the infrastructure integrity of OREI and OETI;

-         to investigate accidents, occurrences and circumstances;

§   affecting work health and safety of persons engaged in offshore infrastructure activities; or

§   involving deficiencies in environmental management; or

§   deficiencies in the infrastructure integrity of OEI;

-         to report on investigations covered above;

-         to advise persons on matters of work health and safety, environmental protection and infrastructure integrity in connection with offshore infrastructure activities;

-         to make reports, including recommendations, to the Minister on issues relating to work health and safety, environmental protection and infrastructure integrity in connection with infrastructure activities;

-         to provide information, assessments, analysis, reports, advice and recommendations to the Minister in relation to the administration and functioning of this Bill and the regulations;

-         to cooperate with the Registrar in matters relating to the administration and enforcement of this Bill;

-         to cooperate with other Commonwealth, State or Territory agencies and authorities having functions relating to the regulation of offshore infrastructure activities;

-         such other functions as are conferred on the Regulator by or under this Bill;

-         to do anything incidental to or conducive to the performance of any of the above functions.

837.           Subclause (2) provides that the functions of the Regulator may be performed within or outside Australia.

Clause 178 - Powers of the Regulator

838.           Subclause (1) provides that the Regulator has the power to do all things necessary or convenient to be done for or in connection with the performance of its functions.

839.           Subclause (2) makes it clear (without limiting the powers of Regulator) that the Regulator has all the powers and functions of an OEI inspector under this Bill.

840.           Subclause (3) provides that the powers of the Regulator may be exercised within or outside Australia.

Clause 179 - Delegation by the Regulator

841.           Subclause (1) provides that the Regulator may, in writing, delegate all or any of its functions or powers to a member of the staff of the Regulator (ie an employee of NOPSEMA); an Executive Level 2 APS employee in the Department; or a person by prescribed by the regulations.

842.           Subclause (2) requires delegates to comply with any written directions of the Regulator when performing a delegated function or exercising a delegated power.

843.           Subclause (3) provides that subclause (1) does not apply to the Regulator’s power to make, vary or revoke a legislative instrument.

Clause 180 - Consultants and persons seconded to the Regulator

844.           Subclause (1) provides that the CEO may engage consultants to perform services for the Regulator in connection with the performance of any of its functions or the exercise of any of its powers.

845.           Subclause (2) provides that officers and employees of the APS, a Commonwealth authority, a State or Territory, or of an agency or authority of a State or Territory may be seconded to the Regulator to assist with the performance of its functions or powers.

Clause 181 - Minister may require the Regulator to prepare reports or give information

846.           Subclause (1) provides that the Minister may, by written notice to the Regulator, require it to prepare a report about one or more specified matters relating to the performance of its functions, or exercise of its powers. A copy of this report must be given to the Minister within the period specified in the notice.

847.           Subclause (2) provides that the Minister may, by written notice given to the Regulator, require it to prepare a document setting out specified information relating to the performance of the Regulator’s functions or the exercise of the Regulator’s powers. A copy of this document must be given to the Minister within the period specified in the notice.

848.           Subclause (3) states that the Regulator must comply with a Minister’s request for a report or information made under subclause (1) and (2).

849.           The ability for the Minister to require the Regulator to provide reports on the exercise of powers and performance of functions is intended to provide the Minister with information. It is not intended that the reports or documents will be tabled in Parliament or made publicly available. The Regulator is required to publish certain enforcement actions under the Bill, to submit Annual Reports and to be subject to periodic reviews of the performance of its functions and the exercise of its powers. Both Annual Reports and review reports must be tabled or otherwise published.

Clause 182 - Minister may give directions to the Regulator

850.           Subclause (1) provides that the Minister may, by legislative instrument, give written directions to the Regulator about the performance of its functions under this Bill.

851.           There is an explanatory note to indicate that the provisions of the Legislation Act 2003 (section 42 and Part 4 of Chapter 3 respectively)relating to disallowance and sunsetting of legislative instruments do not apply to the directions. Directions of this nature are ordinarily exempt from these requirements, by the operation of the Legislation Act and the Legislation (Exemptions and Other Matters) Regulation 2015 . They are administrative in character as they do not determine the law or alter the content of the law; rather they determine how the law does or does not apply in particular cases or circumstances. In addition, they are intended to remain in force until revoked by the Minister.

852.           Subclause (2) provides that a direction under subclause (1) must be of a general nature only.

853.           Subclause (3) makes clear that subclause (2) does not prevent the Minister from directing the Regulator to investigate a particular occurrence in relation to particular OREI or OETI.

854.           Subclause (4) provides that the Regulator must comply with a direction under subclause (1).

Clause 183 - Additional functions and powers

855.           The clause states that the Regulator may, under contract, provide services to a State, the Australian Capital Territory, the Northern Territory and Foreign countries.

856.           The Regulator is not authorised to provide these services if it would impede its capacity to perform its functions, or impede NOPSEMA to perform any of its other functions. 

States and Territories

857.           Subclause (1) authorises the Regulator to provide services under a contract to a State, the Australian Capital Territory and the Northern Territory.

858.           The services must concern the regulation of exploring, exploiting, or storing, transmitting or conveying electricity or a renewable energy product on land or waters within the limits of the State or Territory; or the coastal waters of the State or Territory. 

859.           If the services are to be provided on land or in waters within the limits of the State or Territory, they must relate to the regulation of activities carried on by a constitutional corporation, or to the regulation of vessels, structures or other things owned or controlled, or that are being constructed, operated or decommissioned, by a constitutional corporation.

860.           In all cases the contract for services by the Regulator must be approved by the Minister.

Foreign countries

861.           Subclause (2) authorises the Regulator to provide services under a contract to the government of foreign country (or part of foreign country), or an agency or authority of a foreign country (or part of a foreign country). The services must relate to the regulation of exploring for, or exploiting, renewable energy resources, or the storing, transmitting or conveying electricity or a renewable energy product outside Australia.

862.           Subclause (2) also requires that the contract entered into by Regulator must be approved in writing by the Minister, and subclause (3) provides that before giving this approval the Minister must consult the Foreign Affairs Minister.

Provision of services not to impede other functions

863.           Subclause (4) makes it clear that this clause 183 of the Bill does not authorise the Regulator to provide a service if this would impede the Regulator’s capacity to perform other functions under this Bill or impede the capacity of NOPSEMA to perform other functions of NOPSEMA including under the OPGGS Act.

Certain governance provisions do not apply

864.           Subclause (5) specifies that certain governance provisions do not apply in relation to a power conferred by subclause (1) or (2). It refers to clauses 182, 184 and 189 of this Bill and Division 5 of Part 6.9 and section 690 of the OPGGS Act.

865.           Subclause (6) provides that the annual report for NOPSEMA under section 46 of the Public Governance, Performance and Accountability Act 2013 is not required to include information about a service provided under an abovementioned contract.

Definitions

866.       Subclause (7) sets out two definitions of terms used in this Part:

-         Foreign Affairs Minister means the Minister administering the Diplomatic Privileges and Immunities Act 1967 .

-         regulation includes investigation.

Clause 184 - Annual reports

867.           This provides that the annual report for NOPSEMA under section 46 of the Public Governance , Performance and Accountability Act 2013 must include any matters prescribed by the regulations.

Division 3—Other financial matters

Clause 185 - Money received by the Regulator

868.           This provides that monies which are paid to the Regulator, other than by the Commonwealth, are taken as received for and on behalf of the Commonwealth.

Clause 186 - Commonwealth payments to the Regulator

869.           This clause addresses how the Commonwealth is to make payments to the Regulator and outlines the source of those payments. It clarifies that the Commonwealth must pay to the Regulator all of the following monies and amounts:

-         money appropriated by the Parliament for the Regulator;

-         amounts equal to fees paid to the Regulator under this Bill or regulations;

-         amounts equal to the offshore electricity infrastructure levy;

-         amounts debited from the Offshore Infrastructure Registrar Special Account under subclause 194(2) (about OEI inspectors);

-         amounts equal to amounts of late payment penalty under subclause 190(3) paid to the Regulator; and

-         amounts equal to any other amounts paid to the Regulator by parties other than the Commonwealth.

870.           Subclause (2) states that amounts payable under paragraphs (1)(b) to (f) are to be paid out of the Consolidated Revenue Fund, which is appropriated accordingly.

Clause 187 - Application of money of the Regulator

871.           This provides for the application of money held by the Regulator. It addresses how it may be spent. Subclause (1) sets out that this applies to any money paid to the Regulator.

872.           Subclause (2) provides that the money is to be applied only in the following manner:

-         in payment or discharge of costs, expenses and other obligations incurred by the Regulator to perform its functions and powers under this Bill; and

-         in payment of remuneration or allowances payable under this Bill.

873.           Subclause (3) specifies that this does not prevent investment of those monies which are not immediately required by the Regulator for the purposes under this Bill. This provision is enabled by section 59 of the Public Governance, Performance and Accountability Act 2013 .

Part 3—Fees and offshore electricity infrastructure levy

Clause 188 - Simplified outline of this Part

874.           Clause 188 provides a simplified outline of Part 3 of Chapter 5 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.  

875.           As noted in the financial impact statement, the objective of the fees and levy charged is to recover the costs associated with implementing the Bill.

Clause 189 - Fees

876.           This clause provides for the charging of fees as prescribed for specified services by the Regulator or Registrar. These are cost-recovery fees such as application fees or fees in relation to the performance or exercise of any other function or power under this Bill or the regulations and must not be such as to amount to taxation. These kinds of fees allow costs to be recovered from those directly benefiting from particular services provided under the Bill.

877.           Subclause (1) sets out that the Commonwealth, or the Regulator, or the Registrar on behalf of the Commonwealth, may charge a fee for:

-         dealing with an application made under this Bill or the applied work health and safety provisions; or

-         performing or exercising any other function or power under this Bill or the applied work health and safety provisions.

878.           Subclause (2) provides for the fee amount. This is to be either prescribed by the regulations or worked out in accordance with a method prescribed by the regulations. These regulations would be a disallowable legislative instrument and developed after consultation consistent with the Legislation Act 2003 .

879.           Subclause (3) notes that the fee must not be such as to amount to taxation. Only fees for services would be prescribed.

880.           Subclause (4) provides that the fee is a debt due to the Commonwealth and is recoverable in the court of competent jurisdiction. This allows for the enforcement of any fees imposed and not paid.

Clause 190 - Offshore electricity infrastructure levy

881.           Subclause (1) provides for the collection of the offshore electricity infrastructure levy imposed by the Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021 once enacted . It provides that the levy will become due and payable in accordance with the regulations.

882.           An explanatory note to this subclause explains that the offshore electricity infrastructure levy is to be imposed by the Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021 once enacted. It also provides that regulations under that proposed Act may prescribe different kinds of offshore electricity infrastructure levy.

883.           Subclause (2) states that the regulations may provide for the remittal or refund of all or part of an amount of levy. This is to clarify the scope of the regulation making power should remittals or refunds be necessary.

884.           Subclauses (3) and (4) provide for a late payment penalty to be payable where a levy remains wholly or partly unpaid after the date it becomes due and payable.

885.           Subclause (5) provides that the person to whom a levy is paid may remit a late payment penalty (to apply to the whole or part levy), if the person considers there is a good reason for doing so. Reasonable justification could include a technical error, or error outside of their reasonable control. For example, the person providing incorrect instructions to the licence holder which results in payment not being received in time.

886.           Subclause (6) provides that each levy amount, and each amount in respect of any late payment penalties, is a debt due to the person to whom the levy is payable and is recoverable in a court of competent jurisdiction. The penalty is not cost recovery or taxation, it is a penalty designed to ensure that levies are paid on time. Given the importance of the Registrar and Regulator’s functions, and the fact they are funded through levies, it is critical that functions are adequately resourced through the timely payment of levies by industry.

887.           Subclause (7) provides that if the levy is payable to a person other than the Commonwealth, the levy is recoverable by the person on behalf of the Commonwealth.

888.           Subclause (8) allows for regulations to specify an application to only have been made if an amount of levy has been paid in relation to the application, and to reject an application if the payment is not made. This allows the regulations to provide additional disincentives to not paying the levy if this is necessary to enhance compliance.

Part 4—Compliance and enforcement

889.       This Part introduces four enforcement mechanisms into the Bill:

-         infringement notices;

-         injunctions;

-         adverse publicity orders; and

-         cumulative penalties for continuing offences.

890.           These provisions are modelled on the current enforcement provisions in the OPGGS Act, which has a similar regulatory regime. These enforcement mechanisms, sanctions and penalties are necessary to provide an effective and meaningful deterrent against non-compliance.

891.           A graduated range of enforcement mechanisms is provided as a supplement or alternative to the criminal regime, in order to encourage compliance outcomes. The Regulator and inspectors will be enforcing these requirements. This Bill will be applying the same regulatory powers.

892.           Regulators are best able to secure compliance when they have a range of graduated sanctions that can be imposed, depending upon the severity of the misconduct or breach of statutory requirements in a given set of circumstances. The ability to apply a range of enforcement tools can ensure a more targeted enforcement response, which can also be directed at achieving future behavioural change, rather than serving a purely punitive function.

893.           Non-monetary enforcement mechanisms, such as injunctions and adverse publicity orders have been incorporated into a regulatory regime in addition to direct financial penalties in order to provide a graduated range of compliance tools. The benefits of implementing non-monetary enforcement mechanisms include the ability for the Regulator to tailor the application of enforcement measures to suit the particular circumstances of non-compliance, the ability to better align the penalty with its purpose, and to enable the Regulator to seek an outcome directed towards future behavioural change to bring persons into a position of compliance. The potential for application of non-monetary enforcement mechanisms in the context of a well-resourced industry is also useful as a means to further encourage compliance, given that the level of financial penalties that can be applied may in itself provide an insufficient deterrent.

894.           These enforcement tools will ensure that the Regulator and the courts have the capacity to apply an appropriate and proportionate response to incidents of non-compliance with this Bill, in order to encourage improved compliance outcomes.

895.           In considering the penalty provisions throughout the Bill, it is acknowledged that in aligning with the OPGGS Act, these penalties exceed that provided in the Guide to Framing Commonwealth Offences . The guide recommends a 60 penalty unit maximum for strict liability offences in primary legislation or 50 penalty unit maximum for strict liability offences in regulations. With the application of a continuing offence provision to a number of existing strict liability offences in this item, an offender may conceivably face an amalgamated penalty which totals more than 60 penalty units in this Bill or more than 50 penalty units in the regulations.

896.           A potential departure, should the offence continue for a certain number of days, from the Guide to Framing Commonwealth Offences is justified on the grounds that in a high hazard regime such as this the conduct and consequences associated with the offence are potentially extremely serious (particularly when related to WHS or environmental matters). A penalty high enough to provide sufficient disincentive to promote and secure swift compliance is therefore warranted.

Division 1—Introduction

Clause 191 - Simplified outline of this Part

897.           Clause 191 provides a simplified outline of Part 4 of Chapter 5 of the Bill to help readers understand the substantive provisions. This simplified outline should not be taken as complete and readers should rely on the substantive provisions in the Bill.  

Division 2—OEI inspectors

Clause 192 - OEI inspectors—appointment

898.           Subclause (1) provides for the appointment of OEI inspectors. This may be done by the Regulator in writing. The person to be appointed must be one of the following:

-         a member of the staff of the Regulator;

-         an employee of the Commonwealth or of a Commonwealth authority or agency;

-         an employee of a State or Territory, or of an authority or agency of a State or Territory.

899.           Generally, the persons who may be appointed as an OEI inspector are members of the staff of the Regulator, employees of the Commonwealth or a Commonwealth authority, or employees of a State or Territory or an authority of a State or Territory.

900.           Subclause (2) gives an exception to the above. Despite the list of qualified personnel in subclause (1), the Regulator may appoint as OEI inspectors persons who are not described above if the appointment is for a period, and for the performance of functions, stated in the instrument of appointment.

901.           It is acknowledged that there may be circumstances where a person who is not a member of the staff of Regulator, an APS employee or an officer of a State or Territory may be appointed as a NOPSEMA inspector. However, such appointments are only able to be made for limited periods and limited functions, specified in the instrument of appointment, to enable persons with particular expertise to assist during inspections where required. Accordingly, this power may not be widely used. For example, it is unlikely that such persons would be appointed to perform the functions of an infringement officer. This power reflects the potential need for specialist expertise in assisting with relevant powers for the relevant infrastructure and is subject to the constraints of subclause (3).

902.           Subclause (3) addresses the requirement of the Regulator to be satisfied that the person to be appointed has the knowledge or experience necessary to properly exercise the powers of an OEI inspector. There is a qualification that any limitations as to powers or functions may be set out in an instrument under subclause (2) or a direction under clause 193. This ensures persons covered by subclauses (1) and (2) who lack relevant competencies are not appointed.

903.           Subclause (4) outlines that the Regulator if an employee of a State or Territory or an authority of a State or Territory is to be considered as an OEI inspector