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2010-2011-2012-2013
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
AMENDMENT (COMPLIANCE MEASURES NO. 2) BILL 2013
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Resources and Energy,
the Honourable Martin Ferguson AM, MP)
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
AMENDMENT (COMPLIANCE MEASURES NO. 2) BILL 2013
OUTLINE
The purpose of this Bill is to amend the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 (the Act) to strengthen the offshore petroleum regulatory regime,
through measures to continue the implementation of the Australian Government`s
response to the June 2010 Report of the Montara Commission of Inquiry (Montara
Report), and other policy and technical amendments. These measures aim to improve
compliance, improve environmental performance of offshore petroleum titleholders,
introduce an express polluter-pays obligation and strengthen financial assurance
arrangements.
The importance of effective offshore petroleum industry regulation has been
highlighted in recent years by three serious incidents: a blowout at the Montara
Wellhead Platform on 21 August 2009 off the northern coast of Western Australia;
the explosion of the Deepwater Horizon on 20 April 2010 in the Gulf of Mexico; and
the death of two drill workers on the Stena Clyde rig located in the Otway Basin off
the Victorian coast in October 2012.
The Montara Report, which was prepared by the Montara Commission of Inquiry
following the Montara incident, made several recommendations proposing
amendments to strengthen the offshore petroleum regulatory regime. To give effect
to those recommendations, the Australian Government undertook a review of
Commonwealth legislation applicable to offshore petroleum activities and the marine
environment (the Legislative Review).
The Bill will amend the Act to implement a number of the findings of the Legislative
Review, which aim to strengthen the implementation of the polluter pays` principle
in the offshore petroleum regulatory regime, and provide additional enforcement
powers to regulators and courts. The amendments in this Bill will:
Introduce alternative enforcement mechanisms (infringement notices, daily
penalties for continuing offences and civil penalty provisions, injunctions and
adverse publicity orders) into the offshore petroleum regulatory regime;
Enable inspectors appointed by the National Offshore Petroleum Safety and
Environmental Management Authority (NOPSEMA) to issue environmental
improvement notices and environmental prohibition notices to petroleum
titleholders to remove threats to the environment from offshore petroleum
operations;
Introduce a statutory duty on petroleum titleholders, in the event of an escape of
petroleum arising from operations in the titleholder`s title area, to stop, control
and clean-up the spill, carry out appropriate monitoring and remediate the
environment;
Provide an ability for the regulator to take the necessary action and recover costs
from the titleholder, in the event that the titleholder does not fulfil its statutory
duty; also provide that where a state or territory has incurred costs of clean-up or
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remediation of environmental damage within its jurisdiction resulting from a
release of petroleum in Commonwealth waters, the state or territory has a right to
recover those costs from the titleholder;
Improve the effectiveness of insurance requirements in the Act to ensure that
titleholders are in a financial position to comply with the new statutory polluter
pays duty and also with other extraordinary regulatory costs they might incur.
Alternative enforcement mechanisms
The introduction of alternative enforcement mechanisms into the offshore petroleum
regulatory regime will provide regulators and courts with a broader range of
enforcement tools that can be applied when a person has failed to comply with their
obligations under the Act. The Legislative Review concluded that the current
enforcement mechanisms, sanctions and penalties available under the Act are
insufficient to provide an effective and meaningful deterrent against non-compliance.
A combination of factors - including the complexity of the legislation, the technical
nature of the evidence pertaining to prosecutions, and the criminal standard of proof
applicable to court proceedings - have operated as impediments to effective
enforcement of the requirements of the Act.
The Legislative Review found that there is a strong need for a greater range of
enforcement mechanisms to be considered for inclusion in the offshore petroleum
regulatory regime, as a supplement or alternative to the existing criminal regime, in
order to encourage improved compliance outcomes. The Legislative Review
considered strong evidence that 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. 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. The introduction of infringement notices, daily penalties for
continuing offences and civil penalty provisions, injunctions and adverse publicity
orders into the Act will therefore ensure that the regulator and the courts have the
capacity to apply an appropriate and proportionate response to incidents of non-
compliance with the Act, in order to encourage improved compliance outcomes.
These amendments will also complement additional amendments being made to the
Act in a separate Bill that will introduce a civil penalty regime into the Act.
Environmental improvement notices and environmental prohibition notices
Under Schedule 3 to the Act, NOPSEMA inspectors currently have the ability to issue
OHS prohibition notices and improvement notices to persons where necessary in
order to remove or minimise risks to the occupational health and safety of any person.
The amendments in this Bill will insert new provisions to also enable NOPSEMA
inspectors to issue environmental prohibition notices and environmental improvement
notices to petroleum titleholders in order to remove threats to the environment. A
NOPSEMA inspector will have the ability to issue an environmental prohibition
notice, to require that a particular activity not be conducted, or not be conducted in a
specified manner, or that an offshore vessel or structure not be operated, if the
inspector determines there is an immediate and significant threat to the environment.
An environmental improvement notice will be able to be issued by a NOPSEMA
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inspector where there is a current contravention, or has been a contravention which is
likely to be repeated, of an environmental management law and, as a result, there is a
threat to the environment. The notice would require action to be taken by the
titleholder to remove that threat. Failure to comply with an environmental prohibition
notice or environmental improvement notice will be an offence, or a civil penalty may
apply for a failure to comply with an environmental improvement notice.
Application of the `polluter pays' principle
It is appropriate that, in the event of an escape of petroleum, the polluter is
responsible for ensuring that any damage as a result of the escape is minimised, and
for paying the costs associated with cleaning up the spill and remediating the
environment. The Legislative Review determined that, although the polluter pays`
principle is given effect to varying degrees in the Act, there is scope to clarify its
application, particularly as it relates to ensuring that the social, environmental and
economic impacts of a significant offshore petroleum incident are appropriately
addressed in the legislative regime.
The amendments in this Bill will strengthen and clarify the application of the polluter
pays` principle in the Act through the introduction of a statutory duty requiring
titleholders, in the event of an escape of petroleum occurring as a result of operations
within the title area, to stop, contain, control and clean up the spill, remediate the
environment and carry out appropriate environmental monitoring. This will include
the ability for the regulator (NOPSEMA or the Commonwealth Minister) to recover
from the titleholder costs incurred by them in cleaning up the spill, remediating the
environment and carrying out appropriate environmental monitoring if the titleholder
fails to comply with the statutory duty.
This duty of the titleholder and the ability of the regulator to take the necessary action
and recover costs in the event that the titleholder fails to perform its duty apply only
in Commonwealth waters. The Act cannot and does not either require or authorise a
titleholder to carry out any clean-up or remediation operations in areas that are within
state or Northern Territory jurisdiction. The amendments in this Bill do, however,
provide a right of action to a state or territory that has had petroleum originating from
a release in a Commonwealth title area pollute waters that are within state or territory
jurisdiction or places within the state or territory such as beaches or estuaries. The
new right of action will enable the state or territory to recover from the titleholder
their costs of clean-up and environmental remediation and environmental monitoring.
There is no fault element to this right of action. It is simply a right to recover costs
and expenses as a debt due to the state or territory. The right of action does not
extend to economic costs, which will remain subject to recovery under existing law.
The new right of action does not affect any other rights against the titleholder that a
state or territory or any other person would have available to them.
Financial assurance
The Bill will also amend the existing insurance provisions in the Act to clarify the
operation of those provisions, in order to support the application of the polluter pays`
principle in the offshore petroleum regulatory regime by reinforcing that the
obligation for managing operational risks rests with the titleholder. The amendments
will ensure that it is compulsory for a titleholder to maintain sufficient financial
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assurance to ensure that it can meet the costs of any expenses or liabilities arising in
connection with work done under the title, including expenses relating to the clean-up
or other remediation of the effects of an escape of petroleum.
These amendments collectively implement and address the matters raised in
Recommendations 95 and 96 of the Montara Report.
Other minor policy and technical amendments
This Bill will further improve OHS and environmental outcomes and streamline the
administration of the Act through additional amendments to:
Enable NOPSEMA to publish on its website improvement notices and prohibition
notices issued by NOPSEMA inspectors under Schedule 2A or 3 to the Act;
Enable matters relating to the service of documents under the Act or legislative
instruments to be provided for in regulations under the Act;
Enable an acting SES employee in the Department to act as the National Offshore
Petroleum Titles Administrator;
Enable administrative arrangements for taking eligible voluntary actions when
there is more than one registered holder of a title to be carried through into
legislative instruments under the Act;
Replace specific references to the Standing Council on Energy and Resources
with a more general description.
FINANCIAL IMPACT STATEMENT
The Bill has no financial impact.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
This 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.
Overview of the Bill
The Bill makes various amendments to the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 (the Act) to strengthen the offshore petroleum regulatory regime, in
order to improve compliance, occupational health and safety (OHS) and
environmental outcomes, and to streamline the administration of the Act. A number
of the amendments continue the work of the Australian Government to implement the
lessons learned from recent incidents in the offshore petroleum industry, including the
blowout at the Montara Wellhead platform on 21 August 2009 off the northern coast
of Western Australia and the explosion of the Deepwater Horizon on 20 April 2010 in
the Gulf of Mexico.
The principle amendments in the Bill will:
Strengthen and clarify the application of the polluter pays` principle in the
offshore petroleum regulatory regime, by imposing a statutory duty on petroleum
titleholders, in the event of an escape of petroleum arising from operations in the
titleholder`s title area, to stop, control and clean-up the escape of petroleum,
remediate damage to the environment caused by the escape, and undertake
environmental monitoring of the impacts of the escape; and
Provide the offshore petroleum regulator, the National Offshore Petroleum Safety
and Environmental Management Authority (NOPSEMA), and the courts with an
increased range of enforcement tools to encourage improved compliance by
persons with their obligations under the Act, and ensure that the response to
instances of non-compliance is appropriate and proportionate in relation to
specific breaches of the Act. The particular tools that will be inserted into the Act
by this Bill are infringement notices, daily penalties for continuing offences or
contraventions of continuing civil penalty provisions, injunctions, and adverse
publicity orders.
The Bill also includes additional amendments to:
Enable a NOPSEMA inspector to give an environmental prohibition notice or an
environmental improvement notice to a titleholder requiring action to remove
significant threats to the environment;
Enable NOPSEMA to publish on its website improvement notices and prohibition
notices issued by NOPSEMA inspectors under Schedule 2A (environment) or
Schedule 3 (OHS) to the Act;
Enable matters relating to the service of documents under the Act or legislative
instruments to be provided for in regulations under the Act;
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Enable an acting SES employee in the Department to act as the National Offshore
Petroleum Titles Administrator;
Enable administrative arrangements for taking eligible voluntary actions when
there is more than one registered holder of a title to be carried through into
legislative instruments under the Act;
Replace specific references to the Standing Council on Energy and Resources
with a more general description.
Human rights implications
This Bill engages the following human rights:
The right to work and rights in work;
The protection against arbitrary interference with privacy;
The right to a fair and public hearing;
The right to minimum guarantees in criminal proceedings.
The right to work and rights in work
The measures in this Bill to introduce alternative enforcement mechanisms into the
Act promote the right to work and rights in work, specifically the right to just and
favourable working conditions in article 7 of the International Covenant on Economic,
Social and Cultural Rights. The right to just and favourable conditions of work
encompasses a number of elements, including safe and healthy working conditions.
The introduction of measures such as injunctions and daily penalties for continuing
offences or contraventions of continuing civil penalty provisions encourages persons
to comply with their obligations under the Act, or return to a position of compliance if
the person is in breach, including obligations relating to occupational health and
safety.
For example, the measures in this Bill will enable the court to grant an injunction, on
application by an authorised person, to restrain a person from contravening a
provision that is made enforceable by the Bill, or to compel compliance with such a
provision. The provisions that are made enforceable by injunction in the Bill include
provisions that place OHS duties on persons, including facility operators and
employers, to ensure that risks to persons from operations at an offshore petroleum
facility are safe and without risk to health; the obligation to comply with OHS
compliance notices, such as do-not-disturb notices, prohibition notices and
improvement notices, which are given to persons by a NOPSEMA inspector to
require action to remove the threat to OHS; and the obligation to not interfere with
any equipment or device provided for the health, safety or welfare of members of the
workforce. Therefore, if a person is contravening any of these important health and
safety obligations, they can be required by the court to cease the contravention, and
thereby ensure that safe and healthy working conditions are provided for employees.
Similarly, the introduction of daily penalties for continuing contraventions of certain
provisions relating to OHS will encourage persons in breach of their obligations under
the Act in relation to health and safety to quickly remedy the non-compliance. For
example, a continuing failure to comply with an OHS prohibition notice or OHS
6
improvement notice may attract a daily penalty due to the amendments in this Bill.
These notices are given by NOPSEMA inspectors where activities that are or may be
carried out at a facility, or where contraventions by a person against a listed OHS law,
create threats to the health or safety of any person, and require action to remove the
threat. If a person fails to comply with the notice, the risks to employees will
continue; however the potential for a daily penalty (up to 60 penalty units per day for
an individual and 300 penalty units per day for a body corporate for a continuing
failure to comply with an OHS prohibition notice) will strongly encourage persons to
comply with the notice, and thereby remedy risks to health and safety and ensure that
safe and healthy working conditions are provided.
On the whole, the introduction of these alternative enforcement mechanisms will help
to promote a focus on safe and healthy working conditions in offshore petroleum
operations and ensure that, where persons are in breach of obligations relating to the
provision of safe and healthy working conditions, creating potential risks to health
and safety, those persons are encouraged or required to return to a position of
compliance.
The right to privacy and reputation
The amendments in Part 2 of Schedule 2 to this Bill that will require NOPSEMA to
publish prohibition notices and improvement notices given by a NOPSEMA inspector
under Schedule 2A (environment) or Schedule 3 (OHS) to the Act may engage the
right to privacy and reputation in Article 17 of the International Convention on Civil
and Political Rights (ICCPR), as there is a possibility that such notices may contain
personal information. Article 17 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 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.
1) Legitimate objective
The purpose of the amendments to require NOPSEMA to publish prohibition notices
and improvement notices is to enable lessons learned from inspections to be shared
with other members of the offshore petroleum industry, which will in turn assist those
companies to comply with regulatory requirements, and will also help to increase the
transparency of NOPSEMA`s operations. Publication of notices will enable lessons
to be shared by enabling companies to view and consider the content of notices, in
particular the types of activities in relation to which notices have been given due to
threats to OHS or the environment caused by those activities, and assess their own
activities against the activities described and, where necessary, implement measures
to improve and reduce potential risks caused by their operations. By assisting
companies to comply with regulatory requirements through the publication of notices,
potential threats to OHS and the environment can thereby be reduced or removed.
Given the high-hazard nature of the offshore petroleum industry and the potentially
serious consequences of incidents, the potential for the prevention of threats to OHS
and the environment as a result of these amendments is a highly desirable outcome.
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2) Reasonable, necessary and proportionate response
The amendments in Part 2 of Schedule 2 include a provision requiring that, if a notice
to be published does contain personal information (within the meaning of the Privacy
Act 1988), NOPSEMA must take such steps as are necessary in the circumstances to
ensure that the information is de-identified before the notice is published. Personal
information is de-identified if the information is no longer about an identifiable
individual or an individual who is reasonably identifiable. In practice, it would be
unusual for a circumstance to arise in which any personal information would not be
de-identified, or even removed, by NOPSEMA prior to publication of the notice in
accordance with this safeguard. In the majority of cases, the relevant information in
the notice to be published would generally describe particular activities undertaken at
offshore petroleum premises, such as petroleum facilities, threats to OHS or the
environment caused by those activities, and action required to remove those threats,
without the need to refer to particular persons or personal information.
The amendments will also apply only to notices that are given by a NOPSEMA
inspector after the commencement of the amendments, so that the requirement to
publish prohibition notices and improvement notices will not to be applied
retrospectively as it relates to personal information.
In addition to these safeguards, the use or disclosure of any information that is
personal information is subject to the Privacy Act 1988. Accordingly, the requirement
to publish prohibition notices and improvement notices pursuant to this provision is
reasonable, necessary and proportionate in the circumstances.
Given the legitimate objective of the amendments, and the safeguards that ensure the
amendments are reasonable, necessary and proportionate in the circumstance, the
amendments in Part 2 of Schedule 2 of this Bill are consistent with Australia`s human
rights obligations in relation to the right to privacy.
The right to a fair and public hearing
The amendments in Part 1 of Schedule 1 to this Bill engage the right to a fair and
public hearing in article 14 of the ICCPR through the creation of an infringement
notice scheme. Article 14 ensures that everyone shall be entitled to a fair and public
hearing by a competent, independent and impartial tribunal established by law. 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.
1) Legitimate objective
The ability to only seek criminal prosecution or application of a civil penalty creates a
potential barrier to appropriate enforcement of minor breaches and less serious
contraventions of the Act and regulations. For example, the regulator or the
Commonwealth Department of Public Prosecutions may determine that the cost of
undertaking court proceedings is not justifiable in relation to the level and nature of
the breach. In the absence of an appropriate alternative enforcement mechanism that
may be applied in these cases, such as the ability to issue an infringement notice, there
8
is a high risk that no enforcement action will be taken in relation to such minor or
technical breaches and contraventions.
The introduction of an infringement notice scheme into the Act will therefore enable
the regulator to respond quickly to an alleged contravention of the Act, and provide an
additional option for the regulator to enforce legislative requirements to in turn
encourage compliance by persons with all of their obligations under the Act,
including minor administrative or technical obligations. It will also enable the
regulator to respond in a manner proportionate to the level and seriousness of the
particular breach.
2) Reasonable, necessary and proportionate response
The Bill provides for infringement notices under the Act to be issued and enforced in
accordance with Part 5 of the proposed Regulatory Powers (Standard Provisions) Act
2013 (the Regulatory Powers Act). Under the Regulatory Powers Act, an
infringement officer will be able to issue an infringement notice for contraventions of
strict liability offences that are made enforceable under that Act by the provisions in
this Bill.
In accordance with the principles in the Guide to Framing Commonwealth Offences,
Infringement Notices and Enforcement Powers, infringement notices are proposed to
be applied by this Bill in relation to minor offences with strict liability only. It is
appropriate that more serious offences should be prosecuted in court, and are not
suitable for inclusion in an infringement notice scheme. Fault-based offences are also
not suitable, as proof of fault is often not a straightforward, objective assessment. In
order to determine the provisions in the Act that would be enforceable by an
infringement notice, each strict liability offence provision was therefore examined to
determine whether it would be appropriate to apply an infringement notice in relation
to a breach, based on the above principles. An additional key criterion was that an
enforcement officer, such as a NOPSEMA inspector, should easily be able to make an
assessment of innocence or guilt based on straightforward and objective criteria, for
example where there are clear-cut physical elements of the offence.
The following table lists the provisions that are proposed to be enforceable by an
infringement notice, which demonstrates the administrative and clear-cut nature of
those provisions:
Subsection A failure by a registered holder of a petroleum access authority to
249(2) give a written report about operations carried on in a block/s, where
the block/s are also the subject of a petroleum exploration permit,
petroleum retention lease, or petroleum production licence, to the
holder of the permit, lease or licence, within 30 days of the end of the
month during which the operations are carried on.
Subsection Failure by a titleholder to inform the National Offshore Petroleum
284(5) Titles Administrator (the Titles Administrator) of the discovery of
petroleum in the title area before the end of the 30 day period that
began on the day of completion of the well that resulted in the
discovery.
Subsection A failure to notify the Titles Administrator and NOPSEMA on
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286A(7) becoming a registered holder of a title, ceasing to be a registered
holder of a title, or where there is a change of contact details of a
registered holder of a title.
Subsection Failure by a party to an approved dealing to provide, as requested by
508(4) NOPTA, information about alterations in the interests or rights
existing in relation to the title.
Subsection Failure to comply with a written request from the Titles
509(4) Administrator to produce a document that relates to a transfer or
dealing for which approval is sought.
Subsection Failure by a titleholder to cause a copy of a direction that has
575(4) extended application to be displayed as required.
Subsection Failure by a titleholder to nominate a titleholder representative for the
602K(6) purposes of an inspection, and ensure that representative is present at
the time required in a notice given by a NOPSEMA inspector.
Subsection Failure to comply with a direction to keep accounts and records,
697(3) collect and retain cores, cuttings and samples, and/or give to the
Titles Administrator or a specified person such accounts, records,
cores, etc.
Subclause Failure by a facility operator to ensure there is an operator`s
6(3) of representative present at the facility, and that the name of the
Schedule 3 operator`s representative is displayed in a prominent place at the
facility.
Subclause Failure by an operator to give a report to NOPSEMA about an
82(9) of accident or dangerous occurrence.
Schedule 3
Subclause Failure by an operator to keep records of accidents and dangerous
83(4) of occurrences.
Schedule 3
The right of a person to a fair and public hearing by a competent, independent and
impartial tribunal is preserved by the Bill in its application of the Regulatory Powers
Act, as the provisions of that Act allow a person to elect to have the matter heard by a
court rather than pay the amount specified in the notice. Additionally, the Regulatory
Powers Act provides that this right must be stated in an infringement notice issued to
a person, ensuring that a person issued with an infringement notice is aware of their
right to have the matter heard by a court.
The Bill also ensures against arbitrariness or abuses of power through limitations as to
who can issue an infringement notice. Infringement notices may be issued by the
Chief Executive Officer (CEO) of NOPSEMA, the National Offshore Petroleum
Titles Administrator (the Titles Administrator) or a NOPSEMA inspector. The CEO
of NOPSEMA may delegate this function, but only to a member of the staff of
NOPSEMA, an employee of the Commonwealth or a Commonwealth authority, or an
employee of a State or of the Northern Territory (NT) or an authority of a State or the
NT. Similarly, the Titles Administrator may delegate the function only to an SES
employee or APS employee who holds or performs the duties of an Executive Level 2
position in the relevant Department, or an employee of a State or the NT.
Generally, the persons who may be appointed as a NOPSEMA inspector are members
of the staff of NOPSEMA, employees of the Commonwealth or a Commonwealth
10
authority, or employees of a State or of the NT or an authority of a State or the NT. It
is acknowledged, however, that a person who is not a member of the staff of
NOPSEMA, an APS employee or an officer of a State or the NT may be appointed as
a NOPSEMA inspector in certain circumstances. 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. It is unlikely that such persons would be appointed to
perform the functions of an infringement officer.
The selection of offences that may be enforced by an infringement notice and the
additional safeguards described above ensure that the power to issue an infringement
notice is reasonable, necessary and proportionate. The Bill ensures that relevant
courts have sufficient oversight to ensure against arbitrariness or abuses of power.
Regulatory functions and powers in the issuing of infringement notices are limited to
government officers and a person can elect to have the matter heard by a court.
Given the legitimate objective of the amendments, and the safeguards that ensure the
amendments are reasonable, necessary and proportionate in the circumstances, the
amendments in Part 1 of Schedule 1 to this Bill to introduce an infringement notice
scheme are consistent with Australia`s human rights obligations in relation to the right
to a fair and public hearing.
The right to minimum guarantees in criminal proceedings
New section 611G, to be inserted by item 1 of Schedule 1 to this Bill, will enable a
relevant chief executive (i.e. the CEO of NOPSEMA or the Secretary of the relevant
Department, as the case may be) to issue a signed certificate stating that they did not
allow further time for a person to pay a penalty stated in an infringement notice given
to the person, and that the penalty has not been paid within 28 days after the notice
was given, or that they did allow further time to pay the penalty and the penalty was
not paid within that further time period. In addition, the relevant chief executive may
issue a signed certificate stating that a specified infringement notice was withdrawn
on a day specified in the certificate. For the purposes of all proceedings, including
criminal proceedings, a document purporting to be a certificate must, unless the
contrary is established, to taken to be such a certificate and to have been properly
given. In addition, a certificate is taken to be prima facie evidence of the matters
stated in the certificate.
This would engage the right to minimum guarantees in criminal proceedings in article
14 of the ICCPR, insofar as that right relates to the law of evidence governing
examination of witnesses. In accordance with article 14, the right to cross-examine
prosecution witnesses would normally require evidence to be given in person, so that
the reliability and credibility of the witness can be tested. 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. For
example, evidence given other than in person, such as by way of written statement,
may not violate this right, provided that the reliability and credibility of the witness
giving the statement can still be tested.
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1) Legitimate objective
The purpose of this provision is to facilitate proof of the matters stated in the
evidentiary certificate, given that these relate to formal or technical matters of fact
that would be difficult to prove by adducing admissible evidence. This will ensure
that evidence of a failure to pay an amount stated in an infringement notice or of
withdrawal of the notice can be efficiently presented to the court in any criminal
proceedings for an alleged contravention of the offence provision that was the subject
of the unpaid or withdrawn notice.
2) Reasonable, necessary and proportionate response
The provision enables an evidentiary certificate to be issued by a relevant chief
executive; that is, the Secretary of the relevant Department, or the CEO of
NOPSEMA. Given the level of responsibility that needs to be exercised by persons in
those positions, there would be a very low risk in relation to the reliability and
credibility of the witness giving the certificate.
As an additional safeguard, the certificate is prima facie evidence of the matters stated
in the certificate only, and is not conclusive. This allows an opportunity for evidence
of contrary matters to be adduced, and there is nothing to prevent the relevant chief
executive appearing as a witness at trial to give further evidence if necessary. These
safeguards ensure that the ability for the relevant chief executive to issue an
evidentiary certificate in relation to the matters discussed above is reasonable,
necessary and proportionate.
Given the legitimate objective of the proposed provision, and the safeguards that
ensure the provision is reasonable, necessary and proportionate in the circumstances,
the amendments to insert new section 611G in item 1 of Schedule 1 to this Bill are
consistent with Australia`s human rights obligations in relation to the right to
minimum guarantees in criminal proceedings.
Conclusion
The Bill is compatible with human rights because, to the extent that it may limit
human rights, those limitations are reasonable, necessary and proportionate.
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OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
AMENDMENT (COMPLIANCE MEASURES NO. 2) BILL 2013
NOTES ON CLAUSES
Clause 1: Short title
Clause 1 is a formal provision specifying the short title of the Act.
Clause 2: Commencement
Schedule 1 to the Bill will commence at the later of the following:
(a) the start of the day after this Act receives the Royal Assent; and
(b) immediately after the commencement of Schedule 2 to the Offshore Petroleum
and Greenhouse Gas Storage Amendment (Compliance Measures) Act 2013.
Schedule 2 of that Act is linked to the commencement of the Regulatory Powers
(Standard Provisions) Act 2013 (the Regulatory Powers Act). Therefore this Schedule
1 similarly cannot commence until the commencement of the Regulatory Powers Act.
This is necessary because certain measures within this Schedule trigger the
application of the Regulatory Powers Act, or refer to provisions that will not be
inserted into the Offshore Petroleum and Greenhouse Gas Storage Act 2006 until the
commencement of Schedule 2 to the Offshore Petroleum and Greenhouse Gas
Storage Amendment (Compliance Measures) Act 2013.
Schedule 2 to the Bill will commence at the later of the following:
(a) the start of the day this Act receives the Royal Assent; and
(b) immediately after the commencement of Schedule 1 to the Offshore Petroleum
and Greenhouse Gas Storage Amendment (Compliance Measures) Act 2013.
Schedule 1 to that Act is linked to the commencement of the Regulatory Powers Act.
Therefore this Schedule 2 similarly cannot commence until the commencement of the
Regulatory Powers Act. This is necessary because Schedule 2 to this Bill contains
amendments to provisions of the Offshore Petroleum and Greenhouse Gas Storage
Act 2006, including Schedule 2A to that Act, which will not be inserted into that Act
until the commencement of Schedule 1 to the Offshore Petroleum and Greenhouse
Gas Storage Amendment (Compliance Measures) Act 2013.
The following aspects of the Bill will commence on a day or days to be fixed by
Proclamation. However, if any of the provision(s) do not commence within the period
of 6 months beginning on the day this Act receives the Royal Assent, they commence
on the day after the end of that period:
Schedule 3, Part 1
Schedule 4, Part 1
Schedule 4, items 15 to 19
Schedule 4, item 22
Part 1 of Schedule 3 is to commence by Proclamation to allow time to make necessary
changes to regulations under the Offshore Petroleum and Greenhouse Gas Storage
13
Act 2006 to give full effect to the amendments in that Part, and to allow time for
registered holders of petroleum titles to ensure they have sufficient financial
assurance arrangements in place as required by the amendments in that Schedule.
Part 1 of Schedule 4 is to commence by Proclamation to allow time to make necessary
changes to regulations under the Offshore Petroleum and Greenhouse Gas Storage
Act 2006 to include service of documents provisions in those regulations. The
existing service of documents provisions in the Act will be repealed by the
amendments in this Part - see item 5 of Part 1 of Schedule 4.
Items 15 to 19 and item 22 of Schedule 4 will commence by Proclamation to allow
time to inform titleholders of the amendments that will be made by those items, and in
particular to enable titleholders who have made existing nominations under section
775B or 775C of the Act to make any consequential changes to their nominations
prior to commencement if necessary - see further discussion in relation to those items
below.
The following aspects of the Bill will commence the day after this Act receives the
Royal Assent:
Schedule 3, Parts 2 and 3
Schedule 4, Part 2
Schedule 4, items 20 and 21
Schedule 4, item 23
Schedule 4, Part 4
Clause 3: Schedule(s)
This clause gives effect to the provisions in the Schedules to this Bill.
14
Schedule 1 - Compliance measures
The amendments in this Schedule will introduce four new alternative enforcement
mechanisms into the Act:
Infringement notices
Injunctions
Adverse publicity orders
Cumulative penalties for continuing offences
An independent legislative review conducted of the Act and regulations concluded
that the current enforcement mechanisms, sanctions and penalties available under the
Act are insufficient to provide an effective and meaningful deterrent against
non-compliance. A combination of factors - including the complexity of the
legislation, the technical nature of the evidence pertaining to prosecutions, and the
criminal standard of proof applicable to court proceedings - have operated as
impediments to effective enforcement of the requirements of the Act.
In addition, the review found that there is a strong need for a greater and graduated
range of enforcement mechanisms to be considered for inclusion in the offshore
petroleum regulatory regime, as a supplement or alternative to the existing criminal
regime, in order to encourage improved compliance outcomes. The review
considered strong evidence that 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.
Non-monetary enforcement mechanisms, such as injunctions and adverse publicity
orders can be 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 such as the offshore oil and gas 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.
The introduction of the abovementioned alternative enforcement tools into the Act
will therefore ensure that the regulator and the courts have the capacity to apply an
appropriate and proportionate response to incidents of non-compliance with the Act,
in order to encourage improved compliance outcomes.
These amendments complement additional amendments being made to the Act in a
previous Bill that introduced a civil penalty regime into the Act.
15
Schedule 1, Part 1 - Infringement notices, injunctions and adverse
publicity orders
Division 1: Amendments
Item 1: At the end of Part 6.5
Infringement notices
Item 1 inserts a new Division 5 which introduces the ability for the regulator to issue
infringement notices for contraventions of selected provisions of the Act, and
provides the power to make regulations to the same effect - see new paragraph
790A(ab) inserted by item 3 of Schedule 1. It enables the infringement notices to be
enforced in accordance with Part 5 of the Regulatory Powers Act.
Only providing an ability to seek criminal prosecution or seeking application of a civil
penalty in a court creates a potential barrier to the pursuit of appropriate and effective
enforcement of minor breaches and less serious contraventions of the Act and
regulations. For example, the regulator or the Commonwealth Department of Public
Prosecutions (CDPP) may determine that the cost of undertaking court proceedings is
not justifiable in relation to the level and nature of the breach. In the absence of an
appropriate alternative enforcement mechanism that may be applied in these cases,
such as the ability to issue an infringement notice, there is a high risk that no
enforcement action will be taken in relation to such minor breaches and
contraventions therefore reducing the likelihood of overall compliance.
It is considered that the introduction of an infringement notice scheme into the Act
will enable the regulator to respond quickly to an alleged contravention of the Act,
and provide an additional option for the regulator to enforce legislative requirements
to in turn encourage compliance by persons with all of their obligations under the Act,
including minor administrative or technical obligations. It will also enable the
regulator to respond in a manner proportionate to the level and seriousness of the
particular breach.
In accordance with the principles in the Guide to Framing Commonwealth Offences,
Infringement Notices and Enforcement Powers, infringement notices are proposed to
be applied to minor offences with strict liability only. It is acknowledged that it is
appropriate that more serious offences should be prosecuted in court, and are not
suitable for inclusion in an infringement notice scheme. Fault-based offences are also
not suitable, as proof of fault is often not a straightforward, objective assessment. In
developing the infringement notice scheme for inclusion in the Act, each of the strict
liability offence provisions in the Act was individually examined to determine
whether it would be appropriate to apply an infringement notice in relation to a
breach, based on the above principles. An additional key criterion was that an
enforcement officer, such as a NOPSEMA inspector, should easily be able to make an
assessment of innocence or guilt based on straightforward and objective criteria, for
example where there are clear-cut physical elements of the offence.
The amendments in this Part also trigger the application of Part 5 of the Regulatory
Powers (Standard Provisions) Act 2013 (the Regulatory Powers Act), which creates a
16
framework for the use of infringement notices where an infringement officer
reasonably believes that a provision has been contravened. The Regulatory Powers
Act incorporates the standard principle that if the person to whom an infringement
notice has been issued in relation to an alleged contravention pays the amount in the
notice in the time stated within the notice, the person is not regarded as having
admitted guilt or liability for the alleged contravention, and the person is not regarded
as having been convicted of the offence. Additionally, any liability for the alleged
contravention is discharged, and the person may not be prosecuted in a court for the
alleged contravention, or proceedings seeking a civil penalty order may not be
brought in relation to that alleged contravention (if applicable).
The Regulatory Powers Act also sets out the penalty to be applied in an infringement
notice. The penalty must be the lesser of: (a) one-fifth of the maximum penalty that a
court could impose for a contravention of the relevant provision and (b) 12 penalty
units for an individual or 60 penalty units for a body corporate. This is in accordance
with the principles set out in the Guide to Framing Commonwealth Offences,
Infringement Notices and Enforcement Powers, and as such this Bill will not provide
for any alternative penalties for breaches of infringement notice provisions.
In addition, the Regulatory Powers Act provides for an infringement notice to be
given in relation to continuing offences. An infringement officer will have the ability
to give an infringement notice relating to multiple contraventions of a single provision
if the provision requires the person to do a thing within a particular period or before a
particular time, the person fails or refuses to do so, and the failure or refusal occurs on
more than one day. Further provisions relating to cumulative penalties for continuing
offences are inserted by Part 2 of Schedule 1 to this Bill - see discussion below.
The Regulatory Powers Act also provides for matters including: the period of time
following an alleged contravention within which an infringement notice must be
given; the matters that must be dealt with in an infringement notice; extension of time
to pay the amount in an infringement notice; and the process for withdrawal of an
infringement notice.
Section 611E Infringement notices
A new section 611E Infringement notices lists the existing provisions in the Act
which will be subject to an infringement notice. In accordance with the principles in
the Guide to Framing Commonwealth Offences, Infringement Notices and
Enforcement Powers, infringement notices are proposed to be applied by this Bill to
minor offences with strict liability only. As already stated above, it is acknowledged
that it is appropriate that more serious offences should be prosecuted in court, and
such offences are not suitable for inclusion in an infringement notice scheme. Fault-
based offences are also not suitable, as proof of fault is often not a straightforward,
objective assessment which can be made by anyone other than a court of law. In
order to determine the provisions in the Act that would be enforceable by an
infringement notice, each strict liability offence provision was therefore examined to
determine whether it would be appropriate to apply an infringement notice in relation
to a breach, based on the above principles. An additional key criterion was that an
enforcement officer, such as a NOPSEMA inspector, should easily be able to make an
17
assessment of innocence or guilt based on straightforward and objective criteria, for
example where there are clear-cut physical elements of the offence.
On the basis of this analysis, the following strict liability offences will be enforceable
by infringement notice:
Subsection A failure by a registered holder of a petroleum access authority to
249(2) give a written report about operations carried on in a block/s, where
the block/s are also the subject of a petroleum exploration permit,
petroleum retention lease, or petroleum production licence, to the
holder of the permit, lease or licence, within 30 days of the end of the
month during which the operations are carried on.
Subsection Failure by a titleholder to inform the National Offshore Petroleum
284(5) Titles Administrator (the Titles Administrator) of the discovery of
petroleum in the title area before the end of the 30 day period that
began on the day of completion of the well that resulted in the
discovery.
Subsection A failure to notify the Titles Administrator and NOPSEMA on
286A(7) becoming a registered holder of a title, ceasing to be a registered
holder of a title, or where there is a change of contact details of a
registered holder of a title.
Subsection Failure by a party to an approved dealing to provide, as requested by
508(4) NOPTA, information about alterations in the interests or rights
existing in relation to the title.
Subsection Failure to comply with a written request from the Titles
509(4) Administrator to produce a document that relates to a transfer or
dealing for which approval is sought.
Subsection Failure by a titleholder to cause a copy of a direction that has
575(4) extended application to be displayed as required.
Subsection Failure by a titleholder to nominate a titleholder representative for the
602K(6) purposes of an inspection, and ensure that representative is present at
the time required in a notice given by a NOPSEMA inspector.
Subsection Failure to comply with a direction to keep accounts and records,
697(3) collect and retain cores, cuttings and samples, and/or give to the
Titles Administrator or a specified person such accounts, records,
cores, etc.
Subclause Failure by a facility operator to ensure there is an operator`s
6(3) of representative present at the facility, and that the name of the
Schedule 3 operator`s representative is displayed in a prominent place at the
facility.
Subclause Failure by an operator to give a report to NOPSEMA about an
82(9) of accident or dangerous occurrence.
Schedule 3
Subclause Failure by an operator to keep records of accidents and dangerous
83(4) of occurrences.
Schedule 3
The new section 611E also specifies the persons who would be able to issue an
infringement notice, ie the Chief Executive Officer (CEO) of NOPSEMA, the Titles
18
Administrator, or a NOPSEMA inspector, depending on the provision that has been
breached.
This item inserts a new subsection 611E(6). This subsection gives an infringement
officer the ability to give a single infringement notice relating to multiple
contraventions of a single provision if the provision requires the person to do a thing
within a particular period or before a particular time, the person fails or refuses to do
so, and the failure or refusal occurs on more than one day. A single infringement
notice may also be given in relation to alleged contraventions of 2 or more provisions.
This will be despite subsection 107(3) of the Regulatory Powers Act - the reason for
the departure from the standard being that the remoteness of offshore operations
makes it a virtual impossibility to attend on consecutive days in order to issue
individual infringement notices for each day that the offence continues. NOPSEMA
inspectors only attend on offshore facilities or premises, for the purposes of an
inspection, as a result of well-planned arrangements with facility operators. The same
policy reasoning applies to the departure stated in new section 611F of this same item.
Also in new section 611E, the relevant chief executive` is defined as the CEO of
NOPSEMA or the Secretary for notices issued in relation to NOPSEMA or NOPTA
functions respectively. The relevant chief executive is defined for the purposes of
standard provisions in Part 5 of the Regulatory Powers Act which provide for requests
to be made for extensions of time to make infringement notice payments or
consideration of withdrawal of the infringement notice.
In the case of the Secretary, delegation of these functions is permitted on the policy
basis that there are SES officials within the Department in possession of the relevant
expertise necessary and seniority required to make such decisions.
Noting that regulatory functions in issuing infringement notices may be conceivably
performed by non-public servants (in that there may be NOPSEMA inspectors
appointed who are not Commonwealth or State/Northern Territory employees), this
ability is provided on the basis that the delegation is legislatively restricted to persons
of suitable seniority and expertise and the person outside the Australian Public
Service is subject to full public sector accountability. Paragraph 6.4.2 of the Guide to
Framing Commonwealth Offences, Infringement Notices and Enforcement Powers is
noted, which sets out the relevant legislation, to which any infringement officers
should be made subject either through legislation or the terms of the contract for
service. Delegation in the offshore petroleum regime occurs in limited circumstances
and the non-public servant officer is appointed for a specified limited period and
limited to performing express functions under the NOPSEMA inspector appointment
arrangements as provided for in the Act, together with the CEO of NOPSEMA`s
satisfaction that the person in question has suitable training or experience to properly
exercise the powers of a NOPSEMA inspector.
Section 611G Evidentiary matters
New section 611G allows the relevant chief executive to issue a signed certificate in
relation to matters such as whether he or she allowed further time for payment of the
penalty of an offence or whether an infringement notice was withdrawn. This is not a
legislative instrument, however it may be used in court proceedings to provide the
19
court with evidence. Part 5.3 of the Guide to Framing Commonwealth Offences,
Infringement Notices and Enforcement Powers limits use of these certificates, which
is the basis for the provision specifying that certificates issued under section 611G are
prima facie evidence of the matters stated in it and allow for an opportunity for
evidence of contrary matters to be addressed.
Injunctions
This item also inserts a new Division 6 providing the ability for a court to grant an
injunction, on application by an authorised person, to restrain a person from
contravening certain provisions of the Act, or to compel compliance with those
provisions. Item 1 inserts a new Division 6 which provides for the issue of injunctions
to enforce compliance with this Act, relying on the framework set out in Part 7 of the
Regulatory Powers Act.
The introduction of the ability for a court to grant an injunction in relation to
contraventions of certain provisions of the Act will ensure that persons who are
failing to meet their regulatory obligations can be required to return to a position of
compliance, in addition or as an alternative to the application of any financial penalty
for the contravention. This measure thereby also aims to encourage future
behavioural change; for example, an injunction against a company whose breach is
due to poor compliance programs and internal controls will encourage that company
to address those internal deficiencies, and thereby reduce the risk of future non-
compliance.
This Bill provides for injunctions to be granted in relation to all offence and civil
penalty provisions under the Act, and two additional regulatory obligations for which
a contravention is not an offence (i.e. requirements relating to the timing of
commencement of works or operations in section 568 and the requirement to maintain
sufficient financial assurance in section 571).
Part 7 of the Regulatory Powers Act provides for a court to grant an injunction, on
application by an authorised person, to restrain a person from contravening a
provision that is enforceable under that Part, or to compel compliance with such a
provision. Part 7 of the Regulatory Powers Act, among other things, provides for the
grant of interim injunctions, in addition to the grant of final injunctions.
To ensure the broadest possible application, the amendments are drafted such that an
injunction can be granted in relation to any conduct or omission that would constitute
an offence or contravention of a civil penalty provision under the Act. In addition,
two additional regulatory obligations, contravention of which is not an offence, would
be made enforceable under Part 7 of the Regulatory Powers Act. These provisions
are: s568, which requires works or operations under certain petroleum titles to be
commenced within a certain period of time in specified circumstances; and s571,
which requires petroleum titleholders to maintain sufficient financial assurance for the
costs of expenses and liabilities arising from carrying out work under the title and
complying with legislative obligations. The ability to grant an injunction in relation
to each of these provisions will ensure that persons who are failing to meet the
requirements of the Act can be compelled to comply with their legislative obligations,
whether or not a failure to comply is an offence or contravention of a civil penalty
provision.
20
Section 611J Injunctions
New section 611J sets out in a table the authorised persons who would be able to
apply to the court seeking an injunction, being the responsible Commonwealth
Minister, the Secretary of the Department of the responsible Commonwealth Minister,
the Chief Executive Officer of NOPSEMA, or the Titles Administrator, depending on
the specified enforceable provision in relation to which an injunction is sought.
As contained and explained under Item 3 below, a provision of a legislative
instrument is also enforceable by injunction under Part 7 of the Regulatory Powers
Act.
Adverse publicity orders
Item 1 then goes on to insert a new Division 7 which provides for adverse publicity
orders to be made by a court.
The potential for an adverse publicity order to be granted in addition or as an
alternative to a financial penalty is being inserted into the Act to encourage
compliance by corporations with their regulatory obligations. Noting that the
majority of corporations operating within the offshore petroleum industry are
international and publicly listed companies which highly value their business
reputation and social licence to operate, the mere availability of adverse publicity
orders can have a significant impact in terms of encouraging compliance and creating
a deterrent effect. The ability to seek an adverse publicity order will also enable the
regulator to seek a penalty that is tailored to the nature of the contravention,
particularly where there are broader social or environmental impacts of incidents of
non-compliance.
Section 611L Adverse publicity orders
New section 611L which enables a court to make an adverse publicity order is based
largely on similar provisions in other Commonwealth legislation, such as the
Competition and Consumer Act 2010 and the Work Health and Safety Act 2011.
A court will be able to make an adverse publicity order if it finds a body corporate
guilty of an offence against the Act or regulations (whether or not the court convicts
the body corporate of the offence), or an offence against section 6 of the Crimes Act
1914 (in other words, whether or not the court convicts the body corporate of the
offence) in relation to an offence against the Act or regulations, or if it orders a body
corporate to pay a civil penalty for a contravention of a provision of the Act or
regulations.
The adverse publicity order would be able to be made on application of the person
prosecuting the offence or taking the action to obtain a civil penalty order, and could
be made in addition to any penalty that may be imposed or any other action that may
be taken in relation to the offence or contravention. A time limit of six years after the
commission of the offence or contravention of the civil penalty provision would be
imposed on the ability to apply for an adverse publicity order.
21
An adverse publicity order would require a person to do either or both of the
following within a specified period:
a) To publicise the offence or civil penalty order, its consequences, the penalty
imposed and any other related matter;
b) To notify a specified person or class of persons (such as a group of people
who were particularly impacted as a result of the contravention) of the offence
or civil penalty order, its consequence, the penalty imposed and any other
related matter.
The adverse publicity order may also require the body corporate to give NOPSEMA
or the Titles Administrator evidence that the required actions have been taken by the
body corporate in accordance with the adverse publicity order. Whether the evidence
will be given to NOPSEMA or the Titles Administrator will depend on the nature of
the breach or contravention in relation to which the adverse publicity order is made;
for example, if an adverse publicity order is made in relation to a breach of an OHS
requirement, the evidence would be required to be given to NOPSEMA, as the
regulator of OHS under the Act. If the body corporate fails to give evidence,
NOPSEMA or the Titles Administrator may take the action or actions specified in the
adverse publicity order. Alternatively, if NOPSEMA or the Titles Administrator are
not satisfied that the body corporate has taken the actions specified in the adverse
publicity order in accordance with the adverse publicity order, NOPSEMA or the
Titles Administrator may apply to a court for an order authorising them, or a person
authorised by them, to take the action specified in the adverse publicity order. If
NOPSEMA or the Titles Administrator do take such action, they will be entitled to
recover from the body corporate, by action in a court, an amount in relation to the
reasonable expenses of taking the action.
As noted above, the proposed amendments would specify that an adverse publicity
order may only be made in relation to a body corporate. This is in accordance with
the Guide to Framing Commonwealth Offences, Infringement Notices and
Enforcement Powers, which states that non-monetary penalties such as adverse
publicity orders may be more effective in the context of corporate crime. In most
cases, the requirements of the Act apply in relation to large corporations which
jealously guard their reputation and for whom social licence to operate is important,
making it appropriate to apply adverse publicity orders in relation to bodies corporate
under the Act.
New subsection 611L(7) is included to assist readers, as such an authorisation is not a
legislative instrument within the meaning of section 5 of the Legislative Instruments
Act 2003.
Item 2: Subsection 675(1)
This item inserts a reference to the ability to issue evidentiary certificates in relation
to infringement notices (new section 611G) against the exceptions listed in existing
section 675 in the CEO of NOPSEMA`s ability to delegate his or her functions or
powers.
22
Item 3: After paragraph 790A(a)
Existing section 790A allows the regulations to make a provision of a regulation a
civil penalty provision. This item extends this section so that:
- civil penalties in the regulations may be made a continuing penalty provision;
- injunctions, as provided for in the new provisions in the Act, may be sought
for matters contained in the regulations, and
- to enable infringement notices arrangements to be implemented in the
regulations as well.
The ability to seek up to 50 penalty units` for each day on which a contravention of a
civil penalty provision occurs in the regulations may on the face of it appear to create
the potential for a significant cumulative penalty in the context of a contravention of
regulations. However, it is considered that this maximum daily rate is justified on the
grounds that, in a high hazard regime such as this, the conduct and consequences
associated with a contravention of a civil penalty provision are potentially extremely
serious, particularly when related to OHS or environmental matters, and therefore
warrant application of a penalty high enough to provide sufficient disincentive to
secure swift compliance. In addition, existing section 790 of the Act allows for a
maximum fine of 100 penalty units for each day on which an offence against the
regulations occurs. The amount proposed for a continuing contravention of a civil
penalty provision in regulations is lower than this amount, which has previously been
approved by the Parliament.
Division 2: Application
Item 10: Application
This item contains an application provision which ensures that the new injunctions
provisions will only apply in relation to conduct that a person has engaged in, or a
refusal or a failure by a person to do a thing, on or after the commencement of the
relevant amendments. In other words the new injunctions provisions will not be
retrospectively applied to conduct.
This item also contains application provisions which ensure that the new provisions
enabling the making of an adverse publicity order or issuing of an infringement notice
will only apply in relation to an offence or contravention committed against the Act or
regulations on or after the commencement of the relevant amendments. In other words
the new adverse publicity order and infringement notice provisions will not be
retrospectively applied to conduct.
Schedule 1, Part 2 - Continuing offences and civil penalty provisions
This Part specifies daily penalties that may apply for a continuing offence or
continuing contravention of a civil penalty provision under the Act.
The purpose of introducing daily penalties for continuing contraventions of the Act is
to encourage persons to promptly rectify breaches and return to a position of
23
compliance with their regulatory obligations. Given the high investment costs and
potential profits associated with offshore petroleum operations, strong financial
penalties are likely to be one of the most significant methods to deter non-compliance
with the Act. 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.
Certain offence provisions in the Act are automatically deemed to be continuing
offences due to the operation and application of section 4K of the Crimes Act 1914,
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 Regulatory Powers Act, 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.
In some cases, provisions that are not automatically continuing offences by virtue of
the Crimes Act 1914 or continuing civil penalty provisions by virtue of the Regulatory
Powers Act 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.
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, Infringement Notices and
Enforcement Powers, 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
Telecommunications Act 1997, which was considered during the development of these
amendments.
It is acknowledged that that the Guide to Framing Commonwealth Offences,
Infringement Notices and Enforcement Powers sets 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 Act or more than 50 penalty units in the regulations. It is considered that a
potential departure, should the offence continue for a certain number of days, from the
Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement
Powers 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 OHS or environmental matters, and therefore
24
warrant application of a penalty high enough to provide sufficient disincentive to
secure swift compliance.
Items 11-13: section 227
These items relate collectively to an offence, triggered by a failure to comply with a
direction to vary aspects of a pipeline, committed under s227.
Subsection (5) is expressly noted as a continuing offence under section 4K of the
Crimes Act 1914 with a maximum penalty for each day that an offence under
subsection (5) continues set at 10% of the maximum penalty that can be imposed in
respect of that offence.
Item 14: At the end of section 228
Section 228 makes it an offence for a pipeline licensee to cease to operate a pipeline.
A pipeline licensee may also be liable for a civil penalty for ceasing to operate the
pipeline.
Section 228 contains offence and civil penalty provisions that are not automatically
continuing offence and civil penalty provisions by virtue of application of the Crimes
Act 1914 and Regulatory Powers Act respectively, however the subsections inserted
by this item will make this provision a continuing offence/continuing civil penalty
provision, with a maximum penalty for each day that non-compliance with
requirements continues set at 10% of the maximum penalty that can be imposed in
respect of that offence or civil penalty provision.
This amendment is made because the application of a daily penalty for each additional
day that the pipeline licensee does not operate the pipeline provides a financial
incentive for the licensee to return to compliance.
Items 15-18: section 249
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to report about operations undertaken under a petroleum access authority,
committed under s249.
Subsections (2) and (4) are expressly and respectively noted as a continuing offence
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of that offence or civil penalty provision.
Items 19-22: section 284
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to report about a discovery of petroleum, committed under s284.
Subsections (5) and (7) are expressly and respectively noted as a continuing offence
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
25
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of that offence or civil penalty provision.
Items 23-26: section 286A
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to provide required titleholder contact details, committed under s286A.
Subsections (7) and (8A) are expressly and respectively noted as a continuing offence
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of that offence or civil penalty provision.
Items 27-28: section 507
These items relate collectively to offence and civil penalty provisions, triggered by an
applicant`s failure to provide required information as requested by the Titles
Administrator, committed under s507.
Subsections (4) and (5A) are expressly and respectively noted as a continuing offence
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of that offence or civil penalty provision.
Items 29-33: section 508
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to provide required information as requested by the Titles Administrator in
relation to a dealing relating to a title, committed under s508.
Subsections (4) and (5A) are expressly and respectively noted as a continuing offence
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of that offence or civil penalty provision.
Items 34-38: section 509
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to produce a document as requested by the Titles Administrator in relation to a
dealing relating to a title, committed under s509.
Subsections (4) and (6A) are expressly and respectively noted as a continuing offence
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of that offence or civil penalty provision.
26
Items 39-42: section 575
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to comply with requirements in relation to a direction that has an extended
application, committed under s575. Section 575 applies when a direction has been
given to a titleholder by NOPSEMA or the responsible Commonwealth Minister,
under the general power of those entities to give directions, and the direction also
applies to another person or persons. Under section 575, it is an offence for the
titleholder to fail to give a copy of the direction to the other person or to display a
copy of the direction at a prominent place in the offshore area. A titleholder may also
be liable to a civil penalty for a failure to meet the requirements of section 575.
Section 575 contains offence and civil penalty provisions that are not automatically
continuing offence and civil penalty provisions by virtue of application of the Crimes
Act 1914 and Regulatory Powers Act respectively, however the subsections inserted
by this item will make this provision a continuing offence/continuing civil penalty
provision, with a maximum penalty for each day that non-compliance with
requirements continues set at 10% of the maximum penalty that can be imposed in
respect of that offence or civil penalty provision.
This amendment is made because if a titleholder has not complied with this
requirement, it is important that they do so as soon as possible, to enable the other
person/s to become aware of and comply with the direction. The potential for
application of a daily penalty will therefore provide a disincentive against continuing
non-compliance.
Item 43: At the end of section 576
Section 576 provides that it is an offence, or that a person may be liable to a civil
penalty, for failure to comply with a direction given by NOPSEMA or the responsible
Commonwealth Minister under the general power of those entities to give directions.
Section 576 contains offence and civil penalty provisions that are not automatically
continuing offence and civil penalty provisions by virtue of application of the Crimes
Act 1914 and Regulatory Powers Act respectively, however the subsections inserted
by this item will make this provision a continuing offence/continuing civil penalty
provision, with a maximum penalty for each day that non-compliance with
requirements continues set at 10% of the maximum penalty that can be imposed in
respect of that offence or civil penalty provision.
This amendment is made because depending on the nature of the direction, there may
be clear cases of continuing misconduct over the course of one or more days
following the initial breach. When this is the case, the application of a daily penalty
would assist in deterring continued non-compliance.
Item 44: At the end of section 576D
This item relates to two offences and a civil penalty provision, triggered by a failure
to comply with a significant incidents direction, committed under s576D.
27
Subsections (2) & (4) and (5) are expressly and respectively noted as a continuing
offences under section 4K of the Crimes Act 1914 and a continuing civil penalty
provision under section 96 of the Regulatory Powers Act, with a maximum penalty
for each day that non-compliance with requirements continues set at 10% of the
maximum penalty that can be imposed in respect of those offences or the civil penalty
provision.
Item 45: After subsection 587B(5)
This item relates to two offences and a civil penalty provision, triggered by a failure
to comply with a remedial direction, committed under s587B.
Subsections (2) & (4) and (5) are expressly and respectively noted as a continuing
offences under section 4K of the Crimes Act 1914 and a continuing civil penalty
provision under section 96 of the Regulatory Powers Act, with a maximum penalty
for each day that non-compliance with requirements continues set at 10% of the
maximum penalty that can be imposed in respect of those offences or the civil penalty
provision.
Item 46 - At the end of Division 4 of Part 6.5
Item 46 inserts a new section 611C into the Act to support references in the
amendments made by this Part to contraventions of civil penalty provisions. In many
cases, the civil penalty provision referred to as having been contravened in the new
provision that provides for a daily civil penalty actually states that a person is liable to
a civil penalty for a contravention or breach of another provision, which contains a
conduct rule. For example, new subsection 587B(5B), inserted by item 45, provides
for the imposition of a daily penalty for a contravention of subsection 587B(5), but
subsection 587B(5) itself actually states that a person is liable to a civil penalty if the
person contravenes subsection 587B(1).
For this and similar provisions, as a result of new section 611C, a person will be taken
to have contravened the civil penalty provision mentioned in the new provision
providing for a daily penalty if the person has contravened or breached the
requirement of the other provision mentioned in that civil penalty provision.
Continuing with the previous example, therefore, a person will be taken to have
contravened subsection 587B(5), as mentioned in new subsection 587B(5B), if the
person has contravened or breached subsection 587B(1).
Items 47-50: section 697
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to comply with a direction issued by the Titles Administrator in relation to data
management matters, committed under s697. Under paragraph 697(2)(c), the Titles
Administrator may direct a person to give to the Titles Administrator or another
person such reports, returns, documents, cores, cuttings and samples as are specified
in the direction. It is an offence for a person to fail to comply with such a direction,
or the person may be a liable for a civil penalty for a failure to comply.
28
Section 697 contains offence and civil penalty provisions that are not automatically
continuing offence and civil penalty provisions by virtue of application of the Crimes
Act 1914 and Regulatory Powers Act respectively, however the subsections inserted
by this item will make this provision a continuing offence/continuing civil penalty
provision, with a maximum penalty for each day that non-compliance with
requirements continues set at 10% of the maximum penalty that can be imposed in
respect of that offence or civil penalty provision.
This amendment is made to make this a continuing offence and a continuing civil
penalty provision in order to apply a daily penalty, in order to encourage a person to
comply as soon as possible following an initial contravention.
Items 51-52: section 699
These items relate collectively to offence and civil penalty provisions, triggered by a
failure to comply with a notice given by the Titles Administrator or a NOPSEMA
inspector to provide information or a document to the Titles Administrator or a
NOPSEMA inspector under paragraphs 699(2)(a)-(c), committed under s699.
Subsections (5) and (5A) are expressly and respectively noted as a continuing offence
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of that offence or civil penalty provision.
Paragraphs 699(2)(d)-(e) are excluded from this item as they relate to appearing to
provide evidence before the Titles Administrator or a NOPSEMA inspector, a
contravention not deemed appropriate for a continuing offence or civil penalty
provision.
Item 53: After subsection 780F(6)
Under section 780F a person commits an offence if they have been issued with an
identity card for the purpose of conducting inspections in relation to an inquiry into a
significant offshore incident, and the person does not immediately return the identity
card to the Secretary or another person specified by the Secretary on completion of
the person`s duties.
Section 780F contains an offence that is arguably not an automatically continuing
offence by virtue of application of the Crimes Act 1914, however the subsections
inserted by this item will, for the avoidance of doubt, make this provision a continuing
offence provision, with a maximum penalty for each day that non-compliance with
requirements continues set at 10% of the maximum penalty that can be imposed in
respect of that offence provision.
This amendment is made because although time-based, it is not clear that section 4K
of the Crimes Act 1914 would apply to this provision, and it is therefore proposed to
be made a continuing offence to ensure that a daily penalty may be applied for each
day that the person fails to return their identity card.
29
Items 54-58: clause 6 of Schedule 3
Clause 6 of Schedule 3 makes it an offence for a facility operator to fail to ensure that
an operator`s representative is present at all times at the facility when there are
individuals present at the facility, and to fail to ensure that the name of the
representative is displayed in a prominent place. An operator is also liable to a civil
penalty for a failure to comply with these requirements.
Clause 6 of Schedule 3 contains offence and civil penalty provisions that are not
automatically continuing offence and civil penalty provisions by virtue of application
of the Crimes Act 1914 and Regulatory Powers Act respectively, however the
subclauses inserted by this item will make this provision a continuing
offence/continuing civil penalty provision, with a maximum penalty for each day that
non-compliance with requirements continues set at 10% of the maximum penalty that
can be imposed in respect of that offence or civil penalty provision.
This amendment is made because if an operator has not ensured there is an operator`s
representative at a facility, a daily penalty will provide a continuing financial
incentive to do so. A similar consideration applies if the operator has failed to ensure
that the name of the operator`s representative is displayed in a prominent place at the
facility.
Item 59: At the end of clause 77 of Schedule 3
Clause 77 of Schedule 3 makes it an offence for a person to fail to comply with an
OHS prohibition notice that has been issued by a NOPSEMA inspector.
Clause 77 of Schedule 3 contains an offence that is not an automatically continuing
offence by virtue of application of the Crimes Act 1914, however the subclauses
inserted by this item will make this provision a continuing offence provision, with a
maximum penalty for each day that non-compliance with requirements continues set
at 10% of the maximum penalty that can be imposed in respect of that offence.
Given the potentially severe consequences to human health and safety of a failure to
comply with a prohibition notice, the application of a daily penalty for a continuing
failure to comply will encourage persons to comply with the notice as soon as
possible and thereby remove the threats to health and safety that are the subject of the
notice.
Item 60: At the end of clause 78A of Schedule 3
This item relates to an offence and a civil penalty provision, triggered by a failure to
comply with an OHS improvement notice, committed under clause 78A of
Schedule 3.
Subclauses (2) and (3) are expressly and respectively noted as a continuing offences
under section 4K of the Crimes Act 1914 and a continuing civil penalty provision
under section 96 of the Regulatory Powers Act, with a maximum penalty for each day
30
that non-compliance with requirements continues set at 10% of the maximum penalty
that can be imposed in respect of those offences or the civil penalty provision.
Items 61-66: clause 82 of Schedule 3
Under clause 82 of Schedule 3, the operator of a facility has a duty to notify and
report to NOPSEMA on any accidents or dangerous occurrences that occur at or near
the facility.
Clause 82 of Schedule 3 contains an offence that is arguably not an automatically
continuing offence by virtue of application of the Crimes Act 1914, however the
subsections inserted by this item will, for the avoidance of doubt, make this provision
a continuing offence provision, with a maximum penalty for each day that non-
compliance with requirements continues set at 10% of the maximum penalty that can
be imposed in respect of that offence provision.
A time limit within which the operator is required to give notice or a report to
NOPSEMA is specified in the Offshore Petroleum and Greenhouse Gas Storage
(Safety) Regulations 2009. However, to avoid any doubt about application of section
4K of the Crimes Act, it is proposed to specify in the Act that clause 82 of Schedule 3
is a continuing offence for the purposes of applying a daily penalty.
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Schedule 2 - Prohibition and improvement notices
The amendments in this Schedule will:
Enable a NOPSEMA inspector to issue environmental prohibition notices and
environmental improvement notices to a petroleum titleholder in order to
require action to remove threats to the environment from petroleum operations
Require NOPSEMA to publish on its website OHS and environmental
prohibition notices and improvement notices that have been issued to a person
by a NOPSEMA inspector.
Schedule 2, Part 1 - Environmental prohibition and improvement notices
The purpose of these main amendments in Division 1 of Part 1 of Schedule 2 is to
give NOPSEMA inspectors undertaking environmental inspections the power to issue
environmental prohibition notices or environmental improvement notices in order to
remove a threat to the environment arising from the carrying out of a petroleum
activity or the operation of a petroleum vessel or structure.
The notices and the processes for issuing them are closely modelled on the equivalent
OHS notices in Schedule 3. They perform very much the same function and the kinds
of circumstances in which they may be issued are very similar.
Notes on clauses
Item 4: After clause 11 of Schedule 2A
Item 4 inserts the following new clauses into Schedule 2A to the Act.
Clause 11A Petroleum environmental inspections--environmental prohibition notices
(issue)
New clause 11A enables a NOPSEMA inspector who is conducting a petroleum
environmental inspection in relation to offshore petroleum premises` to issue an
environmental prohibition notice. (Offshore petroleum premises are, essentially, an
offshore vessel or structure where a petroleum activity is taking place. They include
seismic vessels, drilling rigs and production platforms.)
Subclause 11A(2) provides that an inspector may issue an environmental prohibition
notice to a titleholder, in writing, if the inspector, in conducting the inspection, is
satisfied on reasonable grounds that an activity is occurring or may occur that
involves, or would involve, an immediate and significant threat to the environment or
that the operation or use of the premises involves, or would involve, an immediate and
significant threat to the environment, and that it is reasonably necessary to issue the
notice in order to remove the threat. The notice may be issued to the titleholder by
giving it to the titleholder`s nominated representative.
The notice must direct the titleholder to ensure that the activity is not engaged in, or is
not engaged in in a specified manner or that the premises are not operated or used or
not operated or used in a specified manner.
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The notice may specify action that may be taken to satisfy an inspector that adequate
action has been taken to remove the threat to the environment.
The notice issued by the NOPSEMA inspector is required to contain a substantial
amount of information. It must state that the inspector is satisfied as mentioned in
subclause 11A(2), identifying the particular circumstances in whichever subparagraph
in paragraph 11A(2)(a) is applicable, and giving the grounds on the basis of which the
inspector is satisfied. It must specify the activity at the premises or the operation or
use of the premises that involves the threat to the environment. It must specify the
threat to the environment and describe the environment that is subject to the threat.
This last requirement is important to deal with the problem that the environment` is
an amorphous concept that can refer to anything from a very small to a very large part
of the world environment, with potential ramifications for extremely varied and
complex ecosystems. This is especially significant in the case of threats to the marine
environment or the atmosphere, which are potentially at risk when offshore petroleum
activities are being carried on.
Subclause 11A(6) makes it an offence to fail to comply with an environmental
prohibition notice. Subclauses (7) and (8) provide for continuing offences.
Clause 11B Petroleum environmental inspections--environmental prohibition notices
(notification)
Clause 11B imposes notification requirements. Subclause (2) requires that a copy of
the prohibition notice be given, as applicable, to the operator`s representative at the
facility, the master of the vessel or the owner of the premises, plant, substance or
thing. Subclause (3) requires the titleholder to cause a copy of the notice to be
prominently displayed at the vessel or structure.
Subclause 11B(4) provides that if a NOPSEMA inspector is satisfied that action taken
by the titleholder to remove the threat to the environment is not adequate, the
inspector must inform the titleholder accordingly. (It is not an offence to fail to
implement the action set out in the notice as being sufficient to remove the threat,
because the threat has been removed by the prohibition on the activity or the
prohibition on the operation of the premises, as the case may be.) The notice
continues in force until an inspector notifies the titleholder that the inspector is
satisfied that adequate action has been taken to remove the threat to the environment.
Clause 11C - Petroleum environmental inspections - environmental improvement notices
(issue)
New clause 11C enables a NOPSEMA inspector who is conducting a petroleum
environmental inspection in relation to offshore petroleum premises` to issue an
environmental improvement notice. (Offshore petroleum premises are, essentially, an
offshore vessel or structure where a petroleum activity is taking place. They include
seismic vessels, drilling rigs and production platforms.)
A NOPSEMA inspector may issue an environmental improvement notice to a
titleholder, in writing if, in conducting the inspection, the inspector is satisfied on
reasonable grounds that the titleholder is (currently) contravening a petroleum
environmental management law or has contravened such a law and is likely to
33
contravene it again and, as a result, there is or may be a significant threat to the
environment. The notice may be issued to the titleholder by giving it to the
titleholder`s representative at the premises who has been nominated for the inspection.
The notice must state the inspector`s grounds for satisfaction that a specified
contravention is occurring, or has occurred and is likely to occur again. It must also
state the inspector`s grounds for satisfaction that the contravention will or may result
in a significant threat to the environment. This last element is very significant,
because it is important, for constitutional reasons, that these improvement notices not
be able to be used simply to enforce compliance with environmental management
laws. The improvement notice must be directed at removing the threat to the
environment, not merely at securing compliance with the law.
The notice must also specify the threat to the environment and describe the
environment that is under threat. This last requirement is important to deal with the
problem that the environment` is an amorphous concept that can refer to anything
from a very small to a very large part of the world environment, with potential
ramifications for extremely varied and complex ecosystems. This is especially
significant in the case of threats to the marine environment or the atmosphere, which
are potentially at risk when offshore petroleum activities are being carried on.
The notice must specify action that is required to be taken by the titleholder to remove
the threat and specify a reasonable period within which the titleholder is to take the
action. This period may be extended by the inspector.
Clause 11D - Petroleum environmental inspections - environmental improvement notices
(compliance and notification)
Subclause 11D(2) provides that the titleholder must ensure that the notice is complied
with. Subclause (3) makes it an offence to fail to comply. Subclause (4) provides that
a person who contravenes a requirement under subclause (2) is liable to a civil
penalty.
Subclause 11D(5) requires the NOPSEMA inspector to take reasonable steps to give a
copy of the notice to other affected persons - the operator`s representative at the
facility, the master of the vessel or the owner of the premises, as the case may be.
Subclause (6) requires the titleholder to cause a copy of the notice to be displayed at a
prominent place at the offshore premises.
Subclauses 11D(7) and (8) provide for continuing penalties and continuing
contraventions of civil penalty provisions.
Penalty levels
It is acknowledged that the penalty levels specified in these amendments exceed the
recommended maximum, for offences with delegated content both for the global
offences and potentially where amalgamation of continuing offences occurs, as
outlined in the Guide to Framing Commonwealth Offences, Infringement Notices and
Enforcement Powers. The reason for this is that in response to the Montara
Commission of Inquiry and corresponding Australian Government response, the
Australian Government formed the Better Regulation Ministerial Partnership. This
34
Partnership, as part of its work, commissioned an independent review all
Commonwealth Legislation applicable to the offshore petroleum industry. This
review culminated in a report containing a number of recommendations, one of which
was that criminal offences in the Act should be increased to be consistent with the
penalties applied in other high hazard legislation. This recommendation resulted in an
increase to the levels of penalties applied to OHS improvement and prohibition
notices in the Act to 300 and 600 penalty units respectively. Therefore with the
introduction of improvement and prohibition notices for environmental matters in the
offshore regulatory regime warrants the same level of penalties applied given: that
they will be key enforcement tools utilised by the regulator; that the consequences of
environmental breaches in an offshore context are potentially extremely serious for
the Australian marine environment; and as well as the fact that the companies
operating in this industry are extremely well-resourced multinationals for the most
part, a higher level of penalty is required to provide a sufficient deterrent effect.
Merits review
Neither the issue of an environmental prohibition notice nor the issue of an
environmental improvement notice is made subject to review on the merits by a
tribunal (merits review).
No provision for merits review was put into Schedule 2A by the Offshore Petroleum
and Greenhouse Gas Storage Amendment (Compliance Measures) Act 2013. This
was accepted by the Attorney-General`s Department and by the Senate Standing
Committee for the Review of Bills on the basis that the powers exercisable by
NOPSEMA under that Schedule were not of a kind that typically were subject to
merits review.
Prohibition notices and improvement notices are, however, commonly made
reviewable by an administrative tribunal, and the equivalent OHS notices in
Schedule 3 are in fact reviewable, even if they have rarely if ever been the subject of
applications for review.
There is a difficulty with offshore petroleum environmental notices, however, in that
there appears to be no tribunal established under Commonwealth legislation that
would have the necessary environmental credentials, and there is certainly not one
that combines expertise in environmental regulation and offshore petroleum
operations. Even if it were possible to put together a particular group of
appropriately-qualified persons who were members of the Administrative Appeals
Tribunal, they would not have a flow of work that would enable them to build and
maintain their expertise. Added to that is the difficulty of assembling such a group of
persons within the very short timeframe necessary to review decisions, given the very
high cost of delaying offshore operations even for a short time.
In any case, it would seem inappropriate that decisions of NOPSEMA, which was
established to be the single national offshore petroleum regulator for the very reason
that no other body had the critical mass of expert, trained personnel that was required
to regulate environmental management of offshore operations, should be subject to
review by a demonstrably less-qualified and less-experienced body. If such review
were available, there is a very high risk that it would result in gaming by the industry,
with an inevitable loss of effectiveness of NOPSEMA as regulator.
35
This would be particularly undesirable, given the potentially catastrophic
consequences of a breach of environmental management laws by an offshore
petroleum titleholder.
Delegation of rule-making power to officials - Delegating offence content
The above provisions authorising the issuing by NOPSEMA inspectors of
environmental prohibition notices and environmental improvement notices raise
issues of delegation of rule-making power and delegation of offence content to
officials. The issuing of an environmental prohibition notice triggers the requirement
in subclause 11A(4) that the titleholder ensure that the specified activity is not
conducted, or not conducted in a specified manner, or that the vessel or structure is
not operated or used, or not operated or used in a specified manner, with the inspector
specifying the activity, the premises and the manner. Similarly, the issuing of an
environmental prohibition notice will trigger the requirement to take the action
specified by the inspector in the notice. In each case, failure by the titleholder to
comply is an offence.
The environmental management obligations that the Act and regulations impose on a
titleholder are relatively generic, and it is not until those obligations are given content
by the environment plan relating to highly technical operations such as operating a
production facility or drilling a petroleum well, that those generic requirements can be
subject to inspection and enforcement. The operations at each offshore site are unique
and give rise to a unique set of environmental challenges and hazards. It is necessary
for an inspector to carry out an inspection before he or she will be aware of the
existence of specific issues that affect the relevant activity or vessel/structure at that
particular time. It is therefore necessary to put in place processes that will enable the
inspector to assess the environmental performance of the particular titleholder and to
tailor the actual requirements to be imposed on the titleholder to remove specific
threats to the environment.
In order to put strict parameters around the exercise by a NOPSEMA inspector of
these far-reaching powers, the provisions being inserted into the Act require that the
inspector provide a considerable amount of detail in the notice prior to its issue,
including the inspector`s reasons for being satisfied of the key matters that form the
basis for the exercise of the power.
Schedule 2, Part 1, Division 5 - Quasi-retrospective commencement of powers to give
environmental prohibition or improvement notices
Item 40 provides that the amendments made by this Part (the powers to give
environmental prohibition and improvement notices) apply to acts or omissions of
persons, whether occurring before, on or after the commencement of this Part and to
any other matter, whether arising before, on or after that commencement, that is
relevant to the exercise of the powers or performance of functions under this Part.
This commencement provision does not involve any true retrospectivity - the powers
to issue the notices do not arise until the Part commences, and the notices themselves
operate only prospectively. The provision merely ensures that if a threat to the
environment and/or infringing conduct in relation to petroleum activities was already
existing at the time of commencement of the Part, a (prospective) notice under the
36
Part may be issued in relation to that environmental threat or infringing conduct.
These notices are not punitive - they are directed at removing threats to the
environment. It would be absurd if the prior existence of the threat or the infringing
conduct giving rise to a threat were to prevent a NOPSEMA inspector from taking
action under this Part in relation to that (current) threat or infringing conduct.
Schedule 2, Part 2 - Publication of prohibition and improvement notices
The amendments to the Act made by this Part will require NOPSEMA to publish on
its website improvement notices and prohibition notices issued by NOPSEMA
inspectors under Schedule 2A (environment) and Schedule 3 (OHS) to the Act. The
purpose of publication would be to enable lessons learned from inspections to be
shared with other members of the offshore petroleum industry, which will in turn
assist those companies to comply with regulatory requirements, and will also help to
increase the transparency of NOPSEMA`s operations.
Publication of notices will enable lessons to be shared by enabling companies to view
and consider the content of notices, in particular the types of activities in relation to
which notices have been given due to threats to OHS or the environment arising from
those activities, and assess their own activities against the activities described and,
where necessary, implement measures to improve and reduce potential risks caused
by their operations. By assisting companies to comply with regulatory requirements
through the publication of notices, potential threats to OHS and the environment can
thereby be reduced or removed. Given the high-hazard nature of the offshore
petroleum industry and the potentially serious consequences of incidents, the potential
for the prevention of threats to OHS and the environment as a result of these
amendments is a highly desirable outcome.
The application of subsections 602E(3) and (4) of the Act extends the requirement to
publish a notice, so that the requirement would apply whether the notice was given by
a NOPSEMA inspector during an inspection under Schedule 2A or 3 to the Act or
under the Regulatory Powers Act. Section 602E enables a NOPSEMA inspector who
has entered premises under the Regulatory Powers Act to exercise certain powers the
inspector would have been able to exercise if the inspector had entered premises
under Schedule 2A or 3 to the Act, including the power to give an environmental
prohibition notice, an environmental improvement notice, an OHS prohibition notice
or an OHS improvement notice. Subsections 602E(3) and (4) then state that Schedule
2A or 3 (including the requirement to publish notices being inserted into those
Schedules by this Part) respectively apply in relation to the exercise of those powers
by the inspector as if the inspector had entered premises under the applicable
Schedule rather than under the Regulatory Powers Act.
Division 1: Amendments
Item 41: At the end of Division 2 of Part 2 of Schedule 2A
This item inserts a new clause 12A in Schedule 2A to the Act to require NOPSEMA
to publish environmental prohibition notices and environmental improvement notices
issued by NOPSEMA inspectors under clauses 11A and 11C of Schedule 2A (to be
inserted into the Act by item 4 of this Schedule) respectively.
37
New subclause 12A(1) requires NOPSEMA to publish an environmental prohibition
notice or an environmental improvement notice within 21 days after the notice is
issued by a NOPSEMA inspector. This timeframe may enable NOPSEMA to become
aware of any application for judicial review of the decision to issue a notice prior to
publishing the notice on its website.
New subclause 12A(2) ensures that NOPSEMA must not publish a notice if
NOPSEMA is aware that the decision to issue the notice is the subject of an
application for judicial review by a court. To ensure fairness to the titleholder who is
making the application in relation to the decision to issue the notice, the notice will
not be able to be published unless the decision to issue the notice is upheld by the
court - see new subclause 12A(4).
New subclause 12A(3) ensures that, where a notice has already been published by
NOPSEMA under new subclause 12A(1), and the notice is or subsequently becomes
the subject of an application for judicial review by a court, NOPSEMA must remove
the notice from its website as soon as practicable after becoming aware of the
application. To ensure fairness to the titleholder who is making the application in
relation to the decision to issue the notice, the notice will not be able to be published
again unless the decision to issue the notice is upheld by the court - see new
subclause 12A(4).
If the decision to issue the notice is upheld by the court, and all rights for judicial
review, including any right of appeal, have been exhausted, new subclause 12A(4)
requires NOPSEMA to publish the notice within 21 days after becoming aware that
the rights have been exhausted. The notice must not be published, however, if the
decision to issue the notice is not upheld.
New subclauses 12A(5) and (6) require NOPSEMA to take such steps as are
reasonable in the circumstances to ensure that any personal information (within the
meaning of the Privacy Act 1988) that is contained in the notice is de-identified. This
is to ensure the protection of personal information and the right to privacy. Further
discussion in relation to the privacy impacts of the amendments in this Part are
discussed in the statement of compatibility with human rights following the general
outline in this EM.
Item 42: At the end of subclause 77(1) of Schedule 3
This item inserts a note at the end of subclause 77(1) of Schedule 3 to the Act (which
provides for a NOPSEMA inspector to issue an OHS prohibition notice) to advise the
reader that a notice issued by a NOPSEMA inspector under that subclause will be
published on NOPSEMA`s website within 21 days of being issued.
Item 43: At the end of subclause 78(1) of Schedule 3
This item inserts a note at the end of subclause 78(1) of Schedule 3 to the Act (which
provides for a NOPSEMA inspector to issue an OHS improvement notice) to advise
the reader that a notice issued by a NOPSEMA inspector under that subclause will be
published on NOPSEMA`s website within 21 days of being issued.
38
Item 44: At the end of Division 3 of Part 4 of Schedule 3
This item inserts a new clause 80AA in Schedule 3 to the Act to require NOPSEMA
to publish OHS prohibition notices and OHS improvement notices issued by
NOPSEMA inspectors under clauses 77 and 78 of Schedule 3 respectively.
New subclause 80AA(1) requires NOPSEMA to publish an OHS prohibition notice or
an OHS improvement notice within 21 days after the notice is issued by a NOPSEMA
inspector. This timeframe may enable NOPSEMA to become aware of any
application for judicial or merits review of the decision to issue a notice prior to
publishing the notice on its website.
New subclause 80AA(2) ensures that NOPSEMA must not publish a notice if
NOPSEMA is aware that the decision to issue the notice is the subject of an
application for merits review by the reviewing authority (the Fair Work Commission)
under clause 80A of Schedule 3 or for judicial review by a court. To ensure fairness
to the titleholder who is making the application, the notice will not be able to be
published unless the decision to issue the notice is upheld by the court or affirmed by
the reviewing authority (as the case may be) - see new subclause 80AA(4).
New subclause 80AA(3) ensures that, where a notice has already been published by
NOPSEMA under new subclause 80AA(1), and the notice is or subsequently becomes
the subject of an application for merits review by the reviewing authority or judicial
review by a court, NOPSEMA must remove the notice from its website as soon as
practicable after becoming aware of the application. To ensure fairness to the
titleholder who is making the application, the notice will not be able to be published
again unless the decision to issue the notice is upheld by the court or affirmed by the
reviewing authority - see new subclause 80AA(4).
If the decision to issue the notice is upheld by the court or affirmed by the reviewing
authority, and all appeal and review rights in relation to that decision have been
exhausted, new subclause 80AA(4) requires NOPSEMA to publish the notice within
21 days after becoming aware that the rights have been exhausted. The notice must
not be published, however, if the decision to issue the notice is revoked by the
reviewing authority or is not upheld by the court.
New subclause 80AA(5) applies if the reviewing authority revokes the decision to
issue the notice and substitutes its own decision to issue a notice. The substituted
notice must be published by NOPSEMA within 21 days after becoming aware that all
appeal and review rights in relation to the decision to issue the substituted notice have
been exhausted.
New subclauses 80AA(6) and (7) require NOPSEMA to take such steps as are
reasonable in the circumstances to ensure that any personal information (within the
meaning of the Privacy Act 1988) that is contained in the notice is de-identified. This
is to ensure the protection of personal information and the right to privacy. Further
discussion in relation to the privacy impacts of the amendments in this Part are
discussed in the statement of compatibility with human rights following the general
outline in this EM.
39
Division 2: Application
Item 45: Application
This item provides for the new requirement for NOPSEMA to publish prohibition
notices and improvement notices issued by a NOPSEMA inspector under Schedule
2A or Schedule 3 to the Act to apply only to notices issued on or after the
commencement of this Part. NOPSEMA are not required to publish notices issued
prior to the commencement of this Part.
This Part will commence on the later of (a) the start of the day after this Bill receives
the Royal Assent and (b) immediately after the commencement of Schedule 1 to the
Offshore Petroleum and Greenhouse Gas Storage Amendment (Compliance
Measures) Act 2013 (the Compliance Measures Act) - see clause 2 of this Bill.
Schedule 1 to the Compliance Measures Act inserts Schedule 2A into the Act, and
therefore the amendments in this Part cannot commence prior to the commencement
of Schedule 1 to the Compliance Measures Act.
40
Schedule 3 - Financial assurance, polluter pays and directions
The amendments in this Schedule will:
Strengthen the application of the polluter pays principle in the Act, through the
introduction of a statutory duty requiring petroleum titleholders, in the event
of a hydrocarbon spill in the title area, to stop, control, and clean-up the
hydrocarbon spill, remediate the environment and carry out appropriate
monitoring
Enable NOPSEMA or the responsible Commonwealth Minister to take
necessary action and recover costs from the titleholder in the event the
titleholder does not fulfil its statutory duty
Provide a right of action for a state or territory that has incurred clean-up,
remediation and monitoring costs as a consequence of a hydrocarbon spill in a
Commonwealth title area to recover those costs from the titleholder
Strengthen section 571 to require titleholders to maintain sufficient financial
assurance arrangements in order to support the application of the polluter pays
principle, and to provide for NOPSEMA to manage compliance via the
environment plan acceptance process under the regulations.
Clarify the scope of NOPSEMA`s various direction-giving powers in the Act
to ensure that NOPSEMA can always issue effective directions.
Schedule 3, Part 1 - Financial assurance
Item 4 of Part 1 Division 1 repeals existing section 571 which imposed obligations in
relation to insurance. Obligations were imposed in relation to petroleum and
greenhouse gas titles, in different subsections. Subsection 571(3) which related to
greenhouse gas titles has now been relocated without any material change to
section 571A.
The new section 571 imposes an obligation on a petroleum titleholder to maintain
adequate financial assurance`. This is a broader term than insurance` and extends to
various other types of financial instrument and to self insurance`.
Section 571 Financial assurance--petroleum titles
Subsection 571(2) imposes the core obligation in relation to financial assurance. It
imposes on a petroleum titleholder, at all times while the title is in force, to maintain
financial assurance sufficient to give the titleholder the capacity to meet the costs,
expenses and liabilities arising in connection with, or as a result of :
(a) the carrying out of a petroleum activity` (which has the meaning that it
has in the Offshore Petroleum and Greenhouse Gas Storage
(Environment) Regulations 2009) (Environment Regulations);
(b) the doing of any other thing for the purposes of the petroleum activity; or
(c) complying (or failing to comply) with a requirement under the Act (eg a
direction) or the regulations in relation to a petroleum activity.
41
As is apparent from the Examples provided in subsection (2), financial assurance is
required to deal with extraordinary costs, expenses and liabilities that a titleholder
might not have the capacity to meet. It is not expected to cover ordinary expenses of
a titleholder in meeting ordinary operating costs, such as the costs of compliance with
title conditions.
Subsection 571(3) provides for the administrative mechanisms that will be put in
place for NOPSEMA to oversee compliance by a titleholder with its obligation in
subsection (2). Subsection (3) provides that the Environment Regulations may
provide for a titleholder to be required to demonstrate sufficient financial assurance as
a condition precedent to obtaining NOPSEMA`s acceptance of the environment plan
for the relevant activity. The regulations may also require that the financial assurance
be in a form that is acceptable to NOPSEMA. (This is to ensure, for example, that
NOPSEMA is not required to accept financial assurance that is unworkably complex
or piecemeal or that is too difficult to assess.) The regulations may also make a
failure to maintain sufficient financial assurance in a form acceptable to NOPSEMA
(essentially, the package that has been accepted by NOPSEMA) to be a ground for
withdrawal of acceptance of the environment plan.
Subsection 571(4) lists inclusively the forms of financial assurance that may be taken
to satisfy the financial assurance requirement.
Clause 2 of Schedule 2A (at the end of the definition of petroleum environmental law)
Item 5 of Part 1 Division 1 inserts provisions relating to financial assurance in the list
of provisions that are environmental management laws` for the purposes of the
definition of that term in Schedule 2A. The purpose of this amendment is to enable a
NOPSEMA inspector to carry out an inspection into compliance with the financial
assurance obligations of a titleholder.
Application
The amendments relating to financial assurance apply, on or after the commencement
of the amendments, to a title and a titleholder regardless of whether the title came into
force before or after the commencement.
Transitional--environment plan already accepted
The commencement provision above is not retrospective - it only makes the
amendments apply after the date of commencement of the provisions, and there is no
backdating of the commencement. The fact that the new financial assurance
obligation applies to titleholders whose titles were already in force at the
commencement means that a transitional provision is necessary. (There already will
have been a requirement to have insurance in place under existing section 571. It is
not an entirely new obligation and ideally little or no change to existing arrangements
will be necessary.)
The transitional provision applies where an environment plan for an activity was
accepted prior to the commencement of the financial assurance amendments, so that
compliance with the requirement was not demonstrated prior to the acceptance of the
environment plan.
42
Item 8 in Part 1 Division 2 provides that, in the course of a petroleum environmental
inspection under Schedule 2A, a NOPSEMA inspector may demand that compliance
with subsection 571(2) be demonstrated in relation to the activity, in a form that is
acceptable to NOPSEMA. A failure to comply with the demand is grounds for the
withdrawal of acceptance of the environment plan.
Schedule 3, Part 2 - Polluter pays
On 21 August 2009 the Montara Wellhead Platform, located in Commonwealth
waters in the Timor Sea, commenced an uncontrolled release of hydrocarbons for a
period of 74 days - the third largest oil spill in Australia`s history. Following the
incident, the Minister for Resources and Energy, the Hon Martin Ferguson AM MP,
established the independent Montara Commission of Inquiry (MCI) to investigate the
likely causes of the incident and make recommendations on how to prevent future
incidents. On 18 June 2010, the MCI provided the Report of the Montara
Commission of Inquiry (the Montara Report) to the Minister. The Montara Report
outlined 100 findings and 105 recommendations directed at the offshore petroleum
industry`s well operations and activities, the offshore petroleum regulatory regime
related to areas of well regulation, environmental monitoring and management, and
arrangements for incident response.
The Montara Commission of Inquiry discussed the polluter pays principle in
Chapter 6 of the Montara Report, noting a lack of clarity in the regulatory regime and
administrative arrangements regarding the implementation of the polluter pays
principle for costs associated with preparedness, response capability and scientific
monitoring for the offshore petroleum industry. In particular, the Act currently places
no statutory duty or specific liability on titleholders to pay for the clean-up or
environmental damage caused by an escape of petroleum arising from operations in
the titleholder`s title area.
Recommendations 95 and 96 of the Montara Report focus on aspects of the polluter
pays principle. These recommendations specifically address matters relating to costs
of addressing an oil spill, powers to require companies to remediate damage to the
offshore marine environment, and powers to require companies to bear the costs of
scientific monitoring.
The Australian Government released its Final Response to the Report of the Montara
Commission of Inquiry on 25 May 2011. In its response, the Australian Government
accepted Recommendations 95 (in-principle) and 96. In accepting these
recommendations, the Australian Government undertook to identify and implement an
ability to legislatively enforce the polluter pays principle for the offshore petroleum
industry.
These recommendations, among others, were addressed through the Offshore
Petroleum and Marine Environment Legislative Review, which was progressed
under the auspices of a Better Regulation Ministerial Partnership (the Partnership)
between the Minister for Finance and Deregulation and the Minister for Resources
and Energy. The Partnership found that there is scope to clarify the application of the
polluter pays principle in the Act, particularly as it relates to ensuring that the
43
social, environmental and economic impacts of a significant offshore petroleum
incident are appropriately addressed in the legislative regime.
On the basis of the findings and recommendations of the Partnership, the Australian
Government has agreed to amend the Act to:
Impose a statutory duty on petroleum titleholders, in the event of an escape of
petroleum arising from operations within the titleholder`s title area, to stop,
control, and clean-up the escape of petroleum, carry out appropriate
monitoring and remediate the environment; and
Provide an ability for NOPSEMA or the Commonwealth to recover costs from
the titleholder in the event that the titleholder does not fulfil its statutory duty.
Provide a state or territory that has incurred consequential costs and expenses
in cleaning up, remediating and monitoring areas within state or territory
jurisdiction to recover those costs and expenses from the titleholder as a debt
due to the state or territory.
The objective of the amendments in this Part is therefore to implement the above
decisions by strengthening the application of the polluter pays principle in the Act,
so that all reasonable costs of responding to a hydrocarbon spill, including response,
clean-up, remediation and monitoring, will be met in full by the polluter.
Notes on clauses
Part 2 of Schedule 3 inserts into the Act a new Part headed Part 6.1A--Polluter
pays`.
New Part 6.1A of the Act--Polluter pays
Section 572B - Relationship with significant offshore petroleum incident directions
Following an escape of petroleum as a result of the carrying out of a petroleum
activity, NOPSEMA may need to give a direction under section 576B, the power to
give directions dealing with a significant offshore petroleum incident.
Section 572B is necessary to enable NOPSEMA to give an effective direction under
section 576B that requires the relevant titleholder to take action that is inconsistent
with the environment plan for the activity. The reason why section 572B is necessary
is explained in the clause note to section 572C.
Section 572C - Titleholder duty--escape of petroleum
Subsection 572C(1) provides that the section applies in the event of an escape of
petroleum occurring as a result of, or in connection with, a petroleum activity in
relation to the listed types of title. These are, essentially, all the titles in respect of
which operations may give rise to an escape of petroleum. The operations will have
taken place directly or indirectly for the purposes of the exercise of the titleholder`s
rights under the title or the performance of obligations imposed by or under the Act or
the regulations in relation to the title.
There is no fault element to the polluter pays obligation. There merely has to be an
escape of petroleum as a result of, or in connection with, a petroleum activity. The
44
term petroleum activity has the meaning it is given by the Offshore Petroleum and
Greenhouse Gas (Environment) Regulations 2009 (Environment Regulations`).
There is no lower limit to the amount of petroleum that escapes. - The principle
applies to all escapes, big or small.
Subsection 572C(2) provides that the titleholder must, in an offshore area, as soon as
possible after becoming aware of the escape, take all reasonably practicable steps to
eliminate (ie stop) or control the escape, clean up the escaped petroleum, remediate
any resulting damage to the environment and carry out environmental monitoring of
the impact of the escape.
The obligation on the titleholder is confined to an offshore area`, which equates to
Commonwealth waters. These are the waters that are covered by this Act and are
within Commonwealth jurisdiction. The Commonwealth does not have jurisdiction in
state or territory coastal waters or state or territory land areas such as beaches,
estuaries and other coastal ecosystems and so can neither require nor authorise
cleanup or remediation in those areas. There is often disagreement about the
effectiveness of particular techniques that are used to clean up oil from the sea or
from beaches and coastal areas, and some methods are even considered by some
experts to do more harm than good. A state or territory will therefore be in control of
any response operations that are carried out in its jurisdiction, and NOPSEMA will be
in control of the response in Commonwealth waters.
The titleholder is required by subsection 572C(2) to take measures in accordance with
the environment plan that is in force under the Environment Regulations. If particular
measures specified in the environment plan are considered not to be appropriate or
adequate in the circumstances of a particular petroleum spill, NOPSEMA can require
a revision to the environment plan. Alternatively, if there is not time for the
titleholder to prepare, and for NOPSEMA to assess, a revision, NOPSEMA could
give a direction under section 576B, the power to give directions dealing with
significant offshore petroleum incidents. A direction under section 576B will
normally prevail over the part of the environment plan that is inconsistent, to the
extent of the inconsistency (see section 576C), because environment plans have effect
under the regulations. In this particular case, however, the obligation to carry out
response operations in accordance with the environment plan is in the Act
(s 572C(2)), not merely in the regulations. The rule in section 576C that directions
under section 576B prevail over regulations that are inconsistent would not be
sufficient to enable NOPSEMA to require the titleholder to take action different from
that set out in the environment plan, were it not for new section 572B. This provides
that nothing in this Part limits the power of NOPSEMA to give a direction under
section 576B in relation to an escape of petroleum.
Section 572D - Titleholder duty--action by NOPSEMA
Section 572D provides that, if NOPSEMA considers on reasonable grounds that the
titleholder has failed to comply with the duty to eliminate or control the escape of
petroleum or any other aspect of the duty in subsection 572C(2), NOPSEMA may do
those things and then recover its costs or expenses from the titleholder. Under
subsection 572D(3), the money will be recoverable by NOPSEMA on behalf of the
Commonwealth. The money will then be credited to the National Offshore Petroleum
45
Safety and Environmental Management Authority Special Account under
paragraph 683(g).
Section 572E - Titleholder duty--action by responsible Commonwealth Minister
Section 572E confers on the responsible Commonwealth Minister an equivalent
power to that conferred on NOPSEMA by section 572D.
Section 572F - State or Territory may recover costs or expenses
Section 572F applies if there is an escape of petroleum that results from the carrying
out of a petroleum activity in relation to a Commonwealth title, and the escaped
petroleum enters waters of the sea that are within state or territory jurisdiction or land
or waters within the limits of the state or territory.
The section provides that if the state or territory or an agency or authority on behalf of
the state or territory incurs costs or expenses in cleaning up the petroleum,
remediating any damage to the environment caused by the escaped petroleum or
carrying out environmental monitoring of the impact of the escape, those costs or
expenses are a debt due to the state or territory and are recoverable in a court of
competent jurisdiction.
It is only costs and expenses incurred in respect of cleaning up, or remediating or
monitoring the effects of, the escaped petroleum within state or territory jurisdiction
that can be recovered under this section. Economic loss is not recoverable under this
provision.
Section 572F does not limit or affect any right of action that the state or territory, or
agency, would otherwise have against the titleholder arising out of the occurrence of
the escape of petroleum.
Item 10: Application of polluter pays amendments
Item 10 provides that the polluter pays amendments above apply in relation to an
escape of petroleum that occurs on or after the commencement of this Part.
Schedule 3, Part 3 - Directions
The Act includes a number of provisions that enable a regulator to give directions to
petroleum or greenhouse gas titleholders to require the titleholder to do certain things.
These include:
The general power for NOPSEMA or the responsible Commonwealth Minister
to give a direction to a petroleum titleholder in section 574 and section 574A
respectively;
The general power for the responsible Commonwealth Minister to give a
direction to a greenhouse gas titleholder in section 580;
The power for NOPSEMA to give a significant incident direction to a
petroleum titleholder in section 576B;
The power for NOPSEMA or the responsible Commonwealth Minister to give
remedial directions to current and former holders of petroleum titles in
sections 586, 586A, 587 and 587A;
46
The power for the responsible Commonwealth Minister to give remedial
directions to current and former holders of greenhouse gas titles in section 592
and 595.
This Part inserts new provisions into the Act to clarify that the scope of the more
specific power to give remedial directions is not intended to narrow the scope of the
general power to give directions. For example, the specific ability for NOPSEMA to
give a remedial direction to a petroleum titleholder regarding the making good of
damage to the seabed by the end of the title does not mean a direction relating to the
making good of damage to the seabed could not be given under the general power to
give directions.
New provisions to be inserted by this Part will also make it clear that the specific
ability to give a significant incident direction that has application within the offshore
area but outside the titleholder`s title area (subsection 576B(5) of the Act) does not
mean that a direction given under the general power to give directions could not have
a similar application. Although it was never intended that the specific ability to give a
significant incident direction with an application outside the title area should limit the
general power to give directions in this manner, there is a risk that the general power
to give directions could be read down in this manner due to the fact that a similar
specific ability is not mentioned in relation to the general power to give directions in
the Act.
Item 11: After section 574A
This item inserts a new section 574B into the Act to specifically clarify that a
direction given by NOPSEMA or the responsible Commonwealth Minister under the
general power to give directions in sections 574 and 574A respectively may require
the registered holder of the title in relation to which the direction is given to take an
action, or not take an action, anywhere in an offshore area, whether within or outside
the titleholder`s title area.
New subsection 574B(2) will ensure that, if a titleholder is required by a direction to
take an action in, or relation to, an area that is subject to a title held by another
petroleum or greenhouse gas titleholder, NOPSEMA must give a copy of the direction
to that other petroleum or greenhouse gas titleholder as soon as practicable after the
direction is given. This will ensure that the other petroleum or greenhouse gas
titleholder is aware of the existence of the direction and the action that is required to
be taken with its title area by the recipient of the direction.
Item 12: Subsection 576B(5)
This item corrects existing subsection 576B(5) to reflect the policy intent of that
provision. Currently, subsection 576B(5) enables NOPSEMA to give a significant
incident direction that requires the registered holder of the title in relation to which the
direction is given to take an action, or not take an action, anywhere in the offshore
area, whether within or outside the titleholder`s title area. However, it was always
intended that a significant incident direction could be applied in relation to any
offshore area, not just the particular offshore area in which the relevant title
operations are being undertaken. As an example, if a significant incident arose as a
47
result of operations carried out under a title in the offshore area of Western Australia,
NOPSEMA would have the ability to give a significant incident direction that
required action to be taken in the offshore area of the Northern Territory (such as
requiring action to remediate damage to the environment).
This amendment also ensures that subsection 576B(5) is consistent with the new
section 574B, which also clarifies that directions given by NOPSEMA or the
responsible Commonwealth Minister under the general power to give directions may
require action to be taken, or not taken, in any offshore area - see item 11 above.
Item 13: After section 585
This item inserts a new section 585A to clarify that the ability for NOPSEMA or the
responsible Commonwealth Minister to give a remedial direction to a petroleum
titleholder in section 586 and 586A respectively does not limit the power of
NOPSEMA or the responsible Commonwealth Minister to give a direction to a
petroleum titleholder in relation to the same (or a different) matter under the general
power to give directions in section 574 and 574A respectively. As discussed in the
introductory comments above, this is a clarification of existing policy intent.
Item 14 - After section 591
This item inserts a new section 591A to clarify that the ability for the responsible
Commonwealth Minister to give a remedial direction to a greenhouse gas titleholder
in section 592 does not limit the power of the responsible Commonwealth Minister to
give a direction to a greenhouse gas titleholder in relation to the same (or a different)
matter under the general power to give directions in section 580. As discussed in the
introductory comments above, this is a clarification of existing policy intent.
48
Schedule 4 - Minor amendments
The amendments in this Schedule will:
Enable matters relating to the service of documents under the Act or
legislative instruments, which are currently regulated in Part 9.6 of the Act, to
be provided for in regulations
Substitute references to the Standing Council on Energy and Resources
(SCER) in the Act with more general references to the Ministers responsible
for mineral and energy resources matter, in accordance with the SCER Terms
of Reference
Enable the mandatory administrative arrangements that apply to the taking of
eligible voluntary actions by multiple holders of a single title to be carried
through into legislative instruments under the Act
Enable acting SES employees in the Department to act as the National
Offshore Petroleum Titles Administrator.
Schedule 4, Part 1 - Service of documents
The amendments in this Part will enable matters relating to the service of documents
under the Act or legislative instruments to be provided for in regulations under the
Act.
Currently, matters relating to the service of documents that are required or permitted
to be given under the Act are regulated in Part 9.6 of the Act. Generally, Part 9.6
requires documents to be given to regulators, individuals or corporations by personal
delivery of the document or by post.
It is proposed to amend the service of documents provisions to also specifically
enable documents to be served by electronic means, such as email or fax. In many
cases, regulators or persons will find it administratively more efficient and quicker to
serve documents by electronic means. This is particularly important in situations of
potential urgency, such as in relation to the issue of notices under Schedule 2A or
Schedule 3 to the Act. Providing for electronic service will also facilitate the use of
the national electronic approvals tracking system for matters including lodgement of
title-related applications.
There are existing service provisions in the Offshore Petroleum and Greenhouse Gas
Storage (Safety) Regulations 2009 which purport to enable notices given under
Schedule 3 to the Act to be given by electronic means. However, there is a risk that
these provisions would be invalid due to inconsistency with the service of documents
provisions in Part 9.6 of the Act.
During consideration of the necessary amendments to Part 9.6 to enable electronic
service of documents, it was determined that it is more appropriate to deal with
matters relating to the service of documents in regulations rather than the Act, given
the administrative nature of these provisions. It is therefore proposed to move the
existing provisions in Part 9.6 of the Act into the regulations, including any necessary
amendments to enable electronic service of documents. The amendments in this Part
49
will ensure that there is sufficient regulation-making power to enable the making of
the necessary amendments to the regulations.
Division 1: Amendments
Item 1: Section 7 (paragraph (a) of the definition of approved)
This item removes the reference to section 775 in paragraph (a) of the definition of
approved in section 7 of the Act. Section 775 is repealed by this Bill - see item 5 of
this Schedule.
Item 2: Section 7 (paragraph (g) of the definition of approved)
This item makes paragraph (g) the final paragraph of the definition of approved in
section 7 of the Act, due to the repeal of paragraph (h) - see item 3 of this Schedule.
Item 3: Section 7 (paragraph (h) of the definition of approved)
This item repeals paragraph (h) of the definition of approved in section 7 of the Act,
as section 774 (which is referenced in the paragraph) is repealed by this Bill - see
item 5 of this Schedule.
Item 4: Section 286A(9) (paragraphs (c) and (e) of the definition of contact details)
Paragraphs (c) and (e) of the definition of contact details in section 286A(9)
currently provide that the contact details of a petroleum titleholder which must be
provided to the Titles Administrator and NOPSEMA include the titleholder`s
telephone number (if any) and email address (if any). This item removes the
superfluous references to (if any), as in all cases a petroleum titleholder will have a
telephone number and email address.
Item 5: Part 9.6
This item repeals Part 9.6, which currently regulates matters relating to the service of
documents that are required or permitted to be given under the Act. As discussed
above, it is intended that service of documents provisions will be included in
regulations rather than in the Act.
Item 6: Paragraphs 775A(2)(a) to (d)
This item repeals references to subsections that are to be repealed by item 5 of this
Schedule.
Item 7: At the end of subsection 775A(2)
This item amends the Act to allow regulations to be made to increase the list of
notices that are not covered by the definition of eligible voluntary action. This will
ensure that increases to the list, which are a minor administrative matter, can be made
without requiring further changes to the Act.
50
Item 8: After section 782
This item amends the Act to specifically allow regulations to be made providing for or
in relation to the way in which documents are required or permitted to be given for the
purposes of the Act or a legislative instrument under the Act. As discussed above, it
is intended that service of documents provisions will be included in regulations rather
than in the Act.
Matters in relation to the way in which documents are served may include provision
for the time at which documents given by email or post are taken to be given.
This item also ensures that the regulation-making power, and any regulation made
using that power, have effect despite any provision in the Electronic Transactions Act
1999 (the ETA); in other words, the Act is expressly over-ridden for the purpose of
the offshore petroleum and greenhouse gas storage regulatory regime. This is to
avoid any lack of clarity in the application of the ETA in the specific context of the
regime, and to ensure that all provisions relating to service of documents under the
Act are located in one place for ease of reference.
Item 9: Paragraph 93(1)(c) of Schedule 3
This item repeals paragraph 93(1)(c) of Schedule 3, which enables regulations to be
made to prescribe the manner in which notices are to be served under Schedule 3 to
the Act or under the Offshore Petroleum and Greenhouse Gas Storage (Safety)
Regulations 2009 (the Safety Regulations). The new regulation-making power to be
inserted by item 8 means that this provision is no longer required, as regulations
relating to the manner in which notices are to be served under Schedule 3 or the
Safety Regulations will be able to be made under the new power.
Division 2: Application
Item 10: Application - documents given after commencement of amendments
This item applies the amendments in Division 1 only to documents given for the
purposes of the Act, or for a legislative instrument under the Act, on or after the
commencement of the amendments (for commencement information, see clause 3 of
this Bill). The existing provisions in Part 9.6 of the Act will apply to documents
given prior to the commencement of the amendments.
This item also ensures, however, that if a document is given by prepaying and posting
the document as a letter prior to the commencement of the amendments, the
amendments do not apply in relation to that document. This will ensure that the
existing rules in relation to the time that a document given by post is taken to be given
under Part 9.6 of the Act will apply in relation to letters posted prior to the
commencement of the amendments, even if the letter is not received until after
commencement.
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Schedule 4, Part 2 - Standing Council on Energy and Resources
The Standing Council on Energy and Resources (SCER) under the Council of
Australian Governments (COAG) was officially launched by the Prime Minister in
September 2011, replacing the former Ministerial Council on Mineral and Petroleum
Resources (MCMPR) and Ministerial Council on Energy.
Amendments which were made to the Act in 2011 substituted all references to the
former MCMPR with specific references to the Standing Council on Energy and
Resources. However, in its Terms of Reference, which were released following the
making of those amendments, SCER has committed that by July 2016 specific
references to the former MCMPR in governing instruments (including the Act) will be
changed to refer instead to the Ministers responsible for [.....].
The amendments in this Schedule therefore replace all specific references to the
body known as the Standing Council on Energy and Resources in the Act with
references to the Ministers responsible for mineral and energy resources matters.
Although the new wording is more general, it remains in effect a reference to SCER.
The more general reference to the Ministers collectively will, however, also ensure
that the wording in the Act remains current, regardless of any future changes to the
name of the Council.
The amendments in this Schedule will enable the mandatory administrative
arrangements that apply to the taking of eligible voluntary actions by multiple holders
of a single title to be carried through into regulations under the Act.
Division 1: Amendments
Item 11: Section 7
This item inserts a definition for Ministers responsible for mineral and energy
resources matters into section 7 of the Act, to make clear that such references in the
Act refer to a group of Ministers established or recognised by COAG. Currently, this
may be read as a reference to SCER. However, a general definition will prevent the
need for future amendments if changes are made to the formal name of the group in
future.
Item 12: Amendments of listed provisions - Ministers responsible for mineral and
energy resources matters
This item replaces each reference to the body known as the Standing Council on
Energy and Resources in the Act, and substitutes references to the Ministers
responsible for mineral and energy resources matters.
Division 2: Transitional
Item 13: Board members
Subsection 656(4) of the Act requires that each person appointed as a member of the
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NOPSEMA Board must have been selected by the body known as the Standing
Council on Energy and Resources. This item ensures that the continuity of
appointment of existing Board members is not affected by replacing the reference to
the body known as the Standing Council on Energy and Resources with a more
general reference.
Item 14: Chief Executive Officer
Subsection 665(3) of the Act provides that the responsible Commonwealth Minister
must not appoint a person as the chief executive officer of NOPSEMA unless the
person is recommended to the responsible Commonwealth Minister by the body
known as the Standing Council on Energy and Resources. This item ensures that the
continuity of appointment of the current chief executive officer of NOPSEMA is not
affected by replacing the reference to the body known as the Standing Council on
Energy and Resources with a more general reference.
Schedule 4, Part 3 - Multiple titleholders
Due to the high cost of offshore petroleum operations, petroleum titles are often
owned by a consortium of titleholders (commonly referred to as multiple
titleholders`). In November 2010, amendments to the Act inserted a new Part 9.6A,
which applies when there are two or more registered holders of a petroleum or
greenhouse gas title. The provisions in the new Part clarified the requirements of
multiple titleholders in relation to, among other things, administrative actions relating
to applications, requests, nominations and notices.
Division 1 of Part 9.6A provides for the taking of eligible voluntary actions (i.e.
making an application, giving a nomination, making a request, or giving a notice,
where such action is permitted, but not required, under the OPGGSA) by requiring the
nomination of one titleholder to take all voluntary actions on behalf of the titleholder
group. An eligible voluntary action may not be taken by a titleholder group unless a
titleholder has been nominated in accordance with the provisions in Division 1 of Part
9.6A, and the nominated titleholder takes the eligible voluntary action.
Currently, Division 1 of Part 9.6A can be interpreted so that the mandatory
arrangements may only apply to eligible voluntary actions taken under the Act itself.
For consistency and administrative efficiency, the amendments in this Schedule will
also enable the arrangements to be carried through into legislative instruments under
the Act. To fully provide for this, the multiple titleholder arrangements will be
extended to apply to applications, nominations, requests or notices made or given to
NOPSEMA (currently the arrangements apply only in relation to applications, etc,
made or given to the Joint Authority, the Titles Administrator or the responsible
Commonwealth Minister). This is necessary given that a number of applications, etc,
may be made to NOPSEMA under legislative instruments, such as applications for
well activity approvals under the Offshore Petroleum and Greenhouse Gas Storage
(Resource Management and Administration) Regulations 2011.
In addition to the above amendments, this Part includes amendments to sections 775D
and 775E of the Act to ensure that, where legislative instruments impose an obligation
on the registered holder of a petroleum or greenhouse gas title, and there are two or
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more registered holders of the title, the obligation is imposed on each but may be
discharged by any one of the registered holders. Currently, these provisions only
apply where the Act (and not legislative instruments) imposes obligations on
registered titleholders.
Division 1: Amendments
Item 15: Section 775A (heading)
This item inserts a new heading for section 775A and sub-heading for subsection
775A(1).
Item 16: At the end of paragraph 775A(1)(d)
This item enables new paragraphs to be inserted after paragraph 775A(1)(d) - see
item 17 of this Schedule.
Item 17: After paragraph 775A(1)(d)
This item inserts new paragraphs (e) and (f) into subsection 775A(1) to include giving
a plan and giving an objection in the list of eligible voluntary actions that are
permitted to be made under the Act or legislative instruments. Existing regulations
under the Act enable titleholders to give a plan or give an objection in certain
circumstances. The new paragraphs therefore ensure that the taking of such actions is
covered by the multiple titleholder arrangements for taking eligible voluntary actions
in sections 775B and 775C of the Act.
Item 18: Subsection 775A(1)
This item adds NOPSEMA to the list of persons to whom applications, nominations,
etc, that are eligible voluntary actions, can be made or given. Existing regulations
under the Act enable titleholders to take actions that would be eligible voluntary
actions if NOPSEMA were listed as a person to whom an eligible voluntary action
can be made or given, such as submitting a well operations management plan or
environment plan for acceptance. The amendment in this item will therefore ensure
that taking an action that is an eligible voluntary action by giving or making an
application, nomination, etc, to NOPSEMA is covered by the multiple titleholder
arrangements for taking eligible voluntary actions in sections 775B and 775C of the
Act.
Item 19: At the end of section 775A
This item provides that references to this Act in Division 1 of Part 9.6A of the Act
include a legislative instrument under the Act. This will ensure that applications,
nominations, requests, notices, plans or objections that are permitted, but not required,
to be given under legislative instruments, in addition to such actions taken under the
Act, are eligible voluntary actions, and therefore subject to the arrangements for
multiple titleholders to take eligible voluntary actions in sections 775B and 775C of
the Act.
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Items 20 and 21: Paragraph 775D(1)(a) and paragraph 775E(1)(a)
These items amend sections 775D and 775E of the Act to ensure that where a
legislative instrument under the Act imposes an obligation on the registered holder of
a petroleum or greenhouse gas title, and there are two or more registered holders of
the title, the obligation is imposed on each of the registered holders, but may be
discharged by any one of them.
Division 2: Application
Item 22: Application - amendments made to section 775A
This item provides for the amendments made to section 775A by Division 1 of this
Part to apply in relation to nominations given by multiple titleholder groups to the
Titles Administrator under section 775B or 775C of the Act before, on or after
commencement of the amendments. This will ensure that the expanded scope of
eligible voluntary actions will apply in relation to existing nominations so that, for
example, titleholders who have already given a nomination will not need to give a
new nomination to take eligible voluntary actions under a legislative instrument.
These amendments will commence by Proclamation, to allow time to inform
titleholders who have made existing nominations of the increased scope of eligible
voluntary actions that will apply in relation to those nominations from
commencement, and enable them to make any consequential changes to their
nominations prior to commencement if necessary - see clause 2 of this Bill.
Item 23: Application - amendments of sections 775D and 775E
This item provides for the amendments of sections 775D and 775E in items 20 and 21
of this Schedule to apply in relation to an obligation incurred on or after the
commencement of this item; that is, commencement is not retrospective.
This item commences on the day after Royal Assent - see clause 2 of this Bill.
Schedule 4, Part 4 - Acting Titles Administrator
Under section 695C of the Act, the Secretary may appoint a person to act as the
National Offshore Petroleum Titles Administrator (the Titles Administrator) during a
vacancy in the office of the Titles Administrator, or during any period when the Titles
Administrator is absent or otherwise unable to perform the duties of the office. In
order to be eligible to be appointed to act as the Titles Administrator, a person must
be eligible to be appointed as the Titles Administrator.
Section 695A of the Act provides that the Titles Administrator is to be a person who
is an SES employee in the Department. However, the appointee to the office of the
Titles Administrator is in practice the only SES employee in the relevant Branch of
the Department. It may therefore be necessary to enable an acting SES employee in
the Department to act as the Titles Administrator. The amendments in this Part will
ensure that a person is eligible to act as the Titles Administrator if the person is
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eligible to be appointed as the Titles Administrator, or if the person is an acting SES
employee in the Department.
Division 1: Amendments
Item 24: Subsection 695C(2)
This item amends subsection 695C(2) to ensure that a person is eligible to act as the
Titles Administrator either if the person is eligible to be appointed as the Titles
Administrator (i.e. is an SES employee in the Department) or if the person is an acting
SES employee in the Department.
Division 2: Application
Item 25: Application
This item provides for the amendment made by this Part to apply in relation to acting
appointments made on or after the commencement of the amendment, i.e. from the
day after Royal Assent.
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