Commonwealth of Australia Explanatory Memoranda

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OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE AMENDMENT (NATIONAL REGULATOR) BILL 2011

                             2010-2011




THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA




                 HOUSE OF REPRESENTATIVES




OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
    AMENDMENT (NATIONAL REGULATOR) BILL 2011




     SUPPLEMENTARY EXPLANATORY MEMORANDUM




       Amendments to be Moved on Behalf of the Government




  (Circulated by authority of the Minister for Resources and Energy,
              the Honourable Martin Ferguson AM, MP)

 AMENDMENTS TO THE OFFSHORE PETROLEUM AND GREENHOUSE
  GAS STORAGE AMENDMENT (NATIONAL REGULATOR) BILL 2011

GENERAL OUTLINE

The purpose of these Government Amendments is to remove a provision in the
Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator)
Bill 2011 (the National Regulator Amendment Bill) that would enable the responsible
Commonwealth Minister to incorporate a code of practice or standard as existing from
time to time in a direction given to a petroleum titleholder. The Government
Amendments also remove existing provisions in the Offshore Petroleum and
Greenhouse Gas Storage Act 2006 (OPGGS Act) that give the relevant regulator the
same ability to incorporate material as existing from time to time in directions given to
petroleum or greenhouse gas titleholders.

The amendments are in response to concerns raised by the Senate Standing
Committee for the Scrutiny of Bills in relation to the applicable provision in the
National Regulator Amendment Bill in its Alert Digest No. 5 of 2011.

The OPGGS Act currently provides the Designated Authority (i.e. the relevant State
Minister) with a broad general power to give directions to petroleum titleholders. The
National Regulator Amendment Bill will abolish the Designated Authority and give
this power to the National Offshore Petroleum Safety and Environmental
Management Authority (NOPSEMA).

In addition, item 333 of the National Regulator Amendment Bill proposes to insert a
new section 574A into the OPGGS Act to provide the responsible Commonwealth
Minister with a general power to give a direction to a petroleum titleholder relating to
resource management, resource security or data management. Subsection 574A(7)
would enable a direction to apply, adopt or incorporate a code of practice or standard
contained in an instrument as in force when the direction takes effect, or as existing
from time to time. Several existing provisions in the OPGGS Act provide the same
power for a direction issued by the applicable regulator to incorporate codes or
standards, either as in force when the direction takes effect or as existing from time to
time, including the broad general power to give directions that will be transferred
from the Designated Authority to NOPSEMA.

The Senate Standing Committee for the Scrutiny of Bills has expressed concerns in
relation to proposed subsection 574A(7) to the effect that incorporating a code of
practice or standard as existing from time to time may create uncertainty in the law,
and those obliged to obey the law may have inadequate access to its terms. The
Senate Committee also noted that, although subsection 574A(10) requires the text of
the relevant code or standard to be made available on the Department's website, this
is subject to copyright restrictions.

On further consideration, the Government agrees that the Senate Committee has
raised a substantive concern about incorporating material, as existing from time to
time, in a direction by reference. These Government Amendments therefore remove
from proposed subsection 574A(7) the ability to incorporate in a direction material as
"existing from time to time".

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The rationale for removing the ability to incorporate material as in force from time to
time from subsection 574A(7) applies equally to the existing provisions of the
OPGGS Act that provide the same ability. Therefore, these Government
Amendments will also remove those existing provisions from the OPGGS Act.

These Government Amendments will increase regulatory certainty for petroleum and
greenhouse gas titleholders, by ensuring those titleholders will not be subject to
requirements included in codes of practice or standards that may change from time to
time. If the responsible Commonwealth Minister or NOPSEMA, as applicable, elects
to incorporate codes or standards in a direction, that material will be incorporated as
in force when adopted in the direction.

FINANCIAL IMPACT STATEMENT

Nil financial impact on the Australian Government Budget.

REGULATORY IMPACT STATEMENT

These Government Amendments do not impose any new regulatory burden on the
offshore petroleum industry.




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NOTES ON INDIVIDUAL CLAUSES
Clause 1 - Amendment to Clause 2 of the National Regulator Amendment Bill

This clause adds a new item 9 to the table in the existing Clause 2 (Commencement)
of the National Regulator Amendment Bill to provide that a new Schedule 6,
introduced through these amendments (see clause 3), will commence on the day after
the National Regulator Amendment Bill receives Royal Assent.

Clause 2 - Amendment to proposed subsection 574A(7) contained in item 333 of
Schedule 2 to the National Regulator Amendment Bill

This clause omits the proposed subsection 574A(7) contained in item 333 of Schedule
2 to the National Regulator Amendment Bill, and replaces it with a substitute
subsection 574A(7) that allows the application, adoption or incorporation (with or
without modification) of a code of practice or standard contained in an instrument as
in force or existing at the time when the direction takes effect. The amendment omits
the ability to adopt or incorporate such material as existing from time to time. Instead
it will be the case that if the responsible Commonwealth Minister elects to incorporate
codes or standards in a direction, that material will be incorporated as in force when
adopted in the direction.

Clause 3 - Amendment adding a new Schedule 6 to the National Regulator
Amendment Bill

This clause adds a new Schedule 6 "Amendments relating to directions" to the
National Regulator Amendment Bill.

Items 1 to 7 - Subsection 316(3); Subsection 351(3); Subsection 376(5); Subsection
380(7); Subsection 383(7); Subsection 574(7); Subsection 580(6)

These items repeal existing subsections 316(3); 351(3); 376(5); 380(7); 383(7);
574(7); and 580(6) in the OPGGS Act, and insert new subsections 316(3); 351(3);
376(5); 380(7); 383(7); 574(7); and 580(6), that allow the adoption or incorporation
(with or without modification), into a direction, of a code of practice or standard
contained in an instrument as in force or existing at the time when the direction takes
effect. The items repeal the ability to adopt or incorporate such material as existing
from time to time. This is to ensure a consistent approach to all future directions and
the incorporation of extrinsic material.

Item 8 - Application - directions

This item provides that the amendments made by items 1 to 7 apply only to directions
issued after the commencement of this item; in other words the amendments will not
apply retrospectively.




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