Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

On behalf the Standing Committee on Agriculture, Resources, Fisheries and Forestry, I present the committee's report entitled Advisory report on the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011 and related bills.

In accordance with standing order 39(f) the report was made a parliamentary paper.

by leave—On behalf the Standing Committee on Agriculture, Resources, Fisheries and Forestry, I have the pleasure of presenting our advisory report on the Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011 and related bills. The committee believes that the bills amending the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and related legislation are of great importance to the nation. The bills create a single national regulator for the offshore petroleum and gas industry. Through the creation of the National Offshore Petroleum Safety and Environmental Management Authority, NOPSEMA, the bills integrate safety, structural integrity and environmental regulation for the offshore petroleum and gas sector. They also separate these issues from resource management issues, ensuring that safety and environmental management are not compromised by resource development decisions. This is a critical outcome in light of experiences here and overseas, especially the Montara incident in the Timor Sea and the Macondo disaster in the Gulf of Mexico.

Resource management will remain in the hands of Commonwealth and state ministers in the form of the joint authorities, but the day-to-day resource management decisions will be transferred from the designated authorities, essentially the state departments, to the National Offshore Petroleum Titles Administrator, NOPTA. NOPTA will be the principal source of technical advice and support to the joint authorities in resource management decisions, thus reducing the number of regulators from seven to one.

The bills also incorporate the principle of full cost recovery in the regulation of industry. The committee recognises the national and global trend around the world to go to full cost recovery for operational regulation and endorses the cost recovery mechanisms created by these bills. Industry must expect to face closer scrutiny on safety and environmental matters as part of its social licence to operate. Public confidence in industry and its effective regulation is an important consideration for industry as well as government.

The committee also endorses the amend­ing bill dealing with personal property securities. This is important for regulatory consistency and to prevent legal confusion.

The committee has proposed only one change to the bills, allowing the Western Australian government to retain its role in the negotiation and setting of royalties. The committee recognises the importance of the royalties to the Western Australian govern­ment and the expertise that the Western Australian Department of Mines and Petroleum has developed over many years in negotiating and settling royalties. Leaving this matter in the hands of the Western Australian government will not affect the integrity of the reforms and will allow access to the existing expertise of the Department of Mines and Petroleum in administering royalties.

We have also recommended that, in light of NOPSEMA's environmental functions, the NOPSEMA advisory board should include members with environmental expertise. This will be especially important if NOPSEMA receives accreditation under the Environment Protection and Biodiversity Conservation Act.

The bills are the result of a long period of policy review and consultation. They are the government's response to the Productivity Commission's Reviewof Regulatory Burden on the Upstream Petroleum (Oil and Gas) Sector and the Montara commission of inquiry, both of which called for regulatory reform. They are also a response to the global trend towards more integrated and robust regulation for the offshore petroleum and gas industry.

The committee believes that these bills fulfil the objectives laid down in those reports. The bills are actually reforming regulatory processes, tidying up the present arrangement between regulatory bodies for the new era we are now in for the regulation of offshore petroleum. The bills are making the regulatory environment more efficient and effective and are moving towards world's best practice.

I would like to express on behalf of the committee our gratitude to all those who participated in the inquiry on the bills and to the staff of the secretariat. On behalf of the committee, I recommend the report to the House.