Senate debates

Tuesday, 28 February 2006

Offshore Petroleum Bill 2005; Offshore Petroleum (Annual Fees) Bill 2005; Offshore Petroleum (Registration Fees) Bill 2005; Offshore Petroleum (Repeals and Consequential Amendments) Bill 2005; Offshore Petroleum (Royalty) Bill 2005; Offshore Petroleum (Safety Levies) Amendment Bill 2005

In Committee

Consideration resumed from 27 February.


Photo of Ross LightfootRoss Lightfoot (WA, Liberal Party) Share this | | Hansard source

We are dealing with Australian Greens amendments (1) to (3) on sheet 4817, moved by Senator Milne.

5:58 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

I want to go over some of the points that I put to Senator Colbeck on behalf of the government last night, and I hope to get a response. When I raised a range of matters, Senator Colbeck suggested that the environmental planning mechanisms through the environmental plan would somehow suffice. I have checked on that and I understand that the principles of ecologically sustainable development are not incorporated in the act. That is why I have got them as a further amendment. My understanding and reading is that this act takes precedence over the EPBC Act. I asked Senator Colbeck about that last night, and I would like some clarity in the response, particularly as this amendment relates to marine parks.

The other matter I raised last night, which I wish to go over again, is the issue that this legislation has within it the basic assumption that all areas of ocean, including what are called frontier areas of sea, each year are reported in the Department of Industry, Tourism and Resources publication and then companies are invited to get leases in those areas. If it is a frontier area, they get tax breaks. Yet there is no process for the community to look at those areas and make a decision that there ought not to be any mining, drilling, seismic testing or whatever in those areas. In other words, as I put to you last night, this bill makes the assumption that all ocean is available for allocation of leases—with even some tax breaks—unless an environmental plan of some kind prevents it.

This is not being done in the context of regional marine planning, and it is not being done in the context of consultation with other agencies. It is a single use assumption that oil and gas can go anywhere and that these frontier areas, new areas, are available for oil and gas companies to apply for leases in the absence of a context of regional marine planning. I would like the minister to, firstly, confirm whether this area of new acreage release is as I am suggesting it is and, secondly, give me an answer about the precedence of this act over environmental legislation.

6:01 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Senator Milne refers to a number of issues that were raised last night. I do have some information for both Senator Milne and Senator Brown, particularly given the unfortunate circumstances that surrounded us not having the same copies of the second reading speech, which we have fortunately now resolved. I will go over some initial points that relate to this piece of legislation and then I will deal specifically with the issues that Senator Milne has just raised. The Offshore Petroleum Bill is a rewritten and renamed version of the Petroleum (Submerged Lands) Act. The bill provides for the grant of exploration permits, retention leases, production licences, infrastructure licences, pipeline licences and special prospecting authorities and access authorities. The management regime for offshore petroleum exploration, production, processing and conveyance that is proposed by this bill is unchanged in all its essential features from what is set out in the Petroleum (Submerged Lands) Act.

For every one of these activities authorised under the act, an environmental management plan is required as set out in the regulations made under the act—the Petroleum (Submerged Lands) (Management of Environment) Regulations 1999. We discussed those last night. The act works in concert with the Commonwealth’s overarching environmental law—the EPBC Act. These environmental regulations were developed and continue to be reviewed separately to the rewrite exercise of which we are speaking today. The key objective of the regulations is to ensure that operations are carried out in a way that is consistent with the principles of ecologically sustainable development. The amendments proposed by Senators Milne and Brown are primarily to add environmental obligations to the act that, in the government’s view, are not needed as they are handled in the regulations.

I will now go to the questions raised by Senator Milne. Senator Milne is correct in that, annually, potential areas for petroleum exploration are nominated by industry, state governments or Geoscience Australia and, after a process of short-listing, details of the remaining areas are circulated to Commonwealth agencies, including DEH, AFMA, AMSA and Defence, in order to ascertain information on other rights and interests. At the same time, there is a similar consultation process at the state government level, particularly in relation to environment and fishing issues. The state governments also consult with representative bodies in relation to native title interests. As a result of those consultations an area may be modified or withdrawn completely. However, it is more likely that special notices would be prepared to inform potential bidders for an area of issues they will need to address in planning or undertaking exploration activities. The special notices are included in the annual acreage release information pack. After an acreage release is announced by the Minister for Industry, Tourism and Resources, exploration companies have either six months or 12 months, depending on the area, to evaluate existing information on the area and to prepare a bid. Bidding is on a work program basis—in other words, companies bid on the basis of the amount and type of exploration work they are prepared to do in the area over the first three years of any exploration permit granted over the area.

After assessment of bids by the relevant Commonwealth-state-Northern Territory joint authority, the top ranked bidder is made an offer of an exploration permit over the area. The company has one month to consider the offer. If a company accepts an offer, a permit is granted and the work proposed in its original bid becomes an obligation that must be met. However, before any on-site exploration can take place, a specific operational approval is required for each activity, such as a seismic survey or a well. An approved environmental plan pursuant to the management of environment regulations is a prerequisite for obtaining an operational approval. The explorer is also under obligations to meet the requirements of the EPBC Act, particularly in relation to matters of national environmental significance. A circumstance of national environmental significance brings on obligations in relation specifically to other stakeholders.

Specifically in relation to the precedence issue that Senator Milne raised—what has precedence: the EPBC Act or the MOE regulations?—the answer is neither because both have different functions. The management of environment regulations look after the day-to-day management of petroleum activities. The EPBC Act is triggered if an activity has a significant impact on a matter of national environmental significance as defined in the act. The EPBC Act is triggered when an activity takes place in national heritage areas, World Heritage areas, wetlands of international importance, areas where there are threatened species or ecological communities, areas where there are listed migratory species and Commonwealth marine areas.

I will go to a couple of other matters that Senator Brown raised yesterday in relation to a quotation from the second reading speech, including the comment about ‘explicitly requiring consultation with relevant parties before certain adverse decisions are taken’. This was not referring to stakeholder consultation but to a step in the administrative process where the joint authority has to consult with a titleholder before making a decision to either cancel, refuse, renew or terminate a title. Consultation with a titleholder provides the best opportunity for ensuring that the JA process is a correct finding.

The second point was another item in the second reading speech where Senator Brown asked what is meant by the term ‘recovering petroleum on an appraisal basis’. When a discovery is made either with an exploration well, the first well drilled into a structure that is found to contain petroleum, or an appraisal well, an additional well drilled into a structure known to contain petroleum in order to determine things such as the size of the reservoir or the properties of a petroleum pool, the titleholders may wish to bring petroleum to the surface to help assess the commercial potential of the field. This recovery of petroleum will help to determine things such as composition and quality of the oil or gas and flow rates through the reservoir, thus giving an indication of possible production rates. The Offshore Petroleum Bill 2005 has merely made express what was previously implied, that a holder of an exploration permit or retention lease is able to drill a well for the purposes of appraisal.

Thirdly, there was a question in relation to the meaning of disapplying the Navigation Act 1912 and Occupational Health and Safety (Maritime Industry) Act 1993. The OH&S (MI) Act when read together with the Navigation Act establishes an occupational health and safety regime for the maritime industry. The machinery amendment disapplying the abovementioned maritime legislation has been made to avoid the duplication of OH&S regimes while the vessel is deemed to be a facility under the OPB for the purposes of schedule 3 of the bill. A facility includes some vessels that would ordinarily be covered by the maritime legislation such as a vessel used for processing, storing and offloading of petroleum, a drill shop or a pipelay barge. Once the vessel ceases to be a facility for the purposes of the OPB, the maritime legislation will apply again immediately.

6:10 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

Senator Colbeck has just confirmed everything that I was talking about last night. He has conceded that with acreage release it is a process whereby the assumption is that the ocean is available for oil and gas exploration. Then there is a process of consultation, but the decision to issue a permit or licence is made by the designated authority alone with no reference to other sectors or agencies when that actual decision occurs.

In relation to environmental planning, Senator Colbeck talks about the EPBC Act; however, we all know that if you release an acreage you then put out the licence. What you rely on is the company to refer it to the minister under the EPBC Act, and they are not going to do that in many cases. Even if they do, the minister has total discretion to decide whether the action that is going to be taken in that area is a controlled action or not. If on the off-chance it becomes a controlled action, there has only been one case since the introduction of the EPBC Act where the minister has actually stopped anything. That was not because he wanted to but because the courts had determined that he should and he had to—that was in the case of the bats and the Queensland fruit growers in the wet tropics.

Let us get realistic here about where this fits in the hierarchy of decision making. The petroleum act is pre-empting the marine planning process, and I would like to inform Senator Colbeck what the government had to say when it produced its white paper on marine planning in 2004. It said:

Australia’s world-leading program of regional marine planning and management will be brought directly under federal environment law to provide a clearer focus on conservation and sustainable management of the marine environment and offer greater certainty for industry.

I would like Senator Colbeck to explain to me how this rewrite of the petroleum bill fits in with the marine planning process that has been set down in the white paper and which the government brags is going to give a better focus on sustainable management of the marine environment and greater certainty for industry. Why are we having this as a one-user piece of legislation in the absence of this world-leading program of regional marine planning?

6:13 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

The legislation we are debating is designed to deal with issues in relation to, as I said before, the granting of exploration permits. You missed out in your presentation just then the requirement for management plans in each of those zones that are set up. The bill is not designed to look at those things; it is designed to deal with the issues of exploration permits, retention leases, production licences et cetera and other legislation that the government has, including the EPBC Act. If there were a prospect of any exploration in a marine zone, that would be one of the triggers for the environmental processes and the EPBC Act. It is not designed to be doing the same thing. That is what we are saying and that is why we are saying that the amendments that you are proposing are not required, because they are looking at two completely different things.

6:14 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

The minister has missed my point in explaining what is wrong with this legislation. It was designed 40 years ago, when the concept of regional marine planning was unheard of, unthought of, as was the concept of ecologically sustainable development and the concept of the precautionary principle. Forty years ago the legislation made the assumption that the sea was there to be drilled and so on and to go ahead and do it, so the only thing you had to consider in legislation was how to administer the giving of permits et cetera. In fact, the Bills Digest says that the bill is not intended to introduce any major changes, and that is my point. What are we doing, in 2006, just doing a re-edit of a bill which is so wildly outdated in terms of the conceptual framework in which we are working?

The government says, ‘New concept.’ Senator Colbeck, I would really like you to take this in. Regional marine planning is something which people around the world are grappling with. When you look at an area of marine environment, you have to look at ecosystem integrity, fishing, tourism, mineral exploration, mining gas and oil, or whatever else. You have to look at how you manage a regional area of the ocean so that you have these multiple interests taken care of plus the integrity of the environment dealt with. You do not announce that you are going to have a regional planning process for marine areas and then pre-empt that by coming in with an edited rewrite of an act which is based on philosophical assumptions that are outdated and from 40 years ago. That is my problem with this. You are bringing this in and it will become law at the same time as the government is trying to introduce regional marine planning.

What are you going to do then? Will regional marine planning have to be adapted on the basis of what you have already agreed to in this legislation? It is a nonsense. This legislation should be deferred until after the marine planning process and the regulatory and statutory framework are introduced and passed. Then you can fit oil and gas exploration into that context—not pre-empt the process, bring this in and essentially give it precedence. I completely disagree with the minister in his answer about precedence because the act requires that a licence or permit must be used in a manner that does not interfere with:

... the conservation of the resources of the sea and seabed ... to a greater extent than is necessary for the reasonable exercise of the rights and performance of the duties of the first person.

The first person is the licence or permit holder. That gives precedence to the licence or permit over conservation. That is fundamentally written into this act.

You imagine on one level you are just tinkering around the edges and that is all you are doing; but you are tinkering around the edges of something which is philosophically totally flawed, totally outdated, totally last century. That is why these amendments and the next ones I will move, in relation to ecologically sustainable development, are so essential. The amendments will at least provide for marine protected areas to have this capacity to ban oil and gas exploration because, as it stands, there is nowhere in Australia’s territorial waters that the oil and gas explorers and the seismic testers cannot go. This is the issue.

Under the world heritage management plan it is prohibited in certain areas of the Great Barrier Reef. Where management plans exist to exclude them, then they are excluded. That is why these amendments are so important. At least it is a move to get something by way of protection. There will at least be the capacity to have marine protected areas as a place where these activities are prohibited. I would like Senator Colbeck’s answer to my questions as to where this legislation fits into the government’s regional marine planning process and white paper, to explain how it does not pre-empt that process and how it will fit with regional marine planning, because that is precisely the point that I am making.

6:20 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Senator Milne, you completely ignore the place of the regulations as part of this process. They were updated in consultation with the environmental movement in December 2005, just very recently. The regional marine planning process deals with the interaction of all ocean users. That is the primary purpose of that process. It is primarily to make ocean users aware of other rights, be they environmental, fishing or petroleum. There are two things that we are dealing with. You have the regulations under which the environmental conditions are dealt with as part of the act, and which were updated, as I said, in 2005, and you have the basic fundamentals of the regional marine planning process.

6:21 pm

Photo of Bob BrownBob Brown (Tasmania, Australian Greens) Share this | | Hansard source

I will cut directly to the quick. The Greens amendments would prevent mineral exploration and the dangers of oils spills and so on that go with it, and such things as sonar testing, which we know impacts on whales and other marine species, being allowed in marine protected areas. That is what the Greens amendments are saying. Senator Colbeck said that this is handled in the regulations. Could he tell the committee where the regulations say that exploration activities, including the use of drilling, will not be allowed in marine protected areas?

6:22 pm

Photo of Richard ColbeckRichard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | | Hansard source

Senator Brown, that is not what I said. I said that issues that relate to that would be dealt with under the management plan process that comes up either in the marine protected area or for the area that is designated for an exploration licence. Those are the two places where those issues could be dealt with. Each marine protected area has a management plan, as you would obviously be aware, and other environmental issues relating to a licensed area would be dealt with in the management plan that is required for each licensed area under the Environment Protection and Biodiversity Conservation Act.

6:23 pm

Photo of Bob BrownBob Brown (Tasmania, Australian Greens) Share this | | Hansard source

The minister is saying that commercial fishing, for example, is not allowed in marine protected areas, but along comes a multinational oil company and it can stick a drill in there. Before it does that, it can use explosive noise testing, which we know damages both the whole ecosystem in the immediate area and the potential for navigation, for example, of cetaceans—whales and so on. He says that looking after that will be in the regulations. Let me explain to the committee what that means. It means that once this parliament has passed this legislation—and the government has the numbers and the oil corporations know what they are doing; they have fashioned this legislation—out it goes to ensure that they will drill in any marine protected area they want to drill in.

The legislation from an environmental point of view is shown for what it is. It is a farce. So much of the record of the Howard government over the last 10 years is echoed in this legislation. What do you do about the environment? You abrogate the responsibility of this government to look after this nation’s environmental amenity, not least the seas, which are two-thirds of the area that the federal government has aegis over when it comes to the environment. Leave it to the oil companies! In relation to decisions being made by people who are out of reach, as far as the environment movement is concerned, the oil companies will have a field day, and they have had.

I ask the minister whether he could inform the committee when last a major and substantial prosecution was handed down under existing legislation. Under what circumstances would he find this legislation to make any difference at all? What difference would it make? The fact is that, if you are going to have marine protected areas, then you honour those three words. Pivotal is the central word ‘protected’, but this legislation, as so often with this government, abuses Australian English and uses the word ‘protected’ without meaning protected at all. It means that marine protected areas will not be protected from the threats of oil spills, of damage during exploration and of degradation in the years ahead. When there is a commercial impulse, as Senator Milne said, that will always override the environmental one.

We are talking about astonishingly rich marine ecosystems off the Australian coastline which are open to exploitation. This legislation is largely about saying that an environmental regulation will not get in the way. It would have been very simple and beyond such argument as I am putting forward for the minister to come in here with legislation which said that the Environment Protection and Biodiversity Conservation Act rules, with a precautionary principle. Any threat to marine ecosystems is a matter for which the minister must insist on an environmental assessment and make a decision about that. That way there is some public ability to feed into the system. This legislation cuts the public out. The minister says, ‘When it comes to the regulations, we have ticked off with environment groups.’ Really? Is he not saying that there was consultation with environment groups which ultimately made no difference to this legislation? If it did make a difference, can he tell us what that difference is?

I ask the minister whether he would like to go through the exercise of writing to the several environment groups, including the Australian Conservation Foundation, the World Wildlife Fund and the Wilderness Society, and ask, ‘Would you prefer that marine protected areas are actually protected, or do you think they should be open to drilling for oil?’ We all know the answer that will come back. We know that marine protected areas should be protected, but the power of the oil industry over the Howard government, right up to the Prime Minister, is such that there is no such protection here.

That is what the Greens amendment that we are now dealing with simply says. If you are going to have a marine protected area, protect it. It will be protected. The vast majority of the rest of the oceans is left to the oil drillers, but not marine protected areas. The minister says that World Heritage areas are protected. If you look around, you will find that when we come to marine areas that means the Great Barrier Reef. Premier Joh Bjelke-Petersen wanted to drill into that, though he did not say it to the World Wilderness Conference in Cairns in 1980. He waited until afterwards to let that be known, but public outcry stopped it. The area consequently got World Heritage listing, and there would now be pandemonium if you wanted to drill into that area.

There are other areas in Australia’s marine governance which are astonishingly rich and important. In fact, the hallmark of many of these areas is that we know so little about them. We simply do not. There are new species being found all the time—not one or two but dozens—because the areas have not been adequately looked at. The minister knows that, the government knows that, the marine scientists know that, the environment groups know that and the oil companies know that. And guess who gets control of the system? It is the oil companies. In these marine protected areas, the protection applies to everybody, including Australian commercial fishermen, but not to multinational oil companies. That is what this adds up to. That is where we are going to here, because this government has such an appalling attitude to the environment. It comes right down from the Prime Minister.

Whatever else might be said this week about 10 years of the Howard regime, there is very little to contest the fact that it has been the most negligent prime ministership when it comes to what could have been this nation’s grand environmental heritage in that period. It is not just about the government turning its back on such things as ratifying the Kyoto protocol, protecting species, ending old growth logging in this country and using its powers to prevent broadscale clearance of native vegetation, which harbours so many rare and endangered species. Offshore, when it comes to whaling, there has been a lot from this government through the years. But when this summer it got down to the test of doing something about the Japanese whaling and, at least, sending a ship to surveil them and tell the rest of the world what they were doing, this government sat on its hands. It had more important trade considerations to take up. And that is what is happening here. This is the Howard mantra: never let the environment get in the way of a dollar, particularly when it comes from a multinational corporation.

This legislation is about failing to protect this nation’s marine heritage—even the limited areas that are called ‘marine protected areas’, because the oil drillers will not be stopped from infringing on those areas and drilling for oil. That will be after a process, which can be quite damaging, of assessing the area through exploratory activities. When the minister says, ‘It will be handled in the regulations; that is the protection for these areas,’ that is not acceptable in a parliament which is worth its salt. You do not allow any government—particularly the Howard government, with its environmental record—to say: ‘Trust us. We will write regulations in the future. They are not available to you. We will not bring them out. I cannot tell you what they are, but they will look after marine protected areas.’

You do not need regulations to look after marine protected areas—you support this Greens proposal that they be protected and that is it. You have no open door for oil exploration and oil drilling, with all the dangers that come with that down the line. You protect the area. Otherwise, call these areas ‘marine areas vulnerable to oil drilling’ and just be honest about it. That is all you have to do. But this is greenwash. It is dishonest towards the Australian public. Calling these areas ‘marine protected areas’ when they are not is deceiving, and deliberately deceiving, the Australian voter, as happens so often with the environment—and not just the environment—under this government.

6:33 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

Following on from Senator Brown in relation to the regulations which the minister is touting, it is even more imperative that we pass these amendments because there is no ecosystem based management provided for in the legislation. The areas governed by the legislation are separated along state and territory boundaries. There are no provisions establishing regular reviews of management decisions and risk assessments to reflect new knowledge and understanding. In the regulations which Senator Colbeck talked about, there is a requirement for an environment plan to be submitted whenever a new or modified petroleum activity is proposed by an operator, but the decision whether to issue a permit, lease or licence does not involve collaborative decision making or involvement of those with expertise in ecology. There is also no obligation on the designated authority when assessing environmental plans to consider ecologically sustainable development.

The decision to issue a permit or licence made by the designated authority is made alone, with no reference to other sectors or agencies, and the requirement that operators act in a manner that does not interfere with the conservation of marine resources is qualified by the statement, ‘to a greater extent than is necessary,’ clearly making the environment secondary to the needs of the operator. The references to conservation in the regulations and the legislation refer only to the resources of the sea and the seabed and not to the marine environment as a whole. The regulations, while incorporating more than the legislation does, certainly do not go to the issues I was talking about earlier—namely, the requirement for regional marine planning; the requirement that the designated authority, when assessing environment plans and whether or not to issue a permit, can do so alone; and the clear statement of intent that operators act in a manner that does not interfere with the conservation of marine resources to a greater extent than is necessary.

That is the ‘out’ clause for the industry at every turn. They say, ‘It is necessary for us to interfere with the conservation of marine resources,’ and, therefore, they are allowed to do it. That is the problem. That is why we want a situation in which we can exclude and prohibit oil exploration in marine protected areas. It is tragic that we have a situation where the reference to conservation refers only to the resources of the sea and the seabed and not to the marine environment as a whole. That reflects the thinking of four years ago when people talked not about the marine environment, but just about the resources of the sea and the seabed as if they were simply resources to be taken in the absence of any reference to the national oceans policy and in the absence of any regional marine planning.

That is why I am moving these particular amendments which I think most Australians would welcome, and certainly those in the fishing industry would welcome because they are constantly frustrated by what they see as an attempt to get the fishing communities out of marine protected areas in order to let the oil and gas explorers in so that they can do whatever they like in relation to their seismic testing and so on, and not have to fight with the fishermen in terms of resource allocation, space and so on. So let us make it a little bit consistent here: let us have marine protected areas in which oil exploration is prohibited.

Question put:

That the amendments (Senator Milne’s) be agreed to.

6:46 pm

Photo of Christine MilneChristine Milne (Tasmania, Australian Greens) Share this | | Hansard source

by leave—I move:

(1)    Page 2 (after line 12), after clause 2, insert:

2A Object

The object of this Act is to ensure that any offshore activities relating to petroleum exploration, recovery, storage and transport are carried out in a way that is consistent with the principles of ecologically sustainable development, especially in relation to the conservation of marine resources.

(2)    Clause 6, page 15 (line 20), after “safe”, insert “and in accordance with the principles of ecologically sustainable development”.

(3)    Clause 6, page 19 (after line 12), after the definition of petroleum, insert:

Petroleum activity means operations carried out under a permit, lease, licence, authority or consent under the Act or the regulations and, in particular, any of the following operations:

             (a)    seismic or other surveys;

             (b)    drilling;

             (c)    construction and installation of a facility;

             (d)    operation of a facility;

             (e)    significant modification of a facility;

              (f)    decommissioning, dismantling or removing a facility;

             (g)    construction and installation of a pipeline;

             (h)    operation of a pipeline;

              (i)    significant modification of a pipeline;

              (j)    decommissioning, dismantling or removing a pipeline;

             (k)    storage, processing or transport of petroleum;

(4)    Clause 6, page 19 (after line 32), after the definition of pipeline provisions, insert:

principles of ecologically sustainable development means but is not limited to the following:

             (a)    decision-making processes should effectively integrate both long-term and short-term economic, environmental, social and equitable considerations;

             (b)    if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation;

             (c)    the principle of inter-generational equity—that the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations;

             (d)    the conservation of biological diversity and ecological integrity should be a fundamental consideration in decision-making;

             (e)    improved valuation, pricing and incentive mechanisms should be promoted.

(5)    Page 251 (after line 7), after clause 243, insert:

243A Approved environment plan required for a petroleum activity

        (1)    A person must not carry out a petroleum activity unless there is an environment plan approved by the designated authority in force for the activity.

Penalty:                100 penalty units.

        (2)    The contents of an environment plan must be in accordance with the regulations.

(6)    Page 251 (after line 7), after clause 243, insert:

243B Activities must comply with approved environment plan

A person carrying out a petroleum activity for which there is an approved environment plan in force must not carry out the activity in a way that is contrary to the environment plan.

Penalty:   100 penalty units.

(7)    Page 251 (after line 7), after clause 243, insert:

243C Operations must not continue where new environmental risk identified

A person carrying out a petroleum activity for which there is an approved environment plan must not carry out the activity after the identification of:

             (a)    any significant new environmental effect or risk; or

             (b)    a significant increase in an existing environmental effect or risk arising from the activity;

unless the new or increased effect or risk is provided for in the environment plan.

Penalty:   100 penalty units.

Interestingly, we have a 600-page act which has no object. It is unbelievable! I thought I would assist the Senate by providing an object for this act. I move that the object of this act be to ensure that any offshore activities relating to petroleum exploration, recovery, storage and transport are carried out in a way that is consistent with the principles of ecologically sustainable development, especially in relation to the conservation of marine resources. I cannot see that there could be any objection to that, because I then go on to define what the principles of ecologically sustainable development are. Furthermore—and I will get to this in a minute—I move for the incorporation of the precautionary principle.

The reason I argue that it is essential that we put in an object and a definition of ecologically sustainable development is that the subordinate regulations do provide specifically for ecologically sustainable development but this is not provided for in the act, and it ought to be. The reason that it ought to be in the act is that, at the moment, whereas the regulations state that the object is to ensure that any petroleum activity in an adjacent area is carried out in a way that is consistent with the principles of ecologically sustainable development, there is absolutely no obligation on the designated authority when assessing environmental plans to consider ecologically sustainable development. There is no point in having it in the regulations if there is no obligation on the designated authority when you are assessing the environment plans to consider ecologically sustainable development, so let us put it in the act as well as in the regulations. I think that it is imperative that we move to do that.

Secondly, with regard to the precautionary principle, I would like some clarification from Senator Colbeck. I said yesterday that, when a permit or licence is given, a company can potentially hold it for 26 years. That is as I see it, and I would like some clarification as to whether that is the case. I will explain the logic for that. If an exploration permit lasts six years and a renewal of an exploration permit lasts for another five years, with the option for a retention lease for another 15 years if the area is not economically viable in current circumstances, it does seem possible for a company to have a commercial interest in an area for up to 26 years before production occurs.

Progress reported.