Stephen Conroy (Victoria, Australian Labor Party, Minister for Broadband, Communications and the Digital Economy) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE LEGISLATION AMENDMENT (COMPLIANCE MEASURES No. 2) BILL 2013

The tragic deaths of two employees following an incident on the Stena Clyde rig in Bass Strait last year, the uncontrolled release of hydrocarbons from the Montara Wellhead Platform off the northern coast of Western Australia in August 2009 and the explosion of the Deepwater Horizon in the Gulf of Mexico on 20 April 2010 - all serve to represent unfortunate examples of the serious and inherent risks associated with the offshore petroleum industry.

Collectively these events demonstrate and emphasise the need for a strong, effective and properly resourced offshore petroleum regulatory regime to safeguard human health and safety and the Australian marine environment.

The amendments contained in this bill largely continue the Australian Government's work of implementing its response to the Report of the Montara Commission of Inquiry, building as they do, on the previous compliance themed legislative package I introduced in November 2012 and which completed its passage through the Parliament last sitting fortnight.

This bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to clarify and strengthen the compliance, monitoring, investigation and enforcement powers of the national offshore petroleum regulator.

As a result, there will be a range of graduated enforcement measures available to the regulator to appropriately and proportionately address different contraventions of the act.

Compliance measures contained in the amended bill will include:

The bill amends the act by introducing continuing penalties, infringement notices, adverse publicity orders and injunctions .

These tools will enable the regulator to select and apply an appropriate and proportionate regulatory response, depending upon the nature and relative seriousness of the breach that has occurred given the overall set of circumstances.

This range of graduated enforcement tools supplement, but do not replace, existing criminal penalties.

Provisions of the bill also strengthen and clarify the application of the 'polluter pays' principle in the act.

In the event there is an escape of petroleum as a result of operations within a title area, operators will be required to stop, contain, control and clean up the spill, as well as remediate the environment and carry out appropriate environmental monitoring.

In the event that the titleholder fails to comply with these requirements following a spill, the 'polluter pays' provisions will also enable the regulator (NOPSEMA or the Commonwealth Minister) to recover from the titleholder the costs incurred by them carrying out remediation activities.

While recognising that titleholders are operating within the Commonwealth's exclusive jurisdiction, the Australian Government recognises that, should an incident occur, there may be potentially serious environmental consequences in adjacent State and Northern Territory jurisdictions.

Acknowledging this risk, this bill also provides a statutory course of action for State and Northern Territory governments to recoup the costs, from the responsible titleholder, of cleaning up the escaped petroleum and remediating the damage to the environment.

The bill clarifies existing insurance provisions, ensuring that it is compulsory for a titleholder to maintain sufficient financial assurance to meet any expenses or liabilities arising in connection with work done under the title following an escape of petroleum and also with other extraordinary regulatory costs they might incur. 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.

The polluter pays and financial assurance amendments collectively implement and address the matters raised in Recommendations 95 and 96 of the Report of the Montara Commission of Inquiry.

Finally, the bill implements a number of miscellaneous technical and minor policy measures, including:

This current set of amendments makes further strides towards addressing issues identified as arising from the Montara incident in August 2009 and underscores the Government's commitment to the maintenance and continuing improvement of a strong, effective framework for the regulation of offshore petroleum activities.

I commend the bill to the Senate.

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

The opposition supports this legislation as part of the process of ensuring that Australian and global communities are confident in the operation of offshore petroleum assets, particularly in the oil and gas industry—a very important part of the Australian economy. Our gas exports at present come almost entirely from offshore petroleum in Western Australia, with some also from offshore petroleum in the waters north of Darwin. It has involved the introduction of the latest technology in the world, that of a floating LNG plant located aboard a ship which is larger than an aircraft carrier. It is imperative that Australia moves into the next phase of offshore petroleum production, liquids, condensate and oil, and also gas for the LNG plants to supply the Asian markets in particular. This legislation will ensure that those operations are done safely in an environmentally sustainable way.

The amendments introduce a number of important provisions, which are supported by the opposition. We believe the offshore oil and gas industry can operate in the manner which allows it to grow without exposing either the workers or the environment to unnecessary risks. We need to have the right legislation to ensure correct and safe operation, but the onus must be on the industry to go above and beyond the requirements of the legislation to do everything it can to ensure that the safety of its workers and the protection of the environment are paramount. Accordingly, I commend the bill to the Senate.

Stephen Conroy (Victoria, Australian Labor Party, Minister for Broadband, Communications and the Digital Economy) Share this | Link to this | Hansard source

I would like to thank Minister Gray's predecessor, Martin Ferguson, for the work he did in setting up this bill. I would also like to thank Mr Ian Macfarlane for supporting the bill. I thank senators for their contributions and commend the bill to the Senate.

Question agreed to.

Bill read a second time.