Bob McMullan (Fraser, Australian Labor Party, Shadow Minister for Federal/State Relations) Share this | Hansard source

This is the first time I have spoken with you in the chair, Deputy Speaker Secker. Welcome. I can assure you that you will enjoy the task. It is great fun and you can sound really intelligent because the advice you get is fabulous.

The Offshore Petroleum Amendment (Greater Sunrise) Bill 2007 seeks to amend the Offshore Petroleum Act 2006 in order to put in place the necessary domestic arrangements for Australia to meet certain international obligations once the Offshore Petroleum Act 2006 comes into force. Those obligations originate from the agreement between Australia and Timor-Leste relating to the unitisation of the Sunrise and Troubadour fields: the International Unitisation Agreement or IUA. The Customs Tariff Amendment (Greater Sunrise) Bill 2007 seeks to make consequential amendments to the Customs Tariff Act 1995. I indicate at the outset that the Australian Labor Party will be supporting the passage of both these bills.

The Greater Sunrise resource located in the Timor Sea contains an estimated 8.4 trillion cubic feet of natural gas and 295 million barrels of condensate. The international framework for the exploitation of Greater Sunrise has been established by a number of agreements between Australia and Timor-Leste. The Timor Sea Treaty signed in May 2002 defined the Joint Petroleum Development Area and allows the two countries to jointly develop that area pending agreement on a seabed boundary. The Greater Sunrise field straddles the border of the Joint Petroleum Development Area. The treaty attributes 20.1 per cent of the field, known as western Greater Sunrise, to the Joint Petroleum Development Area and 79.9 per cent to an area of sole Australian jurisdiction.

The International Unitisation Agreement signed in March 2003 provided a framework for the joint exploitation of the Greater Sunrise field by unifying the field under the two jurisdictions for production and apportionment purposes. This is necessary because, although the field straddles two jurisdictions, effective management of the petroleum resource requires that Greater Sunrise be exploited as a single resource; a process known as unitisation. Without unitisation of the resource, production from one part of the area in question could be to the detriment of the resource as a whole or to those with an interest in the resource on the other side of the boundary.

The administration of the western Greater Sunrise area is to be carried out by the Timor Sea Designated Authority, the body responsible for the management of the Joint Petroleum Development Area. The eastern Greater Sunrise area, that part of the field which falls outside the Joint Petroleum Development Area, is to be administered under the Offshore Petroleum Act 2006. Certain amendments to that act are required to ensure consistent arrangements for the exploitation of the Greater Sunrise field.

In 2004, parliament passed legislation to implement the International Unitisation Agreement. Since that time the body of law governing offshore petroleum resources has been replaced. What was for many years the prevailing legislation, the Petroleum (Submerged Lands) Act 1967, is to be superseded by the newly passed legislation, the Offshore Petroleum Act 2006. That is part of the reason we have these amendments before us today—they are required to put in place the necessary domestic arrangements required under our unitisation agreement with Timor-Leste.

The bill establishes a principal Northern Territory offshore area and a new eastern Greater Sunrise offshore area. The latter is to fall under sole administration of the Commonwealth. It also establishes the Greater Sunrise Offshore Petroleum Joint Authority while ensuring that the Commonwealth-Northern Territory Offshore Petroleum Joint Authority continues as the joint authority for the principal Northern Territory offshore area. The powers of the Greater Sunrise joint authority are to be invested in the Commonwealth minister.

The bill also clarifies those persons who can act as a delegate of the joint authority. Further, it provides that project inspectors for the Greater Sunrise area will have standard powers of inspectors under the act. The bill will also insert into the act a section which enables satisfaction of the terms of the IUA, which requires the two nations to act in concert on matters relating to the development of the Greater Sunrise unit area.

The bill also seeks to insert new requirements for persons seeking to hold a licence to recover petroleum under the act. These will ensure a consistency in licensing across the Greater Sunrise area. In addition, the bill seeks to make certain amendments which will ensure the smooth operation of joint authorities once the Petroleum (Submerged Lands) Act is repealed and the replacement section, chapter 2 of the Offshore Petroleum Act, comes into force on proclamation. The bill seeks to add a new schedule to the act providing the coordinates of the Greater Sunrise areas.

The bill also deals with some minor technical amendments to the Petroleum Resource Rent Tax Assessment Act 1987 and the Radiocommunications Act 1992. Some of the provisions in the bill deal with regulation-making powers of the Governor-General and the minister in the administration and implementation of the legislation.

The major debate we are having relates to the Offshore Petroleum Amendment (Greater Sunrise) Bill 2007, but we also have before us the consequential bill, the Customs Tariff Amendment (Greater Sunrise) Bill 2007, which makes necessary amendments to the Customs Tariff Act 1995 to conform with the other changes that have been made in the principal bill.

On a related issue, I would like to make some brief comments in reference to the Treaty on Certain Maritime Arrangements in the Timor Sea. There has been understandable and in fact considerable criticism of the way the Howard government has conducted itself in treaty negotiations with our neighbour Timor-Leste over the last few years. Labor understands, however, that the parliament of Timor-Leste voted on Tuesday, 20 February, to accept the treaty by a vote of 48 to five, with three abstentions. Given this emphatic support for the treaty, Labor is satisfied with that treaty arrangement.

Unfortunately, the Minister for Foreign Affairs has bypassed the normal parliamentary process by which the treaty would be examined by the Joint Standing Committee on Treaties prior to ratification. The committee was able to begin its examination only in recent days because the foreign minister failed to table the document for a year after it was signed. The foreign minister then, quite unfortunately, invoked the national interest exemption to bypass the treaties committee process. I am advised that earlier this month the foreign minister said that the East Timorese elections had no bearing on the treaties processes of the Australian parliament but, on 22 February, the minister wrote to the treaties committee stating that the reason for his decision to invoke the national interest exemption was the forthcoming East Timorese election. Both those statements cannot be right.

This is an unfortunate way to handle an important international agreement and shows a lack of respect—I would suggest an arrogance—on the part of the government towards the proper processes of the parliament. It is the sort of thing that happens after being in power too long. Nonetheless, as I have said, Labor will be supporting the bills before us. We have concerns about that process but it does not go to the merits of the legislation. The legislation is, in our view, noncontroversial and is designed merely to ensure that Australia has in place the necessary arrangements to meet our obligations under the International Unitisation Agreement. Accordingly, the opposition will be supporting these bills.

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