Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Hansard source

I too take the opportunity to briefly speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Cash Bidding) Bill and the related bill, the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2013. As the member Melbourne Ports has quite properly pointed out, the purpose of the bills is to amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to provide an optimised model for allocating cash bid exploration permits in the offshore petroleum regulatory regime. The bills arise from a review of the current processes that took place some time ago—a review which was quite appropriate given the importance of offshore petroleum exploration in the waters around our country.

As we have debated in this place on other occasions, the importance of offshore petroleum exploration to the country is unquestioned in terms of what it means for the future of our nation because of the quantities of minerals and gasses that we understand are located in those waters. Simultaneously, the importance of preserving and protecting the natural environment is equally of immense value to our nation—and what is not often well understood or accepted is that the environment within the ocean waters is perhaps far more important than the natural environment that we see on a daily basis on land. In order to try and ensure we get a good balance of what goes on in the ocean waters, some of these changes have been brought in.

What this amendment will effectively do is introduce a two-staged process, whereby someone who wants to get an exploration permit for mining in the ocean waters is, firstly, assessed as to their suitability to even apply for the permit; and, secondly, if they are suitable, they are allowed to engage in a tender process. I will come back to the question of their suitability, because quite frankly I think that is a critical element of this proposal. Assessing whether an applicant is in fact suitable to be able to apply for a permit is critical to the whole process because the suitability of the applicant goes not only to the concern of whether they are suitable and competent to carry out the necessary work, and therefore ensure that the work they are carrying out is in the national interest, but it is also a matter of whether they are suitable and competent in terms of their previous track record in mining exploration, in particular their responsibility with respect to the environment. So the government is able to assess their suitability not only on the basis of their expertise but also on their compliance with the relevant laws and regulations and the level of responsibility shown by their previous activities in complying with all the environmental requirements placed on them.

One of the things that is not clear from the legislation is whether an applicant who is determined to be not suitable has an appeal mechanism available to them to be able to appeal the decision that they were not suitable. I could not find that anywhere in the material that I read, but it would be interesting to get a response from the minister as to whether there is a process available to them. I have no doubt that an applicant may lodge all of the necessary documentation, and perhaps be determined by the minister not to be suitable, and then in turn wish to appeal that decision because they may feel they were harshly or unjustly treated. Having said that, I have to say that I have no problems with the process being a two-stage one, with the suitability question being the first step of that.

The second stage of the process is where the government is now proposing to go from the current system, where I understand an applicant is allocated the permit on the basis of how much work they are expected to be able to carry out, to one where they simply bid for the right to carry out the exploration work on the basis of a value that the government has put on the area that is subject to the licence application. As the member for Melbourne Ports has quite rightly said, in the bidding process it is broken up into four categories: (1) limiting the discretion to refuse an offer of a permit; (2) the reserve price; (3) the separate pre-qualification and bidding process; and (4) a tie-breaker. They are all steps required to try and overcome different issues that may arise out of the whole process.

In my view the bidding process is the fair way to go. It enables an applicant to put in the bid that they believe is commensurate with the opportunities presented by the licence for which they are applying. It also has provision within the whole process to ensure that if the bids are tied then there is a tie-breaking mechanism. If a bidder puts in an application and then refuses to go through with it, they lose their 10 per cent deposit. It also establishes the process that will be required if none of the bidders put in an amount up to the reserve price that the government has set for it. Again, there are processes to see all of that through.

The whole process, I believe, will not only make the process of issuing licences much fairer but also make it more transparent. I think that that is critical given the immense interest that has been shown to date with respect to licences issued for permits to be granted in exploration of both land and sea opportunities here in Australia. We have seen cases in the past where licences have been issued to proponents and the activities resulted in serious damage to the ocean environment. We have also seen cases in the past where other activities associated with the mining, once the licence has been granted, have also resulted in serious environmental damage to the oceans. What we need to try to ensure is that that does not occur again. Whilst there is other legislation which covers some of the matters relating to the obligations of the people who are granted the permits and the penalties involved with them, I believe it is incumbent on the government, on behalf of the community that we represent here, to ensure that the processes that we apply are not only fair but responsible, because the last thing anybody wants to see is some of the environmental damage and catastrophes that have occurred in recent years both in Australia and elsewhere as a result of mineral exploration permits or mineral licences being granted in some of the sea waters around countries. We have had examples here in Australia and also in America where the damage that was done was such that it took months and months, and possibly even longer, to try to rectify or remedy it; in fact, I do not think it was ever properly remedied. The same applies with some of the areas here in Australia.

I think that in this country we have some of the most pristine ocean areas, which we need to protect. We also know that within those areas there are opportunities for mineral development and mining leases to be granted. So this legislation, in my view, draws the right sort of balance and, as I said earlier, picks up on recommendations as a result of a review that was commissioned by the previous government and which is now being implemented by the current government. I commend the legislation to the House.

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