Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Hansard source

I acknowledge the former minister, the longest serving minister for resources our country has ever had, for the work that he has done to build this sector, for the work that he has done to make sure that Australia will be the world's leading LNG producer and for the work that he has done to make sure that our offshore and onshore hydrocarbons' production sector is not only a great place to work and environmentally safe but also a safe workplace.

This Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2016 comes about because of an administrative shortfall, not the kind of shortfall that can be described as being of no consequence. It is a shortfall that arises because of an administrative oversight by the government of which I was a minister, and I apologise for that. I apologise because this oversight, this shortfall, this lack of consistent dealing consistent with the act's fine requirements, was first exposed to the government in 2011 and we, and I, did nothing to attend to it then, placing an onerous obligation on the current government to act in a legislative way to retrospectively repair that flaw.

None of us like retrospective legislation. It was required in this context simply because of the timing of our knowledge and understanding, and the lack of previous action. That is also why the government, in consultation with the opposition, issued a press release on 10 February—issued after the close of markets—advising of the presence of this flaw and the remedy for dealing with it. That media release indicated that it was understood that the legislation would pass with the support of both sides of the House.

I have been assiduous in making sure that all my public comments are to understand that at no point were any environmental standards at risk and at no point was this lapse of public administration a title risk, a safety risk or an environmental risk; it was indeed an administrative shortcoming and an oversight that should not have happened.

As I say, the departmental records indicated that the Department of the Environment and the Department of Resources were aware of the issue as long ago as 2011 and they had intended to progress amendments to the EPBC Act through the parliament. The issue was not resolved as agreed prior to the proclamation of the marine reserve network in November 2012, and subsequent departmental staffing changes resulted in this issue not being adequately monitored and not being adequately remedied at the time.

Offshore petroleum operations in Australian waters are governed by the OPGGS Act and related acts and regulations. The joint authority is responsible for key petroleum title decisions in Commonwealth waters, including the grant and renewal of offshore petroleum titles, the suspension of title conditions and the extension of a title's term. All title-related decisions impacted by the EPBC Act issue are actually decisions made under the OPGGS Act. The joint authority for an offshore area of a state or the Northern Territory is constituted by the responsible state or Northern Territory minister and    other responsible Commonwealth ministers.

Offshore petroleum exploration is only permitted under a petroleum exploration title. A petroleum exploration title is granted for an initial six-year period and may be renewed for two additional five-year periods. In addition, titleholders can also apply to the joint authority for a suspension of the title conditions and an associated extension to the term of the title in order to facilitate variations to the work program under the title. When we became aware of this flaw and the need to take urgent action, legal advice from the Australian Government Solicitor indicated that they were petroleum titles and that renewal and extension decisions had been made without the environment minister's written consent. This, of course, as I said, extended from a Labor government's failure—and I apologise for that. It is an issue that did not have an impact on the environmental regulation or the environmental requirements associated with titles or work programs consistent with those titles.

The Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2016, this bill, will amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to validate past joint authority decisions to grant renewals or extensions of petroleum titles which also have prior usage rights. Joint authorities generally comprise the responsible state and Commonwealth authorities. Subsection 359(3) of the EPBC Act requires that a title, permit, lease or licence that is a prior usage right must have the written consent of the Commonwealth environment minister or their delegate before the usage right can be renewed or have its term extended. That written consent was not provided.

A petroleum title is a prior usage right under the EPBC Act if the title was in force on the date of the proclamation of a Commonwealth marine reserve that overlaps that title area. Titles that are prior usage rights are exempt from having to comply with the provisions of the EPBC Act and regulations that relate to a Commonwealth reserve or of a management plan for that reserve. There have been three relevant Commonwealth marine reserve proclamations that have led to petroleum titles becoming prior usage rights. They are the proclamation of the south-east Commonwealth marine reserve in 2007; the proclamation of the Commonwealth marine reserves in the south-west, north-west, north, temperate, Coral Sea regions in November 2012; and the reproclamation of Commonwealth marine reserves in the south-west, north-west, north, temperate east and Coral Sea regions in December 2013.

The administrative oversight that led to the exposure of the prior usage rights issues is something that had been revealed to the government through its own internal audit processes, and it was later revealed to operators themselves through their own audit processes. What I would say to companies operating in this field—and I know that a number of companies had identified this shortcoming themselves—is that if you are carrying out exploration in our offshore you should have checked your titles, you should have checked the administrative details yourselves. You should have checked to make sure that the audit processes that you run yourselves are as good as those audit processes which the Commonwealth of Australia runs.

The fact that they were identified by a couple companies is in and of itself alarming to me, since all companies operating in the area should be constantly monitoring their leases, their titles and the legal basis for them to ensure that they are above challenge, because the challenge here can be a mischievous challenge. The challenge here can be a challenge to simply stop an exploration activity for political purposes. So all of our interests are served by good companies ensuring that their exposure is as slight as possible and that their compliance is complete.

I am really proud that the government's own processes identified these shortcomings. I am embarrassed that I as a minister participated in these shortcomings, and I apologise for that. But I am really pleased that, having identified the shortcoming, we are able to be absolutely transparent, absolutely upfront and very clear with the Australian people, with our companies, with interested public stakeholders and our communities and to say: 'We found a problem. We have identified it; we have done it upfront and, in the most transparent way, we are fixing it to preserve, firstly, the integrity of our regulation system and, secondly, the property rights of those people operating in these areas.' I commend this bill to the House. It enjoys bipartisan support, as it should. I thank the government for bringing this to the attention of the parliament so that it can be dealt with in an orderly fashion that ensures the continuation of good public administration and good practices in the management of our offshore title system.

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