Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2014, which amends provisions in the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003. I know for a fact that this is one of the most eagerly anticipated pieces of legislation to be considered by the 44th Parliament.

Appropriate cost recovery by both the National Offshore Petroleum Safety and Environmental Management Authority and the National Offshore Petroleum Titles Administrator is critical to ensuring that these entities are resourced in order to effectively administer the offshore petroleum regime, an area that has brought so much wealth to Australia over the last 30 or 40 years. NOPSEMA was established by the former Labor government on 1 January 2012 as Australia's first national independent regulator for (1) health and safety, (2) well integrity and (3) environmental management for offshore oil and gas operations. NOPTA was also established by the former Labor government on 1 January 2012. It administers titles, undertakes data and resource management and provides technical advice to the joint authority.

This bill before the chamber ensures the commencement of amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 that were put in place by the former Labor government. The amendments seek to clarify and strengthen the compliance monitoring, investigation and enforcement powers of the National Offshore Petroleum Regulator and to ensure that enforcement measures for contraventions of the act are appropriate in application and severity in the context of a high-hazard industry, which is obviously the case when you are dealing with oceans and petroleum substances. We do not have to cast our minds back very far at all to find that there have been fatalities in Australian waters and as well as international waters.

These amendments continue the work of Labor to implement the lessons learnt and agreed in response to the report of the Montara Commission of Inquiry. On 21 August 2009 uncontrolled oil and gas were released at the Montara oilfield. Furthermore, there was an incident on 20 April 2010 at the BP operated Macondo oilfield in the Gulf of Mexico, which tragically saw the loss of 11 lives. These incidents serve as a strong reminder to governments, regulators, the offshore petroleum industry and the broader community that there are risks, particularly if we are complacent about the operation and regulation of offshore petroleum activities.

Labor is committed to doing everything possible to avoid incidents like the leak of oil and gas from the Montara Well Head Platform in the future. The former Labor government worked to ensure that we achieved the best and safest offshore petroleum industry in the world. Obviously safety has costs associated with it, but if it prevents fatalities and environmental damage then it is money well spent.

This bill ensures the commencement of amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 that we put in place. I would point out that there are great environmental opportunities, particularly in places like Bass Strait and other depleted fields where perhaps in the future we will be able to store greenhouse gases safely to contribute to combating dangerous climate change. Industry, government and regulators must be absolutely committed to a culture of high safety standards and environmental protection within a framework of continuous improvement. We must work and learn together. Applying the lessons from the incidents that I have mentioned is vital for the effective regulation of the offshore petroleum industry and its ongoing licence to operate, both in a legal sense and in a social sense.

The amendments seek to clarify and strengthen the compliance monitoring, investigation and enforcement powers of the National Offshore Petroleum Regulator and to ensure that enforcement measures for contraventions of the act are appropriate in application and severity in the context of what is of course a high-hazard industry. It continues the work of Labor to implement the lessons learnt and agreed in response to the report of the Montara Commission of Inquiry.

The first major initiative towards a national occupational health and safety policy came in 1985 with the establishment of the National Occupational Health and Safety Commission, a tripartite body comprising representatives of the Australian federal, state and territory governments and of employers and trade unions—three entities working together. The NOHSC's powers were quite limited, being largely concerned with promoting occupational health and safety awareness and debate and providing a national focus and a forum for OH&S policies and strategies. Today Australia has some of the best occupational health and safety standards in the world. But we have also learnt that we must recognise that offshore regulations are implemented in a growing globalised world where capital is being sought by other countries with oilfields. The jobs and prosperity that flow from Australia's offshore petroleum industry, which has made a nearly $28 billion contribution to the Australian economy, are vital for our economy and energy security in the future. But this cannot come at the expense of the protection of human health and safety or the marine environment.

The National Offshore Petroleum Safety and Environmental Management Authority was established in 2005 for the regulation, and health and safety, of the offshore industry around Australia. It was established as a jointly administered authority required to report to the Australian government, and all state and territory ministers were responsible for the offshore petroleum industry and the Ministerial Council on Mineral and Petroleum Resources. In 2009 the Productivity Commission considered the complexity of the regulatory burden of approvals and reporting on the offshore petroleum industry and recommended that there be a single national regulator for Australian waters. I also point out that there are slow steps being taken onshore to achieve a similar efficiency, without lowering standards everywhere. Obviously, as a Queenslander, I always push for our mining industry's standards and think they should be rolled out around Australia, but I am sure other members of parliament will have their own views.

Whilst the Productivity Commission report was being considered, the Montara oil leak and wellhead platform fire occurred. A subsequent inquiry concluded that the operator of this facility did not observe sensible oilfield practices and that there were major shortcomings in systems, processes, communications, risk management and contractor management. These problems were widespread and systemic and they directly led to the blow-out. Obviously there is 20/20 vision with hindsight.

The environmental management authority will present its own challenges. There has always been a focus on trying to prevent environmental incidents, and the role of NOPSEMA is to strengthen that focus by actively managing incidents if they occur and ensuring that robust monitoring is in place to assess the environmental impacts of such incidents and the background impacts of general operations.

Obviously this industry does have some hazards. It is changing. It is catching up with the world. I would like to particularly mention one of my constituents, a young engineer who I follow on Twitter and who has given me some insights into life on an offshore oil rig: Yassmin Abdel-Magied. She is a young Muslim lady who is an engineer out on the oil rigs. It just shows you how much Australia has changed in the last 20 or 30 years of this industry. I commend the amendment bills to the House.

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

I take the opportunity to speak briefly on these two pieces of legislation. The Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Bill 2014 amends provisions in the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003. Amongst these changes the National Offshore Petroleum Titles Administrator is able to fully cost-recover its activities. The changes also enable an applicant, as opposed to a titleholder, to submit an environmental plan or a revision of an environmental plan, the intent of that being to reduce environmental approval times for offshore projects.

The Offshore Petroleum and Greenhouse Gas Storage Amendment (Regulatory Powers and Other Measures) Bill 2014 makes technical amendments which aim to strengthen the offshore petroleum regulatory regime in respect to monitoring, compliance, inspection and enforcement of objectives, which resulted from the Montara Commission of Inquiry. It is important that NOPSEMA and NOPTA are adequately resourced in order to carry out their responsibilities. As the member for Moreton quite rightly pointed out, we have an obligation and a responsibility to ensure the protection of both the people who work on these sites and the environment surrounding them. Cost-recovery of activities is indeed appropriate, as is ensuring that the responsible agencies have adequate powers and that penalties are sufficient to act as deterrents. There are, however, some matters that I wish to raise with respect to the practices and decisions made by the Abbott government relating to offshore mineral, oil and gas exploration and mining operations.

There is considerable interest in Australia's offshore oil and gas reserves. In particular, gas reserves are attracting a huge amount of interest from around the world. It appears that gas is replacing oil, and fracking is opening up new opportunities for gas projects. All mining operations, both onshore and offshore, have environmental risks attached to them. Those risks have to be managed. It is, however, more difficult to manage the risks associated with offshore projects, particularly when something goes wrong, and we have seen that with respect to some of the incidents around the world. When something does go wrong—as was the case with the Montara oil spill, or as we still see with the Fukushima nuclear plant incident in Japan or the BP spill in the Gulf of Mexico in 2010—those incidents come at considerable economic and environmental cost. In the case of some of those incidents, my understanding is that damage is still being caused as a result of what happened some time ago. So managing those risks becomes truly a challenge. I want to put that into context with respect to the environment. Those risks are only one part of the risks that are currently being faced by our ocean waters.

Right now the ocean is at serious risk as a result of climate change. I for one accept the science and the facts related to climate change. Climate change means that the earth is heating up and that there is more carbon dioxide in the atmosphere. The reality is that most of the CO2 is being absorbed by the oceans, as is most of the heat that is in the atmosphere. So the rising temperatures that we are seeing on the ground are also occurring within the ocean environment. As a member of the House Standing Committee on the Environment, I have heard much evidence about the rising water temperatures and the rising levels of carbon dioxide. On top of that, extreme weather events, such as typhoons, hurricanes and the like, also affect the ocean environment. When you add those risks to the risks associated with the kinds of activities we are talking about—mineral, oil and gas exploration—the risks compound. Each risk in isolation can perhaps be dismissed as trivial, but, when you combine them, the impacts are multiplied many times over.

Mining activities which disturb the seabed and/or pollute the waters around the sites of those operations can have serious environmental risks, so they have to be managed—and managed well. Whilst this legislation relates to the some of the agencies tasked with managing our environment and regulating mineral, gas and oil exploration permits in our waters, the reality is that the risks are very serious and difficult to manage.

Australia is blessed with minerals, gas and oil. We therefore attract interest from developers and mining companies from around the world. Indeed, international investors and transnational companies are behind most of our largest offshore mining operations. A concern I have with respect to these operations relates to the Abbott government's decision to remove the market-testing requirement for 457 visa entrants to this country. That decision effectively enables operators of gas and oil exploration sites to bring labour in from other countries—in fact, to employ their own labour. That was an easing of a restriction that the previous government—in fact it was the member for Gorton, who I notice is here in the chamber—brought in to ensure that we employ Australian labour, if available, ahead of international labour.

There is a second aspect to employing Australian labour on these sites. It relates to the management of the environment. I believe not only that Australian workers have the relevant knowledge and experience but that, more importantly, they have national pride. They would therefore work to ensure that these projects are operated consistently with the standards we expect. I cannot say that about the foreign workers who come in and work on these sites. My concern about the environmental risks attached to operations at these sites is magnified when the projects are being resourced, run and worked by people from other countries, people who do not necessarily have Australia's interests at heart. That is one of my concerns.

Another concern I have is that only last week we saw a reversal by this government of Labor's decision to reinstate Australian sea waters within the Australian migration zone. By excluding Australian coastal waters from Australia's migration zone, it increases the likelihood that the operators of these projects—who, as I said earlier, are often international operators—will want to employ their own staff and, in doing so, bring people in from other parts of the world. So we have now seen the Abbott government change two critical policies, with the likely result that these projects will increasingly recruit people from other countries. That to me raises concerns, because the risks attached to these sites—both environmental risks and risks to safety procedures—are very high. I would have much more faith if Australian workers were on these sites rather than foreign workers.

I understand that we are seeing that right now at the Ichthys project in north-west Western Australia. Foreign vessels with foreign crews are being brought in to lay the pipeline to Darwin. Apart from the fact that I have no doubt that the work could have been carried out by Australian vessels and Australian crews, I believe that it is in our national interest to make sure that those projects are conducted in a way that complies with our laws. I believe the best way to do that is, where possible, to have Australians carrying out the work.

The environmental track record of this government since coming to office has been woeful. We also know, from the track record of offshore mining operations, that they do present risks—and that, when problems occur, the implications can be very serious. Also of concern is that, in comparison to projects on land, offshore projects are much harder to monitor. Effectively, they are out of sight and out of mind. That, however, does not mean that the environment is not being damaged, it does not mean that things are not going wrong and it does not mean that we should put our trust in the operators of those ventures.

These regulations certainly allow the agencies tasked with carrying out monitoring to do so more effectively and to recoup the expenditures they incur in doing their work. I have no problems with that. But the matters I have raised are matters we should take very seriously. Whilst the legislation is well intended—and I support the legislation—I have raised these matters because on one hand we are bringing in legislation to try to protect our workers and the environment, but on the other hand we are bringing in policies that I believe do the exact opposite. With those comments, I commend the legislation to the House.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

Madam Deputy Speaker—

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

No, 'Speaker'.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I am sorry, Madam Speaker—old habits die hard. I apologise sincerely. Madam Deputy Speaker, I rise—

Honourable members interjecting—

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

You can't be that intimidated!

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I do not doubt your ability there, Madam Speaker. Madam Speaker, I rise to sum up on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Regulatory Powers and Other Measures) Bill 2014. The Australian government is committed to providing a strong, effective and properly resourced offshore petroleum regulatory regime to safeguard human health and safety, as well as the Australian marine environment. In line with this commitment, the Offshore Petroleum and Greenhouse Gas Storage Amendment (Regulatory Powers and Other Measures) Bill 2014 proposes amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to strengthen the offshore petroleum regulatory regime in respect of compliance, safety, integrity and environmental management objectives.

These objectives will be achieved by ensuring the commencement of important measures to clarify and strengthen compliance, monitoring, investigation and enforcement powers of the national offshore petroleum regulator, the National Offshore Petroleum Safety and Environmental Management Authority, and adjust enforcement measures for contravention of the act to ensure they are appropriate in application and severity in the context of a high-hazard industry.

Amendments made by this bill will ensure that the relevant standard provisions contained in the proposed Regulatory Powers (Standard Provisions) Act 2014, which is currently also being considered by parliament, are triggered for use in the offshore petroleum regulatory regime. Use of these standard provisions is testament to this government's continued commitment to reducing unnecessary regulation and avoiding duplication of legislation by negating the need to include those provisions in the OPGGS Act itself. These combined measures strike a balance between minimising regulatory burden and maintaining this government's commitment to appropriate regulatory oversight for safety and environmental matters.

I wish to thank the members for Brand, Mitchell, Moreton and Makin for their contributions to the debate, and I note that this bill has the support of both sides of the House. This industry is an extremely hazardous industry that requires absolute commitment from industry, from the workers and from government to ensure safeguards for the people who work in the offshore oil industry. When I filled my current role in the previous Howard government, under Minister Macfarlane, I had the opportunity to go out onto the Stag platform and see first hand the issues involved in the offshore oil and gas industry. Safety is paramount. I agree with the comments by the member for Brand, who said yesterday:

It is a dangerous industry. It is an industry marked by great capability and great risk.

He went on further:

Work on the offshore hydrocarbons environment is important for our country. It is important for the economy. But it is not so important that it should bring with it unacceptable risk to the environment or to the health of our workers.

I know that Minister Macfarlane, who has asked me to introduce this bill and then to sum up for him, is as committed today as he was when the original bills were introduced in 2006 to ensuring the safety of Australian workers. That is paramount for this government and I am glad that we have the support of the opposition.

I do take objection to one of the comments by the member for Makin, who said that the coalition, as a government, had an appalling track record in this industry. I point out to him two disasters that have occurred. The Montara disaster occurred in August 2009, and if my memory serves me correctly Labor were in power in 2009. The Stena Clyde incident, which cost Australian lives, occurred in 2012—again, if my memory serves me correctly, Labor were in power in 2012.

But this is not about playing the blame game—this is about addressing the issues and making sure that compliance and health and safety is paramount. I congratulate the member for Brand on his comments. He was a standout minister, along with Martin Ferguson—as, indeed, was Minister Macfarlane in his previous term. They had the attitude and took the actions to make sure that safety measures in the offshore gas and oil industry had bipartisan support. There was not a hair between us in making sure that we supported actions to preserve life in this industry. We remain committed to continuing the improvement of the offshore petroleum and greenhouse gas storage regulatory regime. In line with this commitment, the government intends to bring forward further measures currently under consideration and development for progression in late 2014. I commend the bill to the House.

Question agreed to.

Bill read a second time.