Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Hansard source

[by video link] I rise to speak on the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021. The purpose of this bill is to stop offshore petroleum companies entering transactions where their dominant purpose is the avoidance of the decommissioning and remediation costs of end-of-life assets. The proposed legislation is a regulatory response to Woodside's plan to avoid liabilities in the Timor Sea, which ends with the Australian taxpayer being on the hook for $1.6 billion.

The story behind this legislation needs to be put on the record, because it's more than a story of incompetence by the regulators and incompetence by a parade of government ministers drawn from the National Party. It is also the story of a government which prefers the interests of its foreign-owned petroleum companies over the interests of Australian citizens. So, let us begin the story.

In September 2015 Woodside Petroleum entered into an agreement to dispose of its majority interest in the Laminaria and Coralina joint venture, which included the Northern Endeavour, a floating oil production storage and offloading facility. The Laminaria and Coralina oil leases are located 550 kilometres off Darwin under 340 metres of water in the Timor Sea. By 2014, these oil fields had produced 100 per cent of their expected production, and Woodside decided these petroleum assets had reached the end of their life. Woodside's Timor Sea petroleum assets were unsellable because the liabilities far outweighed any asset value. Woodside considered decommissioning these oil assets but instead came up with a less costly plan—they decided to transfer the assets and liabilities to a small company which would eventually go bust, leaving the Australian taxpayer with the clean-up costs. Entering a transaction where the dominant purpose was the avoidance of a billion-dollar clean-up cost made sense; there were no anti-avoidance provisions in the Offshore Petroleum and Greenhouse Gas Storage Act 2006, so what they planned to do was legal. In 2015, Woodside paid a small group of companies $24 million to take over their Timor Sea assets and liabilities—the first act of this tragedy had been written. A handful of foreign-owned transnational companies, which operate in Australia's offshore waters, knew Woodside was offloading its liabilities, initially to a small company but later to the Australian taxpayers. It seems only the regulators and the minister did not understand what was happening. In any case, the industry watched to see if Woodside would get away with their plan. If they did, it meant it would be okay for them to do the same. The industry did not have to wait long to see if Woodside's sting would work.

The second act of this tragedy began when, in July 2019, the National Offshore Petroleum Safety and Environmental Management Authority, NOPSEMA, issued a prohibition notice on the Northern Endeavour. The owners of the Northern Endeavour pleaded for the prohibition notice to be replaced by an improvement notice, which would have given them time to generate funds and undertake repairs. The owners of the Northern Endeavour showed good faith by spending millions of dollars on repairs, but, without any road map back to production, the business went into administration, then liquidation. Two hundred and fifty Australians lost their jobs.

In February 2020, the Australian government became liable for up to $1 billion or more of maintenance and clean-up costs. This event is without precedent. The Northern Endeavour Taskforce was established to manage the Northern Endeavour. To date, $200 million has been spent on weekly maintenance costs of this oil ship—$200 million. I understand a further $382 million will be spent between now and mid-2023, when the Northern Endeavour is expected to be towed away. This additional cost is based on the current weekly maintenance cost of $4 million, for a further 96 weeks. So far, we can see the taxpayer on the hook for $582 million, enough to build a 300-bed hospital in regional Queensland.

In March 2020, Steve Walker was asked to review the circumstances leading up to the government taking over Timor Sea assets previously owned by Woodside Petroleum. In June 2020, the Walker review was published. It was made public in September 2020, after a freedom-of-information request. The report, largely written by NOPSEMA, exonerates NOPSEMA and is a whitewash. NOPSEMA initially said health and environmental concerns were the reasons for the July 2019 prohibition notice on the Northern Endeavour, but on 18 May 2021 they told me health and safety were their concerns. What happened to their environmental concerns? Those environmental concerns disappeared after the government commissioned Woodside to report on the environmental problems arising from the decommissioning of the Northern Endeavour. We will never know what is in that $8.8 million report, because it is marked 'cabinet-in-confidence'. What are they hiding? If NOPSEMA had commissioned the Woodside report before they issued a prohibition notice to stop production on the Northern Endeavour, then it is reasonable to assume 250 Australians might not have lost their jobs and taxpayers would not have lost $600 million that cannot be recovered.

The bill we are debating today makes no provision for Woodside to pay for cleaning up the Northern Endeavour. That is the reason why I have proposed an amendment to make the legislation retrospective to 1 January 2015. If the legislation operates from 1 January 2015, then Woodside would pay for the costs it has avoided. If my Woodside amendment were supported, there would be no need for the proposed industry-wide levy announced in the May 2021 budget. The levy of 48c per barrel means the whole industry, not Woodside, will pay to clean up the Northern Endeavour and its associated oilfields. I think it's entirely understandable that the industry is resisting this levy. The government is still trying to persuade the offshore petroleum industry to pay for Woodside's liabilities, and that is the reason why, after 12 months, there is no legislation before the Senate. There is no reason to believe an industry-wide levy will be introduced. Woodside Petroleum's gift of its liabilities to a small Australian company was like the bottom-of-the-harbour tax schemes, which sent companies into liquidation, leaving the tax commissioner as the only creditor. The government closed these schemes by making it a criminal offence to enter into them, but this time there are no consequences for Woodside.

To understand why the government is willing to let the Australian taxpayer fork out up to a billion dollars in place of Woodside, we need to look at the relationship between Woodside Petroleum and National Party ministers. Woodside is a corporate member of the National Party. This means Woodside Petroleum pays $55,000 a year for special access to National Party ministers, who, in a coalition government, traditionally hold the portfolio for offshore petroleum. Woodside Petroleum is not the only petroleum company to be a corporate member of the National Party. The conflict of interest, apparent or real, is obvious. Why does the Prime Minister allow this conflict of interest to continue? The government knows much more than it's telling. But its decision not to make this legislation retrospective to catch the Woodside avoidance transaction makes no sense if you genuinely represent the interests of Australians. The Woodside sting means they were able to recently enter into an agreement with BHP with a billion dollars more in assets than they would otherwise have had. It's a lot of money and enough to grease a few palms.

Labor intend to support the government to pass this legislation without making it retrospective, and they are doing that because something is better than nothing with an estimated industry liability of $60 billion in cleaning up end-of-life petroleum assets. The government and Labor could get together to make the legislation retrospective and save the taxpayer a couple of billion dollars but they fear the power of petroleum companies with deep pockets so close to the next federal election.

These stories will never be told by the two big parties because too often they put their future over the interests of Australians. But we all know One Nation never puts its interests before the people of Australia. I am constantly calling for accountability. At Senate estimates a few years ago I questioned the then minister for resources, Senator Matt Canavan, with regard to the Northern Endeavour. He was evasive and didn't particularly want to answer my direct questions. Something stinks to high heaven with regard to the Northern Endeavour, and you will never convince me otherwise.

I will not support the legislation unless my amendment calling for Woodside and not the taxpayers to pay for the costs is supported. If the Labor Party oppose my amendment, they will also have to tell the Australian taxpayers why. I have questioned for years our oil and gas resources—about the profits and about the taxes that multinationals should be paying but don't. That's only because the government is not pursuing it. There have been a lot of cover-ups that have happened, and this is the biggest cover-up that I've ever seen. Woodside is responsible and should pay for these costs, not the Australian taxpayer to the tune of billions of dollars.

As I've said, where is the legislation that is going to impose this levy? We haven't seen it. It's not before us. So it's all smoke and mirrors. It's all talk. Who is going to end up paying this bill? It is going to be you, the taxpayer, and me, out of our taxes. We have to stand up to this. I'm calling on the Labor Party, I'm calling on the crossbenchers and I'm calling on the Greens party: let common sense prevail here. A company has done the wrong thing. They got rid of their assets to get out of the clean-up costs. That is the guts of this whole issue that I'm talking about now. We have to make sure that they pay for it. The Australian government expects any other Australian to pay for what they are responsible for, and that's all I'm asking for. So I hope that the Labor Party does come on board with me on this and I hope that the coalition government sees the common sense in this—that Woodside should be paying for it—because otherwise I will continue to ask: why is Woodside in cooperation with the National Party? Why are they paying $55,000 a year to have access to National Party ministers who deal with petroleum, oil and gas? Is it a conflict of interest? It certainly is. Anyway, the public will judge them, as I'm judging them. Like I said, I think it stinks to high heaven.