Rex Patrick (SA, Independent) Share this | Hansard source

[by video link] I want to speak in favour of this amendment to the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 from One Nation. It is a good amendment. I want to reflect on the debate that's taken place thus far. We have seen people talking about Northern Oil & Gas Australia, NOGA, being a company that was unable, or purportedly unable, to meet its obligations. A lot of the blame has been directed towards them. But they are not the only party involved here, and they are not the only party that needs to share the blame.

As Senator Whish-Wilson has just been saying, Woodside played a significant role in this. Basically, they decided that they had exhausted what they wanted to get out of the Laminaria field, so they started to reduce maintenance on the Northern Endeavour and then, eventually, off-loaded that asset to NOGA. In my view, they did so completely irresponsibly. They knew exactly what they were doing: they were getting rid of their obligation to clean up the field and remove the Northern Endeavour. Now, the strange thing here is that, after the whole liquidation of NOGA and the taxpayer starting to pick up the bill, Woodside has been paid $8 million in consulting fees on how to clean up the mess. So they rid themselves of the responsibility and now the taxpayer is paying them to give advice on how to clean up the field. That is just an unbelievable situation.

We also have NOPTA. NOPTA are responsible for the issuing of titles and looking at each of the different entities that wish to operate in and around Australia. Of course, in this circumstance, and it's the thing this bill is trying to fix up, Woodside didn't sell off the tenement; they sold off the company that owned the tenement. That's the controversy that this bill is trying to fix today. But, on the evidence that has been provided at estimates, NOPTA realised this loophole existed back in 2015. They realised this from another situation, yet they didn't do anything about it. So we ended up with the situation that's now taken place with Woodside and the Northern Endeavour when it was all preventable. They knew about the loophole and they did nothing. So NOPTA also has to share some blame here. NOPSEMA are the safety and environmental regulator. They are responsible for a vessel that might be moored off the Australian coastline, extracting oil and gas. They were the ones that stopped the production licence. They initiated a prohibition against the Northern Endeavour operator, which is a company called UPS, basically stopping the company from producing oil. That company would have continued to operate had there been cash flow available from the production of the oil, but NOPSEMA effectively stopped that. I understand that they did that for safety reasons. But, having worked with Senator Hanson at estimates on this, I say that NOPSEMA did not work collectively with NOGA to try and deal with the safety situation.

Ironically, the safety situation that initiated the prohibition was the falling of a pipe. It was self-reported. It wasn't as though the operator didn't do the right thing. They reported it. No-one seems to know where the pipe is. That's gone missing. That became the start of all of this. I went to NOPSEMA at estimates, after the company had entered into administration, and said: 'You need to help this company. You need to put on the table what it is they need to do to make the vessel safe again.' NOPSEMA simply weren't interested in assisting. Of course, that left the company in no position to continue, because they didn't know what the pathway back to operation was. They didn't know how to get cash flow returning. I said to the head of NOPSEMA at the time, 'You are going to drive this company into liquidation.' He said, 'No, that won't happen, Senator,' and a month later we find the taxpayer having to step in to operate the vessel. We see Upstream Production Solutions operating the vessel. They were operating the vessel prior to this mess, and now we're paying them again to operate the vessel in lighthouse mode. If you look at the auditor's report that dealt with NOGA, you can see that the government is paying something like twice the odds to operate a vessel in lighthouse mode, compared to what NOGA were paying for them to operate a vessel that was producing oil. It's just incredible.

Lloyd's Register International was the classification society that had issued the class certificate for Northern Endeavour, which is a key document that is required for them to operate. In effect, NOPSEMA were relying on that. The NOPSEMA report found 'serious concerns regarding the veracity of Lloyd's Register International's application of its rules and processes and the resulting information'. The indication of this is: 'It calls into question the reliability of the information provided to the operator of the facility and the extent to which they may use it to assess risk of structural failure, which could to lead to catastrophic consequences for both personnel and equipment.' The bottom line is NOPSEMA went in and looked at the organisation, Lloyd's, and Lloyd's were found to be remiss in their ability to issue certifications in relation to not just the Northern Endeavour but also the other three vessels that were examined at the time. So we have other vessels that Lloyd's had certified improperly, and NOPSEMA had a responsibility to make sure that they were doing their job.

I can tell you right now that Lloyd's is still getting paid to do classification certifications on the Northern Endeavour. I might point out that, had Lloyd's done its job properly, we would have known much, much sooner that the Northern Endeavour had some issues, and NOGA, the company that bought it when it was under certification, would have looked much more closely at the vessel had it not had that class certificate. So there are a number of players that have been responsible for this. We shouldn't sheet home blame to NOGA.

It is for that reason—particularly in relation to Woodside, who knew exactly what they were doing—that I'm supporting Senator Hanson's amendment. Her amendment takes the responsibility back to 2015, not 2021. Now, people might look at that and say, 'That's retrospective, and we don't like retrospective legislation,' but this is remedying a conscious act by a company—that is, Woodside Petroleum—to off-load their own responsibility. As for this being retrospective, all it does is remedy unconscionable conduct by Woodside Petroleum. That's what we're trying to remedy here, and that's why the Senate should be supporting Senator Hanson's amendment. Companies ought to know that, if they operate in and around Australia in a manner that is not consistent with their ethical obligations, parliament will retrospectively hold them to account. There is enough evidence on the table for that to occur. People just have to go and look at the reports. Look at the Walker review into this whole affair. Look at Senate estimates. We have examined this properly, and the right thing to do is to hold Woodside to account. Yes, it goes back to 2015, but that's when they were committing unconscionable acts in trying to off-load their responsibilities. Thank you.