Petroleum (Submerged Lands) Amendment Bill 2011
Hon Alison Xamon; Hon Norman Moore; Deputy President; Hon Jon Ford
Second Reading
Resumed from an earlier stage of the sitting.
HON ALISON XAMON (East Metropolitan) [5.10 pm]: I rise to indicate that the Greens (WA) also will support the Petroleum (Submerged Lands) Amendment Bill 2011 and note that some of the debate around the changes to this particular regime has already occurred following the petroleum and geothermal energy safety levies legislation debate last week. I note that the bill will effectively return to the state the National Offshore Petroleum Safety Authority’s powers in relation to safety. In this instance it will be the responsibility of the Department of Mines and Petroleum. I think that is probably a good move at this point. It will mean that asset management and integrity can now be managed by the state and that, of course, is an integral part of worker safety.
As I mentioned in the debate last week, I think the Varanus incident brought this issue home to us in that, effectively, the state was left to assume the burden of failure with the system and to shoulder the cost of it. However, it was not within the state’s jurisdiction to examine the integrity of, in this case, the pipes at Varanus Island. I think it is, therefore, important that we allow the state to resume that role, because it seems to me a little bit problematic if we are expected to bear the pain but not have the capacity to try to ensure that incidents such as what occurred at Varanus do not happen in the first place. I will also say that I am aware that there was significant disquiet around the decision to have NOPSA investigate the incident, as it was effectively seen as NOPSA investigating itself, in many ways, to determine how diligent it had been in seeking to ensure that circumstances such as those that led to the explosion at Varanus did not occur. I therefore think it is important we start looking at changes to the regime.
I note that NOPSA will change to the National Offshore Petroleum Safety and Environmental Management Authority and will, effectively, have responsibility for controlling all commonwealth offshore petroleum activities. I have also spoken to stakeholders about these changes and I note that the bill is cautiously welcomed. There is certainly hope, particularly by the Maritime Union of Australia, given these issues refer to offshore arrangements. The MUA is hoping that this legislation will provide more of an opportunity for concerns that the MUA raises to be addressed. I am aware that there is a real sense that NOPSA has not been successful in responding to concerns that have been raised. I will say that I think it has translated to a significant lack of confidence in NOPSA. Therefore, it has got to a point where certainly the unions are indicating that they will support any change to the status quo because they are very clear that they do not think the status quo is working.
The issue of jurisdiction around safety issues has been a problem for some time; it has been the source of debate within this house. I note that the intent of this legislation is to try to address some of those jurisdictional issues. Having said that, though, I note with regard to the players who will be involved in worker safety in offshore matters, we are talking about, effectively, going from NOPSA, the Australian Maritime Safety Authority and WorkSafe to the Department of Mines and Petroleum, AMSA and WorkSafe. It will take NOPSA out of the picture and, as I have said, that is not without some relief by some of the stakeholders who, as I mentioned, have been unhappy. But I note that we will still be left with relative complexity when it comes to who will be responsible for what. When we have debated this issue previously, the big concerns raised were around previous instances. One in particular that has already been alluded to was a serious incident that occurred two years ago. The three agencies that had potential jurisdiction at that point were NOPSA, AMSA and WorkSafe. Effectively, they were pointing at each other saying, “It’s not my problem.” That led to a two-week delay until it was determined who had ultimate responsibility and liability. I think everyone would agree that that is clearly an unacceptable situation. I am aware when we debated what was happening with jurisdictional issues—we talked a little bit about onshore as well as offshore arrangements, but I will talk about offshore arrangements now—that the minister gave a very clear undertaking that the issue of jurisdictional disputes was firmly on his radar and he would be endeavouring to see whether there was some resolution to that. I wonder to what degree the issues that arose have been part of the motivator to go down this path, because it will reverse what we did not that long ago, so it is quite a lot of change in a relatively short period.
As I mentioned when we raised these discussions before in this place, the minister gave an undertaking to address this. After the debate the minister responded quite comprehensively in a letter to me and, I am led to believe, Hon Jon Ford, as the key participants in that debate, to outline many of the proposed measures. As the letter was written in May last year, I had some questions about where we are at. Some of it, unfortunately, is not now relevant, particularly pertaining to NOPSA, but my issue was that one of the purposes of this Petroleum (Submerged Lands) Amendment Bill 2011 is to provide a clear demarcation between the commonwealth and state offshore regulators, which is referred to in the explanatory memorandum. I think that is a laudable objective. The question I have is: given AMSA is still in the picture, to what degree is that likely to be successfully managed? Clearly, there are two state players and only one national player now, but, potentially, that issue could still arise.
Going back to the letter that the Minister for Mines and Petroleum provided, at that point the minister indicated that legal advice had been sought and that it effectively said it is more likely that the potential exists for jurisdictional overlap rather than jurisdictional gap. I understood the minister to have said that, although the Australian Maritime Safety Authority will still have a role to play, that did not preclude WorkSafe from being involved. I am interested to know whether that also applies to the Department of Mines and Petroleum. Will AMSA have an overarching role to play and will DMP be involved as well? I do not have a problem with that or with having more than one regulator and multiple eyes keeping an eye on the matter. However, I would have a problem if we went back to what was happening before whereby rather than having multiple eyes keeping an eye on safety, asset management and integrity issues, effectively nobody was looking at it because everyone thought that another agency was responsible. I am keen for the minister to clarify the expected likely interaction between DMP and AMSA under these new arrangements. I make the point that AMSA is held in pretty much the same level of regard as NOPSA, which is not highly regarded. A criticism that is repeated about AMSA is that it does not have inspectors, only surveyors. I do not think it is a problem to have two bodies that are effectively looking at the same area, as long as that is not used as an excuse for neither authority to take overarching responsibility for what is going on; otherwise, we will continue to have the same issues that we have had to date.
Another question I have for the minister concerns the reference made in the letter to boundary issues between WorkSafe and AMSA being improved and an updated memorandum of understanding being put together. In fairness to the minister, WorkSafe, of course, is not his department and nor is the minister responsible for the activities of AMSA. However, this is a jurisdictional issue and, as I understand it, in May last year a commitment was made to work towards improving the MOU so that the demarcation issues could be resolved, but that has not been finalised yet. The minister might not be able to give me advice on that, which is fair enough because it is not his department, but if he is able to shed any light on that, because it was in the original letter, I would be very interested to know the status of that. This is an ongoing issue that has not been fully resolved.
I have some specific questions about the new regime. Hon Jon Ford spoke at length about the concerns regarding the secrecy of NOPSA’s safety case management regimes. It is certainly felt that these should be more readily available, if not publicly, then at least to a broader group of stakeholders. I wonder whether DMP intends to continue with the current practice or whether there is scope to pursue a more transparent regime to make safety cases more widely available. There is considerable concern about their unavailability and I believe it would be quite useful for them to be more readily available.
I also want to ask the minister about the various bodies for overseeing the effectiveness of the new regimes. Previously we spoke about how the moneys being expended would be overseen and how they could be altered, depending on what changed from year to year. I have quite a few questions about that. How will we assess whether the new safety officers are doing a good job at enforcing the regime? What criteria will be used to measure that? Who will oversee that? Is there likely to be a tripartite approach to that oversight?
Obviously a good regime needs checks and balances, resources and safeguards. We have talked about resources being raised by a levy, and we will need to keep a close eye on that to ensure that the regime is funded at best practice levels. I want to raise some concerns about the checks and balances. As I said, there is cautious support for DMP taking over the role of NOPSA, for the reasons I have already outlined. NOPSA is not considered to be particularly good at doing what it has done. It is sometimes referred to as the “teflon” agency in the sense that issues slide off it fairly quickly without it being held accountable in the way people would expect. When we were discussing the levies, we talked about which state agency is in the best position to take on that role. I said that WorkSafe would potentially be the obvious choice, even though I am not a fan of WorkSafe taking on that role because I believe it requires a level of technical expertise that is not within its capabilities. There are enough issues within WorkSafe for it to deal with. I have been pretty clear in this place about my ongoing criticisms of WorkSafe. I am not a big fan of it and believe there is ample scope for improvement. The issue I have with DMP taking over the role is not about the competence or commitment of the people who work there, but I have reservations about the department that is responsible for ensuring the petroleum industry is expanded— effectively, that is its role; it is there to promote industry and exploration—also having responsibility for ensuring the safety regime. I hope that there is no conflict between those two roles. In an ideal world I would like to believe that these issues would go hand in glove, but there is a potential conflict of interest. I understand that entirely different departments deal with these issues, but if a department is instructed to pursue production at a great rate of knots, I would hope that that would never put pressure on it to hold back criticism of the performance of a particular company if it was felt to be untenable.
I am sure that the minister will not be happy with me for mentioning the Auditor General’s report “Ensuring Compliance with Conditions on Mining” in which the Auditor General raised concerns about the way that environmental management was being managed. I am making a comparison—possibly it is a bit of a stretch, and I certainly hope so—that there is potentially a conflict of interest between a department that is responsible for ensuring that the industry is being supported and promoted while at the same time the department could potentially hold back on certain industry activities on environmental management or worker safety. As I said, I am aware that we have separate departments and very competent and professional staff dealing with this. Maybe it is just an issue of perception, but I thought that I would at least say that.
Having said that, apart from WorkSafe, which one would think would ideally be responsible for safety, there does not seem to be a logical home for anyone else to deal with these areas. So the Department of Mines and Petroleum it is, and, certainly, I am still hoping that DMP will be able to do a better job than the National Offshore Petroleum Safety Authority has done. I note also that DMP will still have to deal with the new NOPSA—namely, the National Offshore Petroleum Safety and Environmental Management Authority— particularly regarding pipelines, I suspect, which are beyond the jurisdictional areas. Therefore, I will be interested to hear the minister’s comments on the progress of how that is likely to be managed. As I have mentioned already, there have been enough problems with the way in which NOPSA has interacted with WorkSafe, so I hope that we do not have the same problems with NOPSEMA being able to interact with DMP, because it will have to happen, and I certainly hope there is goodwill coming from the commonwealth on this.
Hon Norman Moore: It’s a contradiction in terms when you say “goodwill” and “the commonwealth” in the same sentence.
Hon ALISON XAMON: Oh, dear me; that is most disappointing. But I would be interested to know where that is at, because I would really hate it if we go into a new regime and we effectively have exactly the same demarcation issues that we had before. I am not sure that I necessarily share Hon Jon Ford’s views about where the demarcation should occur. I do like the idea of having one clear regulator that oversees safety, but I reserve judgement on who that should be at any particular point and whether it should be the state or the commonwealth at high-tide level or whatever. However, I certainly recognise that having multiple people involved has not been particularly helpful in far too many instances, so narrowing the scope would be good. This bill does not do that; it basically changes one regulator to another. So we are not closer to removing the scope of parties that are involved, unfortunately; we are just changing who will be managing that.
In effect, they are the comments I wanted to make. As I said, the Greens (WA) support this bill. We are certainly hoping that, by changing to DMP from NOPSA, we will see a bit of a change in culture, certainly in engagement with the unions, the people working on the ground and the other safety officers. I think that would be welcomed. I am expecting that we will be able to have a better relationship between WorkSafe and DMP. It will be much easier to do that as they are both state departments. I still maintain some considerable concerns about how the Australian Maritime Safety Authority will fit in with all this and whether exactly the same problems that we have had with NOPSA will emerge. However, having said all that, I also add cautious support for the bill. I will be watching keenly to see how the regime rolls out in practice. It is good that we have done this in conjunction with a cost recovery model in the form of the levies. As a package, I think that is sound. With those few comments, I indicate that the Greens will support this legislation.
Hon NORMAN MOORE:
.....................I appreciate the National Party’s support. Hon Wendy Duncan is quite right; we have two systems, but the bill clarifies who is responsible for what. Hon Alison Xamon supports the bill and talked about Varanus. I have commented on that to the extent I am able. I look forward very much to making the report public but that may be a little way off yet.
Hon Alison Xamon: Maybe closer to the election!
Hon NORMAN MOORE: I will release it only when I do not jeopardise the case. If it turns out that the court case is still going at the next election, it will not be released by me. That would be ridiculous. I have resisted all along jeopardising the state’s position on that. The honourable member also mentioned industry not having a lot of confidence in NOPSA and she talked about regulatory complexity and confusion. I agree that there is still a lot of that in the system. We need to sit down and work on that. She mentioned the Australian Maritime Safety Authority. I do not think this bill will make much difference to that. The relationship with AMSA will remain the same, but we need to work with AMSA.
Hon Alison Xamon: Except that DMP will have to manage that relationship rather than NOPSA.
Hon NORMAN MOORE: I think Hon Alison Xamon will find that we are a very friendly lot and want to get along with AMSA so that we manage things in a cooperative way. I cannot recall the letter I wrote that the member quoted from. She might show it to me so that I can refresh my memory on those issues. The member mentioned safety cases and I have discussed that. She asked how we assess the competency of our new safety officers. The department hierarchy and management structure will make sure people who are engaged by the petroleum safety division will generally be employed under contracts and will have performance-based contracts so that we ensure they do their job properly. I have no doubt that industry will tell us if they are not doing their jobs properly. It is in the interest of the government and of industry to make sure we manage safety in the best way possible. I like the term “teflon NOPSA”.
Question put and passed.
Bill read a second time.
Committee