Chapter 4
Legislation for Low Aromatic Fuel
The need for legislation
Gaps in the current approach
4.1
Evidence from numerous Indigenous witnesses and organisations spoke
about the fact that even though their own communities stocked low aromatic fuel,
sniffable fuel was being obtained from retailers in proximity to those
communities.[1]
Mr Lance McDonald, an elder from Papunya, a community that has a low aromatic
fuel bowser, expressed deep concern about the ongoing presence of sniffable
fuel at Tilmouth Well:
Tilmouth Well is the only frightening one for us, because we
are living on the same road that it is on. Tilmouth Well is in the middle of
where three tribes are mixed up. There is Anmatjere tribe this side, Warlpiri
and us mob—Luritja Pintubi tribe. We think that Tilmouth Well needs to change
because we do not want to go backwards. We want to go forwards.[2]
4.2
This fear is underscored by recent experiences at Papunya and Kintore
where sniffing outbreaks have spread rapidly:
[T]here was recently a boy from South Australia who came up
for a funeral and got left behind when the other mob left. They left him there
with extended family, but he was falling through the safety net a bit. He
started sniffing and he started other people sniffing, and then there were 12
people sniffing in Papunya. That boy's father turned up and took him to Kintore
and the sniffing died down there. The youth workers got really involved with
them. At Papunya the other 11 stopped. But then he started up another 15 in
Kintore. So you really cannot underestimate what one person can do.[3]
4.3
The majority of submissions were deeply concerned that the
actions of a few retailers that still supply RULP and do not stock low aromatic
fuel had frustrated the comprehensive rollout of low aromatic fuel in affected
regions for several years and in some cases more than five years.
4.4
The Warlpiri Youth Development Aboriginal Corporation (WYDAC) argued
that the campaign to eradicate petrol sniffing was at a crossroads because the
progress that had been achieved so far was under threat:
[W]e stand at an important juncture in Central Australia,
where a new generation of children in much of the region have grown up free of
sniffing culture, however due to the irresponsible decisions of a few of
retailers, sniffing culture appears to be once again rearing its head in some
sites. We know from hard experience that sniffing, once established in an
affected community can rapidly spread. Sniffing once accepted by a few as
something that's too hard to deal with quickly becomes viewed this way by all.
We stand at this juncture now in Central Australia but it seems to us that
governments still have the capacity to act and there are still straight-forward
steps that can be taken. We encourage the federal government to take a lead on this
issue and for the various political parties to work collaboratively with them.
Voluntary roll out of Opal has been a good thing, but the time has come to
finish the job.[4]
Stakeholder arguments in favour of Commonwealth legislation
4.5
A majority of stakeholder submissions were in favour of Commonwealth
legislation for low aromatic fuel and the main arguments put forward in support
of a legislative approach are presented below.[5]
4.6
A legislative approach that prohibited retailers in designated regions
from selling RULP was seen as a necessary step towards closing the gaps in the
current program. The voluntary scheme was deemed insufficient for
dealing with the petrol sniffing that has been to the historical resistance of
a few retailers to stocking low aromatic fuel.[6]
4.7
Retailers in the Central Australian Region currently stock low aromatic
fuel voluntarily and continued adherence to this agreement is crucial to the
success of the scheme. Several organisations were very concerned that there is
no guarantee that one retailer will not revert to RULP, potentially leading to
a 'domino' effect where the voluntary agreement collapsed.[7]
Legislation was seen as the best way to prevent the unravelling of a voluntary
agreement:
Currently all retailers in Alice Springs use Opal
voluntarily. Maintenance of this outcome is crucial to the success of Low
Aromatic Fuel initiatives in the Central Australian Region. However, if any individual
retailer decided to stop stocking Opal and make other types of fuel available
for sale - thereby breaching the status quo - it is likely that other retailers
would follow suit, in order to avoid any potential commercial disadvantage. The
proposed legislation would provide a strong deterrent to prevent this happening
and would also provide a path for action should such a situation occur in Alice
Springs or in any other site crucial to the effectiveness of the Low Aromatic
Fuel initiative.[8]
4.8
Dr John Boffa argued that a mandatory approach is essential because a
large part of the success achieved with the voluntary rollout in Central
Australia can be attributed to the unique level of grass-roots inter-agency
collaboration and hard work in that particular region, and that this level of collaboration
does not exist in other regions:
[W]e have achieved a comprehensive rollout here ... largely ...
because of CAYLUS and the interagency collaboration and the partnerships and
the constant talking to outlets and educating them, which has got people to do
the right thing voluntarily, but there are still a few outlets that have not.
But in other parts of the country they have got nowhere near that comprehensive
commitment.[9]
4.9
The committee also heard that previous strategies to address petrol
sniffing such as the renowned Mount Theo program that had originally succeeded
in overcoming petrol sniffing could no longer be applied today. Although the
comprehensive program of care provided at Yuendumu is an essential element of
overcoming petrol sniffing, WYDAC expressed grave concern about the
re-emergence of petrol sniffing and urged the government to mandate Opal fuel:
We know that Opal fuel has proven effective but, unless the
sale of Opal is mandated, and across the broader region, there is a real danger
of sniffing outbreaks and devastating consequences.
The gains achieved to date through the rollout of Opal fuel
are crucial but they are also fragile. We currently have a generation of
children in much of the region who have grown up free of a sniffing culture.
However, due to what we believe are the irresponsible decisions of some
retailers, the sniffing culture appears to be once again rearing its head in
some sites. We know from hard experience that sniffing, once established in an
affected community, can rapidly spread. It is an epidemic we do not wish to
relive.
We stand at a junction in Central Australia now and we cannot
afford to go back. Our program is known for its hard earned success over many,
many years. We cannot emphasise too strongly to this inquiry that the way we
tackled sniffing in the Warlpiri communities would not be permitted today ... Increased
scrutiny on process and regulations means that the successful strategies that
Mount Theo used in the early days would not be considered acceptable. We have
welcomed a higher level of accountability and scrutiny. However, we despair at
the possibility of a resurgence of petrol sniffing, especially given that our
original successful strategies could not be applied today.[10]
4.10
CAYLUS pointed out that by consolidating the progress that has been
achieved with the voluntary rollout of low aromatic fuel, legislation would
provide communities with the security to focus on community development without
having to contend with recurrent petrol sniffing episodes.[11]
4.11
CAYLUS summed up the views expressed by many community organisations by
stating that:
We have often said that if this legislation was in place you
may never have to use it. But if you ever did have to use it you would be
really glad you had it, as opposed to 'here we are again and we are 12 months
away from even getting it written'. We know that we can fix sniffing through
the Opal strategy. This legislation consolidates that victory and makes it
possible to replicate that victory anywhere. It does seem like a no-brainer to
me.[12]
4.12
Adjunct Professor Michael Moore observed that the campaign to tackle
petrol sniffing has much in common with previous successful public health
campaigns:
It is important to remember that successful public health
campaigns are never about one thing; they are about a whole series of things.
They are about individual responsibility but they are also about tackling
underlying causes and operating within particular settings. There is a snowball
impact for effective campaigns—that is, you begin to get everybody on side and
it reaches a point where you cannot get the last few, and that is when it is
time for legislation.
If I can draw just a very quick analogy: when our community
tackled motor car related morbidity and mortality, we began a process of trying
to explain about accidents and the power of cars and trying to get people to
drive sensibly and lower their speeds. Then a whole series of things happened.
There was legislation to improve motor cars, to change the speed limits and
particularly to prevent driving under the influence of alcohol, and seat belts
requirements and so on. And each one of those steps combined was done, first of
all, with general understanding in the community, which was then followed at
the last bit by legislation. I think what is happening here is applying the
same sort of principles, and that is why the Public Health Association is
supportive of the Low Aromatic Fuel Bill 2012.
4.13
The committee raised the issue that banning a product may lead to
potentially unintended consequences. Mr Moore pointed out that the PHAA does
not advocate banning substances, but rather advocates imposing restrictions 'to
try to change attitudes'. Mr Moore noted that the most successful health
campaigns have removed a dangerous substance and replaced it with a safer
alternative. He believed that the bill fits within this broad approach by
removing RULP and replacing it with a low aromatic alternative.[13]
Current Northern Territory legislation
Northern Territory Volatile
Substance Abuse Prevention Act
4.14
The benefits and limitations of existing Northern Territory legislation were
examined in order to determine firstly, whether the operation of such
legislation in conjunction with the voluntary rollout of Opal and the operation
of the eight point plan is sufficient to achieving the objective of eliminating
petrol sniffing, and secondly, whether the addition of Commonwealth legislation
would have a greater impact than the legislation that currently exists.
4.15
The Northern Territory Volatile Substance Abuse Prevention Act
(the Act) was introduced in February 2006, and amended in 2010, in an attempt
to reduce the harmful effects of abuse of volatile substances such as petrol,
paint and glue.[14]
4.16
Under the Act, police and authorised persons[15]
are empowered to remove and dispose of volatile substances from somebody who is
inhaling, intends to inhale, or has recently inhaled a volatile substance, and
take them to a 'place of safety' or into protective custody.[16]
4.17
The Act also provides for assessments of people at risk of volatile
substance abuse to be carried out. Assessment findings can trigger a
recommendation to the Chief Health Officer to apply to the local court for a
treatment order. Court-ordered treatment programs can run for up to 16 weeks
and be extended if necessary. If a person fails to participate in a
court-ordered program, they may be subject to a warrant to compel them to
attend treatment.[17]
Community Management of Volatile
Substances
4.18
Community members and Shire Councils are also able to apply to the Minister
for a certain area in their community or a whole community area to be declared
a
management area under the Act:
A management plan is then developed for the area to establish
rules for possession, supply and use of volatile substances. Delegates of the
Minister hold community meetings, explaining the workings of management plans
and consequences for the communities with such plans. The delegates also assist
and guide communities through the making of the plan.[18]
4.19
Community members must agree to the area and the plan. Signs must be
erected at entry points to the community advising that the community is subject
to a management plan. The police are empowered to enforce the management plan.
Unlawful supply
4.20
The Act provides that a person must not ‘supply a volatile substance to
another person if the supplier knows, or ought to know, that the other person
intends to inhale the substance.’[19]
4.21
Likewise a supplier must not give a person a volatile substance if the
supplier ‘... knows, or ought to know, that the recipient intends to give the
substance to another person for inhaling.’[20]
Unlawful supply is an offence under the Act and is punishable by a fine or
imprisonment.
Limitations of the Volatile
Substance Abuse Prevention Act
4.22
Given the existence of the Act, the committee sought evidence on whether
the Act was sufficient to control sniffing in the NT, and whether this model
could be used in other jurisdictions to control petrol sniffing.
4.23
The committee notes that two recent coronial inquests that reported in
October 2011, one completed in WA and another in SA, recommended the
implementation of a law similar to the NT Volatile Substance Abuse Prevention
Act in their respective jurisdictions.[21]
4.24
CAYLUS noted the positive impacts of the Act in enabling some
communities to exert a level of control over sniffing and empowering police to
deal with sniffing. Mr McFarland said that the various mechanisms within the
act including the management plans and the mandatory rehabilitation make it a
'very powerful act'.[22]
4.25
However, CAYLUS drew attention to limitations in the Act regarding the
extent to which a management plan can exercise control over fuel outlets in the
surrounding area. The three community examples given below demonstrate that the
Act is insufficient to remove petrol sniffing.
4.26
CAYLUS stated that they had worked with Anmatjerre Council in 2008 to
apply for a management plan under the Act in the hope of being able to force
the nearby Ti Tree roadhouse to switch to low aromatic fuel. The NT government
advised that the powers under the Act were insufficient to compel a private
business outside the management area to stop selling sniffable fuel.[23]
4.27
The Indigenous community at Lake Nash sells low aromatic fuel and has a
management plan. However, unleaded fuel comes into the community from the nearest
roadhouse at Urandangi across the Queensland border that does not stock low
aromatic fuel, a jurisdiction over which the Lake Nash management plan has no
control.[24]
CAYLUS also pointed out that it would be unfair to arrest people in Lake Nash
for having RULP in their fuel tank when cars coming into the community via
Urandangi have no choice but to refill with sniffable fuel.[25]
4.28
The community at Titjikala elected not to have a management plan
because even though the nearby fuel outlet at Maryvale station does not sell
RULP, it does sell premium unleaded. Although Titjikala sells low aromatic fuel,
cars that need to refuel at Maryvale on a Sunday when the Titjikala outlet is
closed bring sniffable fuel back into the community. Titjikala decided that a
management plan would be unenforceable, firstly, because there would be
occasions when vehicles would be coming into the community with sniffable fuel
in their tanks purchased from Maryvale, and secondly, because there are no
police in Titjikala to enforce a management plan.[26]
4.29
Dr John Boffa suggested that ongoing sniffing in certain areas was a
clear indication that the Act alone was not enough to solve the problem and
that further legislation was required. Responding to the suggestion that
further legislation was unnecessary, Dr Boffa said:
It is a furphy. If that were the case, you would not have
petrol-sniffing in Lake Nash, Yirrkala and Katherine at the moment. If that act
were enough, without Opal being mandated, then we would not have that problem.
It is a good act, it is an important contribution, but by itself is not enough.
It is no reason not to do this as well. Western Australia, South Australia—they
should all have a similar act; but, even if they did, it is absolutely not a
reason to not go ahead with this legislation as well.[27]
4.30
Dr Howard Bath acknowledged the beneficial provisions within the Act, in
particular the ability to generate community-based approaches to volatile
substance abuse:
In the Northern Territory we have the Volatile Substance
Abuse Prevention Act, under which there is a comprehensive process where areas
can approach the government and asked to be declared a management area for
volatile substances. There is a consultation and they can develop a management
plan for the area which is an enforceable plan. It does cover issues broader
than just fuel and fuel supply. That is more possible in a jurisdiction like
the Northern Territory. Trying to get coordination across several different
jurisdictions we recognise would be extremely hard. We think the ideal would be
that, in addition to imposing restrictions on fuel and the supply of Opal
fuel—low aromatic fuel—it is important also that there are local management
approaches to the difficulties around sniffing or solvents.[28]
4.31
However, recognising the difficulties of coordinating approaches across
jurisdictions, the position of Dr Howard Bath was that Commonwealth legislation
that enforced the prohibition of RULP and controlled PULP would complement the
Act.[29]
The constitutional capacity for Commonwealth legislation
4.32
This section considers whether the Commonwealth government possesses the
constitutional capacity to legislate across several jurisdictions with regard
to RULP and low aromatic fuel.
The Corporations power
4.33
Section 51(xx) of the Constitution (Corporations power) gives the
Commonwealth Parliament the power to make laws with respect to trading,
financial and foreign corporations.
4.34
The SACES report found that the Commonwealth could use the Corporations
power to enact legislation and that the legislation would be effective, would
very likely be upheld by the courts, and would have relatively low compliance
costs. There would, however, be some risk that a small number of unincorporated
outlets may not be controlled by the scheme.[30]
4.35
Noting that the bill is based on the Commonwealth Corporations power, Mr
Sean Brennan stated that the Bill appeared 'legally sound' and 'is likely to be
effective in regulating the conduct of at least a very high proportion of fuel
suppliers in a given area in Australia'.[31]
Professor Larissa Behrendt endorsed the conclusions of the SACES report and the
Gilbert and Tobin Law Centre submission to the 2009 inquiry regarding the sound
constitutional basis for Commonwealth legislation.[32]
4.36
However, the SACES report, the Gilbert and Tobin Law Centre, and the Jumbunna
Indigenous House of Learning all noted that other Constitutional powers could
be used to supplement Commonwealth legislation based on the Corporations power.
Mr Brennan and Professor Behrendt suggested that consideration be given to
extending the bill to rely on other Commonwealth powers in the Constitution in
order to capture commercial suppliers of fuel which are not trading corporations
for the purposes of the Constitution, and also to support the rollout of low
aromatic fuel in areas beyond the Northern Territory .[33]
Two of these powers, the Territories power and the Races power, are considered
below.
The Territories power
4.37
Under section 122 of the Constitution, the Commonwealth has the power to
make laws for the government of a Territory.
4.38
Given that petrol sniffing is a regional problem that traverses state
boundaries, the key question regarding the Territories power is whether that
power can operate in state jurisdictions beyond the Northern Territory.
4.39
The SACES report found that the Territories power could not target
sniffing activity outside the Territory, but that 'a prescribed region could
extend beyond the Territory into areas which have an impact on efforts to
reduce sniffing in the Territory'.[34]
4.40
In his submissions to both the 2009 and 2012 inquiries, Mr Brennan cited
legal precedent[35]
in noting that 'the High Court has repeatedly confirmed that a Commonwealth law
relying on the Territories power can operate effectively inside the boundaries
of a State'.[36]
The High Court has also indicated that in the event of conflict between
Commonwealth law and state law, the Commonwealth law would prevail.[37]
4.41
Mr Brennan cited two cases[38]
to argue that:
The key to constitutional validity is a sufficient connection
between government of the Northern Territory and the operation of a law inside
a State such as Western Australia, South Australia or Queensland.[39]
4.42
Based on the cases cited above, Mr Brennan said that the use of a law
based on the Territories power within a state such as Western Australia, South
Australia or Queensland would be constitutionally valid based on the following
proposition:
... regulating fuel supply in these cross-border locations
is practically relevant to the effectiveness of supply restrictions within the
Territory.[40]
4.43
Mr Brennan believed that this proposition is supported by 'the evidence
presented to the Committee and elsewhere, that the necessary practical,
geographical connection exists – indeed, it underpins the regional strategy adopted
by governments'.[41]
Summing up, Mr Brennan indicated the legislation 'would effectively apply to
all those who supply fuel in the relevant sense in a wide region of Central
(and, if necessary, northern) Australia'.[42]
4.44
The conclusions drawn by Mr Brennan about the constitutional validity of
extending the bill to draw on the Territories power were endorsed by Professor
Behrendt.[43]
The Races power
4.45
Section 51(xxvi) of the Constitution gives the Commonwealth Parliament
the power to make laws with respect to the people of any race for whom it is
deemed necessary to make special laws.
4.46
Opinions differ on the desirability of using the Races power to augment
the Corporations power on which the bill is based. The SACES report noted that
the 'use of Race power to impose restrictions on groups is clearly
discriminatory and largely undesirable from a public policy perspective'.[44]
4.47
Mr Brennan was cautious about the use of the Races power but concluded
that:
... on balance it was appropriate in this instance to resort to
the power. In this respect I have been assisted by the debate which has
unfolded over the last 18 months or so regarding constitutional reform in
respect of Australia’s first peoples. It is clear that the Expert Panel which
reported to the Australian Government in January 2012 on constitutional
recognition of Indigenous Australians strongly supported the maintenance of a
power to make national laws with respect to Aboriginal and Torres Strait Islander
people, conditioned by the presence of a non-discrimination clause. This is a
position which I support. The retention of a national power to make
Indigenous-specific laws seems to enjoy widespread endorsement.[45]
4.48
Professor Behrendt states that 'the legislative scheme would clearly be
a law "benefitting the people of any race", noting that the
communities targeted by the regulatory scheme are predominantly Aboriginal'. Conceding
that the scheme would be discriminatory, Professor Behrendt argues that it
would be permissible because the limitations are 'legitimate, necessary and
proportionate'. Regarding the findings made in the SACES report about the
undesirability of discriminatory provisions within legislation, Professor
Behrendt recommends that those concerns 'can be addressed by strengthening the
requirements for consultation under the Act'. Professor Behrendt concludes that
the benefit of drawing on the Races power 'is that the law would be capable of
consistent application throughout the country and in relation to all people'.[46]
Referral of powers
4.49
Under section 51(xxxvii) of the Constitution, a state or states may
refer powers to legislate on particular matters to the Commonwealth.
4.50
SACES found that a referral of powers by the States to the Commonwealth
would provide 'a strong legal foundation' for the scheme, be 'highly effective
in controlling legitimate supply activity', and be relatively straightforward
for suppliers to comply with. The disadvantage is that a referral requires not
only agreement by the States, but also ongoing support because the SACES report
found that States can terminate a referral.[47]
4.51
Mr Brennan noted that a further disadvantage of the referral approach is
that it 'slows to the pace of the slowest moving state or territory in order to
achieve the overall legislative outcome that you want'.[48]
Professor Behrendt observed that referral might be a preferred response both
legally and symbolically, but notes the danger that governments can change
during the negotiation process and that a referral could be rescinded.
State legislation
4.52
Besides considering the Commonwealth capacity to legislate on low
aromatic fuel, the SACES report also examined the potential for state legislation.
Subject to the Australian Constitution, the SACES report noted that the states
have the capacity to regulate the sale of petroleum products and regulate
controlled substances.
4.53
However, the SACES study found that State legislation 'has more uncertain
prospects of success, greater potential for delay, and greater risks of
differences in the specifics of the law from jurisdiction to jurisdiction'.[49]
In contrast, the Commonwealth has a clear capacity to legislate in this area.
The SACES study concluded that leaving the regulation of this issue to the
states was the least preferred option, an opinion with which Mr Brennan agreed.[50]
4.54
Evidence from other organisations also suggested that a comprehensive state-based
approach would be much more difficult to achieve.[51]
Position of WA, SA and NT on state
legislation
4.55
The committee is aware that three jurisdictions have made statements
regarding the possibility of State and Commonwealth legislation.
4.56
The previous Northern Territory Labor government made a submission to
the 2009 inquiry supporting the introduction of Commonwealth legislation that
would allow the prohibition of sniffable fuel 'in identified areas of
geographical concern'.[52]
4.57
The Western Australian Minister for Mental Health, the Hon Graham Jacobs
was quoted in The Australian on 13 August 2010 stating that Commonwealth
legislation to mandate the sale of Opal was necessary to address the problem of
petrol sniffing:
It's my belief that we need to have some overarching
legislation. We cannot deal with this problem . . . by ad hoc state by state
(laws).[53]
4.58
The South Australian Minister for Mental Health and Substance Abuse, the
Hon John Hill, praised the effectiveness of the current voluntary scheme in the
APY lands, but did note that 'some retailers in the far north of South
Australia, outside of the APY lands, continue to stock regular unleaded fuel'.[54]
Minister Hill also states that the South Australian government will contribute
to the FaHCSIA evaluation of the PSS and will determine its position on a potential
legislative approach in light of that evaluation and the current Senate inquiry
into the bill.
Committee view
4.59
The committee notes the strong support for legislative action from
organisations in central Australia, organisations involved in drug and health
issues, and individuals from affected communities. It also notes that previous
studies have identified legislative intervention as cost effective.
4.60
The committee has concerns about an act relying solely on the
corporations power to implement a scheme. It is possible that this could even
encourage smaller outlets to avoid incorporation in order to avoid being
captured by the scheme, though it received no evidence one way or the other on
this matter. The committee notes that witnesses seemed unsure of whether all
existing fuel outlets were incorporated.
4.61
The use of the territories power appears prudent and would be likely to
cover the main cases of non-cooperation with the scheme that have been raised
to date with the committee. The use of the race power presents important policy
questions. The committee accepts the valid arguments put by the Gilbert and
Tobin Centre of Public Law and Jumbunna Indigenous House of Learning, but
believes further consultation with Indigenous communities, particularly those outside
the Northern Territory, would be necessary before also seeking to ground
legislation in that power.
Recommendation 2
4.62
The committee recommends that a legislative scheme for low aromatic fuel
not be confined to reliance upon the corporations power.
Other aspects of the bill
4.63
The submissions from BP Australia and Shell Australia both support the
objective of the bill to reduce the potential harm to the health of people
living in areas where petrol sniffing has occurred.[55]
However, they raised some concerns.
Mandate and consumer education
4.64
BP Australia and Shell Australia note that the bill would essentially
amount to a mandate for Opal fuel in particular areas. BP Australia and Shell
Australia both 'generally oppose mandates due to the market distortions and
unintended consequences' they can create, but both companies appreciate the
need for governments to create appropriate policy responses to public health
matters. As such, both companies are 'impartial' on the bill's policy mechanism.[56]
4.65
Both BP Australia and Shell Australia raise concerns about the ongoing
importance of stakeholder acceptance in any future Opal rollout. BP Australia
states that:
Significant time and resources are required prior to a launch
of Opal fuel into a community. Objectives of this stage include gaining
community support and developing technical understanding in key stakeholders.
The success of these pre-launch steps may be diminished where
introduction of Opal fuel is driven by mandate rather than a whole-of-community
demand and complete stakeholder acceptance.
Any decision to mandate Opal fuel will need to accommodate
existing Opal rollout plans and not assume an ‘immediate fix’ will be in place
once the Minister makes a declaration.[57]
4.66
Similarly, Shell Australia states that:
Mandates however do not equal consumer acceptance and regardless
of the outcome of the Bill, we would certainly encourage the work by the
Department of Health and Ageing to continue in rolling out plans to gain
community and stakeholder acceptance of low aromatic fuels.[58]
4.67
In addition, both BP Australia and Shell Australia concur with other
stakeholders (and with the committee) that the other aspects of the eight point
plan are essential complementary aspects of a holistic approach to tackling
petrol sniffing.
4.68
The bill also contains provisions whereby suppliers may be subject to
certain requirements in low aromatic fuel areas and fuel control areas such as
promotion and the provision of information. Shell raised concerns about the
extent to which companies may be required to promote and provide information:
Shell supports the current programme conducted by the
Department to work with local communities on education and acceptance of low
aromatic fuel prior to roll-out. Shell does not support the proposal for companies
to take on sole responsibility for consumer education. Shell sees that fuel manufacturers
and suppliers are a support to the Department on technical and fuel quality matters
but that Government should take a leading role in consumer/community/customer education
and the implementation of complementary initiatives to support health outcomes.[59]
4.69
The committee asked DoHA to respond to Shell's queries, including in
relation to information and consumer education. The Department noted that these
decisions would be a matter for consideration by government and could not
comment further.[60]
4.70
The SACES report addressed the specific issue of prohibiting RULP as
opposed to mandating low aromatic fuel. The legislative options evaluated in
the SACES report did not mandate, nor contained any provision to mandate, the
sale of any low aromatic product, but instead focussed on the control of
aromatic fuels:
[T]he sale of Opal is not mandated, nor is there a power to
mandate it or indeed to mandate the sale of any other non-aromatic product.
This is because it would be an unusual intrusion on individual rights for a
government to require an individual to sell petrol of any sort. Instead the
decision to sell non-aromatic petrol is a commercial decision to be taken by
the prospective supplier. Obviously the uptake of a non-aromatic product is
likely to be boosted by controls on the sale of aromatic petrol (especially if
the control is prohibition). Governments may also choose to subsidise the
supply of a non-aromatic alternative.[61]
4.71
The committee notes that the bill contains provisions for prohibiting
the sale of RULP in designated zones and controls on the storage and supply of
other fuels such as PULP.[62]
While such provisions might essentially amount to a mandate for low aromatic
fuel in prescribed regions, the committee sees that the bill does not mandate
the sale of low aromatic fuel. The decision to sell a low aromatic fuel would
still be a commercial decision to be taken by the retailer.
4.72
The committee further notes that the bill does not use a 'blanket'
approach to designating regions, but rather places the power in the hands of
the Minister to determine particular regions as low aromatic or fuel control
areas.[63]
Scope of powers to regulate fuel
4.73
Clause 11 of the bill would allow regulation of the supply, transport,
possession or storage of any fuel. Shell expressed concern about this
provision:
Shell does not support the broad powers set out in Section 11
which could allow the Minister to limit supply of premium fuels. Shell would
like clarity over the right for companies to maintain the overall product mix
on sites, including premium fuels which have previously not been affected by
the roll out of Low aromatic 91.[64]
4.74
The committee notes this concern, but also notes that in some locations,
the supply of premium fuel is already regulated voluntarily (for example
through locks on pumps), while in other locations, the availability of premium
fuel has been identified as a source of problems with sniffing.[65]
4.75
BP Australia themselves indicated that premium fuel cannot be ignored as
part of the equation, for a number of reasons:
Positive engagement of fuel distributors and retailers has
been fundamental to the success of Opal implementation.
Whilst this view has developed from an environment without a
mandate mechanism, a future mandate for Opal fuel may simply result in
increased PULP availability.
The production of Opal fuel at BP’s Kwinana Refinery in
Western Australia is part of a complex supply chain that impacts the production
of other liquid fuels such as premium fuels (PULP) and diesel.[66]
Committee view
4.76
If a regulatory regime were put in place, it would not be prudent to
exclude premium fuel from its scope, in certain circumstances. However, the
committee does not believe a case has been made that the legislation should
have the scope to apply to every fuel including, for example, diesel or gas.
Recommendation 3
4.77
The committee recommends that the government consider whether
legislation should define more narrowly the fuels to which the bill would
apply, but accepts that there should be capacity to regulate the management of
premium fuel in some circumstances.
Availability of fuel and
consultation
4.78
It remains clear that supply, storage, and distribution remain
challenging aspects of the roll-out of low aromatic fuel. Some aspects, particularly
the construction of new storage facilities, are discussed elsewhere in this
report, in chapters 2 and 5. The committee notes that the bill would require
the Minister to conduct consultations prior to designating a low aromatic fuel
area or fuel control area.[67]
It also notes that the bill states that the Minister 'must' have regard to the
availability of low aromatic fuel in relation to the area[68]
when making a decision to designate an area.
4.79
While the bill refers to 'suppliers of fuel' as being amongst those who might
be consulted, the committee notes that this might not be taken to include the
manufacturers or refiners of fuel. As evidence to the committee has shown, the
refining and initial distribution of the fuel is a major element of the supply
chain, and one which faces significant potential capacity and cost constraints.
Committee view
4.80
The committee understands the purpose of the consultation provisions,
and does not doubt their good intent. It recognises that section 17(1) of the
Legislative Instruments Act would be likely to contribute to ensuring that
manufacturers or refiners of fuel would be consulted. That section states:
(1) Before a rule-maker makes a legislative instrument, and
particularly where the proposed instrument is likely to:
(a) have a direct, or a substantial indirect, effect on
business; or
(b) restrict competition;
the rule-maker must be satisfied that any consultation that
is considered by the rule-maker to be appropriate and that is reasonably
practicable to undertake, has been undertaken.
4.81
It may help clarify the intention behind the bill if the Explanatory
Memorandum indicated that it would be intended that all elements of the supply
chain would be considered relevant to consultation when considering declaration
of low aromatic fuel areas.
4.82
The committee is also unsure about how the bill would apply in the event
that there was a LAF supply problem once a declaration had been made. What
would be the consequences if LAF became unavailable to supply to a low aromatic
fuel area? On the face of it, it is possible that such a situation would be one
to which a Ministerial exemption under clause 17(1) might apply. However clause
17(1)(b) states that a Minister can only exempt corporations from the bill's
provisions in a low aromatic fuel area or fuel control area provided that 'it
is unlikely that the wellbeing of people will be adversely affected by the
exemption'. Even if there was a shortage of LAF, the re-introduction of regular
unleaded petrol would still be likely to 'adversely affect' the population
within the meaning of the bill, so an exemption may not be able to be granted.
A more likely outcome would seem to be that the minister would make a further
designation effectively removing the low aromatic fuel area altogether. The committee
is unsure if that is the intention behind the bill, or whether this is the best
way to deal with such a scenario.
Recommendation 4
4.83
The committee recommends that there be further examination of the wording
of the explanatory memorandum, consultation and exemption clauses, to ensure
that fuel manufacturers are properly included, and the bill does not have
unintended consequences in the event of supply bottlenecks or disruption.
Conclusion
4.84
On 20 July 2012 the Minister for Indigenous Health, the Hon Warren
Snowdon MP, wrote to the Northern Territory Chief Minister and the premiers of
Queensland, South Australia and Western Australia. He noted the current issues
that the government is addressing around storage and distribution issues. He
sought their views on the possibility of Commonwealth legislation to control
the supply and transport of low aromatic fuel in their jurisdictions. The
Minister indicated that, if appropriate, he would 'host a cross-jurisdictional
forum to discuss a consistent legislative approach to petrol sniffing including
low aromatic fuel'.[69]
4.85
The committee recognises that any legislative action to mandate the
supply of low aromatic fuel needs to consider storage and supply issues,
complement voluntary roll-out, and prioritise designated petrol sniffing
strategy zones. Some of these issues are considered further in chapters five
and six.
Recommendation 5
4.86
The committee recommends that the Australian Government continue to consult
with the relevant state and territory governments on the possibility of
national legislation to mandate the supply of low aromatic fuel to ensure that
there is agreed and coordinated action to address petrol supply.
Recommendation 6
4.87
In light of the preceding matters, the committee recommends that the
current bill not be proceeded with.
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