Referral of the inquiry
1.1
Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019 (the bill) and Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019 ('the levies bill') were introduced in the House of Representatives and read a first time on 4 December 2019.
1.2
On 5 December 2019, the Senate referred the provisions of the bills to the Senate Economics Legislation Committee for inquiry and report by
7 February 2020.
Purpose of the bills
1.3
The purpose of the bill is to amend the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) to:
allow effective title administration and regulation of a greenhouse gas (GHG) storage formation that straddles the boundary between State/NT coastal waters and Commonwealth waters;
enable unification of adjacent Commonwealth GHG titles;
strengthen and clarify the monitoring, inspection and enforcement powers of National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) within State/Territory jurisdiction during an oil pollution emergency originating in Commonwealth waters; and
make minor policy and technical amendments to improve the operation of the OPGGS Act.
1.4
The purpose of the levies bill is to amend Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Act 2003 ('the Levies Act') to:
ensure that levies imposed by the Levies Act are effectively imposed on cross-boundary GHG titles;
provide that the Levies Act binds, and is taken always to have bound, the Crown in right of each of the States and the NT; and
make a technical correction to section 2 of the Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment Act 2019.
1.5
The Assistant Minister for Regional Development and Territories,
Ms Nola Marino, MP, summarised the bills' aims in her second reading speech. The bill and levies bill clarify the application of levies in relation to cross-boundary greenhouse gas titles, as well as to the Crown in right of the states and the Northern Territory (NT). Moreover:
Amendments to the [OPGGS Act] included in [the bill] provide for the grant of cross-boundary greenhouse gas titles over an area that includes both Commonwealth waters and state or Northern Territory coastal waters.
Amendments to the OPGGS Act included in [the bill] also provide that greenhouse gas related provisions of the OPGGS Act and the regulations apply, and are taken to always have applied, to the states and the Northern Territory. These amendments are intended to remove any doubt about the validity of greenhouse gas assessment permits that have been granted to the Crown in right of Victoria.
The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and the National Offshore Petroleum Titles Administrator both operate on a cost-recovery basis. This bill removes any doubt that levies imposed by the Levies Act are effectively imposed on cross-boundary greenhouse gas titles, including the part of a title that is in state or Northern Territory coastal waters, and that the Levies Act applies to the Crown in right of each of the states and the Northern Territory. In effect, this means that levies are imposed in relation to regulatory activities undertaken in respect of greenhouse gas titles held by a state or the Northern Territory.
The amendments included in this bill will not change the substance or practical effect of the Levies Act. The purpose of retrospective application is to validate past payments of annual titles administration levy by the Crown in right of Victoria under the Levies Act. No person will be disadvantaged as a result of retrospectivity.
Overview of the bills
Offshore Petroleum and Greenhouse Gas Storage Amendment (Cross-boundary Greenhouse Gas Titles and Other Measures) Bill 2019
1.6
The bill consist for four schedules:
Schedule 1—Cross-boundary greenhouse gas storage
Part 1—General amendments
Part 2—Application and transitional provisions
Part 3—Amendments contingent on the commencement of Schedule 2 to the Timor Sea Maritime Boundaries Treaty Consequential Amendments Act 2019
Schedule 2—Application of greenhouse gas provisions to bodies politic
Schedule 3—Technical amendments
Schedule 4—Oil pollution
Part 1—General amendments
Part 2—Amendments relating to environment plans
Part 3—Application provision
Part 4—Amendments contingent on the commencement of Schedule 2 to the Timor Sea Maritime Boundaries Treaty Consequential Amendments Act 2019
Offshore Petroleum and Greenhouse Gas Storage (Regulatory Levies) Amendment (Miscellaneous Measures) Bill 2019
1.7
The levies bill consists of three schedules:
Schedule 1—Cross-boundary greenhouse gas titles
Schedule 2—Crown to be bound
Schedule 3—Technical correction
Further explanation of the bills' aims
Greenhouse Gas cross-boundary storage
1.8
The EM explained that the bill will amend the OPGGS Act to provide for the grant and administration of single GHG titles that are partly located in Commonwealth waters and partly located in State/NT coastal waters. Upon the grant of the title, the title area becomes Commonwealth waters for all purposes of the OPGGS Act.
1.9
Cross-boundary titles will be regulated under the OPGGS Act in the same way as other GHG titles located in Commonwealth waters. The EM explained that decisions about the granting of cross-boundary GHG titles will be made by a newly established Cross-Boundary Authority, consisting of the responsible Commonwealth Minister and the relevant State or NT Resources Minister, similar to current Joint Authority arrangements for petroleum titles in Commonwealth waters.
1.10
Decisions about other matters that are now made by the responsible Commonwealth Minister will continue to be made by the Minister, as those decisions have a technical element that might affect the level of long-term risk. Titles administration will be undertaken by the Titles Administrator. NOPSEMA will have regulatory responsibility for environmental management, safety and well integrity.
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Protections for pre-commencement petroleum titles and existing petroleum production licences, both in Commonwealth waters and State/NT coastal waters, will be maintained.
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After site closing, the Commonwealth will assume long-term civil liability for the whole cross-boundary storage operation and any other operations wholly within the cross-boundary title area. The EM argued that this encourages governments to ensure GHG storage operations are carried out to the highest standards, thus limiting the assumed risk.
1.13
The levies bill makes amendments to the Levies Act to ensure that there is no doubt that the levies imposed by that Act can be effectively applied to cross-boundary titles, including the part of the title that is in State/NT coastal waters.
Unification of adjacent Commonwealth GHG titles
1.14
The OPGGS Act currently requires GHG injection and storage activities to be conducted wholly within a single title area. The EM explained that the bill will amend the OPGGS Act to enable the holder of two adjacent Commonwealth GHG titles to apply for a single title across the two areas, where the holder has reasonable grounds to suspect that there is a geological formation that straddles the two titles.
Strengthen and clarify powers of NOPSEMA inspectors during oil pollution emergencies
1.15
The EM stated that the current powers of NOPSEMA are not sufficient to ensure compliance by a titleholder with its environmental management obligations in the event of an oil pollution emergency in Commonwealth waters. In particular, NOPSEMA currently does not have power to inspect for or enforce compliance by the titleholder in areas of State/Territory jurisdiction, such as in coastal waters or onshore.
1.16
Obtaining a warrant or consent (which can subsequently be withdrawn) can significantly impede compliance monitoring in emergency situations and NOPSEMA inspectors will need regulatory intelligence in real time under dynamic situations, including monitoring and enforcing compliance across a number of locations within and outside an offshore area.
1.17
The bill will amend the OPGGS Act to enable NOPSEMA inspectors to enter premises used for implementation of oil spill response obligations without a warrant whether located in Commonwealth or State/Territory jurisdiction, in the event of such an emergency. The amendments will enable NOPSEMA to monitor whether a titleholder is in compliance with its oil spill response obligations, and take enforcement action if the titleholder is failing to meet its obligations. The bill will also amend the OPGGS Act to extend the operation of polluter pays obligations and the application of significant incident directions that may be given by NOPSEMA to areas of State/Territory jurisdiction.
Levies Act binds the Crown
1.18
The bill amends the OPGGS Act to provide that the GHG-related provisions of the Act and regulations apply, and are taken to always have applied, to the States and the NT. The amendments are intended to remove any doubt about the validity of GHG assessment permits that have been granted to the Crown in right of Victoria. The levies bill makes consequential amendments to the Levies Act to also ensure that that Act binds, and is taken to always have bound, the Crown in right of the States and the NT. The amendments ensure that levies are imposed in relation to regulatory activities undertaken in respect of GHG titles held by a State or the NT. The EM argued that this will in turn ensure that NOPSEMA and the Titles Administrator continue to be fully cost-recovered for their regulatory operations.
1.19
The purpose of retrospective application is to validate past payments of annual titles administration levy by the Crown in right of Victoria under the Levies Act. The EM argued that no person will be disadvantaged as a result of retrospectivity.
Date of effect
1.20
The EM notes that there are a number of different commencement triggers and other amendments to regulations that will start to take place once the bills receive Royal Assent. Clause 2 in each bill sets these requirements.
Financial impact statement
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The EM stated that the bills are expected to have nil financial impact and that the amendments to the Levies Act will ensure that NOPSEMA and the Titles Administrator are fully cost-recovered for their regulatory operations.
1.22
The EM also notes the financial investment the Australian Government has made in the CarbonNet project in the Gippsland Basin, Victoria, and the Hydrogen Energy Supply Chain (HESC) project. These investments total $144 million and the amendments relating to the creation and administration of cross-boundary GHG titles in these bills will enable and support these projects proceeding.
Legislative scrutiny
1.23
The bill was not considered by the Senate Standing Committee for the Scrutiny of Bills.
Compatibility with Human Rights
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The EM stated that the bill engages the following rights:
Protection against arbitrary interference with privacy and reputation; and
The right to minimum guarantees in criminal proceedings.
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The following sections explain the relevant human rights principles, and how the various schedules impact on those rights.
Right to privacy and reputation
1.26
Article 17 of the International Covenant on Civil and Political Rights (ICCPR) prohibits arbitrary or unlawful interference with an individual’s privacy, family, home or correspondence, and protects a person’s honour and reputation from unlawful attacks. This right may be subject to permissible limitations where those limitations are provided by law and are non-arbitrary. In order for limitations not to be arbitrary, they must be aimed at a legitimate objective and be reasonable, necessary and proportionate to that objective.
Schedule 4
1.27
Schedule 4 extends the powers of NOPSEMA inspectors in the event of an oil pollution emergency originating from petroleum operations in Commonwealth waters. This will enable NOPSEMA inspectors to access emergency response premises without a warrant to monitor compliance by a titleholder with emergency response obligations in the event of an offshore petroleum incident.
1.28
Warrant-free inspection powers will be limited by purpose; that is, to determine whether the petroleum titleholder has complied or is complying with the oil pollution emergency provisions of an environment plan and/or a significant incident direction given by NOPSEMA. In the event of an oil pollution emergency, a requirement to obtain a warrant could significantly impede compliance monitoring and it is particularly important that NOPSEMA has the ability to act quickly to determine whether a titleholder is compliant with their clean-up, remediation and monitoring obligations in relation to an oil spill.
1.29
Noting the limitation of warrant-free inspections by purpose, a NOPSEMA inspector would only be able to inquire into personal matters relating to an individual to the extent that the inquiry related to compliance by a titleholder with its regulated obligations. Further, the warrant-free oil pollution environmental inspection powers will only be exercisable during a declared oil pollution emergency.
1.30
Additional right to privacy protections include that immediately on entering premises for the purposes of an inspection without a warrant, a NOPSEMA inspector must take reasonable steps to notify the occupier of the premises of the purpose of entry. NOPSEMA inspectors will also be required to produce the inspector’s identity card when requested to do so by the occupier.
1.31
The EM argued that any limitation of the right to privacy in extending warrant-free inspection powers of NOPSEMA in the event of an oil pollution emergency is to meet a legitimate objective, and is reasonable, necessary and proportionate to meeting that objective.
The right to minimum guarantees in criminal proceedings
1.32
Article 14(3) of the ICCPR establishes guarantees that must be observed in criminal proceedings including, the right to be free from self-incrimination. This right may be subject to legal and non-arbitrary limitations. In order for limitations not to be arbitrary, they must be aimed at a legitimate objective and be reasonable, necessary and proportionate to that objective.
Schedule 1
1.33
Schedule 1 includes an amendment which will enable the responsible Commonwealth Minister to require a person to provide information if that person has information that is relevant to the exercise of the Minister's duties in relation to an application for a cross-boundary GHG injection licence.
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A person is not excused from giving information or producing a document on the ground that the giving of the information or production of the document might tend to incriminate a person or expose the person to a penalty. However, the information given or document produced is not admissible in evidence against the person in any civil or criminal proceeding (other than a proceeding relating to the provision of false or misleading information).
1.35
This partial immunity from legal consequences has the benefit that it increases the likelihood of obtaining information. To ensure effective administration of the OPGGS Act, it may be more important to establish the facts than to be able to use the facts in a prosecution or legal action. The EM argued that to shut off any line of inquiry would not be in the public interest.
1.36
The ‘use’ immunity is restricted only to individuals. This ensures continuing protection of the human rights of the individual, and the EM argued that this is consistent with other Commonwealth legislation, such as the Work Health and Safety Act 2011 and the Telecommunications Act 1997.
1.37
Although the privilege against self-incrimination is abrogated, there is also immunity against use of the information or document in civil or criminal proceedings other than for specified offences. The EM argued that this safeguard ensures that the section is reasonable and proportionate to meeting this objective, and therefore the provision meets Australia’s human rights obligations to afford minimum guarantees in criminal proceedings.
Schedule 4
1.38
The OPGGS Act allows a NOPSEMA inspector to require a person to provide information if the inspector believes on reasonable grounds that the person is capable of doing so. The information must be reasonably connected with the conduct of an environmental inspection.
1.39
Where matters relating to compliance with oil pollution emergency response obligations are concerned, it will often be more important to establish the facts rather than to be able to use the facts in a prosecution or legal action. The EM argued that to shut off any line of inquiry would not be in the public interest given the nature of the potential harm that could occur.
1.40
A person is not excused from providing information on the ground that doing so may tend to incriminate the person or make the person liable to a penalty. This requirement will apply during oil pollution environmental inspections at emergency response premises.
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However, any information obtained is not admissible in evidence against the person in any civil or criminal proceeding other than a proceeding relating to the provision of false or misleading information.
Conclusion
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In conclusion, the EM stated that the first bill is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.
1.43
The EM also stated that the levies bill is compatible with human rights as it does not raise any human rights issues.
Conduct of the inquiry
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The committee advertised the inquiry on its website and wrote to relevant stakeholders inviting written submissions by 17 January 2020.
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The committee received five submissions which are listed at Appendix 1.
1.46
The committee thanks all individuals and organisations who participated in the inquiry, especially those who made written submissions.