Offshore Regulatory Reform Proceeds

The provisions concerning financial assurance, the service of documents and multiple titleholders in the Offshore Petroleum and Green House Gas Storage Amendment (Compliance Measures No. 2) Act 2013 (Compliance Measures Act No. 2) have now commenced. The Act was passed in the Australian Parliament on 16 May 2013 and received Royal Assent on 28 May 2013.

The Compliances Measures Act No. 2 follows the  Offshore Petroleum and Green House Gas Storage Amendment (Compliance Measures No. 1) Act 2013 (Compliance Measures Act No. 1), further implementing the recommendations of the Final Government Response after the June 2010 Report of the Montara Commission of Inquiry (the Report). The Compliance Measures Act No. 1 received Royal Assent on 14 March 2013. Changes target improving the operating processes of the offshore petroleum industry and offer further enforcement powers to the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

Compliance Measures Act No. 1: Key Changes

• The introduction of a civil penalty scheme, which providing the regulator with an alternate enforcement mechanisms intended to improve compliance;
• Increasing the current criminal penalty levels under the Offshore Petroleum and Greenhouse Storage Act 2006 (the Act) to align with other major hazard industry legislation;
• Harmonising OHS offence penalties with the Work Health and Safety Act 2011 to recognize the significant dangers involved in a major hazard industry;
• Restructuring NOPSEMA’s powers of inspection to improve clarity and consistency between each category of inspector, including amalgamating NOPSEMA’s inspector categories into a one inspector category known as ‘NOPSEMA inspector’;
• Rephrasing the Act to allow for the standard monitoring and investigation powers in the proposed Regulatory Powers (Standard Provisions) Bill 2012 (the Regulatory Powers Bill), to be enlivened. These powers will enable NOPSEMA inspectors to use the monitoring and investigation powers in the Regulatory Powers Bill to monitor and investigate compliance with all requirements under the Act and related regulations.

Compliance Measures Act No. 2: Key Changes

• Applying an array of alternative enforcement tools, such as infringement notices, adverse publicity orders, injunctions and continuing penalties;
• Empowering NOPSEMA inspectors to issue environmental prohibition notices and environmental improvement notices to oblige petroleum titleholders to take action where necessary to eliminate significant threats to the environment;
• Requiring NOPSEMA to publish OH&S and environment improvement notices and prohibition notices on its website;
• Implementing an unambiguous polluter pays requirement in the Offshore Petroleum and Green House Gas Storage Act (OPGGS Act) and a third party cost recovery regime. The regimes includes implementing a statutory course of action for State and Northern Territory governments against titleholders in the event the government(s) sustain cleaning costs in coastal or onshore waters;
• Clarifying insurance obligations in the OPGGS Act to ensure satisfactory financial assurance is maintained as compulsory and to clarify of the role of the regulator in ensuring compliance; 
• Facilitating the service of documents under the OPGGS Act or legislative instruments by providing for enabling regulations under the OPGGS Act. The ultimate goal is to include electronic service and receipt of documents/information in the regime; and
• Implementing multiple titleholder arrangements in the regulations.  

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