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2010-2011-2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
AMENDMENT (COMPLIANCE MEASURES) BILL 2012
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Resources and Energy,
the Honourable Martin Ferguson AM, MP)
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
AMENDMENT (COMPLIANCE MEASURES) BILL 2012
OUTLINE
The purpose of this Bill is to amend the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 (the Act) to strengthen the offshore petroleum regulatory regime in
respect of compliance, safety, integrity and environmental management objectives.
The amendments seek to clarify and strengthen the compliance, monitoring,
investigation and enforcement powers of the national offshore petroleum regulator,
and ensure that enforcement measures for contraventions of the Act are appropriate in
the context of a high-hazard industry.
The importance of effective offshore petroleum industry regulation and control has
been highlighted in recent years by three serious incidents: a blowout at the Montara
Wellhead Platform on 21 August 2009 off the northern coast of Western Australia, the
explosion of the Deepwater Horizon on 20 April 2010 in the Gulf of Mexico, and only
a few months ago with the tragic loss of two drill workers on the Stena Clyde rig
located in the Otway Basin off the Victorian coast. The amendments in this Bill
continue the work of the Australian Government to implement the lessons learned as a
result of these incidents. The June 2010 Report of the Montara Commission of
Inquiry made several recommendations proposing amendments to the offshore
petroleum regulatory regime. To give effect to those recommendations the Australian
Government undertook a review of Commonwealth legislation applicable to offshore
petroleum activities and the marine environment (the Legislative Review).
The Bill amends the Act to implement a number of the findings of the Legislative
Review, which aim to strengthen the operating practices of the offshore petroleum
industry and provide additional enforcement powers to regulators. The Legislative
Review proposed several changes to the Act, including:
· The introduction of a civil penalty regime;
· Increases to current criminal penalty levels under the Act, consistent with major
hazard industry legislation;
· Penalties, including custodial penalties, for occupational health and safety (OHS)
offences under the Act to be harmonised with the Work Health and Safety Act
2011 or made greater, as appropriate, to reflect the greater consequences in a
major hazard industry; and
· Redrafting the National Offshore Petroleum Safety and Environmental
Management Authority's (NOPSEMA) inspectorate powers to provide greater
clarity and consistency between the various powers of each category of inspector,
and remove unnecessary procedural requirements that are likely to impede
NOPSEMA's ability to effectively perform its enforcement functions.
The Bill will also make amendments to provide parties responsible for administration
of the Act and associated regulations the ability to share information with each other,
and with other relevant Commonwealth and State/Territory bodies, in circumstances
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where it is appropriate, in order to enable those bodies to adequately discharge their
legislative functions and powers.
Finally, the Bill also implements a decision to remove the responsible State Minister
for Tasmania, as is its stated preference, from the Joint Authority arrangements.
Civil Penalties
The Bill will introduce a civil penalty regime to the Act, to provide an alternative
enforcement tool aimed at improving compliance outcomes. The Legislative Review
concluded that the current enforcement mechanisms, sanctions and penalties available
under the Act are insufficient to provide an effective and meaningful deterrent against
non-compliance. A combination of factors - including the complexity of the
legislation, the technical nature of the evidence pertaining to prosecutions, and the
criminal standard of proof applicable to court proceedings - have operated as
impediments to effective enforcement of the requirements of the Act. The Legislative
Review found that there is a strong need for a greater range of enforcement
mechanisms to be considered for inclusion in the offshore petroleum regulatory
regime, as a supplement or alternative to the existing criminal regime, in order to
encourage improved compliance outcomes. In addition, the Legislative Review
considered strong evidence that regulators are best able to secure compliance when
they have a range of graduated sanctions that can be imposed, depending upon the
severity of the misconduct or breaches of statutory requirements. The Legislative
Review concluded that the Regulator does not currently have available sufficient
compliance and enforcement mechanisms in the middle range of regulatory responses,
such as civil penalties, which are available to regulators of other comparable industry
sectors within Australia and under like regulatory regimes internationally.
The introduction of a civil penalty regime will provide an additional mechanism for
the Regulator to apply within a graduated range of enforcement tools, to encourage
and support improved industry compliance with the Act. Providing such alternative
enforcement tools will enable the Regulator to provide an appropriate and
proportionate response, depending upon the nature and relative seriousness of the
breach that has occurred. In addition, the application of civil penalties (in the form of
financial sanctions) as a supplement or alternative to the existing criminal penalties,
and set at an appropriate level to reflect the nature of the offshore petroleum industry
as a high-hazard industry, will encourage improved compliance with the Act. This
will further enhance the existing objective-based regime by supporting continuous
improvement by industry, which is responsible under the regime to demonstrate to the
Regulator that the risks of operations are reduced to as low as reasonably practicable.
Criminal Penalties
The Bill will also amend the Act to increase criminal penalties for certain OHS and
environmental offences. The Legislative Review concluded that many of the criminal
penalties in the Act are too low to provide an effective and meaningful deterrent, in
particular when compared with the penalties that apply for similar conduct under
comparable regulatory regimes. Given the potentially severe consequences of an
offshore petroleum incident and the high-risk nature of the industry, it is appropriate
that criminal penalties for non-compliance with regulatory requirements are at least
equivalent with the penalties that apply for similar offences under other
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Commonwealth legislation. The proposed increases have been determined following
careful consideration of the penalties that apply under comparable legislation,
including the Work Health and Safety Act 2011 and the Environment Protection and
Biodiversity Conservation Act 1999, and are designed to ensure that the penalty
applied is appropriate to reflect the potentially severe consequences of non-
compliance. The application of appropriate levels of criminal penalties and the
possibility of imprisonment in the most serious cases are key in achieving and
maintaining a credible level of deterrence to complement other types of enforcement
actions.
Inspectorate Powers
Since the transition to a single national regulator for the offshore petroleum industry
occurred on 1 January 2012, the National Offshore Petroleum Safety and
Environmental Management Authority (NOPSEMA) is responsible for regulating
OHS of petroleum and greenhouse gas storage operations; structural integrity of
petroleum facilities, wells and well-related equipment; environmental management of
petroleum operations; and day-to-day petroleum operations. NOPSEMA has the
power to appoint inspectors to monitor and investigate compliance with the Act and
associated regulations; petroleum project inspectors may exercise powers of access,
inspection and entry for the purposes of the Act and regulations, and OHS inspectors
may conduct inspections to monitor and investigate compliance with listed OHS laws,
and concerning accidents or dangerous occurrences that occur at or near a facility.
With the advent of a single national petroleum regulator, it has become clear that
having two separate types of inspectors with inconsistent functions and powers is
inefficient, and unnecessarily complicates the administration of the Act. By providing
for one set of inspectors with more consistent compliance monitoring and
enforcement powers, these amendments will ensure more effective enforcement of the
requirements of the Act and its associated regulations.
In terms of petroleum regulation, the Bill will abolish the two existing categories of
inspector, and will instead provide for the Chief Executive Officer of NOPSEMA (the
NOPSEMA CEO) to appoint NOPSEMA inspectors to conduct inspections to
monitor and investigate compliance with the Act and regulations. The amendments
will trigger the standard monitoring and investigation powers in the proposed
Regulatory Powers (Standard Provisions) Act 2012, so that NOPSEMA inspectors
will have the ability to exercise these powers to monitor compliance with and
investigate suspected non-compliance with the Act and regulations. A warrant will be
required to exercise these powers, which will include powers of entry, access,
compliance monitoring (under a monitoring warrant), and search and seizure of
evidential material (under an investigation warrant).
In addition to the standard monitoring and investigation powers, the Bill will provide
for a set of additional powers that will enable NOPSEMA inspectors to enter offshore
facilities, vessels and structures and onshore regulated business premises to monitor
compliance with listed OHS laws and petroleum environmental management laws
without a warrant, consistent with the existing powers of OHS inspectors and
petroleum project inspectors. Given the relative difficulty of accessing offshore
facilities, this will provide NOPSEMA with the flexibility to conduct routine
inspections without the requirement to obtain a warrant in each case. However,
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NOPSEMA inspectors will in all cases be required to obtain a warrant before
exercising powers to search for and gather evidential material.
Sharing information
This Bill also makes important additional amendments to the Act to enable the parties
responsible for administration of the Act to share regulatory information in
appropriate circumstances. Currently, the Act does not include express provision to
enable information obtained during the exercise of powers and functions under the
Act and regulations to be shared. In the absence of an express provision, it has
become evident that there are potential legal impediments to regulators being able to
share information where it may be otherwise appropriate to do so, such as for the
purposes of a joint investigation to comprehensively investigate an incident and
pursue a successful prosecution of companies at fault, or to educate other regulators
about potential operational risks that have been discovered during the course of
compliance monitoring or investigations. This is particularly evident given the
outcome of the 2009 case of Apache Northwest Pty Ltd v Agostini, in which the
Federal Court applied established legal principle to prevent information compulsorily
acquired under Western Australian legislation being released to a Commonwealth
Officer as part of a joint Commonwealth/State inquiry into the explosion of a gas
pipeline on Varanus Island in June 2008. The Court applied the principle in Johns v
Australian Securities Commission that a statute which confers a power to obtain
information for a purpose defines, expressly or impliedly, the purpose for which the
information when obtained can be used or disclosed.
The amendments in the Bill will make express provision for regulators to share
information in certain circumstances. NOPSEMA, the National Offshore Petroleum
Titles Administrator (the Titles Administrator), the responsible Commonwealth
Minister, and the members of the Joint Authority and their delegates will have the
ability to share with each other information obtained during the exercise of their
legislative powers and functions, for the purpose of the recipient exercising their own
powers and functions under the Act and regulations. In addition, the NOPSEMA
CEO will have the ability to share information with other appropriate Commonwealth
and State/Northern Territory agencies where the information will assist those agencies
to exercise their powers or functions under legislation.
Removal of Tasmania from Joint Authority arrangements
Finally, the Bill amends the Act to remove the responsible Tasmanian Minister from
the Joint Authority for the offshore area of Tasmania. As a State jurisdiction,
Tasmania has indicated its preference to be removed from participation in Joint
Authority arrangements under the Act, following the transition to a national regulator
on 1 January 2012. The amendments will make the responsible Commonwealth
Minister the sole member of the Joint Authority for the offshore area of Tasmania,
with responsibility for Joint Authority decision-making in relation to that offshore
area. Administrative arrangements will be put in place to ensure the Tasmanian
Government is kept informed of significant developments in the offshore area of
Tasmania.
FINANCIAL IMPACT STATEMENT
The Bill has no financial impact.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
The Bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the
Act) to strengthen the offshore petroleum regulatory regime in respect of compliance,
safety, integrity and environmental management objectives. In part, the Bill continues
the work of the Australian Government to implement the lessons learned from recent
incidents in the offshore petroleum industry, including the blowout at the Montara
Wellhead Platform on 21 August 2009 off the northern coast of Western Australia and
the explosion of the Deepwater Horizon on 20 April 2010 in the Gulf of Mexico. The
Bill amends the Act to implement a number of findings from a review of
Commonwealth legislation applicable to offshore petroleum activities and the marine
environment, in response to the Report of the Montara Commission of Inquiry, which
aim to strengthen the operating practices of the offshore petroleum industry and
provide additional enforcement powers to regulators.
The Bill also ensures that parties responsible for administration of the Act and
associated regulations will have the ability to share information with each other, and
with other relevant Commonwealth, State and Northern Territory government
agencies, in circumstances where it is appropriate in order to enable those bodies to
adequately discharge their legislative functions and powers.
The amendments in the Bill include the following:
· Increases to criminal penalties for occupational health and safety and
environmental offences under the Act, consistent with major hazard industry
legislation;
· Introduction of a civil penalty regime;
· Extension of the circumstances in which a NOPSEMA inspector can issue a
prohibition notice to include when an activity may occur at a facility that would
involve an immediate health or safety risk to a person (implementation of
Recommendation 72 of the Report of the Montara Commission of Inquiry);
· Amendments to existing inspectorate functions and powers provisions, including
updating monitoring and investigation powers, to reflect the change in offshore
regulatory arrangements from 1 January 2012;
· Amendments to provide NOPSEMA inspectors with the ability to give notices,
such as do-not-disturb notices and prohibition notices, to titleholders in relation to
the titleholder duty of care in relation to wells and well-related equipment;
· Enable the sharing of information between entities under the offshore petroleum
regime, and sharing of information with other appropriate Commonwealth, State
and Northern Territory agencies;
· Remove the responsible State Minister for Tasmania from the Joint Authority for
the offshore area of Tasmania.
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Human rights implications
This Bill engages the following human rights:
· The protection against arbitrary interference with privacy;
· The presumption of innocence;
· The right to minimum guarantees in criminal proceedings.
Right to privacy and reputation
Article 17 of the International Convention 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 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.
Monitoring and investigation powers
The amendments in this Bill will:
· Enable NOPSEMA inspectors to use the monitoring powers in Part 2 of the
Regulatory Powers (Standard Provisions) Act 2012 (the Regulatory Powers Act)
(when enacted) to monitor compliance with all obligations of persons under the
Act and associated regulations;
· Repeal the existing offence-related search and seizure provisions in Part 4 of
Schedule 3 to the Act, which apply only to investigations in relation to suspected
contraventions of occupational health and safety (OHS) obligations, and instead
enable NOPSEMA inspectors to use the equivalent investigation powers in Part 3
of the Regulatory Powers Act to investigate compliance with all obligations of
persons under the Act and associated regulations;
· Make the monitoring powers in Schedule 3 to the Act, which currently apply only
to the monitoring of compliance with OHS obligations and which allow for
monitoring by inspectors without warrant, also available for the purpose of
monitoring compliance with obligations of petroleum titleholders under
environmental management laws.
The monitoring powers in Part 2 of the Regulatory Powers Act will enable a
NOPSEMA inspector to enter premises for the purpose of monitoring compliance
with all obligations of persons under the Act and associated regulations. The
investigation powers in Part 3 of the Regulatory Powers Act will enable a NOPSEMA
inspector to enter premises where there are reasonable grounds for suspecting that
there may be material on the premises related to the contravention of an offence or
civil penalty provision of the Act or regulations.
The term "premises", as defined by the Regulatory Powers Act, is extended by these
amendments to include any vessel, structure or other thing located in an offshore area
that is being used or has been used for the purposes of offshore petroleum operations
or offshore greenhouse gas storage operations.
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New Schedule 2A, as inserted by these amendments, will enable a NOPSEMA
inspector to enter and search offshore petroleum premises or regulated business
premises, without warrant, to monitor compliance by persons with petroleum
environmental laws. "Offshore petroleum premises" include a Schedule 3 facility, a
licensed infrastructure facility, or a vessel used to carry out a seismic survey for the
purposes of petroleum exploration. "Regulated business premises" are the onshore
business premises of a petroleum titleholder.
In all cases, these inspection powers are limited by purpose; that is, the purposes of
determining whether obligations of persons under the Act and associated regulations
are being complied with. The powers are necessary to enable NOPSEMA, as the
national regulator of offshore petroleum operations, to monitor and investigate
compliance by persons (generally oil companies) with their obligations under the Act
and regulations. In the context of a high-hazard industry, it is particularly important
to ensure that the regulator has sufficient powers to ensure regulatory obligations are
being complied with. Non-compliance by a person may, for example, increase the
risks to health or safety of persons (including employees) and the environment from
petroleum operations, which may have potentially serious consequences. Recent
instances, including the blowout of the Montara Wellhead Platform in the Timor Sea
in August 2009, the explosion of the Deepwater Horizon on 20 April 2010 in the Gulf
of Mexico (resulting in 11 deaths), and the fatalities of two persons in operations on
the Stena Clyde rig in Bass Strait, emphasise the importance of powers to ensure
compliance by persons with their regulatory obligations.
In the course of an inspection, an inspector may observe or see things relating to
persons in their capacity as private individuals. However, such instances would only
be incidental to the conduct of a lawful inspection. A NOPSEMA inspector would
only be able to inquire into personal matters relating to an individual, if at all, in the
exercise of a specific power in Part 2 or 3 of the Regulatory Powers Act (with a
warrant) or in Schedule 2A or 3 to the Act (OHS and environmental compliance
monitoring), and therefore only to the extent that those matters relate to compliance or
non-compliance of a person with their obligations under the Act and associated
regulations. Any limitation of the right to privacy, therefore, is to meet a legitimate
objective, and is reasonable, necessary and proportionate to meeting that objective.
Monitoring and investigation under the Regulatory Powers Act
When an inspection is undertaken using the monitoring and investigation powers in
the Regulatory Powers Act, the provisions in that Act will protect against arbitrary
abuses of power as the entry, monitoring, search, seizure and information gathering
powers provided in it are conditional upon consent being given by the occupier of the
premises or prior judicial authorisation. Where entry is based on the consent of the
occupier, consent must be informed and voluntary and the occupier of premises can
restrict entry by authorised persons to a particular period. Additional safeguards are
provided through provisions requiring authorised persons and any persons assisting
them to leave the premises if the occupier withdraws their consent.
The Act will provide that a magistrate (including a Judge of the Federal Circuit Court)
is an "issuing officer" for the purposes of issuing a warrant to enter premises for the
purpose of monitoring or investigation. The Regulatory Powers Act also provides
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limits on the issuing of a monitoring or investigation warrant. In the case of an
investigation warrant, for example, an issuing officer may issue an investigation
warrant only when satisfied, by oath or affirmation, that there are reasonable grounds
for suspecting that there is, or may be within the next 72 hours, evidential material on
the premises. An issuing officer must not issue a warrant unless the issuing officer
has been provided, either orally or by affidavit, with such further information as they
require concerning the grounds on which the issue of the warrant is being sought.
Such constraints on this power ensure adequate safeguards against arbitrary
limitations on the right to privacy in the issuing of warrants.
A NOPSEMA inspector cannot enter premises under the Regulatory Powers Act
unless their identity card or a copy of the warrant under which they are entering is
shown to the occupier of the premises. This provides for the transparent utilisation of
the Bill's powers and mitigates arbitrariness and risk of abuse.
Use of force against things
In executing an investigation warrant only (and therefore not for monitoring
purposes), a NOPSEMA inspector, or a person assisting a NOPSEMA inspector, will
have the power to use such force against things (not persons) as is necessary and
reasonable in the circumstances. The purpose of the use of force against things would
be to search for and gather evidence of contraventions or suspected contraventions of
the Act or regulations. Therefore, a NOPSEMA inspector could not break open a
thing belonging to a person, or a thing likely to contain personal information relating
to a person or persons, unless the inspector reasonably believed that there is evidence
of a contravention of the Act or regulations inside the thing. In addition, in such a
case, the potential observation of personal information would be incidental to the
exercise of a lawful and necessary power, and such information could not be seized or
inquired into by an inspector except to the extent it related to a contravention or
suspected contravention by a person with their obligations under the Act or
regulations.
If a NOPSEMA inspector were not able to use force against things when considered
necessary and reasonable to do so to obtain evidence of an offence or contravention of
a civil penalty provision, a legitimate aim of the Act to ensure that non-compliance by
persons with their lawful obligations can be determined and enforced would be
frustrated. Given the high-hazard nature of the industry, and the potentially severe
consequences of non-compliance by persons with their regulatory obligations, such a
power is reasonable, necessary and proportionate to achieving this objective.
Monitoring without warrant under Schedule 2A and Schedule 3
When an inspection is undertaken under Schedule 2A (or existing Schedule 3) to the
Act, a NOPSEMA inspector will have the ability to enter and search regulated
premises without a warrant. From its inception, the former National Offshore
Petroleum Safety Authority (NOPSA) has had the power to enter offshore petroleum
facilities without warrant in order to monitor compliance by facility operators with
their OHS obligations. The rationale for warrant-free entry was that, in order to
construct or operate a facility, it was necessary for the operator to submit a facility
safety case to NOPSA for approval. The safety case sets out the means by which the
operator proposes that it will meet its OHS duties of care to ensure that the facility is
8
safe and that activities carried out at the facility will be safe, and thereby functions as
a form of licence to construct and operate the facility, with the facility being, in that
sense, licensed premises. In the high hazard environment of offshore petroleum
operations, it is necessary that there be a close and interactive relationship between
the regulator and the facility operator, with the regulator having unrestricted access to
the premises.
NOPSA became NOPSEMA on 1 January 2012 and, on that date, also became the
operational regulator of environmental management of offshore petroleum activities.
As with the construction and operation of a petroleum facility, it is an offence to carry
out a petroleum activity without the acceptance by NOPSEMA of an environment
plan for the activity. Again, the environment plan describes the means by which the
responsible person will ensure that environmental impacts of the activity will be kept
as low as reasonably practicable, and the environment plan functions as a licence to
carry out the activity, with the offshore vessel or structure where the activity is to take
place being an integral part of the operator's environmental performance
requirements. Environmental compliance inspections currently take place under
section 601 of the Act, without the requirement for a warrant.
NOPSA/NOPSEMA has been in operation since 1 January 2005. In that time, it has
built up a national and international reputation as an effective high-hazard industry
regulator with an appropriately skilled and trained inspectorate. Compliance
monitoring is an important part, if not the most important part, of NOPSEMA's
functions. Monitoring inspections are carried out according to a monitoring strategy
developed by NOPSEMA, as required by its functions as stated in section 646 of the
Act. Notably, at least for the purpose of inspecting premises offshore, an inspector
would also need to arrange with the operator or titleholder to obtain transport to and
accommodation at the premises. An operator and/or titleholder would therefore be
given advance notice of a forthcoming inspection. To interpose a further requirement
that a NOPSEMA inspector obtain an external consent prior to carrying out each
inspection would therefore provide little by means of an additional safeguard.
A requirement to go through the process of obtaining a warrant might well also
impede NOPSEMA's ability to respond rapidly in an emergency. As the Montara
incident demonstrated, in the offshore petroleum industry an incident such as a failure
of well integrity can quickly escalate into a major accident event, with risks to human
health and safety and the marine environment. In these circumstances, the ability of
the regulator to access offshore and onshore premises of responsible persons without
delay can be critical.
As described above, a monitoring inspection in Schedule 2A or 3 is limited by
purpose, i.e. to monitoring compliance by persons with petroleum environmental laws
and listed OHS laws respectively. Personal information could only be inquired into in
a warrant-free inspection to the extent it may be obtained in the exercise of a specific
power in Schedule 2A or Schedule 3, and therefore to the extent that it relates to
compliance by a person with these laws. In the context of a high-hazard industry, the
objective of reducing safety and environmental risks by ensuring compliance is
legitimate, and the limitations on the right to privacy are reasonable, necessary and
proportionate.
9
The ability to enter and search premises without warrant is for the purposes of
compliance monitoring only. In all cases, an inspector will not be able to exercise
powers to search for and gather evidential material unless the inspector has first
obtained a warrant for the purposes of Part 3 of the Regulatory Powers Act.
Immediately on entering premises for the purposes of an inspection without warrant, a
NOPSEMA inspector must take reasonable steps to notify the purpose of the entry to
the occupier of the premises, and will also be required when requested to do so by the
occupier to produce the inspector's identity card.
Finally, entry without warrant applies only to a petroleum vessel or structure, it does
not extend to residential quarters; therefore the risk that such entry would infringe a
person's right to protection against arbitrary or unlawful interference with their
privacy, family, home or correspondence is extremely low.
Information sharing
The amendments in Schedule 3 to this Bill will facilitate the sharing of information
within NOPSEMA, between entities with regulatory functions and powers under the
Act, and between NOPSEMA and relevant Commonwealth, State and Northern
Territory agencies.
The amendments will:
· Enable information obtained by NOPSEMA or a NOPSEMA inspector for a
particular purpose, such as in relation to occupational health and safety, to be used
by NOPSEMA for the purposes of the performance or exercise of any of its
functions or powers under the Act and associated regulations;
· Enable the entities with legislative functions and powers under the Act and
regulations (i.e. NOPSEMA, the Titles Administrator, the responsible
Commonwealth Minister and the members of the Joint Authorities) to share
information with each other, for use in or for the purposes of the performance of
each entity's functions and powers; and
· Enable the sharing of information between NOPSEMA and other relevant
Commonwealth, State and Northern Territory Government agencies, to assist or
enable those agencies to perform their legislative functions and powers.
The amendments in the Bill will provide that information that can be shared may
include personal information. This power therefore constitutes an interference with
privacy. In addition to this Bill, the use or disclosure of personal information
obtained under Schedule 3 is regulated under the Privacy Act 1988. The interference
with privacy is therefore lawful.
The information sharing provisions in this Bill are also not arbitrary, because they are
in accordance with the provisions, aims and objectives of the ICCPR, and are
reasonable, necessary and proportionate in the circumstances.
Information shared within NOPSEMA would be for the purposes of the performance
or exercise of any its functions or powers under the Act and associated regulations.
Enabling information to be used within NOPSEMA in this manner will ensure the
10
more efficient and effective operation of the regulator to achieve the legitimate and
lawful objectives of the Act and regulations in relation to regulation of the high-
hazard offshore petroleum industry. For example, the ability to share information
obtained during an OHS-related inspection within NOPSEMA would prevent a
NOPSEMA inspector having to conduct a separate inspection, using powers relating
to petroleum environmental inspections, in order to use that information for the
purposes of NOPSEMA's environmental management regulatory functions.
Information may only be shared between entities with regulatory functions under the
Act and associated regulations, or between NOPSEMA and other Commonwealth,
State or NT government agencies, for use by those entities/agencies in relation to the
exercise of their functions or powers under an Act or regulations.
In all cases, the ability to share information is discretionary and not obligatory. The
person in possession of the information will be able to specifically consider the type
of information to be shared and the rationale for sharing that information in each
particular case before making a decision to share the information. The CEO of
NOPSEMA will also have the ability to place conditions on the sharing of
information with other Commonwealth, State or NT government agencies, such as
conditions restricting further disclosure. A provision has been included to require
parties to de-identify personal information wherever possible (where the sharing of
specific personal information is not necessary). While the amendments could in
theory have used or disclosed personal information obtained prior to the
commencement of the Bill, as such uses or disclosures would be permitted under
Information Privacy Principles 10(1)(c) and 11(1)(d) in the Privacy Act 1988 as uses
or disclosures required or authorised by or under law, it was considered that as a
matter of privacy policy, the `required or authorised by law' exceptions to the general
prohibitions against the use or disclosure of personal information should apply only in
relation to the law as it applied at the time when the personal information was
collected. In other words, the sharing of information provision is not to be applied
retrospectively as it relates to personal information. The regulator will also, as a
matter of good privacy policy as opposed to a legislated requirement, notify
individuals whose personal information was collected prior to the commencement of a
new use and disclosure regime that a new regime applies.
In addition to these requirements and safeguards, the use or disclosure of any
information that is personal information is subject to the Privacy Act 1988.
Accordingly, the sharing of personal information pursuant to this provision is
reasonable, necessary and proportionate in the circumstances.
The proposed measures are reasonable given the safeguards in place under the Bill
itself and under the Privacy Act 1988 in terms of the use and disclosure of personal
information. The information sharing provisions are necessary as they allow for the
sharing of information between agencies to assist in the performance of functions and
powers set out in legislation that may relate, for example, to regulation and protection
of personal health or safety, or of the environment, in the context of a high-hazard
industry. There is a legitimate purpose for the provisions and the provisions are
suitable to achieve this aim, particularly in light of the purposes for which information
can be shared. The information sharing provisions are therefore proportionate. The
interference with the right to privacy in Schedule 4 is therefore lawful and not
11
arbitrary. Accordingly, the provision is consistent with Australia's human rights
obligations in relation to the right to privacy.
Right to be presumed innocent until proven guilty
Article 14(2) of the International Covenant on Civil and Political Rights provides that
everyone charged with a criminal offence shall have the right to be presumed innocent
until proved guilty according to law. The protections in Article 14(2) of the ICCPR
only apply in criminal proceedings. Generally, consistency with the presumption of
innocence requires the prosecution to prove each element of a criminal offence
beyond reasonable doubt. Offence provisions which place an evidential or legal
burden on the defendant and no-fault offences, such as strict and absolute liability
offences, which allow for the imposition of criminal liability without the need to
prove fault, will engage the presumption of innocence. This is because a defendant's
failure to discharge the burden or the lack of a burden altogether may permit their
conviction despite reasonable doubt as to their guilt.
The Human Rights Committee (Committee) has provided limited guidance as to
whether the concept of `criminal charge' should be autonomously interpreted. It has
stated that `[c]riminal charges relate in principle to acts declared to be punishable
under domestic criminal law'. The notion may also extend to acts that are criminal in
nature with sanctions that, regardless of their qualification in domestic law, must be
regarded as penal because of their purpose, character or severity' (General Comment
No. 32, at paragraph 15). Guidance can also be drawn from the jurisprudence from
the European Court of Human Rights in relation to a similar provision in Article 6 of
the European Convention for the Protection of Human Rights and Fundamental
Freedoms 1950, despite Australia not being a party to the Convention. The
jurisprudence of the European Court of Human Rights on Article 6 indicates that
factors relevant to when a matter will be found to be `criminal' include whether the
proceedings are brought by a public authority (Benham v UK (1996) 22 EHRR 293),
whether there is a punitive or deterrent element to the process (Ozturk v Germany
(1984) 6 EHRR 409), and whether there are potentially serious consequences
attached, such as imprisonment (Campbell and Fell v UK (1985) 7 EHRR 165).
Civil penalties
The Bill introduces a new civil penalty regime in the Offshore Petroleum and
Greenhouse Gas Storage Act 2006. The Parliamentary Joint Committee has noted
that it is possible for a civil penalty regime which subjects a person to a high penalty
and is intended to be punitive or deterrent in nature to constitute a `criminal charge'
for the purposes of the presumption of innocence in Article 14(2) (see the
Committee's Fifth Report, page 8, paragraph 1.21-1.26). Penalties in the Bill range
from 90 to 2,250 penalty units. The Bill also provides for the defence of taking
reasonable steps to comply in relation to certain civil penalty provisions, and
application of the Regulatory Powers Act will apply a mistake of fact defence to the
entire civil penalty regime.
The new civil penalty provisions are being introduced to the Act as the result of a
legislative review undertaken in accordance with the agreed Government response to
the Report into the Montara Commission of Inquiry. This was a legislative review of
the effectiveness of compliance and enforcement tools available to the regulator in the
12
offshore regulatory regime. This review found that in order to be able to more
effectively and proportionately regulate the industry, a graduated set of compliance
and enforcement tools were required including civil penalties.
This Bill introduces a civil penalty regime to the Act. To determine the provisions in
relation to which a civil penalty would be applied, each existing criminal offence
provision in the Act was considered in the context of a range of factors to determine
the appropriateness of also applying a civil penalty to the provision. The factors that
were taken into account included: whether breach of the provision should merit
criminal punishment only (for example, given the moral culpability associated with
the misconduct); whether a higher financial penalty, and the relative ease of obtaining
a civil penalty order in comparison to a criminal prosecution, would provide an
additional economic incentive to encourage compliance with the provision; whether
the penalty would apply to corporate wrongdoing; and whether the penalty for breach
would appropriately be set at a level high enough to warrant court proceedings.
After determining the provisions that would be suitable for application of a civil
penalty, the provisions were ranked according to two main factors: 1) the nature of the
provision (for example, whether the provision is merely administrative in nature, or
whether the provision regulates the manner in which offshore petroleum operations
are to be conducted), and 2) the seriousness of the potential consequences of non-
compliance with the provision. The penalties to be applied to each provision were
then determined in accordance with the ranking, with lower penalties applied for
lower ranked provisions, medium level penalties applied for mid-ranked penalties,
and so forth. For example, lower financial penalties are applied to provisions that are
largely administrative in nature, such as a failure to keep records of accidents and
dangerous occurrences, or a failure to comply with reporting obligations on holders of
petroleum access authorities. On the other hand, higher financial penalties are applied
to provisions in relation to which a breach could have potentially serious
consequences for safety or the environment, such as a failure to comply with work
practices requirements in the Act, or a failure to comply with a significant incident
direction, to provide a stronger incentive for persons to ensure compliance with those
obligations.
When determining whether it would be appropriate to apply civil penalties for
contraventions of particular provisions in the Act, and the level of financial penalty to
be applied, the application of civil penalties and the level of penalties in like
Commonwealth legislation, such as the Work Health and Safety Act 2011 and the
Environment Protection and Biodiversity Conservation Act 1999, were also
considered.
As is the case in the Work Health and Safety Act 2011, civil penalties are not applied
for breaches of OHS duties in Schedule 3 to the Act, which will remain offence
provisions only. This generally reflects the community's view that any person who
has a work-related duty of care but does not observe it should be liable to a criminal
sanction for placing another person's health and safety at risk. This is particularly the
case for a high-hazard industry. This approach is also in line with international
practice. The criminal penalties applied for breaches of OHS duties under the Act are
to be increased by the amendments in this Bill - see items 66-93 of this Schedule.
13
The Bill also provides for civil penalties to be enforced under Part 4 of the Regulatory
Powers Act. The Regulatory Powers Act provides for a framework of standard
regulatory powers exercised by agencies across the Commonwealth. The Regulatory
Powers Act was, according to its Explanatory Memorandum tabled during
introduction to Parliament, prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011, and declared as being compatible with the human
rights and freedoms recognised or declared in the international instruments listed in
section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Strict liability offences
There are a number of strict liability offences in the Bill. The OPGGS Act contains a
range of strict liability offences given that, in many cases, fault may be difficult to
prove due to the remote and complex nature of offshore operations and the prevalence
of multiple titleholder arrangements. In terms of the right to presumption of innocence
as afforded to individuals, the reality is that in the offshore regulatory regime
investigations and prosecutions are conducted largely if not solely in relation to
companies, not individuals. Prosecutions to date have only been in relation to
companies, and it is not anticipated that this regulatory approach would change in the
future given the nature of the industry and the requirements imposed. A penalty of
100 penalty units is considered appropriate. It is noted this is higher than the
preference stated in A Guide To Framing Commonwealth Offences, Infringement
Notices and Enforcement Powers, September 2011 for a maximum 60 penalty units
for offences of strict liability. However, offshore resources activities, as a matter of
course, require a very high level of expenditure and therefore by comparison a smaller
penalty would be an ineffective deterrent. Also, the parties in question are, due to the
overall `licencing' arrangements in place for activities, well aware of their duties and
obligations.
Right to minimum guarantees in criminal proceedings
Proposed clause 8 of Schedule 2A engages the right to minimum guarantees in
criminal proceedings, particularly that set out in Article 14(3)(g) of the ICCPR.
Article 14(3) of the ICCPR establishes a number of guarantees that must be observed
in criminal proceedings, including the right to be free from self-incrimination.
Clause 8 allows a NOPSEMA inspector to require a person to answer questions or
produce documents or things, if the inspector believes on reasonable grounds that the
person is capable of answering the question or producing the document or thing, that
is reasonably connected with the conduct of a petroleum environmental inspection.
This clause gives NOPSEMA inspectors broad powers of inquiry to enable them to
properly perform their functions. It is an offence to fail to comply with a requirement
under this clause.
Under clause 8, a person is not excused from answering a question or producing a
document or thing when required to do so on the ground that the answer to the
question or production of the document or thing may tend to incriminate the person or
make the person liable to a penalty. However, the answer given or document
produced, the fact of the answering of the question or production of the document, or
any information obtained as a direct or indirect consequence of the answering of the
question or production of the document, is not admissible in evidence against the
14
person in any civil or criminal proceeding (other than a proceeding relating to the
provision of false or misleading information).
Where matters relating to compliance with environmental management laws are
concerned, it may occasionally be more important to establish the facts rather than to
be able to use the facts in a prosecution or legal action. Maintaining a privilege
against self-incrimination would significantly hamper the regulator's ability to
monitor the titleholder's compliance with applicable environmental requirements or to
understand the causes of incidents that have occurred that may, if they recur, cause a
major accident event leading to damage to the environment. NOPSEMA faces
substantial difficulties in obtaining information about offshore petroleum activities for
the purpose of monitoring compliance and in investigating the causes of incidents.
Offshore operations are extremely technologically complex. They take place far from
land, and in the case of well operations, far below the seabed, making physical
inspection difficult or impossible for an inspector. In many cases, the inspector's best
recourse is to ask questions of those carrying out the operations or to have them
produce operational records detailing, for example, maintenance schedules. In
particular, establishing the titleholder's standards of compliance over time can be a
particular challenge, especially if records are incomplete. In an environment where
compliance requires a major financial investment and where non-compliance can add
considerably to the profits to be made, there should be nothing put in place that
hampers the inspector's ability to establish the facts and investigate whether there has
been compliance. Especially in an industry where non-compliance can result in
incidents that have the potential to cause major environmental damage, an inspector
must be able to follow-up any leads that are obtained from the answers given to
questions. To shut-off any line of inquiry would not be in the public interest, given
the nature of the potential harm that could occur.
Subclauses (8) and (9) of clause 8 abrogate the privilege against self-incrimination
and provide an immunity against use or derivative use of the information or
document in civil or criminal proceedings other than for specified offences - i.e. use
immunity and derivative use immunity are provided. Clause 8 ensures that
NOPSEMA inspectors have a sufficiently broad power to establish facts, while
protecting individuals from proceedings on the basis of providing the information.
This safeguard ensures that clause 8 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.
Conclusion
The Bill is compatible with human rights because, to the extent that it may limit
human rights, those limitations are reasonable, necessary and proportionate.
15
OFFSHORE PETROLEUM AND GREENHOUSE GAS STORAGE
AMENDMENT (COMPLIANCE MEASURES) BILL 2012
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 is a formal provision specifying the short title of the Act.
Clause 2 - Commencement
Schedules 1 and 2 to the Bill will commence at the later of the following:
(a) the start of the day after the Act receives the Royal Assent, and
(b) immediately after the commencement of Parts 2 and 3 or 4 (as appropriate) of the
Regulatory Powers (Standard Provisions) Act 2012 (the Regulatory Powers Act).
Parts 2 and 3 of that Act are triggered by the amendments in Schedule 1 to this Bill to
enable NOPSEMA inspectors to use the monitoring and investigation powers
contained in those Parts. Therefore, the amendments in that Schedule cannot
commence until Parts 2 and 3 of the Regulatory Powers Act has commenced.
Part 4 of that Act is also triggered by the amendments in Schedule 2 to this Bill to
provide for the enforcement of civil penalty provisions inserted into the Act.
Therefore, the amendments in that Schedule cannot commence until Part 4 of the
Regulatory Powers Act has commenced.
Schedules 3 and 4 to the Bill commence on the day after Royal Assent.
Clause 3 - Schedules
This clause gives effect to the provisions in the Schedules to this Bill.
Schedule 1 - monitoring and investigation powers
Introduction
This part of the Bill streamlines the appointment provisions for NOPSEMA inspectors
and updates and expands the monitoring and investigation powers of those inspectors.
The purpose of these amendments is to:
(a) merge NOPSEMA's `petroleum project inspectors' and `OHS inspectors' into a
single kind of inspector called a `NOPSEMA inspector';
(b) enable NOPSEMA inspectors to use the monitoring and investigation powers in
Parts 2 and 3 of the Regulatory Powers (Standard Provisions) Act 2012 (when
enacted) to monitor and investigate compliance with all obligations of persons
under the Act and associated regulations;
(c) delete the offence-related search and seizure provisions in Part 4 of Schedule 3 to
the Act, currently applying only to investigations by OHS inspectors, as these are
16
replaced by the equivalent powers in Part 3 of the Regulatory Powers Act that
apply to all investigations;
(d) make the monitoring powers in Schedule 3 to the Act, which currently apply only
to the monitoring of compliance with OHS obligations and which allow for
monitoring by OHS inspectors without warrant, also available for the purpose of
monitoring compliance with obligations of petroleum titleholders under
environmental management laws.
In summary, NOPSEMA inspectors will be able to use the monitoring and
investigation powers in Parts 2 and 3, respectively, of the Regulatory Powers Act to
monitor and investigate compliance with all obligations of persons under the Act and
associated regulations. Entry and search under either Part 2 or Part 3 requires a
warrant. In addition, NOPSEMA inspectors will continue to be able to monitor
compliance by persons with their OHS obligations, without warrant, at offshore
`facilities' and at onshore `regulated business premises' (i.e. premises of facility
operators and titleholders) under existing Schedule 3 to the Act. Under new
Schedule 2A, NOPSEMA inspectors will now also be able to monitor compliance by
petroleum titleholders with environmental management laws, without warrant, at
certain offshore vessels and structures and also at onshore premises of the titleholder.
For monitoring of compliance with OHS or environmental management laws at any
offshore or onshore premises that do not fall within the above limited categories, entry
will take place (under a warrant) under the Regulatory Powers Act.
For monitoring and investigating compliance with non-OHS and non-environmental
management obligations of persons under the Act and associated regulations,
NOPSEMA inspectors will have available the powers in Parts 2 and 3 of the
Regulatory Powers Act.
The reason for distinguishing between OHS and environmental obligations of persons
on the one hand, and other operational and reporting obligations on the other hand, is
primarily the need for powers of entry for monitoring purposes without warrant in the
case of OHS and environmental management obligations under the Act and associated
regulations.
Rationale for monitoring of OHS and environmental compliance without warrant
The National Offshore Petroleum Safety Authority (NOPSA) was established by the
Petroleum (Submerged Lands) Amendment Act 2003. From its inception, NOPSA
had the power to enter offshore petroleum facilities without warrant in order to
monitor compliance by facility operators with their OHS obligations. The rationale
for warrant-free entry at that time was that, in order to construct or operate a facility it
was necessary for the operator to submit a facility safety case to NOPSEMA for
approval. The safety case set out the means by which the operator proposed that it
would meet its OHS duties of care to ensure that the facility was safe and that
activities carried out at the facility would be safe. The safety case thus functioned as
a form of licence to construct and operate the facility, with the facility being, in that
sense, licensed premises. In the high hazard environment of offshore petroleum
operations, it was necessary that there be a close and interactive relationship between
the regulator and the facility operator, with the regulator having unrestricted access to
the premises. The need for unrestricted access to a facility was further underlined in
2010, with the inclusion of a new titleholder OHS duty of care in relation to wells and
well operations at a facility.
17
NOPSA became NOPSEMA on 1 January 2012 and, on that date, became also the
operational regulator of environmental management of offshore petroleum activities.
As with the construction and operation of a petroleum facility, it is an offence to carry
out a petroleum activity without the acceptance by NOPSEMA of an environment
plan for the activity. Again, the environment plan describes the means by which the
responsible person will ensure that environmental impacts of the activity will be kept
as low as reasonably practicable. Again, the environment plan functions as a licence
to carry out the activity, with the offshore vessel or structure where the activity is to
take place being an integral part of the operator's environmental performance
requirements. Environmental compliance inspections currently take place under
section 601 of the Act, without any requirement for a warrant.
NOPSA-NOPSEMA has been in operation since 1 January 2005. In that time, it has
built up a national and international reputation as an effective high hazard industry
regulator with an appropriately skilled and trained inspectorate. Compliance
monitoring is an important part, if not the most important part, of NOPSEMA's
functions. Monitoring inspections are carried out according to a monitoring strategy
developed by NOPSEMA, as required by its functions as stated in section 646 of the
Act. To interpose a requirement that a NOPSEMA inspector obtain an external
administrative consent prior to carrying out each inspection would serve no purpose.
A requirement to go through the process of obtaining a warrant might well also
impede NOPSEMA's ability to respond rapidly in an emergency. As the Montara
incident demonstrated, in the offshore petroleum industry an incident such as a failure
of well integrity can quickly escalate into a major accident event, with risks to human
health and safety and the marine environment. In these circumstances, the ability of
the regulator to access offshore and onshore premises of responsible persons without
delay can be critical.
Part 1--Application of Regulatory Powers (Standard Provisions) Act 2012
This Part contains the provisions necessary for triggering the operation of the
Regulatory Powers Act for compliance monitoring and investigation by NOPSEMA
inspectors for the purposes of the Act and associated regulations. The Regulatory
Powers Act does not apply of its own force. It only applies if its application is
triggered by another Commonwealth Act. It is the purpose of this Part of the Bill to
insert provisions into the Act that trigger that operation. The provisions will go into
Part 6.5 of the Act, which is to have its heading amended to: "Part 6.5--Compliance
and enforcement".
In order for the Regulatory Powers Act provisions to operate as designed, it is also
necessary that the applying Act specify a number of matters for the purposes of that
application. These include the specification of `provisions subject to monitoring' and
`provisions subject to investigation' - see sections 9 and 39, respectively of the
Regulatory Powers (Standard Provisions) Act 2012.
Item 6: Sections 600 to 602
Section 601 Meaning of listed NOPSEMA law
The `listed NOPSEMA laws' are the provisions of the Act and related regulations that
are the `provisions subject to monitoring' and `provisions subject to investigation' for
these purposes.
18
The `listed NOPSEMA laws' are set out in the table in section 601. They are,
essentially, all of the provisions of the Act and regulations that impose obligations on
persons in relation to petroleum titles and petroleum operations. In addition to these
petroleum-related provisions, the `listed NOPSEMA laws' include provisions in
Part 6.6 relating to greenhouse gas safety zones and in Schedule 3 in relation to OHS
at greenhouse gas facilities and the titleholder's duty of care in clause 13B of
Schedule 3 with respect to greenhouse gas wells. The reason for inclusion of these
specific greenhouse gas-related provisions is that NOPSEMA is the regulator of
health and safety of offshore greenhouse gas storage operations. NOPSEMA is not,
however, the regulator of other aspects of greenhouse gas operations.
None of the amendments in this Bill are intended to affect in any way compliance
monitoring or enforcement of existing provisions of the Act or regulations that are not
`listed NOPSEMA laws'. For example, the powers of greenhouse gas project
inspectors in Division 2 of Part 6.5 are not affected.
Section 602 NOPSEMA inspectors--appointment
Section 602 is now the single provision under which NOPSEMA inspectors will be
appointed. It replaces section 600 (appointment of petroleum project inspectors) and
section 680 (appointment of OHS inspectors). Subsections 602(1), (2), (3) and (5)
replicate the provisions of former section 680, in relation to the NOPSEMA CEO's
powers of appointment and inspectors' powers, functions and duties under the
corresponding State/NT Acts. A NOPSEMA inspector must be:
(a) a member of the staff of NOPSEMA;
(b) an employee of the Commonwealth or of a Commonwealth authority; or
(c) an employee of a State or of the Northern Territory or of an authority of a State or
of the Northern Territory.
Subsection 602(4) replicates former section 681 in providing for matters that must be
stated on the identity card. However, the identity cards will no longer be issued under
this section of the Act but under the Regulatory Powers Act (section 36). The
NOPSEMA CEO will still issue the cards, being the `relevant chief executive' for the
purposes of that Act.
Section 602A NOPSEMA inspectors--directions by CEO
This section replicates clause 48 of Schedule 3 of the Act in relation to the power of
the CEO of NOPSEMA to give directions to inspectors. Subsection (1) enables the
CEO to give written directions stating conditions subject to which an inspector's
powers may be exercised. Subsection (2) enables the CEO to impose conditions on
the exercise of powers, or the performance of functions or duties, by a particular
NOPSEMA inspector.
Subsection (3) states that, if a direction under subsection (1) is of general application,
the direction is a legislative instrument for the purposes of the Legislative Instruments
Act 2003. Subsection (4) states that, if a direction under subsection (1) is not of
general application, the direction is not a legislative instrument for the purposes of the
Legislative Instruments Act 2003. Subsection (5) states that a notice under
subsection (2) is not a legislative instrument for the purposes of the Legislative
Instruments Act 2003. Subsections (4) and (5) are included to assist readers, as in
19
these circumstances, an instrument is not a legislative instrument within the meaning
of section 5 of the Legislative Instruments Act 2003.
Section 602B NOPSEMA inspectors--reimbursement for exercise of powers relating
to the Titles Administrator
Section 602B replicates former subsection 600(7), as the whole of section 600 has
now been replaced. This reimbursement provision, which arises from the ability of
the Titles Administrator to obtain assistance from a NOPSEMA inspector when
performing Titles Administrator functions, now applies in relation to all NOPSEMA
inspectors.
Sections 602C and 602D
Sections 602C and 602D are the provisions of the Act that trigger the application of
the monitoring and investigation powers in the Regulatory Powers Act for use by
NOPSEMA inspectors. Those powers are available to be used for monitoring and
investigating compliance with all `listed NOPSEMA laws'. Following sections 602C
and 602D are some special provisions that `tailor' the standard regulatory powers to
enable their use in the regulatory environment in which NOPEMA operates.
The following provisions in section 602C specify matters for the purposes of the
monitoring powers in Part 2 of the Regulatory Powers Act.
Section 602C Listed NOPSEMA laws--monitoring powers (general)
Provisions and information subject to monitoring
Subsections 602C(1) provides that the `listed NOPSEMA laws' are `subject to
monitoring' under Part 2 of the Regulatory Powers Act. Subsection 602C(2) provides
that `(i)nformation given in compliance or purported compliance with one or more of
the listed NOPSEMA laws' is also `subject to monitoring' under that Part.
These subsections operate in conjunction with section 19 (among other provisions) of
the Regulatory Powers Act. Section 19 provides that an `authorised person' (ie a
NOPSEMA inspector) may, under certain conditions, enter premises and exercise
monitoring powers for either or both of the following purposes:
(a) determining whether a provision that is `subject to monitoring' has been or is
being complied with;
(b) determining whether information that is `subject to monitoring' is correct.
(The conditions relate to consent by the occupier or the making of the entry under a
warrant.)
Related provisions
Subsection 602C(3) provides that all offence provisions and civil penalty provisions
under the Act or a regulation under the Act, or a provision for a related offence under
the Crimes Act 1914 or the Criminal Code is `related to' the listed NOPSEMA laws.
This is concerned with evidential material that can be secured or seized under a
monitoring warrant or investigation warrant. The main effect of this subsection as it
concerns NOPSEMA inspectors is that they can secure or seize evidential material
20
relating to an offence under the Act or the associated regulations relating to
greenhouse gas operations, if such material is found while they are exercising
monitoring or investigation powers in relation to petroleum matters.
Authorised applicant
Subsection 602C(4) provides that a NOPSEMA inspector is an `authorised applicant'
for the purpose of obtaining a monitoring warrant under the Regulatory Powers Act.
Authorised person
Subsection 602C(5) provides that a NOPSEMA inspector is an `authorised person' -
ie a person authorised to exercise monitoring powers under Regulatory Powers Act.
Issuing officer
Subsection 602C(6) provides that a magistrate is an `issuing officer' for the purpose
of issuing monitoring warrants to NOPSEMA inspectors.
Relevant chief executive
Subsection 602C(7) provides that the CEO of NOPSEMA is the `relevant chief
executive' in relation to NOPSEMA inspectors
Relevant court
Subsection 602C(8) provides that the courts listed in the subsection are `relevant
courts' for the purposes of matters arising out of the exercise of powers by inspectors
under Part 2 of the Regulatory Powers Act.
Person assisting
Subsection 602C(9) provides that a NOPSEMA inspector may be assisted by a
member of the staff of NOPSEMA in exercising powers or performing functions or
duties in relation to the exercise of monitoring powers under Part 2 of the Regulatory
Powers Act. The staff of NOPSEMA are required to be engaged under the Public
Service Act 1999.
Section 602D Listed NOPSEMA laws--investigation powers (general)
Section 602D makes equivalent provision in relation to the investigation powers in
Part 3 of the Regulatory Powers Act to that made in section 602C (above) in relation
to the monitoring powers in Part 2 of that Act.
The only significant difference is that, in executing an investigation warrant, a
NOPSEMA inspector and the person assisting may use such force against things as is
reasonable and necessary (subsection 602D(1)). In the unlikely event that there was
no-one willing or able to assist the inspector by eg opening storage cabinets,
reasonable force could be used.
Section 602E Listed NOPSEMA laws--additional powers
Section 602E sets out additional powers that a NOPSEMA inspector may exercise
after entering premises under Part 3 of the Regulatory Powers Act. These additional
powers are:
21
(a) in the case where the inspector's entry to the premises is in connection with a
petroleum environmental law--the power to issue a `do not disturb' notice that the
inspector would have if entry to the premises had been for the purposes of a
petroleum environmental inspection under Schedule 2A; and
(b) in the case where the inspector's entry to the premises is in connection with a
listed OHS law, the powers that the inspector would have if entry to the premises
had been for the purposes of an OHS inspection under Schedule 3--to issue:
o a do not disturb notice under clause 76 of Schedule 3;
o a prohibition notice under clause 77 of Schedule 3;
o an improvement notice under clause 78 of Schedule 3.
The above notices under clauses 76, 77 and 78 of Schedule 3 would have been able to
be issued by an OHS inspector when exercising powers under Schedule 3 following
entry to a facility under a warrant. Entry to premises under a warrant will now take
place under the Regulatory Powers Act. The intention of including these additional
powers is that a NOPSEMA inspector who is exercising powers under Part 3 of the
Regulatory Powers Act will be able to issue the same notices as could have been
issued under Schedule 3 in order to deal with OHS risks at a facility, and also to
ensure that premises, structures and plant are not disturbed. A `do not disturb' notice
can also be issued in the case where the inspector's entry to the premises is in
connection with a petroleum environmental law.
Section 602F Listed NOPSEMA laws--monitoring and investigative powers (special
provisions
This section provides for extended or alternative meanings of terms used in the
Regulatory Powers Act. These extended or alternative meanings are necessary to
`tailor' the standard Regulatory Powers Act regime to the offshore petroleum
industry.
Premises
Subsection 602F(2) gives `premises' an extended meaning that includes, for example,
a pipeline. Items of plant used in offshore petroleum operations or offshore
greenhouse gas operations may not be `structures' in the ordinary sense of that word
and so would not fall within the definition of `premises' in the Regulatory Powers
Act.
Occupier
Subsection 602F(3) gives an extended meaning to the term `occupier' when used in
relation to offshore `premises'.
(a) In the case of a `facility' in relation to an OHS inspection, the occupier is the
operator's representative at the facility.
(b) If (a) does not apply , and the premises are a vessel under the command or charge
of a master--the master.
(c) If neither (a) nor (b) applies and the powers are exercised in relation to a
petroleum environmental law--the titleholder's representative (if any) at the
premises.
22
(d) If there is no occupier present as provided in (a), (b) or (c) - the person who
appears to be in overall control of the premises.
While this definition may appear complex, the different possibilities need to be
specified in order to deal with the different circumstances in which the powers may be
exercised and the different categories of law in relation to which compliance is being
monitored or investigated. No duties are imposed on an `occupier'. The `occupier' is
simply a person who must be given notice of entry into or onto the `premises'.
Section 602G Listed NOPSEMA laws--monitoring and investigative powers
(reasonable facilities and assistance)
Section 602G extends the forms of assistance that a facility operator or a titleholder
may be required to provide to a NOPSEMA inspector for the purposes of the
NOPSEMA inspector exercising monitoring or investigatory powers under the
Regulatory Powers Act offshore. The section corresponds to existing subclause 73(2)
of Schedule 3 in relation to OHS inspections under that Schedule. The additional
requirements are necessary because a NOPSEMA inspector cannot access an offshore
vessel or structure without the operator or titleholder providing the necessary
transport (usually helicopter) and also providing accommodation and meals when an
inspection takes place over more than one day. Except in an emergency, inspections
are planned with the operator or titleholder in advance. The provision of such
assistance to an inspector is a normal and expected part of engaging in the offshore
petroleum industry.
Section 602H Listed NOPSEMA laws--monitoring and investigative powers
(Greater Sunrise visiting inspectors)
Section 602H continues unchanged the existing powers of a Greater Sunrise visiting
inspector. Greater Sunrise visiting inspectors were created in order to give effect to
the provisions of Article 24 of the International Unitisation Agreement between
Australia and Timor-Leste, by enabling Timor-Leste to satisfy itself that its
fundamental interests in relation to measurements of unit petroleum are met.
A Greater Sunrise visiting inspector must not, in his or her capacity as such, exercise
any other powers of a NOPSEMA inspector under the Regulatory Powers Act (as
applied by these amendments), or otherwise under the OPGGSA. However, this does
not prevent the same person also being separately appointed to exercise the powers of
a NOPSEMA inspector in other offshore areas. In such a case, two separate identity
cards will need to be provided to the person.
Section 602J Listed NOPSEMA laws--monitoring and investigative powers
(petroleum environmental laws)
Section 602J confers on NOPSEMA and NOPSEMA inspectors the functions and
powers and imposes the duties given by Schedule 2A in relation to petroleum
environmental laws.
23
Section 602K Listed NOPSEMA laws--monitoring and investigative powers
(titleholder's representative)
Section 602K applies in relation to any monitoring or investigative inspection to be
carried out by a NOPSEMA inspector at offshore premises where the subject matter
of the inspection is, or includes, a titleholder's compliance with an obligation of the
titleholder under a listed NOPSEMA law. The inspector may be exercising powers
under:
o the Regulatory Powers Act, as applied by this Part 6.5 in relation to any listed
NOPSEMA law;
o Schedule 2A in relation to obligations of a petroleum titleholder under an
environmental management law; or
o Schedule 3 in relation to a petroleum titleholder's or greenhouse gas titleholder's
obligations under a listed OHS law.
Under subsection 602EB(3), a NOPSEMA inspector may, by written notice, require
the titleholder to nominate a representative to be present at the offshore premises
during the period of the inspection. The purpose of the requirement is so that (for
example, there will be someone on board who has knowledge of the titleholder's
operations at those premises, who is therefore likely to be able to give the inspector
information about the operations that are the subject of the inspection and to answer
questions the inspector might have. There are no specific requirements as to the level
of knowledge a titleholder's representative must have - this is left to the common
sense of the titleholder. As with any offshore inspection by a NOPSEMA inspector, a
fairly high level of cooperation by the person whose operations are being inspected is
necessary, in order for the inspector to be able to carry out the inspection. Because of
the close and interactive relationship between the offshore petroleum industry and
NOPSEMA, that cooperation can be expected to be forthcoming.
No minimum time is specified that the inspector must allow for the titleholder to
comply with the obligation to nominate a representative, because there is a need for
flexibility. Inspections are organised by NOPSEMA in advance with the person
(titleholder or facility operator) whose operations are being inspected. If for no other
reason, this is necessary because the industry member must provide the transport. In
routine cases, therefore, the titleholder will always in practice have adequate advance
notice, and the representative will travel to the offshore location in the same transport
as the inspector. In the case of an emergency, or where an incident has occurred that
requires an inspection to be carried out at short notice, the nomination of the
representative will also have to be made quickly. In all cases, the titleholder only has
to take `all reasonably practicable steps' to ensure that the representative is present, so
there is an inbuilt necessity for the inspector to act reasonably in specifying the time
for compliance.
The offence of failure to comply with the obligation to nominate a representative is an
offence of strict liability. Since this is a procedural offence with a penalty of less than
60 penalty units, it is consistent with the A Guide To Framing Commonwealth
Offences, Infringement Notices and Enforcement Powers, September 2011.
Titleholder's obligation
The obligation to nominate a titleholder's representative arises only where an
inspector is monitoring or investigating compliance by a titleholder with its
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`titleholder's obligations'. Subsection (8) provides that these are the titleholder's
obligations to comply with:
o for an inspection under Part 2 or 3 of the Regulatory Powers Act-- a `listed
NOPSEMA law' (see the Table in section 601);
o Schedule 2A in relation to obligations of a petroleum titleholder under an
environmental management law; or
o Schedule 3 in relation to a petroleum titleholder's or greenhouse gas titleholder's
obligations under a listed OHS law (except, in the case of a greenhouse gas
titleholder, under Part 5 of the Offshore Petroleum and Greenhouse Gas Storage
(Resource Management and Administration) Regulations 2011).
Section 602L Listed NOPSEMA laws--monitoring and investigative powers
(relationship with other powers
Section 602L ensures that NOPSEMA or a NOPSEMA inspector is not prevented, by
having exercised powers or performed a function under Part 2 or 3 of the Regulatory
Powers Act, from exercising a power or performing a function under any provision of
the Act, and vice versa. Simply, NOPSEMA or a NOPSEMA will have to ensure that
the conditions precedent for the exercise of the power or the performance of the
function (eg the obtaining of a warrant) have been satisfied.
Item 7: Division 6 of Part 6.9 of Chapter 6
Item 7 repeals Division 6 of Part 6.9. This Division previously provided for
appointment of OHS inspectors and the issuing to them of identity cards. Those
provisions have now been located in the amended Part 6.5, headed `Compliance and
enforcement'.
Item 8: Section 790A Regulations dealing with the Regulatory Powers Act
Item 8 inserts new section 790A into Part 9.11, the Part of the OPGGS Act that
provides for the making of regulations. New section 790A provides that regulations
may make a provision of a regulation a civil penalty provision and modify the
Regulatory Powers Act as it applies in relation to a regulation.
The Regulatory Powers Act contains provisions enabling the application of the
various parts of that Act to be triggered by regulations made under another Act and
for those regulations to modify the application of the Regulatory Powers Act in
specified ways. This regulation-making power triggers the operation of those
provisions of the Regulatory Powers Act in relation to civil penalty provisions in
regulations under the OPGGS Act.
Part 2--Petroleum environmental inspections
Item 9: After Schedule 2
Item 9 inserts a new Schedule 2A after existing Schedule 2 to the Act. It is headed:
`Schedule 2A--Petroleum environmental laws: Additional NOPSEMA inspection
powers'.
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New Schedule 2A confers monitoring powers on NOPSEMA inspectors equivalent to
the OHS monitoring powers in existing Schedule 3 (the OHS Schedule). The new
environmental monitoring powers are exercisable by NOPSEMA inspectors for the
purpose of monitoring compliance with environmental management laws. The
powers include powers of entry and search without warrant, power to require the
answering of questions and the production of documents or things, and power to
direct that premises not be disturbed.
Clause 2--Definitions
facility
In Schedule 2A, facility means a facility as defined in Schedule 3. This means a
vessel or structure that is a facility within clause 4 of Schedule 3. However, since this
Schedule 2A only applies to compliance with obligations under an environmental
management law, and NOPSEMA is not regulator of environmental management of
greenhouse gas operations, a facility at which an inspection can be carried out under
this Schedule must in practice always be a petroleum facility.
Note that the concept of a `facility' is used in this Schedule merely to describe a
particular category of structure or vessel. Unlike in the case of an inspection relating
to compliance with a listed OHS law, a NOPSEMA inspector does not have any
different powers on board a `facility' than on board any other offshore premises.
offshore petroleum premises
These are the offshore structures and vessels at which a NOPSEMA inspector may
exercise the monitoring powers conferred by Schedule 2A. The categories are:
o a facility (as defined in Schedule 3);
o a licensed infrastructure facility;
o a seismic survey vessel;
o any other offshore vessel or structure (other than a vessel under the command
of a master) used for the carrying out of an activity in connection with the
exercise of a petroleum titleholder's rights or the performance of a petroleum
titleholder's obligations under the Act and associated regulations.
These are the vessels and structures that can be boarded without warrant for the
purposes of an inspection under Schedule 2A. A vessel under the command of a
master, that is not a facility or a seismic survey vessel, that is being used for an
activity described in the last dot point above can still be boarded for the purpose of
monitoring the titleholder's compliance with its environmental obligations, but that
will need to take place under a monitoring warrant under Part 2 of the Regulatory
Powers Act.
Division 1--Petroleum environmental inspections: general provisions
Clause 3 Petroleum environmental inspections--nature of inspections
Clause 3 provides that a `petroleum environmental inspection' is an inspection under
Part 2 of Schedule 2A.
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An inspection in relation to compliance of operations at an offshore vessel or structure
need not involve a NOPSEMA inspector in going offshore. An inspection can be a
`desk' inspection.
Subclause 3(2) confers the power to conduct a petroleum environmental inspection. It
may be conducted by a NOPSEMA inspector to determine whether a petroleum
environmental law has been or is being complied with, or to determine whether
information given in compliance, or purported compliance, with a petroleum
environmental law is correct.
Clause 4 Petroleum environmental inspections--offshore petroleum premises
Clause 4 confers the enter and search powers in relation to offshore petroleum
premises and provides for the NOPSEMA inspector to give notification of entry to the
various categories of `occupier'. This clause has the same content as the existing
equivalent clause (clause 50) in Schedule 3. There is an exception - the words in
paragraph 50(1)(a)(iv) `inspector has reasonable grounds to believe relate' have been
changed to `inspector is satisfied on reasonable grounds relate'. These words have
simply been standardised across the two Schedules. It is not considered that the
meaning is materially different, given the requirement for `reasonable grounds'.
Clause 5 Petroleum environmental inspections--regulated business premises
Clause 5 confers powers of entry and search at `regulated business premises'. This
term is defined in clause 2. Clause 5 has the same content as existing clause 51 in
Schedule 3.
Clause 6 Petroleum environmental inspections--obstructing or hindering NOPSEMA
inspector
Clause 6 has the same substantive content as clause 54 of Schedule 3.
Division 2--Petroleum environmental inspections: compliance powers
Clause 7 Petroleum environmental inspections--power to require assistance
The power to require assistance in clause 7 is substantively the same as existing
clause 73 of Schedule 3.
The clause provides a `reasonable excuse' defence. This form of defence has been
retained, as there would otherwise be too many potential circumstances constituting a
defence to set out in the provision. The burden of proof is reversed because the
circumstances are likely to be exclusively within the knowledge of the defendant.
Clause 8 Petroleum environmental inspections--powers to require information and
the production of documents and things
This clause enables a NOPSEMA inspector, for the purposes of a petroleum
environmental monitoring inspection, to require the titleholder, or persons in specified
relationships with the titleholder, to answer questions or to produce documents and
things. If the person is not physically present at the premises at the time of the
27
requirement being made, the requirement must be made in writing and the time for
compliance must be at least 14 days.
Subclauses (8) and (9)
Subclauses (8) and (9) abrogate the privilege against self-incrimination and provide
an immunity against use of the information or document in civil or criminal
proceedings other than for specified offences - ie a use immunity. There is also a
derivative use immunity.
The reason for the abrogation of the privilege against self-incrimination is that, in its
application to an employee or a contractor who is a natural person, the privilege
would significantly hamper the regulator's ability to monitor the titleholder's
compliance with applicable environmental requirements or to understand the causes
of incidents that have occurred that may, if they recur, cause a major accident event
leading to damage to the environment.
NOPSEMA faces substantial difficulties in obtaining information about offshore
petroleum activities for the purpose of monitoring compliance and in investigating the
causes of incidents. Offshore operations are extremely technologically complex.
They take place far from land, and in the case of well operations, far below the
seabed, making physical inspection difficult or impossible for an inspector. In many
cases, the inspector's best recourse is to ask questions of those carrying out the
operations or to have them produce operational records detailing (eg) maintenance
schedules. In particular, establishing the titleholder's standards of compliance over
time can be a particular challenge, especially if records are incomplete. In an
environment where compliance requires a major financial investment and where non-
compliance can add considerably to the profits to be made, there should be nothing
put in place that hampers the inspector's ability to establish the facts and investigate
whether there has been compliance. Especially in an industry where non-compliance
can result in incidents that have the potential to cause major environmental damage,
an inspector must be able to follow-up any leads that are obtained from the answers
given to questions. To shut-off any line of inquiry would not be in the public interest,
given the nature of the potential harm that could occur.
The clause provides a `reasonable excuse' defence. This form of defence has been
retained, as there would otherwise be too many potential circumstances constituting a
defence to set out in the provision. The burden of proof is reversed because the
circumstances are likely to be exclusively within the knowledge of the defendant.
Clause 9 Petroleum environmental inspections--power to take possession of plant
and samples etc
The power in clause 9 to take possession of plant and samples etc is substantively the
same as that in clause 75 of Schedule 3.
Clause 10 Petroleum environmental inspections--do not disturb notices (general)
Clauses 10 and 11 have substantively the same content as existing clause 76 of
Schedule 3. While clause 76 has itself now been split into two clauses, this is merely
to simplify the drafting.
As is the case with clause 4 of this Schedule (above) the words in subclause 76(1)
`inspector has reasonable grounds to believe' have been changed to `inspector is
28
satisfied on reasonable grounds'. These words have simply been standardised across
the two Schedules. It is not considered that the meaning is materially different, given
the requirement for `reasonable grounds'.
Absence of administrative appeal rights
No right to seek administrative (merits) review has been provided against the exercise
of powers of a NOPSEMA under clauses 8, 9 and 10 above. The powers are
exercisable merely for the purpose of assisting the monitoring of compliance and are
of an early-stage, process nature. The consequences for a person affected will usually
be minor and transitory. (Compare the issue of prohibition notices and improvement
notices under Schedule 3, for which appeal rights are provided.)
Clause 12 Petroleum environmental inspections--tampering and removal of notices
Clause 12 has substantively the same content as existing clause 79 of Schedule 3.
Division 3--Reports: inspections concerning petroleum environmental laws
Clause 13 Reports on inspections concerning petroleum environmental laws
Clause 13 applies if a NOPSEMA inspector has conducted either:
(a) a petroleum environmental inspection under this Schedule 2A; or
(b) an inspection under Part 2 or 3 of the Regulatory Powers Act.
The clause otherwise is substantively the same as existing clause 80 of Schedule 3.
Part 4--OHS inspections
Items 10 through to 161 make a large number of small changes to Part 6.9 of the Act
and Schedule 3 concerning OHS inspections. These changes are made for the
purposes of:
o carrying through the change of name from 'OHS inspector' to 'NOPSEMA
inspector';
o standardising the drafting structure of the sets of monitoring and investigation
powers available to NOPSEMA inspectors;
o improving the consistency of definitions of terms;
o clarifying the types of obligations of persons that are the subject of compliance
monitoring and investigation under each set of provisions;
o changing 'believes on reasonable grounds' to 'is satisfied on reasonable grounds';
o dividing some clauses into two to simplify the drafting, without changing the
content.
The following items introduce significant changes therefore warrant explanation.
Item 56: Clauses 52 and 53
Item 56 repeals clauses 52 and 53. These clauses provided for entry and search under
warrant at premises other than 'regulated business premises'. Entry and search at such
29
premises will now take place under Part 2 or 3 of the Regulatory Powers Act.
Item 57: Subdivision B of Division 3 of Part 4 of Schedule 3
Item 57 repeals clauses 55 to 72 of Schedule 3. These were the clauses providing for
offence-related entry, search and seizure. They are replaced by Part 3 of the
Regulatory Powers Act.
Item 89: Clauses 76, 77 and 78 of Schedule 3
Clause 77 OHS inspections--prohibition notices (issue)
The Report of the Montara Commission of Inquiry concluded that, given the
potentially severe consequences of an offshore petroleum incident, the regulator
should have the ability to prohibit certain conduct before there is an imminent risk of
danger to health and safety, rather than waiting until the risk has actually eventuated.
On this basis, the Commissioner recommended (Recommendation 72) that the
prohibition notice powers of a NOPSEMA inspector should be extended to enable an
inspector to issue a prohibition notice when the inspector believes, on reasonable
grounds, that a risk to healthy and safety may occur, in addition to when a risk is
actually occurring (as the Act currently provides). This Bill implements the
Australian Government's agreement to implement Recommendation 72.
The amount of penalty units for the failure to comply with a prohibition notice has
been increased from 250 penalty units to 600 penalty units. This is as a result of a
decision to increase the relevant criminal penalties in the Act to ensure that they are at
least consistent with the penalties applied in other legislation, as is appropriate for a
high-hazard industry.
Clause 78: OHS inspections--Improvement notices (issue)
Item 89 also rewrites clause 78, which provides for a NOPSEMA inspector, when
conducting an OHS inspection, to issue an improvement notice to a person
('responsible person').
The Australian Government Solicitor (AGS) has advised that there is a moderate risk
that clause 78 in its current form would impermissibly confer judicial power on
NOPSEMA inspectors, contrary to Chapter III of the Constitution. This is because
the notice issued by an inspector under clause 78 at present in effect requires the
responsible person to take the action necessary to prevent a contravention, or likely
contravention, of a provision of a listed OHS law.
AGS has advised that if clause 78 is amended to instead:
(a) require that the NOPSEMA inspector identify in the notice a specific OHS
risk that arises from the contravention or likely contravention; and
(b) require that the notice specify action that must be taken to reduce or prevent
the risk arising from the contravention or likely contravention;
then the risk will be reduced to negligible.
Clause 78 has therefore been recast so that action that the responsible person is
required to take is directed to the health and safety risk, rather than to preventing the
contravention.
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The amount of penalty units for the failure to comply with a prohibition notice has
been increased from 100 penalty units to 300 penalty units. This is as a result of a
decision to increase the relevant criminal penalties in the Act to ensure that they are at
least consistent with the penalties applied in other legislation, as is appropriate for a
high-hazard industry.
Finally, a civil penalty has been added to this clause with a potential liability of
400 penalty units for a contravention of a requirement to comply with an
improvement notice. This addition of an alternate enforcement mechanism is to
provide the regulator with an additional compliance tool to encourage industry
compliance with important health and safety requirements. As a general rule, as noted
below in the explanatory notes in relation to civil penalties in Schedule 2 of the Bill,
civil penalties were not applied to OHS duties and requirements. However as a
reflection of the improvement notice being a primary and frequently used practical
compliance measure utilised by the regulator, the option of criminal and civil
penalties as a pursuit of compliance with this requirement to comply with an
improvement notice was deemed appropriate.
Item 95: Clause 80--Reports on listed OHS law inspections
Item 95 amends clause 80 to require that reporting under clause 80 is required
following an inspection in relation to a listed OHS law whether the inspection is
conducted under Schedule 3 or under Part 2 or 3 of the Regulatory Powers Act.
Item 103: Clause 80A Appeals concerning OHS inspections etc.--decisions subject
to appeal
New clause 80A sets out in Table form the decisions of a NOPSEMA inspector under
Schedule 3 that are subject to administrative review.
The decisions now include decisions made by an OHS inspector, when conducting an
investigation under Part 3 of the Regulatory Powers Act, to issue a 'do not disturb'
notice, a prohibition notice or an improvement notice.
Schedule 2 - Offences and civil penalties
Introduction
This Schedule amends the Act to:
a) increase the criminal penalties that apply to certain occupational health and safety
(OHS) and environmental offences;
b) introduce civil penalties for contraventions of certain provisions; and
c) provide for those civil penalties to be enforced under the standard framework
established in Part 4 of the Regulatory Powers Act.
Increases to criminal penalties
A legislative review conducted of the Act and regulations concluded that many of the
criminal penalties in the Act are too low to provide an effective and meaningful
deterrent and do not adequately reflect the high-hazard nature of the offshore
31
petroleum industry, in particular when compared with the penalties that apply for
similar conduct under comparable high hazard Australian legislation.
Given the potentially severity and/or extent of OHS and environmental consequences
of an offshore petroleum incident, and in order to encourage compliance in order to
reduce the risk of such an incident occurring, it is appropriate that level of criminal
penalties that may be sought for non-compliance with regulatory requirements are at
least equivalent, if not greater, with the penalties that apply for similar offences under
other high hazard legislation.
The increases to criminal penalties provided for by this Schedule are based on a
comparison between the criminal penalties that apply under the Act and those that
apply under the Work Health and Safety Act 2011 (in relation to OHS offences), the
Environment Protection and Biodiversity Conservation Act 1999, the Commonwealth
Protection of the Seas Acts, the Navigation Bill 2012, and the Dangerous Goods
(Road and Rail Transport) Act 2008 (NSW) (in relation to environmental offences).
The amendments will ensure the penalties applied under the Act are consistent with
the level of penalties applied for similar offences in those comparable legislative
schemes, as is appropriate for a high-hazard industry.
Civil penalties
This Schedule introduces a civil penalty regime to the Act.
Based on principles largely gathered from the Australian Law Rreform Commission
Report 95: Principled Regulation Principled Regulation: Federal Civil and
Administrative Penalties in Australia together with a comparison with similar high
hazard Australian legislation, a methodology was established for introduction of civil
penalties to the Act.
Application of the methodology first identified the provisions in relation to which a
civil penalty would be appropriately applied, with each existing criminal offence
provision in the Act considered in the context of a range of factors to determine the
appropriateness of also applying a civil penalty to the provision.
The factors that were taken into account included:
· whether a breach of the provision in question should merit criminal punishment
only (for example, given the moral culpability associated with the misconduct);
· whether a higher financial penalty, and the relative ease of obtaining a civil
penalty order in comparison to a criminal prosecution, would provide an
additional economic incentive to encourage compliance with the provision;
· whether the penalty would apply to corporate wrongdoing; and
· whether the penalty for breach would appropriately be set at a level high enough
to warrant court proceedings.
After identifying provisions that would be suitable for application of a civil penalty,
the provisions were ranked and grouped according to two main factors:
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· the nature of the provision (for example, whether the provision is merely
administrative in nature, or whether the provision regulates the manner in which
offshore petroleum operations are to be conducted), and
· the seriousness of the potential consequences of non-compliance with the
provision.
The penalties to be applied to each provision were then determined in accordance
with the ranking, with lower penalties applied for lower ranked provisions, medium
level penalties applied for mid-ranked penalties, and so forth. For example, lower
financial penalties are applied to provisions that are largely administrative in nature,
such as a failure to keep records of accidents and dangerous occurrences, or a failure
to comply with reporting obligations on holders of petroleum access authorities. On
the other hand, higher financial penalties are applied to provisions in relation to which
a breach could have potentially extremely serious consequences for OHS or the
environment, such as a failure to comply with work practices requirements in the Act,
or a failure to comply with a significant incident direction, to provide a much stronger
incentive for persons to ensure full compliance with those obligations.
When determining whether it would be appropriate to apply civil penalties for
contraventions of particular provisions in the Act, and the level of financial penalty to
be applied, the application of civil penalties and the level of penalties in like
Commonwealth legislation, such as the Work Health and Safety Act 2011 and the
Environment Protection and Biodiversity Conservation Act 1999, were also
considered.
As is the case in the Work Health and Safety Act 2011 (WHS Act), civil penalties are
not applied to breaches of primary OHS duties in Schedule 3 to the Act, which will
remain criminal offence provisions only. As noted in the Explanatory Memorandum
accompanying the WHS Act, this approach generally reflects the community's view
that any person who has a work-related duty of care but does not observe it should be
liable to a criminal sanction for placing another person's health and safety at risk.
This is particularly the case for a high-hazard industry. This approach is also in line
with international best practice. Therefore the criminal penalties applied for breaches
of OHS duties under the Act are instead to be increased to ensure they are consistent
with comparable offences in the WHS Act by the amendments in this Bill - see items
66-93 of this Schedule.
The number of penalty units specified for a contravention of each provision by this
Schedule is the maximum amount that a defendant who is a natural person could be
ordered to pay by a court for breach of a civil penalty provision. Where the defendant
is a body corporate, the court may apply a penalty up to five times the pecuniary
penalty specified for the provision (see paragraph 85(5)(a) of the Regulatory Powers
Act).
In accordance with section 97 of the Regulatory Powers Act, it will not be necessary
to prove fault in a proceeding for breach of a civil penalty provision under the Act.
However, under section 98 of the Regulatory Powers Act, a mistake of fact defence
will apply in relation to all civil penalty provisions in the Act. To ensure that a person
will not be liable for simple errors of fact, the person will be able to raise a defence in
civil penalty proceedings on the grounds that the person's conduct was the result of a
33
considered but reasonable error of fact. The person who asserts that a particular
course of action resulted from a mistake of fact has the burden of proving the matter.
Part 1: Offence and civil penalty provisions
This Part provides for increases to criminal penalties and insertion of civil penalty
provision.
Division 1: Amendments
Item 1: Before subsection 228(1)
This item inserts a new heading before subsection 228(1) to direct the reader that the
subsection is an offence provision.
Item 2: Subsection 228(1)
This item specifies within subsection 228(1) that an offence against that subsection is
an offence of strict liability. This was formerly provided in subsection 228(4), which
is repealed by this Bill - see item 9 of this Schedule. Section 228 is re-structured to
more clearly enable the insertion of a civil penalty provision within that section.
Item 3: At the end of subsection 228(1)
This item inserts a note to direct the reader to section 6.1 of the Criminal Code in
relation to strict liability.
Item 4: After subsection 228(1)
This item inserts a new subsection 228(1A) which provides for a pipeline licensee in
relation to a pipeline to be liable to a civil penalty if the licensee ceases to operate the
pipeline. The penalty for a contravention of this provision is 265 penalty units.
Subsection 228(1A) is subject to the exceptions in subsection 228(2) and (3).
Item 5: Subsection 228(2)
This item amends subsection 228(2) to apply the exception in that subsection to the
new civil penalty provision inserted by item 4 of this Schedule, in addition to the
existing offence provision in subsection 228(1).
Item 6: Subsection 228(2) (note)
This item repeals the existing note to subsection 228(2) and inserts a new note. The
effect of this amendment is to inform the reader that a defendant bears an evidential
burden in relation to the exception in subsection 228(2), in proceedings for a civil
penalty under new subsection 228(1A) (item 4 to this Schedule refers), as is the case
in proceedings for an offence against existing subsection 228(1).
Item 7: Subsection 228(3)
This item amends subsection 228(3) to apply the exception in that subsection to the
new civil penalty provision inserted by item 4 of this Schedule, in addition to the
existing offence provision in subsection 228(1).
34
Item 8: Subsection 228(3) (note)
This item repeals the existing note to subsection 228(3) and inserts a new note. The
effect of this amendment is to inform the reader that a defendant bears an evidential
burden in relation to the exception in subsection 228(3), in proceedings for a civil
penalty under new subsection 228(1A) (item 4 to this Schedule refers), as is the case
in proceedings for an offence against existing subsection 228(1).
Item 9: Subsection 228(4)
This item repeals subsection 228(4). Item 2 amends subsection 228(1) to specify
within that subsection that an offence against that subsection is one of strict liability -
refer to notes against that item.
Item 10: After subsection 249(1)
This item inserts a new heading before subsection 249(2) to direct the reader that the
subsection is an offence provision.
Item 11: At the end of section 249
This item inserts a new subsection 249(4) which provides that the holder of a
petroleum access authority is liable to a civil penalty for a failure to comply with
reporting obligations specified in subsection 249(1). The penalty for a contravention
of this provision is 90 penalty units.
Item 12: At the end of section 280
This item inserts a new subsection 280(5) which provides that a person is liable to a
civil penalty if the person contravenes a requirement in subsection 280(2), which
relates to interference with other users of the marine environment. The penalty for a
contravention of this provision is 265 penalty units.
Item 13: At the end of section 284
This item inserts a new subsection 284(7) which provides that a person is liable to a
civil penalty if the person contravenes a requirement in subsection 284(2), which
relates to the requirement to notify the Titles Administrator of the discovery of
petroleum in a petroleum exploration permit area, petroleum retention lease area, or
petroleum production licence area. The penalty for a contravention of this provision
is 150 penalty units. The requirement in subsection 284(2) does not apply if
petroleum is discovered by a greenhouse gas assessment permittee, a greenhouse gas
holding lessee, or a greenhouse gas injection licensee.
Item 14: After subsection 286A(8)
This item inserts a new subsection 286A(8A) which provides that a person is liable to
a civil penalty if the person fails to meet notification requirements set out in
subsections 286A(2), (3), (4) or (5). The penalty for a contravention of this provision
is 90 penalty units.
This item does not apply a civil penalty in relation to the notification requirement in
subsection 286A(1), as the timeframe to comply with that subsection ended on 30
January 2012.
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Item 15: After subsection 507(5)
This item inserts a new subsection 507(5A) which provides that a person is liable to a
civil penalty if the person contravenes a requirement in a notice given by the Titles
Administrator under subsection 507(2). The penalty for a contravention of this
provision is 90 penalty units.
Item 16: Subsection 507(6) (heading)
This item replaces the existing heading to subsection 507(6) to add a reference to the
civil penalty provision inserted by item 15 to this Schedule.
Item 17: At the end of subsection 507(6) (before the note)
This item inserts an additional requirement for the Titles Administrator to refer to the
effect of the civil penalty provision inserted by item 15 of this Schedule in a notice
given to a person under subsection 507(2).
Item 18: After subsection 508(5)
This item inserts a new subsection 508(5A) which provides that a party to an
approved dealing in a petroleum title is liable to a civil penalty if the person
contravenes a requirement in a notice given by the Titles Administrator to provide
information in relation to the dealing, under subsection 508(2). The penalty for a
contravention of this provision is 90 penalty units.
Item 19: Subsection 508(6) (heading)
This item replaces the existing heading to subsection 508(6) to add a reference to the
civil penalty provision inserted by item 18 to this Schedule.
Item 20: At the end of subsection 508(6) (before the note)
This item inserts an additional requirement for the Titles Administrator to refer to the
effect of the civil penalty provision inserted by item 18 of this Schedule in a notice
given to a person under subsection 508(2).
Item 21: After subsection 509(6)
This item inserts a new subsection 509(6A) which provides that a person is liable to a
civil penalty if the person contravenes a requirement in a notice given by the Titles
Administrator under subsection 509(2). The penalty for a contravention of this
provision is 90 penalty units.
Item 22: Subsection 509(7) (heading)
This item replaces the existing heading to subsection 509(7) to add a reference to the
civil penalty provision inserted by item 21 to this Schedule.
Item 23: At the end of subsection 509(7) (before the note)
This item inserts an additional requirement for the Titles Administrator to refer to the
effect of the civil penalty provision inserted by item 21 of this Schedule in a notice
given to a person under subsection 509(2).
36
Item 24: After subsection 569(6A)
This item inserts a new subsection 569(6B) which provides that a person is liable to a
civil penalty if the person contravenes a work practices requirement in subsection
569(1). The penalty for a contravention of this provision is 1,000 penalty units.
The penalty is set at a relatively high level, as the work practices obligations of
titleholders in section 569 are considered a central tenet of the offshore petroleum
regime. A potential liability for a high penalty aims to encourage compliance and
continuous improvement within an objective-based regime.
It is a defence in proceedings for a civil penalty in relation to a contravention of this
provision if the defendant proves that the defendant took all reasonable steps to
comply with subsection 569(1) - see item 25 of this Schedule.
Item 25: After paragraph 569(7)(a)
This item adds a new paragraph to the existing defence provision in subsection
569(7), to also provide that it is a defence in proceedings for a civil penalty for a
contravention of subsection 569(1) if the defendant proves that the defendant took all
reasonable steps to comply with subsection 569(1) - see item 24 of this Schedule.
Item 26: Section 569 (notes 1 and 2)
This item repeals the existing notes at the end of section 569 and replaces them with a
new note. The effect of this item is to remedy an incorrect reference to a "general
direction" in existing note 1 at the end of section 569. The new note removes the
reference to a "general direction", and combines the existing two notes into one note.
Item 27: After subsection 572(5)
This item inserts a new subsection 572(5A) which provides that the holder of a
petroleum exploration permit, petroleum retention lease, petroleum production
licence, infrastructure licence, pipeline licence, petroleum special prospecting
authority or petroleum access authority is liable to a civil penalty if that titleholder
contravenes a requirement in subsection 572(2) or (3) in relation to the maintenance
or removal of property in the title area. The penalty for a contravention of this
provision is 525 penalty units.
As civil penalties are not applied to greenhouse gas provisions at this time, a civil
penalty will not apply to a breach of a requirement in subsection 572(2) or (3) by the
holder of a greenhouse gas assessment permit, greenhouse gas holding lease,
greenhouse gas injection licence, greenhouse gas search authority or greenhouse gas
special authority. However, the holder of one of these titles commits an offence if the
holder breaches either of those subsections.
Item 28: Section 572 (notes 1 and 2)
This item repeals the existing notes at the end of section 572 and replaces them with a
new note. The effect of this item is to remedy an incorrect reference to a "general
direction" in existing note 1 at the end of section 572. The new note removes the
reference to a "general direction", and combines the existing two notes into one note.
37
Item 29: Section 573 (fifth paragraph)
This item amends the simplified outline of Part 6.2 to inform the reader that there is a
defence in a prosecution for an offence, or in a proceeding for a civil penalty order,
relating to a breach of a relevant direction of taking reasonable steps to comply with
the direction - see item 37.
Item 30: Subsection 574(2) (note 2)
This item replaces the existing note 2 to this subsection to inform the reader that
breach of a direction given by NOPSEMA under section 574 may attract a criminal or
civil penalty.
Item 31: Subsection 574A(2) (note 2)
This item replaces the existing note 2 to this subsection to inform the reader that
breach of a direction given by the responsible Commonwealth Minister under section
574A may attract a criminal or civil penalty.
Item 32: At the end of section 575
This item inserts a new subsection 575(6) which provides that a titleholder is liable to
a civil penalty if, in the case that a direction is given by NOPEMA or the responsible
Commonwealth Minister under section 574 and 574A respectively to the titleholder
and another person, the titleholder contravenes notification requirements in
subsections 575(1), (2), (3), (3A), (3B) or (3C). These notification requirements are
designed to ensure the other person or persons who are subject to the direction are
made aware of the direction. The penalty for a contravention of this provision is
135 penalty units.
Item 33: Section 576
This item replaces existing section 576, which provides that breaches of certain
directions are a strict liability offence punishable by 100 penalty units, with a new
compliance provision incorporating offence and civil penalty provisions.
New subsection 576(1) sets out the basic rule that a person who is subject to a
direction under section 574 (general power for NOPSEMA to give directions) or
section 574A (general power for the responsible Commonwealth Minister to give
directions) contravenes subsection (1) if the person breaches that direction.
It is considered that the existing penalty of 100 penalty units does not adequately
reflect the severity of the potential consequences associated with a breach of a
direction, and is particularly inadequate for more serious cases of misconduct.
New subsection 576(2) therefore establishes a new fault-based offence for a breach of
a direction, in addition to the existing strict liability offence, with an associated
penalty of 5 years imprisonment or 2,000 penalty units (or both). Due to the
operation of subsection 4B(3) of the Crimes Act 1914, the maximum penalty that may
be imposed on a body corporate for a breach of a direction is 10,000 penalty units.
38
Setting the penalty at this level has due regard to the potential negative impacts of
non-compliance, the need for penalties to appropriately punish serious breaches, and
the need for penalties to provide a more effective disincentive against offending
conduct. Appropriate criminal penalties and the possibility of imprisonment in the
most serious cases are a key part of achieving and maintaining a credible level of
deterrence to complement other types of enforcement action in the offshore petroleum
regulatory regime.
The penalty that is applied departs from the standard fine/imprisonment ratio in
section 4B of the Crimes Act 1914. Section 4B provides that if an offence specifies a
penalty of imprisonment but not a fine, the court may elect to apply a maximum fine
for an individual of 5 penalty units multiplied by the maximum prison term in months,
instead of or in addition to a penalty of imprisonment. In effect, therefore, the
maximum financial penalty that a court could ordinarily apply for a breach of a
direction (punishable by 5 years imprisonment) is 300 penalty units for a natural
person and 1,500 penalty units for a body corporate (applying the corporate multiplier
in subsection 4B(3) of the Crimes Act 1914). It is however considered that a financial
penalty at this level is inadequate in relation to the conduct being penalised. A failure
by a person to comply with a direction could have potentially severe consequences, in
the context of the high-hazard nature of the offshore petroleum industry. In addition,
given the industry being regulated, a breach of a direction would in most cases be a
breach by a body corporate. In the case of a breach by a body corporate, a term of
imprisonment would not be applied and instead ordinarily the imprisonment term is
converted into penalty units to apply as a financial penalty to the body corporate.
It is not proposed to set a higher maximum term of imprisonment for this offence.
Instead, to ensure that the financial penalty that may be applied is appropriate in
relation to the conduct being penalised and the potential consequences of a breach, the
amendments in these items intentionally depart from the standard fine/imprisonment
ratio, and apply a maximum financial penalty of 2,000 penalty units for a natural
person (10,000 penalty units for a body corporate). This is consistent with the penalty
applied for breach of an equivalent provision in the Protection of the Sea (Powers of
Intervention) Act 1981.
The existing strict liability offence and associated penalty of 100 penalty units are
also retained (in new subsection 576(4)) given that, in many cases, fault may be
difficult to prove due to the remote and complex nature of offshore operations and the
prevalence of multiple titleholder arrangements. A penalty of 100 penalty units is
considered appropriate. It is noted this is higher than the preference stated in A Guide
To Framing Commonwealth Offences, Infringement Notices and Enforcement Powers,
September 2011 for a maximum 60 penalty units for offences of strict liability.
However, offshore resources activities, as a matter of course, require a very high level
of expenditure and therefore by comparison a smaller penalty would be an ineffective
deterrent.
The fault-based offence provision in subsection 576(2) does not specify a fault
element. Under section 5.6 of the Criminal Code, if an offence provision does not
specify a fault element and if the physical element of the offence consists of a
circumstance or a result, the fault element is recklessness. In other words, for a
person to be found guilty of a breach of a direction under the fault-based offence, the
39
prosecution would have to prove that the person was reckless in relation to whether
their conduct would result in a breach of the direction.
For the reasons discussed above, similar amendments are also made in relation to
breaches of significant incident directions and remedial directions - see items 36 and
48 of this Schedule. The rationale for the establishment of a fault-based offence with a
departure from the standard fine/imprisonment ratio and going above the preferred
strict liability penalty units as explained above in this item apply also to items 36 and
48.
New subsection 576(5) provides that a person is liable to a civil penalty for breach of
a direction given under section 574 or 574A. The penalty for a contravention of this
provision is 525 penalty units.
New subsection 576(6) and (7) continue to apply the defence in existing subsection
576(3), which provides that, if a direction under section 574 or 574A applies to a
titleholder and another person, and the other person is prosecuted for an offence in
relation to a breach, it is a defence if the person adduces evidence that the person did
not know, and could not reasonably be expected to have known, of the existence of
the direction. If the person adduces such evidence, the person is not to be convicted
unless the prosecution proves that the person did know, or could reasonably be
expected to have known, of the existence of the direction. The new subsections also
extend the defence to apply in a civil penalty proceeding for the purposes of new
subsection 576(5).
Item 34: Subsection 576B(7) (note 2)
This item replaces the existing note 2 to this subsection to inform the reader that
breach of a significant incident direction given by NOPSEMA under section 576B
may attract a criminal or civil penalty - see item 36.
Item 35: Subsection 576C(1) (note 1)
This item remedies an incorrect reference to a "general direction" in note 1 to
subsection 576C(1).
Item 36: Section 576D
This item replaces existing section 576D, which provides that a breach of a significant
incident direction is a strict liability offence punishable by 100 penalty units, with a
new compliance provision incorporating offence and civil penalty provisions.
New subsection 576D(1) sets out the basic rule that a person who is subject to a
significant incident direction under section 576B contravenes subsection (1) if the
person breaches that direction.
Subsection 576D(2) creates a new fault-based offence for breach of a significant
incident direction, punishable by 5 years imprisonment or 2000 penalty units, or both.
This fault-based offence provision does not specify a fault element. Under section 5.6
of the Criminal Code, if an offence provision does not specify a fault element and if
the physical element of the offence consists of a circumstance or a result, the fault
element is recklessness. In other words, for a person to be found guilty of a breach of
40
a direction under the fault-based offence, the prosecution would have to prove that the
person was reckless in relation to whether their conduct would result in a breach of
the direction.
Subsection 576D(4) retains the existing strict liability offence for breach of a
significant incident direction, punishable by 100 penalty units. A penalty of 100
penalty units is considered appropriate. It is noted this is higher than the preference
stated in A Guide To Framing Commonwealth Offences, Infringement Notices and
Enforcement Powers, September 2011 for a maximum 60 penalty units for offences of
strict liability. However, offshore resources activities, as a matter of course, require a
very high level of expenditure and therefore by comparison a smaller penalty would
be an ineffective deterrent.
See the discussion about item 33 of this Schedule for information in relation to
amendments to create a new fault-based offence and retain the existing strict liability
offence for breaches of directions under the Act. The discussion in relation to item 33
also provides a justification for the departure from the standard fine/imprisonment
ration in section 4B of the Crimes Act 1914.
New subsection 576D(5) provides that a person is liable to a civil penalty for breach
of a significant incident direction. The penalty for a contravention of this provision is
2,250 penalty units. The penalty is set at a high level compared to the civil penalty
that may be applied for breaches of other types of directions given the potentially
extremely serious consequences to human health or safety or the environment of a
titleholder's failure to comply with a direction issued in the context of a significant
incident relating to petroleum operations.
Item 37: Section 578
This item re-writes existing section 578, which provides for a defence of taking
reasonable steps to comply with a direction in a prosecution for an offence in relation
to a breach of the directions specified in that section. The effect of the re-write is to
extend the defence so that it also applies in proceedings for a civil penalty order for a
breach of a direction. As is the case in relation to the existing offence provision, the
defendant bears a legal burden in relation to this matter in a prosecution for an offence
or a proceeding for a civil penalty order. The onus of proof is placed on the defendant
as the facts as to whether the defendant took reasonable steps to comply are peculiarly
within the knowledge of the defendant. This is particularly the case given the remote
nature of offshore petroleum operations.
The re-write also makes a technical amendment to include a direction given by the
responsible Commonwealth Minister under Division 1 of Part 6.4 (remedial directions
to current or former petroleum titleholders) in the list of directions referred to in this
section. This direction was incorrectly included in the similar defence provision
relating to breaches of greenhouse gas directions in section 584 of the Act. This
amendment is necessary to ensure that the defence can apply in proceedings for a civil
penalty order in relation to a breach of a remedial direction given to a current or
former petroleum titleholder, as civil penalties are not applied in relation to
greenhouse gas provisions. A consequential amendment is made to section 584 - see
item 38 of this Schedule.
41
Item 38: Paragraph 584(b)
This item excludes a direction given by the responsible Commonwealth Minister
under Division 1 of Part 6.4 from the list of directions in that section in relation to
which a defence of taking reasonable steps to comply is applied. This defence is not
removed, however, as the reference is instead moved to a similar provision in section
574 relating to petroleum-related directions - see item 37 of this Schedule.
Item 39: At the end of subsection 586(2)
This item inserts a new note at the end of subsection 586(2) to inform the reader that
breach of a remedial direction given by NOPSEMA to a current titleholder under
section 586 may attract a civil or criminal penalty - see item 48 of this Schedule.
Item 40: Subsections 586(5) and (5A)
This item repeals the strict liability offence provision in subsection 586(5) and (5A).
This offence provision is moved to another section - see item 48 of this Schedule.
Item 41: At the end of subsection 586A(2)
This item inserts a new note at the end of subsection 586A(2) to inform the reader that
breach of a remedial direction given by the responsible Commonwealth Minister to a
current titleholder under section 586A may attract a civil or criminal penalty - see
item 48 of this Schedule.
Item 42: Subsections 586A(5) and (6)
This item repeals the strict liability offence provision in subsection 586A(5) and (6).
This offence provision is moved to another section - see item 48 of this Schedule.
Item 43: Subsection 587(2) (note)
This item makes the existing note to subsection 587(2) Note 1, as a new note is added
- see item 44 of this Schedule.
Item 44: At the end of subsection 587(2)
This item inserts a new note at the end of subsection 587(2) to inform the reader that
breach of a remedial direction given by NOPSEMA to a former titleholder under
section 587 may attract a civil or criminal penalty - see item 48 of this Schedule.
Item 45: Subsections 587(6) and (7)
This item repeals the strict liability offence provision in subsection 587(6) and (7).
This offence provision is moved to another section - see item 48 of this Schedule.
Item 46: At the end of subsection 587A(2)
This item inserts a new note at the end of subsection 587A(2) to inform the reader that
breach of a remedial direction given by the responsible Commonwealth Minister to a
former titleholder under section 587A may attract a civil or criminal penalty - see
item 48 of this Schedule.
42
Item 47: Subsection 587A(6) and (7)
This item repeals the strict liability offence provision in subsection 587A(6) and (7).
This offence provision is moved to another section - see item 48 of this Schedule.
Item 48: After section 587A
This item inserts a new section 587B to provide for the application of criminal and
civil penalties for breach of a remedial direction given by NOPSEMA or the
responsible Commonwealth Minister to a current or former titleholder under section
586, 586A, 587 or 587A of the Act.
New subsection 587B(1) sets out the basic rule that a person who is subject to a
remedial direction under section 586, 586A, 587 or 587A contravenes subsection (1)
if the person breaches that direction.
Subsection 587B(2) creates a new fault-based offence for breach of a remedial
direction, punishable by 5 years imprisonment or 2,000 penalty units, or both. This
fault-based offence provision does not specify a fault element. Under section 5.6 of
the Criminal Code, if an offence provision does not specify a fault element and if the
physical element of the offence consists of a circumstance or a result, the fault
element is recklessness. In other words, for a person to be found guilty of a breach of
a direction under the fault-based offence, the prosecution would have to prove that the
person was reckless in relation to whether their conduct would result in a breach of
the direction.
Subsection 587B(4) retains the existing strict liability offence for breach of a remedial
direction under section 586, 586A, 587 or 587A, punishable by 100 penalty units. A
penalty of 100 penalty units is considered appropriate. It is noted this is higher than
the preference stated in A Guide To Framing Commonwealth Offences, Infringement
Notices and Enforcement Powers, September 2011 for a maximum 60 penalty units
for offences of strict liability. However, offshore resources activities, as a matter of
course, require a very high level of expenditure and therefore by comparison a smaller
penalty would be an ineffective deterrent.
See the discussion about item 33 of this Schedule for information in relation to
amendments to create a new fault-based offence and retain the existing strict liability
offence for breaches of directions under the Act. The discussion in relation to item 33
also provides a justification for the departure from the standard fine/imprisonment
ration in section 4B of the Crimes Act 1914.
New subsection 587B(5) provides that a person is liable to a civil penalty for breach
of a remedial direction. The penalty for a contravention of this provision is
525 penalty units.
Item 49: Paragraph 620(3)(b)
The Act currently inconsistently refers to "obstructs and hinders" (e.g. subsection
601(12), subsection 607(9), subclause 54(1) of Schedule 3) and "hinders and
obstructs" (e.g. subsection 620(3), subsection 621(9)). This technical amendment will
remove the inconsistency by replacing "hinders or obstructs" with "obstructs or
43
hinders" in paragraph 620(3)(b), and ensure the inconsistency is not perpetuated in the
new civil penalty provision in subsection 620(5) - see item 51 of this Schedule.
Item 50: Subsection 620(3) (penalty)
This is a technical amendment. The existing description "for contravention of this
subsection" was inserted due to an ambiguity in the application of section 4D of the
Crimes Act 1914. The ambiguity relates to whether a penalty located at the end of a
section divided into subsections is regarded as "at the foot of" the subsection or "at
the foot of" the section as a whole. Section 80 of the Regulatory Powers Act defines
"civil penalty provision" in a way that avoids this ambiguity.
Item 51: At the end of section 620
This item inserts new subsections 620(4) and (5).
New subsection 620(4) provides that a person is liable to a civil penalty if a person
contravenes a requirement in subsection 620(1).
New subsection 620(5) provides that a person is liable to a civil penalty if the person
obstructs or hinders an authorised person who is acting under subsection 620(1).
The penalty in either case is 350 penalty units.
Item 52: Paragraph 621(9)(b)
This is a technical amendment to correct inconsistencies in the Act - see discussion
for item 50 of this Schedule.
Item 53: Subsection 621(10) (penalty)
This is a technical amendment - see discussion for item 49 of this Schedule.
Item 54: At the end of section 621
This item inserts new subsections 621(11) and (12).
New subsection 621(11) provides that a person is liable to a civil penalty if a person
contravenes a requirement in subsection 621(1), (4) or (7).
New subsection 621(12) provides that a person is liable to a civil penalty if the person
obstructs or hinders an authorised person who is acting under subsection 621(1).
The penalty in either case is 90 penalty units.
Item 55: After subsection 697(3A)
This item inserts a new subsection 697(3B) which provides that a person is liable to a
civil penalty for a contravention of a direction given by the Titles Administrator under
subsection 697(2). The penalty for a contravention of this provision is 150 penalty
units.
44
Item 56: After subsection 699(5)
This item inserts a new subsection 699(5A) which provides that a person is liable to a
civil penalty for a contravention of a requirement in a notice given by the Titles
Administrator or a NOPSEMA inspector under subsection 699(2). The penalty for a
contravention of this provision is 150 penalty units.
Item 57: Subsection 699(6) (heading)
This item replaces the existing heading to subsection 699(6) to add a reference to the
civil penalty provision inserted by item 56 to this Schedule.
Item 58: After paragraph 699(6)(a)
This item inserts an additional requirement for the Titles Administrator or a
NOPSEMA inspector to refer to the effect of the civil penalty provision inserted by
item 56 of this Schedule in a notice given to a person under subsection 699(2).
Item 59: After subsection 759(3)
This item inserts a new heading before subsection 759(4) to direct the reader that the
subsection is an offence provision.
Item 60: After subsection 759(4)
This item inserts a new subsection 759(4A) which provides that a person is liable to a
civil penalty for a contravention of a requirement in a notice given by the responsible
Commonwealth Minister under subsection 759(2). The penalty for a contravention of
this provision is 150 penalty units.
Item 61: Subsection 759(5) (heading)
This item replaces the existing heading to subsection 759(5) to add a reference to the
civil penalty provision inserted by item 60 to this Schedule.
Item 62: After paragraph 759(5)(a)
This item inserts an additional requirement for the responsible Commonwealth
Minister to refer to the effect of the civil penalty provision inserted by item 60 of this
Schedule in a notice given to a person under subsection 759(2).
Item 63: Clause 3 of Schedule 3
This item inserts a new definition of "health and safety requirement" for the purposes
of amendments to criminal penalties for breaches of occupational health and safety
obligations. The definition is located in new clause 16A - see item 93 of this
Schedule.
Item 64: After subclause 6(3) of Schedule 2
This item inserts a new heading before subclause 6(4) to direct the reader that the
subsection is an offence provision.
45
Item 65: After subclause 6(4) of Schedule 3
This item inserts a new subclause 6(4A) of Schedule 3 which provides that an
operator of a facility is liable to a civil penalty for: (a) a failure to ensure that, at all
times when one or more individuals are present at a facility, an operator's
representative is also present; or (b) a failure to take all reasonably practicable steps to
ensure that the name of the operator's representative is displayed in a prominent place
at the facility. The penalty for a contravention of either requirement is 135 penalty
units.
Items 66 - 93
These items affect an increase in criminal penalties that apply for breach of an
occupational health and safety duty in Schedule 3 to the Act.
Schedule 3 to the Act imposes OHS duties on the following persons:
a) The operator of a facility;
b) The titleholder (in relation to well operations);
c) A person in control of a part of a facility, or of any work carried out at a facility;
d) An employer;
e) A manufacturer of plant, or a substance, for use at a facility;
f) A supplier of a facility, or of any plant or substance for use at a facility;
g) A person who erects or installs a facility, or any plant at a facility; and
h) A person at a facility.
The Act currently provides that a breach of an OHS duty is an offence, punishable by
a penalty of 1,000 penalty units (for a person mentioned in a), c) or d)) or 200 penalty
units (for a person mentioned in b), e), f), g) or h)). The fault element for the existing
offences is negligence.
A comparison with the penalties applied for breaches of OHS duties in the Work
Health and Safety Act 2011 (WHS Act) (which may range up to $3,000,000 for a
body corporate) suggests that the current penalties in the Act do not adequately reflect
the seriousness of such breaches, particularly in the context of a high-hazard industry
in which the consequences of a health or safety incident may be particularly serious.
The WHS Act also does not apply different penalties on the basis of the person on
whom the duty is imposed. The amendments in items 66-93 of this Bill therefore
increase the penalties that may apply for breach of an OHS duty under the Act, and
introduce a two tier penalty system.
For both tiers, the first element of the offence provision is that the person is subject to
a health and safety requirement. A "health and safety requirement" is defined as a
requirement under the relevant provisions providing for duties relating to OHS in
clauses 9 to 15 of Schedule 3 to the Act. As is currently the case, this element attracts
absolute liability because it is a `jurisdictional element'. A jurisdictional element is
essentially a precondition of the offence. The person's state of mind with respect to
that element has little, if any, bearing on their culpability. It is sufficient that a person
46
is subject to a health and safety requirement rather than that they knew they were
subject to a requirement.
A fault element of recklessness applies to the first tier offence provision in relation to
the conduct and result elements of the provision; that is, that the person omits to do an
act, and the omission breaches the health and safety requirement. A fault element of
recklessness is applied to both elements to ensure that persons can be held responsible
when they are reckless in relation to their conduct and the result of that conduct, given
the potentially severe consequences of a failure to comply with a health and safety
duty. This also achieves the policy of consistency with the provisions of the WHS
Act. The penalty applied to a first tier offence is 3,500 penalty units for a natural
person (or 17,500 penalty units for a body corporate, by applying the corporate
multiplier in subsection 4B(3) of the Crimes Act 1914). This is consistent with the
maximum penalty that may apply to a body corporate for breach of a "Category 1"
offence under the WHS Act. The penalty reflects the level of seriousness of the
offence, and is set at a level high enough to cover the most egregious examples of
offence, particularly in a case where a person has been reckless as to whether or not
their conduct breaches their health and safety duties.
If recklessness if the fault element for a physical element of an offence, proof of
intention, knowledge or recklessness will satisfy that fault element (section 5.4 of the
Criminal Code). Recklessness is applied to both the conduct and result elements the
provision to ensure that a person will commit an offence if they are reckless in
relation to their conduct and to the resulting known potential risks and consequences.
A penalty of 1,750 penalty units for a natural person (or 8,750 penalty units for a body
corporate) applies for a tier two offence, which is consistent with the maximum
penalty that may apply to a body corporate for breach of a "Category 2" offence under
the WHS Act. As is the case in the existing offence provisions, a fault element of
negligence applies to the second tier offence provision in relation to the conduct and
result elements of the provision. Negligence is a well-established indication of
liability in the context of occupational health and safety, and has been applied in this
manner in relation to the OHS duties in the Act since 2009.
The two tier penalty system and associated penalty levels will apply in relation to
every class of persons who has an OHS duty under the Act. Given the potential
consequences of a health or safety incident as a result of a breach by any person, it is
important that the level of penalties is adequate to penalise the offending conduct, and
will encourage duty-holders to ensure compliance with their OHS duties.
Item 66: Subclause 9(1) of Schedule 3 (note)
This item makes the existing note to subclause 9(1) Note 1, as a new note is added -
see item 67 of this Schedule.
Item 67: At the end of subclause 9(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 9(1) (duties of operator) is an offence.
47
Item 68: Subclauses 9(4), (4A) and (4B) of Schedule 3
This item repeals the existing offence created by subclauses 9(4), (4A) and (4B). A
new clause makes a breach of a requirement in subclause 9(1) an offence - see item
93 of this Schedule.
Item 69: Subclause 10(1) of Schedule 3 (note)
This item makes the existing note to subclause 10(1) Note 1, as a new note is added -
see item 70 of this Schedule.
Item 70: At the end of subclause 10(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 10(1) (duties of persons in control of parts of facility or particular work) is
an offence.
Item 71: Subclauses 10(4), (5) and (6)
This item repeals the existing offence created by subclauses 10(4), (5) and (6). A new
clause makes a breach of a requirement in subclause 10(1) an offence - see item 93 of
this Schedule.
Item 72: Subclause 11(1) of Schedule 3 (note)
This item makes the existing note to subclause 11(1) Note 1, as a new note is added -
see item 73 of this Schedule.
Item 73: At the end of subclause 11(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 11(1) (duties of employers) is an offence.
Item 74: Subclause 11(5), (5A) and (5B) of Schedule 3
This item repeals the existing offence created by subclauses 11(5), (5A) and (5B). A
new clause makes a breach of a requirement in subclause 11(1) an offence - see item
93 of this Schedule.
Item 75: Subclause 12(1) of Schedule 3 (note)
This item makes the existing note to subclause 12(1) Note 1, as a new note is added -
see item 76 of this Schedule.
Item 76: At the end of subclause 12(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 12(1) (duties of manufacturers of plant) is an offence.
Item 77: Subclause 12(2) of Schedule 3 (note)
This item makes the existing note to subclause 12(2) Note 1, as a new note is added -
see item 78 of this Schedule.
48
Item 78: At the end of subclause 12(2) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 12(2) (duties of manufacturers of substances) is an offence.
Item 79: Subclause 12(3), (3A) and (3B) of Schedule 3
This item repeals the existing offence created by subclauses 12(3), (3A) and (3B). A
new clause makes a breach of a requirement in subclause 12(1) or (2) an offence - see
item 93 of this Schedule.
Item 80: Subclause 13(1) of Schedule 3 (note)
This item makes the existing note to subclause 13(1) Note 1, as a new note is added -
see item 81 of this Schedule.
Item 81: At the end of subclause 13(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 13(1) (duties of suppliers of facilities, plant and substances) is an offence.
Item 82: Subclause 13(2), (2A) and (2B) of Schedule 3
This item repeals the existing offence created by subclauses 13(2), (2A) and (2B). A
new clause makes a breach of a requirement in subclause 13(1) an offence - see item
93 of this Schedule.
Item 83: Subclause 13A(1) of Schedule 3 (note)
This item makes the existing note to subclause 13A(1) Note 1, as a new note is added
- see item 84 of this Schedule.
Item 84: At the end of subclause 13A(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 13A(1) (duties of petroleum titleholders in relation to wells) is an offence.
Item 85: Subclause 13A(2) of Schedule 3 (note)
This item makes the existing note to subclause 13A(2) Note 1, as a new note is added
- see item 86 of this Schedule.
Item 86: At the end of subclause 13A(2) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 13A(2) (duties of petroleum titleholders in relation to wells) is an offence.
Item 87: Subclause 13A(3), (4) and (5) of Schedule 3
This item repeals the existing offence created by subclauses 13A(3), (4) and (5). A
new clause makes a breach of a requirement in subclause 13A(1) or (2) an offence -
see item 93 of this Schedule.
Item 88: Subclause 14(1) of Schedule 3 (note)
This item makes the existing note to subclause 14(1) Note 1, as a new note is added -
see item 89 of this Schedule.
49
Item 89: At the end of subclause 14(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 14(1) (duties of persons erecting facilities or plant) is an offence.
Item 90: Subclause 14(2), (2A) and (2B) of Schedule 3
This item repeals the existing offence created by subclauses 14(2), (2A) and (2B). A
new clause makes a breach of a requirement in subclause 14(1) an offence - see item
93 of this Schedule.
Item 91: At the end of subclause 15(1) of Schedule 3
This item inserts a note to inform the reader that a breach of a requirement under
subclause 15(1) (duties of persons in relation to OHS) is an offence.
Item 92: Subclause 15(2), (2A) and (2B) of Schedule 3
This item repeals the existing offence created by subclauses 15(2), (2A) and (2B). A
new clause makes a breach of a requirement in subclause 15(1) an offence - see item
93 of this Schedule.
Item 93: After Division 1 of Part 2 of Schedule 3
This item inserts new Division 1A to provide for enforcement of occupational health
and safety duties - see discussion above regarding items 66-93 for information about
the selected fault elements and applicable penalties.
New clause 16A of Schedule 3 defines "health and safety requirement" in relation to
the duties of persons imposed by clauses 9 to 15 of Schedule 3.
New clause 16B of Schedule 3 makes it an offence for a person to fail to comply with
a health and safety requirement. Absolute liability applies in relation to the person
being subject to a health or safety requirement. A fault element of recklessness
applies to the omission to do an act and the resultant breach of a requirement. A
penalty of 3,500 penalty units for a natural person (or 17,500 penalty units for a body
corporate, by applying the corporate multiplier in subsection 4B(3) of the Crimes Act
1914) is applied for a breach.
New clause 16C of Schedule 3 also makes it an offence for a person to fail to comply
with a health and safety requirement. Absolute liability applies in relation to the
person being subject to a health or safety requirement. A fault element of negligence
applies to the omission to do an act and the resultant breach of a requirement. A
penalty of 1,750 penalty units for a natural person (or 8,750 penalty units for a body
corporate, by applying the corporate multiplier in subsection 4B(3) of the Crimes Act
1914) is applied for a breach.
Item 94: Clause 54 of Schedule 3 (heading)
This item replaces the existing heading to clause 54 and replaces it with a new
heading that refers to a "NOPSEMA inspector" rather than an "OHS inspector" -
refer to the amendments in Schedule 1 to this Bill.
50
Item 95: Paragraph 54(1)(b) of Schedule 3
This item replaces existing paragraph 54(1)(b) in order to change references to an
"OHS inspector" to references to a "NOPSEMA inspector" - refer to the amendments
in Schedule 1 to this Bill. The new paragraph also removes the reference to exercise
of powers in clause 52 as this clause is repealed - see item 54 of Schedule 1 to this
Bill.
Item 96: Subclause 54(1) of Schedule 3 (penalty)
This item increases the penalty for an offence against subsection 54(1) (obstructing or
hindering a NOPSEMA inspector) from 50 penalty units to 60 penalty units. See
discussion about increases to criminal penalties under the introduction to the
amendments in Schedule 2 above.
Item 97: After subclause 54(1) of Schedule 3
This item inserts a new subclause 54(1A) which provides that a person is liable to a
civil penalty if the person obstructs or hinders a NOPSEMA inspector in the exercise
of the inspector's powers under clause 50 or 51 of Schedule 3. The penalty that
applies for a contravention of this provision is 135 penalty units.
Item 98: Subclause 54(2) of Schedule 3
This item adds a reference to new subclause 54(1A) (see item 95 of this Schedule) to
provide that that subsection, in addition to subsection 54(1), does not apply if the
person has a reasonable excuse.
Item 99: Clause 54 of Schedule 3 (note 1)
This item replaces existing note 1 to provide that, in either a prosecution for an
offence against subclause 54(1) or a proceeding for a civil penalty under subclause
54(1A), the defendant bears an evidential burden in relation to the matter in subclause
54(2) (i.e. whether the defendant had a reasonable excuse).
Items 100 and 101: Subclause 73(3) of Schedule 3 (at the end of the penalty) and
subclause 74(5) and (7) of Schedule 3 (at the end of the penalty)
These items amends the existing offence provisions in subclause 73(3) and subclauses
74(5) and (7) of Schedule 3 to specify a financial penalty of 60 penalty units, in
addition to or as an alternative to the current penalty of imprisonment for 6 months
that applies to those offences.
Section 4B of the Crimes Act 1914 provides that if an offence specifies a penalty of
imprisonment but not a fine, the court may elect to apply a maximum fine for an
individual of 5 penalty units multiplied by the maximum prison term in months,
instead of or in addition to a penalty of imprisonment. In effect, therefore, the
maximum financial penalty that a court could currently apply for a breach of these
offence provisions is 30 penalty units for a natural person and 150 penalty units for a
body corporate (applying the corporate multiplier in subsection 4B(3) of the Crimes
Act 1914). However it is considered that a financial penalty at this level is inadequate
in relation to the conduct in question being penalised. A failure by a person to
51
comply with these provisions would substantially impact a NOPSEMA inspector's
ability to conduct an inspection in relation to compliance with the Act and regulations.
Given the high-hazard nature of the offshore petroleum industry, the consequences of
a breach of these provisions could be severe. In addition, in the event of a breach by a
body corporate, a term of imprisonment could not be applied, and the court would
instead apply a financial penalty.
It is not therefore proposed to increase the maximum term of imprisonment that
currently applies for these offences. Instead, to ensure that the financial penalty that
may be applied is appropriate in relation to the conduct being penalised, the
amendments in these items depart from the standard fine/imprisonment ratio, and
apply a maximum financial penalty of 60 penalty units for a natural person (300
penalty units for a body corporate). This financial penalty is consistent with
equivalent provisions in the Work Health and Safety Act 2011.
A similar amendment is made to clause 86 of Schedule 3 to the Act - see item 103 of
this Schedule.
Item 102: At the end of clause 83 of Schedule 3
This item inserts a new subclause 86(6) of Schedule 3 which provides that an operator
of a facility is liable to a civil penalty for a contravention of the requirement to
maintain records of accidents and dangerous occurrences in subclause 83(1). The
penalty that applies for a contravention of this provision is 60 penalty units.
Item 103: Subclause 86(1) of Schedule 3 (at the end of the penalty)
This items amends the existing offence provision in subclause 86(1) of Schedule 3 to
specify a financial penalty of 60 penalty units, in addition to or as an alternative to the
current penalty of imprisonment for 6 months that applies to those offences. For the
rationale for this amendment, refer to the discussion in relation to items 100 and 101
above. A failure to comply with this subsection would result in interference with or
the rendering ineffective of equipment provided for the health, safety or welfare of
members of the workforce at a facility, which could have significant consequences,
and justifies the higher financial penalty.
Item 104: Clause 87 of Schedule 3 (after the heading)
This item inserts a new heading before clause 87 of Schedule 3 to the Act (which will
become subclause 87(1) of Schedule 3 - see item 105 of this Schedule) to direct the
reader that the subclause is an offence provision.
Item 105: Clause 87 of Schedule 3
This item makes clause 87 of Schedule 3 to the Act subclause 87(1) of Schedule 3. A
new subclause 87(2) is inserted - see item 106 of this Schedule.
Item 106: At the end of clause 87 of Schedule 3
This item inserts a new subclause 87(2) of Schedule 3 which provides that an operator
of a facility or employer of members of the workforce at a facility is liable to a civil
penalty if that person levies, or permits to be levied, on any member of the workforce
at the facility, any charge in relation to anything done or provided in accordance with
52
a listed OHS law in order to ensure the health, safety or welfare of persons at or near
the facility. The penalty for a contravention of this provision is 350 penalty units.
Item 107: Subclause 88(2) of Schedule 3 (penalty)
This item increases the penalty for a breach of a requirement under subclause 88(1)
from 250 penalty units to 600 penalty units. The increased level of penalty units is
consistent with the penalty that applies for breach of an equivalent provision in the
WHS Act - see general discussion about increases to criminal penalties under the
introduction to the amendments in Schedule 2 above.
Part 2: Civil penalty enforcement
This Part contains the provisions necessary for triggering the operation of Part 4 of the
Regulatory Powers Act for enforcement of the civil penalty provisions in the Act.
The Regulatory Powers Act does not apply of its own force. It only applies if its
application is triggered by another Commonwealth Act. The provisions will go into a
new Division 4 of Part 6.5 of the Act.
Item 108: At the end of Part 6.5
This item inserts a new `Division 4 - Civil penalties' of Part 6.5 of the Act.
New section 611A provides a simplified outline of Division 4 of Part 6.5.
New section 611B provides as follows:
(1) Specified civil penalty provisions
Subsection (1) triggers the application of Part 4 of the Regulatory Powers Act to
enforce the civil penalty provisions in the Act.
(2) Authorised applicants
Subsection (2) provides for the persons who can make an application for a civil
penalty order under Part 4 of the Regulatory Powers Act. The "authorised applicants"
for the purposes of the Act are the responsible Commonwealth Minister, the CEO of
NOPSEMA and the Titles Administrator, with respect to the particular civil penalty
provisions that relate to their functions or powers.
(3) Relevant court
Subsection (3) provides for a "relevant court" for the purposes of Part 4 of the
Regulatory Powers Act to be the Federal Court, the Federal Circuit Court, and the
Supreme Court of a State or Territory. An authorised applicant may make an
application for a civil penalty order to any one of those courts.
(4) Extension to offshore areas
Subsection (4) ensures that Part 4 of the Regulatory Powers Act applies in relation to
all offshore areas, including the offshore area of any external Territory to which the
Act applies.
53
Part 3: Application and transitional
This Part contains application and transitional provisions.
Item 109: Application of Division 1 amendments
This item provides for application of the amendments in Part 1 (items 1 to 107) of this
Schedule. The amendments apply in relation to contraventions of the Act occurring
on or after the commencement of Schedule 2 to this Bill - see clause 2 of this Bill.
This ensures that civil penalties cannot be applied retrospectively.
Item 110: Transitional regulations
This item enables the making of transitional regulations including prescribing any
saving or application provisions.
Schedule 3 - Using and sharing information and things
Introduction
This Schedule of the Bill is intended, in part, to deal with difficulties that might arise
in the enforcement and administration of the Act and associated regulations in relation
to use and sharing by the various regulatory entities that perform functions and
exercise powers under the Act and regulations, as a result of restrictions on the use of
information, documents and things obtained pursuant to coercive powers under the
provisions relating to compliance monitoring and enforcement under the Act. The
day-to-day functioning of NOPSEMA, the Titles Administrator, the responsible
Commonwealth Minister and the members of the Joint Authority necessitates a level
of information-sharing between those entities that may run counter to the principle
articulated in Johns v Australian Securities Commission (1993) and that formed the
basis for the decision in Apache Northwest Pty Limited and Apache Energy Limited v
Agostini and Bills, a decision of the Federal Court handed down on 22 May 2009.
The Apache case concerned circumstances whereby the Western Australian
Department of Mines and Petroleum made available information obtained under
coercive powers in Western Australian legislation to the panel members of the inquiry
jointly established by Western Australia and the Commonwealth to report on the
Varanus Island incident. The principle enunciated in Johns v Australian Securities
Commission, and that formed the basis for the decision in the Apache case that the
information in question could not be provided to the panel members, was stated as
follows:
... when a power to require disclosure of information is conferred for a
particular purpose, the extent of dissemination or use of the information
disclosed must itself be limited by the purpose for which the power was
conferred. In other words, the purpose for which a power to require disclosure
of information is conferred limits the purpose for which the information
disclosed can lawfully be disseminated or used.
Information or things acquired under a number of monitoring and general
administrative provisions of the Act may be acquired coercively and is acquired for
purposes that are either expressly stated or that are able to be inferred from the
54
context in which the power appears. This presented no difficulty when the Act and
regulations were administered by the Designated Authorities, who also advised the
Joint Authorities. An inability to share coercively-acquired information is now a
more significant impediment to administration since the functions of the former
Designated Authorities were, on 1 January 2012, split between NOPSEMA and the
Titles Administrator. While the Titles Administrator has taken over the function of
advising the Joint Authority, a significant amount of the information needed by the
Titles Administrator in order to provide that advice is obtained and held by
NOPSEMA. There is also an added factor that the responsible Commonwealth
Minister now has some functions that were formerly functions of the Designated
Authorities.
The amendments to the Act in relation to information-sharing achieve three
objectives.
Firstly, they enable NOPSEMA, the regulator of petroleum operations and the entity
with responsibility for compliance monitoring and enforcement, to use information or
things acquired for the purposes of any of its regulatory functions for the performance
of any of its other regulatory functions.
Secondly, they enable a free flow of information among all of the regulatory entities
performing functions and exercising powers under the Act and related regulations.
Thirdly, there is provision for the CEO of NOPSEMA, in his or her discretion, to
make available information or things acquired by NOPSEMA to a range of
Commonwealth or State or Territory entities, including coroners, who perform
functions and exercise powers under a law. There is provision for the CEO to impose
conditions as to the particular purpose(s) for which the information can be used and
also conditions as to maintenance of confidentiality.
The above provisions apply, but are not limited to, information or things acquired
under coercive powers.
The provisions do not affect Part 7.3 of the Act, which provides for protection of
confidentiality of technical information and samples (data) or Part 9.10A which
provides for the setting up of inquiries into significant offshore incidents. The
provisions also do not apply to greenhouse gas information, except to the extent that
information relates to greenhouse gas safety zones, occupational health and safety of
offshore greenhouse gas storage operations, or the duty of care of greenhouse gas
titleholders in relation to wells in clause 13B of Schedule 3 to the Act.
Part 1: Amendments
This Part amends the Act to provide for the use and making available of information,
documents or things, as outlined below.
Item 1: At the end of Chapter 6
This item inserts a new Part 6.11, relating to use and sharing of information,
documents or things obtained under the Act or regulations.
55
Division 1 of Part 6.11 provides for introductory matters.
New section 695S provides a simplified outline of Part 6.11.
New section 695T inserts definitions for the purposes of Part 6.11.
New section 695U sets out the scope of Part 6.11. Subsection (1) establishes the
concept of "offshore information" as information, a document, a copy of a document,
an extract of a document. Offshore information or a thing obtained during the course
of an exercise of a power or performance of a function under the Act is covered by the
provisions of Part 6.11. This new section also notes that offshore information may be
or include personal information. A note points out that the use or disclosure of
personal information is regulated under the Privacy Act 1988. The Statement of
Compatibility with Human Rights that forms part of this Explanatory Memorandum
discusses the privacy implications of these amendments.
Subsection (1A), without limiting the scope outlined in subsection (1), expressly
states that coercively obtained information, such as that obtained by or given to
NOPSEMA inspectors under warrant or not under a warrant, is included in the
application of Part 6.11.
Subsection (2) makes clear that Part 6.11 does not imply that offshore information or
things covered by Part 6.11 may not otherwise have been able to be used or made
available if not for the provisions in Part 6.11. It ensures that Part 6.11 does not limit
the use or sharing of offshore information or things otherwise than in accordance with
Part 6.11.
Subsection (3) ensures that Part 6.11 does not apply to offshore information or things
covered by Part 7.3 of the Act (release of technical information) or regulations made
under or for the purposes of Part 7.3. These provisions safeguard commercially
sensitive or technical offshore information or things. Excluding these provisions from
the operation of Part 6.11 continues the existing protections applied by the Act and
regulations to commercial-in-confidence information.
Subsection (4) ensures that Part 6.11 does not apply in relation to inquiries into
significant offshore incidents. Inquiries into significant offshore incidents are covered
by stand-alone provisions in Part 9.10A of the Act, which generally applies the
provisions of the Royal Commissions Act 1902 in relation to such inquiries.
Subsection (5) provides that Part 6.11 does not apply in relation to offshore
information or things that relate to certain offshore greenhouse gas storage operations.
Greenhouse gas-related information is not covered by Part 6.11, except to the extent
that it relates to a greenhouse gas safety zone in Part 6.6 of the Act, or a listed OHS
law, other than Part 5 of the Offshore Petroleum and Greenhouse Gas Storage
(Resource Management and Administration) Regulations 2011. That Part of those
Regulations is excluded as the responsible Commonwealth Minister, rather than
NOPSEMA, is responsible for the administration of that Part to the extent it relates to
greenhouse gas titles.
56
Division 2 of Part 6.11 (section 695V) provides for the use of offshore information or
things by NOPSEMA. This provision will enable NOPSEMA to use offshore
information or things, which NOPSEMA or an inspector appointed by NOPSEMA or
the CEO of NOPSEMA obtain in performing a function or exercising a power under
the OPGGSA or a legislative instrument under the Act, in performing any of its
functions or exercising any of its power under the Act or regulations, regardless of the
purpose for which the offshore information or thing was initially obtained. See the
introductory discussion above in relation to the purpose of this provision.
The new section refers to "an inspector appointed by NOPSEMA or the CEO", as this
section may commence before the amendments to replace the existing petroleum
project inspectors and OHS inspectors with a single category of inspector called
"NOPSEMA inspectors" - see Schedule 1 to this Bill. The broad reference will
ensure that Part 6.11 can apply in relation to petroleum project inspectors and OHS
inspectors before that commencement, and NOPSEMA inspectors after that
commencement.
Division 3 of Part 6.11 provides for the sharing of offshore information or things:
a) among all of the regulatory entities performing functions and exercising powers
under the Act and related regulations, and
b) with a range of Commonwealth or State or Territory entities that perform
functions and exercise powers under a law.
New section 695W enables any of the following entities, which perform regulatory
functions and powers under the Act and related regulations, to make offshore
information or things available to each other:
· The responsible Commonwealth Minister;
· The Secretary of the Department of the responsible Commonwealth Minister;
· The CEO of NOPSEMA;
· The Titles Administrator;
· Each member of a Joint Authority.
See the introductory discussion above in relation to the purpose of this provision.
The members of the Joint Authorities, including responsible State and Northern
Territory Ministers, would impliedly be able to share offshore information or things
obtained through these proposed provisions with their Department, for the purposes of
the relevant Department providing policy advice to the Minister.
The recipient of the offshore information or thing may only use the offshore
information or thing in the course of the performance of the recipient's functions or
exercise of the recipient's powers under the Act or a legislative instrument under the
Act, or in the course of the administration of the Act or a legislative instrument under
the Act.
New section 695X enables the CEO of NOPSEMA to make offshore information, or
things available to the following Commonwealth, State or Northern Territory
57
agencies, for those agencies to use in the course of the performance of the agency's
functions or the exercise of the agency's powers under a law or for the purposes of a
law:
· The Australian Maritime Safety Authority;
· The Civil Aviation Safety Authority;
· The Australian Defence Force;
· The Australian Federal Police;
· Customs;
· The police force of a State or Territory;
· The Director of Public Prosecutions of the Commonwealth;
· The coroner of a State or the Northern Territory;
· An agency of the Commonwealth, a State or Territory responsible for
administering or implementing laws relating to OHS;
· An agency of the Commonwealth, a State or Territory responsible for
administering or implementing laws relating to the protection of the environment;
· Any other agency of the Commonwealth, a State or Territory responsible for
investigating contraventions of laws, or administering or ensuring compliance
with laws.
The final category in the above list is included to ensure that offshore information or a
thing can be made available to an agency that is responsible for investigating
contraventions of laws or administering or ensuring compliance with laws, which is
not covered by one of the more specific items in the list. Although broad, the
provision incorporates an in-built safeguard as the information is not required to be
made available by the CEO. As noted above, in practice an agency will be required to
make a case for having the information made available to them.
The ability for the CEO of NOPSEMA to share offshore information or things with
these agencies for use in the performance of those agencies' functions or powers will
help fulfil a number of regulatory objectives, such as to ensure that offshore
information or things can be provided to relevant agencies in the event that an
incident has implications that cross jurisdictional boundaries, or that offshore
information or things can be shared for the purposes of a joint investigation. The
agencies listed above as potential recipients are those that are considered may require
information in these circumstances.
The sharing of offshore information or things is discretionary rather than an
obligation; the CEO of NOPSEMA therefore has the ability to determine the
appropriateness of sharing particular offshore information or things in each case. In
practice, an agency would need to justify to the CEO the reasons that the information
should be made available and explain the manner in which they intend to use that
information.
The CEO also has the ability to place conditions at any time on the use or further
release of the offshore information or things by the agency to which the offshore
58
information or thing is made available. This will ensure, for example, that the CEO
can safeguard personal information by applying a condition that the recipient agency
keeps that information confidential. Conditions are imposed by way of a written
notice as outlined in subsection (3).
New section 695X has a subsection (4) which declares that a notice issued under
subsection (3) is not a legislative instrument. This provision is included to assist
readers, as the instrument is not a legislative instrument within the meaning of section
5 of the Legislative Instruments Act 2003.
New section 695Y relates to personal information. Before personal information is
made available as provided for in Division 3, the entity making the information
available must take reasonable steps to ensure that the personal information is de-
identified. This provides an additional safeguard to protect personal information.
Part 2: Application and transitional
This Part provides for the application of the amendment made by this Schedule and
transitional arrangements relating to them.
Item 2: Application
This item provides that the amendment made by this Schedule applies in relation to
offshore information (other than personal information) and things obtained before, on
or after commencement. Retrospective application will ensure, for example, that
information in a safety case or environment plan submitted to the regulator prior to
the commencement of these provisions can be shared, even though a revised safety
case or environment plan may not be required to be provided until a number of years
after the commencement of these provisions.
However, this item also specifies that the amendment made by this Schedule will only
apply in relation to personal information obtained on or after commencement. While
the amendments could in theory have enabled the use or disclosure of personal
information obtained prior to the commencement of these amendments, as such uses
or disclosures would be permitted under Information Privacy Principles 10(1)(c) and
11(1)(d) in the Privacy Act 1988 as uses or disclosures required or authorised by or
under law, it was considered that as a matter of privacy policy, the `required or
authorised by law' exceptions to the general prohibitions against the use or disclosure
of personal information should apply only in relation to the law as it applied at the
time when the personal information was collected.
Item 3: Transitional regulations
This item enables the making of transitional regulations including prescribing any
saving or application provisions.
Schedule 4 - Joint Authority for Tasmania
This Schedule makes amendments to the Act to change the constitution of the Joint
Authority for the offshore area of Tasmania, and to make consequential and
transitional amendments. The effect of these changes is to remove the responsible
State Minister for Tasmania from the Joint Authority for the offshore area of
59
Tasmania. After the commencement of these amendments, that Joint Authority will
consist solely of the responsible Commonwealth Minister.
Part 1: Amendments
This Part provides for amendments to the constitution of the Joint Authority for the
offshore area of Tasmania.
Item 1: Section 4
Item 1 amends the simplified outline of the Act in section 4 to reflect the new Joint
Authority arrangements for the offshore area of Tasmania.
Item 2: Section 7 (paragraph (a) of the definition of responsible State Minister)
This item amends the definition of "responsible State Minister" in section 7 to provide
for a new definition in respect of Tasmania. The existing definition identifies the
"responsible State Minister" in relation to membership of the Joint Authority. The
definition is unchanged in relation to all States other than Tasmania. In relation to
Tasmania, the "responsible State Minister" is the Tasmanian Minister responsible for
the Tasmanian Petroleum (Submerged Lands) Act 1982.
Item 3: Subsection 56(2)
This item amends subsection 56(2) to provide that the Joint Authority for an offshore
area of a State, other than Tasmania, is constituted by the responsible State Minister
and the responsible Commonwealth Minister.
Item 4: After subsection 56(2)
This item inserts a new subsection 56(2A) to provide for the constitution of the Joint
Authority for the offshore area of Tasmania. The responsible Commonwealth
Minister is the Joint Authority for that offshore area. The new subsection also
provides for that Joint Authority to be known as the Commonwealth-Tasmania
Offshore Petroleum Joint Authority.
Item 5: Subsection 56(6)
This item corrects a drafting anomaly.
Item 6: Subsection 56(8)
This item corrects a drafting anomaly.
Item 7: Subsections 58(1) and 59(1)
This item amends subsections 58(1) and 59(1) to exclude the Joint Authority for
Tasmania from the operation of sections 58 and 59. The processes provided for by
these sections are only relevant where there is more than one member of a Joint
Authority.
60
Item 8: Section 60
This item amends section 60 to exclude the Joint Authority for Tasmania from the
operation of this section. Section 60 is only relevant where there is more than one
member of a Joint Authority.
Item 9: Subsection 61(2)
This amends subsection 61(2) to exclude the Joint Authority for Tasmania. This
subsection is only relevant where there is more than one member of a Joint Authority.
Item 10: Before paragraph 61(2A)(a)
This item inserts a reference to Tasmania in subsection 61(2A), to provide for records
of the decisions of the Joint Authority for Tasmania. The effect of this amendment is
that, as is the case for the existing Joint Authorities for which the responsible
Commonwealth Minister is the sole member, written records of the decisions of the
Joint Authority for Tasmania, which are kept by the Titles Administrator, are prime
facie evidence that the decision was duly made as recorded if the record is signed by a
person who was the Joint Authority at the time the decision was made.
Item 11: Subsection 64(1) (heading)
This item amends the heading to subsection 64(1) to exclude reference to the Joint
Authority for Tasmania. That Joint Authority is excluded from the operation of
subsection 64(1) - see item 12 of this Schedule.
Item 12: Subparagraphs 64(1)(a)(i) and (ii)
This item amends subparagraphs 64(1)(a)(i) and (ii) to exclude the Joint Authority for
Tasmania from the operation of subsection 64(1). This subsection is only relevant
where there is more than one member of a Joint Authority.
Item 13: After subsection 64(1)
This item inserts a new subsection 64(1A) to provide for judicial notice of the
signature of a person who is, or has been, the Joint Authority for Tasmania, or a
delegate of that Joint Authority. This subsection also provides for judicial notice of
the fact that a person is, or was at a particular time, the Joint Authority for Tasmania,
or a delegate of that Joint Authority.
Item 14: Section 66 (heading)
This item amends the heading to section 66 to exclude reference to the Joint Authority
for Tasmania. That Joint Authority is excluded from the operation of section 66 - see
item 15 of this Schedule.
Item 15: Subsection 66(1)
This item amends subsection 66(1) to exclude the Joint Authority for Tasmania from
the operation of section 66. This section is only relevant where there is more than one
member of a Joint Authority.
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Item 16: Paragraph 66(1)(b)
This item corrects a technical anomaly in subsection 66(1). Subsection 66(1)
currently provides that a Joint Authority for a State or the Northern Territory may
delegate the functions and powers of the Joint Authority to two persons together, each
of whom is one of the following:
a) An APS employee who is an SES employee or acting SES employee;
b) An employee of a State or of the Northern Territory.
As it stands, paragraph (b) could be read as authorising a delegate of a Joint Authority
for a State or the Northern Territory who is an employee of a different State (or of the
Northern Territory) than the State (or Northern Territory) concerned; that is, the
provision does not link the State or Northern Territory employee delegate to the
relevant Joint Authority for that particular State or the Northern Territory.
The amendment to paragraph 66(1)(b) in this item will replace the words "an
employee of a State or the Northern Territory" with "an employee of the relevant
State, or of the Northern Territory, as the case requires". This will make clear that the
State or Northern Territory delegate of the Joint Authority must be an employee of the
State or Northern Territory concerned.
Item 17: After section 66
This item inserts a new section 66A to provide for delegation of the functions and
powers of the Joint Authority for Tasmania. The Joint Authority may delegate any or
all of the functions or powers of the Joint Authority under the Act or regulations.
However, the Joint Authority may delegate a function or power to an APS employee
only if the employee is an SES employee or acting SES employee.
A copy of an instrument making, varying or revoking a delegation must be published
in the Gazette.
Part 2: Transitional
This Part provides for necessary transitional arrangements as a result of the change of
the constitution of the Joint Authority for the offshore area of Tasmania.
Item 18: Previously constituted Joint Authority for Tasmania
This item applies to an act or thing done for the purposes of the Act by, or in relation
to, the Joint Authority for Tasmania as constituted before the commencement of this
item; that is, when the membership of that Joint Authority consisted of the responsible
State Minister and the responsible Commonwealth Minister.
Sub-item (2) ensures that the act or thing has effect, and the Act (as amended) applies
accordingly, after the commencement of this item as if the act or thing had been done
by, or in relation to, the Joint Authority for Tasmania as constituted after the
commencement of this item. The reference to "and the Act...applies accordingly"
ensures that if, for example, the Joint Authority for Tasmania as formerly constituted
made a decision under the Act before the commencement of this item, the decision
itself would "have effect" after commencement as if it had been made by the newly
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constituted Joint Authority for Tasmania. With the addition of the words "and the Act
applies accordingly", a reference elsewhere in the Act to the making of such a
decision by a Joint Authority would "apply accordingly"; that is, it would apply as if
the cross-reference in the Act to the decision made by the (newly constituted) Joint
Authority also picked up a reference to a decision made before commencement by the
(formerly constituted) Joint Authority.
Sub-item (3) provides for sections 61 (records of decision of a Joint Authority) and 64
(judicial notice of signature of a member of a Joint Authority) to continue to apply
unamended insofar as records and other documents signed by a member of the Joint
Authority for Tasmania before commencement are concerned.
The term `the Act' is defined broadly in this item to include regulations and
instruments made under or for the purposes of the Act. This is designed to cover
references to the Joint Authority in documentation not directly made under the Act,
as well as regulations, subordinate instruments and title instruments made or issued
directly in the exercise of powers given by the Act.
Item 19: Transitional regulations
This item enables the making of transitional regulations including prescribing any
saving or application provisions.
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