Commonwealth Numbered Regulations - Explanatory Statements

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PETROLEUM (SUBMERGED LANDS) (DATUM) REGULATIONS 2002 2002 NO. 198

EXPLANATORY STATEMENT

Statutory Rules 2002 No. 198

Issued by the Authority of the Minister for Industry, Tourism and Resources

Subject - Petroleum (Submerged Lands) Act 1967

Petroleum (Submerged Lands) (Datum) Regulations 2002

Section 157 of the Petroleum (Submerged Lands) Act 1967 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The Act provides the legal framework for the exploration for, and the production of, petroleum for those parts of Australia's continental shelf and Exclusive Economic Zone which are under Commonwealth jurisdiction. The Act is administered jointly by the Commonwealth, State and Northern Territory Governments.

Subsection 150N(1) of the Act provides for the regulations to declare that, for the purposes of describing the position on the surface of the Earth of a point, line or area in a title (ie exploration permit, production licence, etc) or other instrument under the Act, a specified datum is to be the current datum, replacing the previous datum (as set out in Attachment A).

In the Act sections 150R, "Variation of titles etc." and 150S, "Variation of application for titles" provide that the regulations may authorise the Designated Authority to make various arrangements for relabelling or annotating existing title documents and other instruments to take account of the new datum. The Designated Authority is the relevant State or Northern Territory Minister responsible for petroleum, who, under the Act, has many administrative powers and functions over petroleum operations in Commonwealth waters adjacent to that State or Territory. In conformity with these arrangements, the Regulations set out below give new powers to the Designated Authority. This means, under delegations by the State or Northern Territory Minister, the powers will be exercised by the various State or Northern Territory Mines, Energy or Resource Departments, the delegate generally being referred to as "the Director".

The purpose of the Regulations is to prescribe the Geocentric Datum of Australia (GDA) as the current datum (section 150N refers) for describing positions on the surface of the earth and to set in place arrangements for relabelling or annotating existing title documents.

The need for the Regulations arises from the Government's Australian Spatial Data Infrastructure program, under which it has been determined that the GDA will be adopted in Commonwealth legislation.

The Regulations have determined that any new or renewed title will show title area boundaries in coordinates referenced to the GDA. The Regulations also enable existing titles to be relabelled in terms of GDA coordinates. The priority for relabelling will be existing production licences, pipeline licences and infrastructure licences, which either go for 21 years or are indefinite in term. It is considered likely that a State or Territory that manages only a few permits or leases will also relabel those titles. However, permits and leases have a term of only 5 or 6 years, and States which manage a large number of these titles will not be expected to relabel them during their current term. It has been agreed between the Commonwealth, States and Northern Territory that relabelling will be carried out within 6 months of the changeover time.

Details of the Regulations are set out in Attachment B.

The Regulations commenced on gazettal.

Authority: Section 157 of the Petroleum (Submerged Lands) Act 1967

ATTACHMENT A

HOW TO UNDERSTAND THE DATUM

The latitude and longitude of a point do not in themselves provide the means of identifying the position of that point on the surface of the Earth with any accuracy. A "datum", the reference surface for the latitude and longitude, also needs to be specified. The issue is similar to quoting a volume with appropriate units, eg 100 imperial gallons is different from 100 US gallons.

Since the 1960s, the coordinates of trig points that are used for onshore surveying in Australia have been derived by a process of working outwards from a primary reference point known as the Johnston Geodetic Station in the Northern Territory. The latitude and longitude of that Station have been determined very accurately, and also its elevation above the spheroid representing the Earth. This information, together with measurements indicating the size and shape of the spheroid, constitutes a datum, namely the Australian Geodetic Datum (AGD).

Adopted in 1966, the AGD, which can also be known as "AGD66", is based on the Australian National Spheroid, which is an ellipsoid designed to be the best estimate of the Earth's shape in the Australian region, rather than from a global perspective. As a result, this Datum is biased to the extent that it has the centre of the spheroid some 200 metres from the Earth's centre.

A geocentric datum is one that is based on a spheroid having its centre at the centre of the Earth. In recent decades, geocentric datums have been adopted worldwide for most aeronautical and shipping applications due to their international capabilities. A geocentric datum is directly compatible with the Global Positioning System used in satellite navigation and will ensure compatibility across various geographic information systems at the local, regional, national and global level. In view of these benefits, Australia has devised the GDA, also known as "GDA94".

Under the Act, areas under petroleum exploration permits, production licences and certain other titles must consist of an integral number of blocks. The boundaries of these blocks are defined by gridlines at 5 minute intervals of latitude and longitude starting respectively from the equator and from Greenwich. Previously, the datum was the AGD. This meant that, when surveying offshore, there was generally no alternative to using a computer-based transformation program to give geocentric coordinates that could then be used with satellite positioning to identify the position of a point on the seabed.

Because of the 200 metre dislocation mentioned above, if the Act had been changed to simply accept the existing AGD coordinates as GDA coordinates, holders of existing titles under the Act would have found that the area in which they may operate had shifted by about 200 metres over the seabed. Following consultation with the petroleum industry, the Government decided that adoption of the GDA in the Act must not lead to this result. Consequently, the blocks existing under the Act will be retained in the same position on the seabed as they have occupied since the Act was passed in 1967, but their coordinates will be relabelled in terms of the GDA. This consideration underpins what was done to the Act under the Petroleum (Submerged Lands) Legislation Amendment Act 2001 which, among other things, added sections 150N to 150W to provide the framework for the GDA to be adopted by regulation.

These amendments came into effect on 28 October 2001, paving the way for these Regulations to be made.

ATTACHMENT B

NOTES ON INDIVIDUAL CLAUSES

Regulation 1 -Name of Regulation

This Regulation provides the title of the Regulations.

Regulation 2 - Commencement

This Regulation provides for the Regulations to commence on gazettal.

Regulation 3 - Definitions

This Regulation makes clear that the Act referred to in the Regulations is the Petroleum (Submerged Lands) Act 1967 and directs the reader to the Schedule at the end of the Regulations for the definition of "Geocentric Datum of Australia". This Regulation also provides notes directing the reader to various sections of the Act for certain other definitions used in the Regulations.

The terms "block", "datum" and "Designated Authority" are explained above. A "geographic coordinate" includes a meridian of longitude by itself and a parallel of latitude by itself "Register" means the Register, provided for in Division 5 of Part IIII of the Act, that serves as the formal system of record keeping about petroleum titles under the Act. The "current datum" is the datum declared by these Regulations, ie the GDA. The "previous datum" is the AGD The "changeover time" is the time when these Regulations came into effect. An "instrument under this Act" means every instrument other than the Regulations. A "title" means a permit (ie an exploration permit), lease (ie a retention lease), licence (ie a production licence), infrastructure licence, pipeline licence, special prospecting authority or access authority.

Regulation 4 - Declaration of current datum (Act s 150N)

Section 150N enables the current datum to be declared by regulation, and such a declaration means that the current datum replaces the previous datum. This Regulation declares the current datum to be the GDA, which is described in greater detail in Schedule 1.

Regulation 5 - Variation of instruments (Act s 150R)

The Act enables regulations to be made giving power to the Designated Authority to relabel geographic coordinates in an area description or an area diagram forming part of an existing title document or some other instrument under the Act so that the geographic coordinates refer to the current datum. The provision appears in separate subsections of section 150B, respectively for a permit, lease, licence, infrastructure licence, special prospecting authority, access authority, pipeline licence and any other instrument. This regulation confers these powers on the Designated Authority, so that, from the changeover time, geographic coordinates in existing title documents and other instruments may be relabelled with reference to the GDA. However, as explained in the note to Regulation 6, not every one of these powers will necessarily be used.

Regulation 6 - Variation of titles etc. (Act s 150R)

Subsection 150R(8) of the Act enables regulations to be made giving power to the Designated Authority to insert annotations in existing and new title documents so that the datum to which any geographic coordinate refers becomes clear. The reason for allowing an annotation to say that the coordinate on a title is shown in AGD66 reference is that existing short-term titles (eg permits) will not necessarily be relabelled in GDA. If a permit document is not relabelled, an annotation of the fact that it is in AGD66 reference should be entered on it to avoid confusion. If it is relabelled, for the same reason, an annotation of the fact that it is now in GDA reference should be entered on it.

Subregulation (2) enables the annotation to be entered in any one of three ways, ie using an adhesive label, adding an imprint (eg by laser printer or a rubber stamp) or replacing the page.

Subregulation (3) provides that these arrangements apply only to the copies kept by the Designated Authority in its Register (explained in the note under Regulation 3). In other words, there is no obligation on the Designated Authority to mail, or otherwise convey, revised title documents to titleholders.

Regulation 7 - Variation of applications for titles (Act s 150S)

This Regulation refers primarily to applications for titles that have been submitted but not processed before the changeover time. If such an application includes an area description referring to a geographic coordinate, it would be referenced to AGD because this is what was required under the Act until these Regulations were made. This Regulation, provided for under section 150S of the Act, enables the Designated Authority to vary the application before finalising consideration of it so that it refers to GDA.

The power given by this Regulation could also be used for amending an application lodged after the changeover time if the applicant has inadvertently used AGD reference instead of GDA. However, later than 12 months after the changeover time, Regulation 9 means it will be against the Regulations for the application to refer to any datum other than GDA.

Regulation 8 - Documents submitted to Designated Authority

In the Act, regulations and directions, one can find references to records and other documents (which may include geographic coordinates) that must or may be prepared by title-holders. Examples of these are safety cases, environment plans, applications for approval to drill a well, periodic reports and final reports on wells and surveys.

Records and documents of this kind are not "applications for titles" within the meaning of section 150S nor are they "instruments" under the Act. An "instrument" is legally a document signed by a regulator, eg a permission, certificate or direction, that, generally speaking, offers, bestows or denies some benefit to a company or requires something from the company.

To avoid confusion about the datum that applies to any geographic coordinate mentioned in any document prepared by an industry-member, Regulation 8 enables the Designated Authority to ask submitters of such documents to specify the datum if it is not specified.

Subregulation (2) provides that, if the submitter receives such a request from the Designated Authority, he or she must provide the information in writing within 14 days, but that written advice may be provided by any convenient method, including email and facsimile transmission.

The Regulation does not require the Designated Authority to seek clarification about the datum in every case in which an industry-member submits a document including a geographic coordinate without specifying a datum. For instance, if there were other information in the document that enabled one to deduce what the datum was, or if the exact location of the point referred to by the geographic coordinate were of trivial significance to the purpose of the document, the Designated Authority might decide to accept or consider the document as it is.

Subregulation (3) enables the Designated Authority to reject or refuse to consider the Document if the person who has received a request of the kind referred to above does not provide the information about the datum. If the document were seeking the Designated Authority's approval for some proposed action, eg the drilling of a well, that rejection would generally be the end of the matter unless and until the company decided to submit another application.

However, as explained in the Note, if the document were in the nature of a report for a data collection program or an investigation, and the datum applying to the geographic coordinate were important to ensure the scientific integrity of the information gathered, the Designated Authority could be expected to take further action to require the datum to be specified. This could be done by using the powers to issue a direction under section 115 or section 101 of the Act.

Section 115 refers to the situation where the Designated Authority, or an inspector, has reason to believe that a person is capable of giving information or producing documents relating to petroleum exploration operations, operations for the recovery of petroleum, operations relating to the processing or storage of petroleum or the preparation of petroleum for transport or operations connected with the construction or operation of a pipeline. In that situation, section 115 states, in part, that the Designated Authority may, by instrument in writing served on that person, require that person to furnish to the Designated Authority in writing, within the period and in the manner specified in the instrument, any such information.

Section 101 is more general in its application and states, in part, that the Designated Authority may, by instrument in writing served on the registered holder of a title, give to the registered holder a direction as to any matter with respect to which regulations may be made. A pecuniary penalty applies to a failure to comply with a direction under either section 101 or 115.

Regulation 9 - Documents made or prepared under Act etc

This Regulation refers to records and documents of the same type, prepared by industry-members, as are referred to in Regulation 8. While that Regulation addresses the potential problem of companies neglecting to specify any datum, this Regulation addresses the undesirability of companies, after the changeover time, continuing to use the previous datum, ie AGD, instead of the current datum, ie GDA.

In documents to which this Regulation applies, any geographic coordinate that is mentioned will need to refer to GDA and specify that this is the datum. If not, the document will not serve the purpose it is meant to serve, ie meeting a requirement or validly putting forward an application of some kind.

To give industry-members time to get used to the new datum, this Regulation will apply only to documents prepared more than 12 months after the changeover time. However, even before that time, industry-members will be able to use the GDA and will be encouraged to do so.

Moreover, this Regulation will apply only to a record or other document that is made because it is required by, or serves a purpose under, the Act, or regulations or directions made under the Act. In other words, it will not be an offence against this Regulation if a company references internal (or public) company documents to some datum other than GDA. Even if the company later decided to append one or more such documents to a submission it made to the Designated Authority, there would be no infringement of this Regulation as the internal document had not been prepared as a requirement of, or for a purpose under, the Act, regulations or directions. Nonetheless, if any such appendix mentioned a geographic coordinate without specifying a datum, the Designated Authority could make an enquiry about it as provided under Regulation 8.

Regulation 10 - Transitional provisions (Act s 150U)

Section 150U provides that the regulations may make provision for matters of a transitional nature arising from the change from the previous datum to the current datum. This Regulation addresses three technical issues relating to the change.

Subregulation (1) is concerned with stipulating the method that is to be used for performing the conversion from AGD to GDA. This is because more than one such method has been developed since GDA was devised and the most recent one is the most accurate. This is the one referred to in the Gazette Notice that is mentioned in the subregulation. This Notice reads as follows:

"The meeting of the Inter-governmental Committee on Surveying and Mapping (ICSM) held in Melbourne on 25-29 October 1999, resolved to develop a national transformation product consisting of a national coverage transformation grid from AGD66 to GDA94, and a separate transformation grid from AGD84 to GDA94 for all AGD84 jurisdictions. These transformation grids are now available, in the NTv2 format, from Chapter 7 of the GDA Technical Manual, which can be accessed on the World Wide Web at http://www.anzlic.org.au/icsm/gda/index.html. Grid transformation is the easiest and most accurate method of transforming data between AGD and GDA and is recommended by the ICSM for all digital spatial data transformation in Australia." [Signatory: P. Ramm, Chairman, Inter-governmental Committee on Surveying and Mapping]

The above transformation method can yield conversion results showing anything up to several decimal places of a second of latitude and longitude. Subregulations (2) and (4) seek to bring some order to the number of decimal places that are to be quoted when geographic coordinates are converted to GDA reference. The standard is 2 decimal places of a second. Subregulation (4) ensures there is no confusion about the fact that the second digit of the decimal expression is to be rounded, taking account of what the third digit is.

Subregulation (3) refers to the fact that, referenced to AGD, the Act defines the size of every block to be exactly 5 minutes of latitude by 5 minutes of longitude. For mathematical reasons to do with the shape of the Earth, the apparent precision of the dimensions of the blocks will not be maintained when the geographic coordinates are converted to GDA reference. When the conversions are quoted to 2 decimal places of a second, in some cases the dimensions of the block will appear to be 5 minutes by 5 minutes, and, in other cases, either of these measures could be different by 0.01 seconds, ie the measure could be 4 minutes, 59.99 seconds or 5 minutes 00.01 seconds. This does not change the area of the block or its position on the seabed from what they were under AGD. Subregulation (3) provides that the apparent change in dimensions after conversion does not change the fact that the area is a block within the meaning of the Act.

Schedule 1 - Geocentric Datum of Australia

This Schedule defines the GDA. The definition contains a number of geodetic specifications. The "Reference Ellipsoid" has the geometric form that the datum assumes to represent the size and shape of the Earth. The "semi-major axis" represents the radius of the Earth at the equator. The other quantity is the "semi-minor axis", which represents the radius of the Earth at the north or south pole. The "flattening" is a way of describing the relationship between the lengths of the semi-major axis and the semi-minor axis. The "inverse flattening" is the reciprocal of this. Thus the value of the inverse flattening that is given means that when 1 is divided by 298.257222101, it gives the fraction of the semi-major axis length by which the semi-minor axis is shorter than the semi-major axis. This equates to around 0.34 percent of the semi-major axis length.

The "Reference Frame" establishes the datum by tabulating very precisely the latitude and longitude of 8 geodetic stations around Australia as well as their height above the Reference Ellipsoid. In practice this means that, if a person's satellite navigation equipment is set so that it shows the specified geographic coordinate at each of the 8 geodetic stations, that equipment will also correctly show the geographic coordinate of any location when it comes to surveying the boundaries of a petroleum tenement at sea. This is true within the limitations of the GPS system and the positioning techniques used.

REGULATION IMPACT STATEMENT

These Regulations implement the changeover from the Australian "Geodetic Datum (AGD) to the Geocentric Datum of Australia (GDA) for the purpose of managing titles and data under the Petroleum (Submerged Lands) Act 1967 (the PSL Act).

Problem:

Background

The recent development of the satellite-based Global Positioning System (GPS) and international surveying systems has led to great improvements in the accuracy with which the location of particular points on the Earth's surface can be identified and described. The availability of low-cost GPS receivers has led to rapid uptake of this technology, including in the offshore petroleum exploration and production industry.

Australia's previous system of geographical reference has been a regionally-based best-fit mathematical model of the Earth's surface, known as the Australian Geodetic Datum (AGD). This system of reference is not directly compatible with GPS, with the result that users of GPS need to use computer-based software to transform global coordinates obtained from GPS to AGD and vice versa.

In 1994, at the United Nations Regional Cartographic Conference for Asia and the Pacific, the Australian Government made a commitment to adopt a new geocentric coordinate reference system to make Australia's mapping, navigation and positioning system internationally compatible. For Australia's petroleum and minerals legislation, the specific authority for the change to a geocentric reference is a Ministerial exchange of letters in October 1995, in which the implementation of the Commonwealth Public Interest Spatial Data Transfer Policy was approved.

Australia's new datum is entitled the Geocentric Datum of Australia 1994, also referred to as "GDA94" or "GDA." It uses an internationally agreed point as the centre of the Earth, and a global best-fit mathematical model of the shape of the Earth. This is designed to maximise compatibility across geographic systems at the local, regional, national and global level, and is directly compatible with GPS.

Primary problem: complications with surveying faced by petroleum operators

The essence of the problem as far as the offshore petroleum industry is concerned is that GDA is now in existence and has practical advantages, analogous to what metric units of measurement have over imperial units. If the Commonwealth legislation that manages the offshore petroleum industry is not changed, then the industry's dealings with the regulator will be burdened by the on-going need to make conversions, somewhat analogous to what would have been the case if a Road Traffic Act had continued to specify speed limits in miles per hour after metric speedometers were introduced.

Without appropriate amendments being made to the PSL Act or Regulations to adopt the GDA as the datum under the Act, offshore petroleum operators surveying the boundaries of their tenements would always need to apply computer-based software to their satellite navigation equipment to ensure that they were on the correct side of the boundary. If they needed to report to the regulator the positions of various points, for example those forming part of a geological survey, they would also need to ensure that the software were applied. Otherwise they might not be in compliance with the Act, which, without these Regulations being made, stipulates that the position on the surface of the Earth of a point, line or area is determined by reference to AGD.

Secondary Problem: reporting geographic coordinate information to the regulator

If action is taken as set out below to solve the primary problem, ie to adopt the GDA by Regulations under the Act, a secondary problem also needs to be addressed, viz. possible confusion when operators submit to the regulator written material that specifies a geographic coordinate. This would arise if the operator neglected to specify the datum. Then, if the information were retained, for example in a geological database, the scientific integrity of the information would be compromised, because the exact location of the geological structure in question could be in one of two spots, depending on whether the datum was AGD or GDA.

If the GDA is adopted, getting operators to specify the datum in their submitted material would not necessarily solve the problem entirely. If the operator submitted geographic coordinate information and stated it to be referenced to AGD, the regulator would either need to convert the coordinate to GDA reference, or require the operator to resubmit it referenced to GDA.

Objective of Government action:

The general objective of moving to GDA is to simplify access and improve data quality and integration to help provide better access for all Australians to essential spatial data. The national initiative will affect a wide variety of economic, social and environmental applications. It will facilitate a coordinated approach to spatial data management throughout the Commonwealth.

The change to GDA under the PSL Act forms part of a broader Commonwealth Government strategy to modernise and streamline the administrative arrangements for managing Australia's offshore petroleum resources, and to ensure that Australia remains an attractive location for offshore petroleum exploration and development.

The specific purpose of these Regulations is to apply the GDA to the PSL Act, and to coordinate a smooth transition to the new standard.

Options:

Primary problem: complications with surveying faced by petroleum operators

Alternatives to explicit government regulation were not considered in relation to the primary problem. It is not deemed desirable to continue with the status quo of geographic coordinate information under the PSL Act being referenced to a different datum to the one that is compatible with satellite navigation offshore.

To meet the need for certainty, universality and compatibility, explicit government regulation is required.

The regulatory form best suited to the adoption of GDA under the PSL Act has been carefully considered. In the process legal advice was obtained from the Australian Government Solicitor.

Two options were considered for the adoption to GDA, viz the gazettal of the new datum or the making of regulations under the PSL Act (both would have required amendment of the PSL Act).

Option 1: Gazettal of the change of datum for the PSL Act

This option had the advantage of administrative simplicity. Following amendment of the PSL Act, the adoption of GDA would have been implemented by a Gazette notice approved by the Minister.

Co-ordinates of latitude and longitude would have remained the same in relevant PSL Act documents. As long as all administrators and industry stakeholders were notified that the datum had changed - and this could have been effected by a 'blanket' notification and amendment to registers held by State/Northern Territory administrators - there would have been little need for transitional arrangements.

This sub-option had one long-term administrative disadvantage, specifically that Gazette notices are not readily accessible. While the current issue of the Gazette may be purchased, past notices are not readily available. Legislation and regulations are more accessible, as they can be purchased in hard copy at any time or accessed on the Internet. As well as this, one Gazette notice would not necessarily have been sufficient for all time. In the future it is possible that the datum may need revision to take account of slight movements in the Earth's crust. Under this option, any future revisions would have required a new Gazette notice but there would not have been a central information anchor, such as a set of consolidated regulations, to make the public aware of the new notice.

However, the fundamental problem with this approach was that retaining the same coordinates under the new datum would lead to a shift, in the location on the seabed of all points and boundaries, of some 200 metres. This had the potential to lead to confusion, uncertainty and disputation over the location of offshore petroleum tenements and the transfer of commercially valuable rights and interests from one titleholder to another. Consultation revealed at an early stage that this option would not be acceptable to offshore petroleum operators.

This sub-option was not further developed in light of the legitimate concern of stakeholders that it would lead to an unacceptable level of legal and commercial uncertainty.

Option 2: Regulations under the PSL Act

Regulations must be approved by the Governor-General in Executive Council, and are subject to review and disallowance by Parliament. While this process is more onerous than gazettal, it is also more accountable and leads to a more robust outcome because of Parliamentary review.

Copies of regulations can be purchased in hard copy and are accessible on the Internet and are available in most law libraries.

Regulations are capable of providing for phased implementation of change and transitional arrangements that take account of impacts on stakeholders. This is particularly important in light of the need to ensure that tenement boundaries not be allowed shift as a result of the change.

Option 2 was preferred because of the need to ensure that tenement boundaries do not shift as a result of the change to GDA. Regulations under the PSL Act would be capable of providing for implementation arrangements that take account of the stakeholder views and ensure a smooth and certain changeover to the new datum.

As a result, in 2001, amendments were passed to the PSL Act to enable the datum to be set by Regulations under the Act.

Secondary problem: reporting geographic coordinate information to the regulator

An alternative to explicit government regulation was considered in relation to the secondary problem, as was another option involving the use of Directions under the Act and a third requiring the use of Regulations.

Option 1: guidelines to encourage the use of the correct datum in material submitted by industry to the regulator, supported if needed by ad hoc directions under the Act

This option is based on having Datum Regulations but without ones addressing what is to be done by industry-members preparing documents for submission to the regulator. Once the rest of the Datum Regulations had been made, guidelines could have been framed asking industry-members to reference to the GDA all geographic coordinates in documents they submitted to the regulator.

This would rely on the majority of industry-members cooperating voluntarily. If a particular operator proved persistently uncooperative, a formal direction under section 101 of the PSL Act could be given to that operator requiring information to be submitted in GDA reference.

This option would have no advantages other than that industry-members would feel marginally less restrained by Regulations.

One disadvantage would be that there might be imperfect consistency in the administration of the guidelines by the various State and Northern Territory Minerals and Energy Departments. As well as this, a fair degree of vigilance by those Departments would be required if the primary incentive for industry-members to comply with the requirement were a set of guidelines.

The guidelines would also not be subject to Parliamentary scrutiny or disallowance.

However, the main basis for concluding that the use of guidelines would be inadequate for this task is that, when the Commonwealth initially circulated a consultation draft of the Regulations without provisions addressing what is to be done by industry-members preparing documents, some industry-members were dissatisfied. They stated that the practicalities of the new datum and impact on industry needed more consideration, and the precise instance they cited was the lodgement of documents by operators to the regulator. After the two Regulations addressing this issue had been drafted by the Commonwealth, the industry-members concerned were satisfied with the proposal.

Option 2: standing directions under the Act to provide for the use of the correct datum in material submitted by industry to the regulator

Under section 101 of the PSL Act, directions can be issued in respect of any matter in relation to which regulations can be made. Directions of a standing nature need to be approved by each Joint Authority, ie the Commonwealth Minister administering the PSL Act and each of the State or Northern Territory Ministers responsible for petroleum. The direction then needs to be served individually on every titleholder.

This option would have no advantages.

The disadvantages would be the administrative onerousness and risk of delays that would be involved in the process of making and serving the new directions. Moreover, a direction is a relatively clumsy instrument, with a pecuniary penalty attached to its infringement. A direction would not be suitable to enforce a requirement in a case where a non-pecuniary sanction were preferred.

The directions would also not be subject to Parliamentary scrutiny or disallowance.

Option 3: Regulations to provide for the use of the correct datum in material submitted by industry to the regulator

Since it is deemed appropriate to use a judicious transitional arrangement for introducing the GDA to the management of the offshore petroleum industry, and a system that is not particularly heavy-handed in terms of its sanction provisions once it is bedded down, the use of regulations has notable advantages.

In summary, one provision would be that if a person gives to the Designated Authority or an inspector a document, because it is required by or serves a purpose under the Act, and quotes a geographic coordinate in the document without specifying the datum, the Designated Authority may ask for the datum to be specified. This could be done by any convenient means, eg telephone. If thereafter the person fails to provide the datum information, the Designated Authority could on that basis reject or refuse to consider the document. This provision would have particular relevance to the first year after the Regulations come into effect.

After 12 months, a second provision would come into effect, specifically that if a person gives to the Designated Authority or an inspector a document, because it is required by or serves a purpose under the Act, and quotes a geographic coordinate, that geographic coordinate must be referenced to GDA and the document must say so. Otherwise, the document does not serve the purpose that it is meant to serve, ie it would be like a form, cheque, etc that has been left unsigned.

These provisions can be implemented by Regulations, which have the additional advantage of being subject to Parliamentary scrutiny and disallowance.

There are no real disadvantages in administering the requirements in this way. The draft Regulations have been framed so that there will be no impact on internal (or public) company records.

Impact analysis:

The groups impacted by the change are Commonwealth and State/Northern Territory administrators of the PSL Act and the offshore petroleum exploration and production industry operating in Commonwealth waters. There would also be minor indirect impacts on other Commonwealth and State agencies involved in the administration of the PSL Act or affected by the offshore petroleum operations authorised under it.

The operational benefits of moving to GDA for the purposes of the PSL Act are that it will:

•       provide direct compatibility of PSL Act documentation with GPS measurements allowing for direct input of GPS field data into:

- datasets from other GPS surveys; and

- mapping datasets and geographic information systems produced on a geocentric datum;

•       establish a basic common framework which facilitates interchange of data between various geographic information applications;

•       eventually eliminate the need for GPS users in the offshore petroleum industry to understand datums and transformations and result in more efficient utilisation of resources, thereby reducing overheads. and

•       avoid ambiguities about physical locations of exploration and production titles, especially where jurisdictions adjoin.

In 1995, a cost-benefit analysis was produced for the Australia New Zealand Land Information Council on investment in improving Australian land and geographic data infrastructure. The study highlighted the importance of improved co-ordination between governments and of the adoption of common standards to facilitate data exchange. It estimated that for every dollar invested in improving the provision of land and geographic data, $4 of benefit was generated within the economy.

Commonwealth Regulators

Costs to the Commonwealth of adopting the GDA in the PSL Act include one-off costs, some of which have been already met, of obtaining legal advice, securing the introduction of legislation into Parliament, marketing the adoption of GDA through the production of articles in newsletters for industry and undertaking an audit procedure 6 months after the regulations have been made.

Benefits of the change include petroleum industry infrastructure which is based on a modem spatial data framework, is internationally compatible and uses the same spatial data infrastructure as other sectors of the economy, thereby reducing the risk of environmental and safety hazards.

The immediate administrative costs borne by the Commonwealth in implementing and legislating the new spatial data infrastructure are considered to be more than offset by the long term economic, social and environmental benefits which are obtained as a result of the changeover.

State and Northern Territory Regulators

Under longstanding arrangements between the Commonwealth and the States/Northern Territory for the administration of the PSL Act, State/Northern Territory Minerals and Energy Departments have primary responsibility for the day to day administration of the Act, including the creation and registration of documentation associated with the various titles eg petroleum exploration permits. These same Departments also administer minerals and petroleum legislation onshore and in State/Northern Territory waters. In some cases, eg Western Australia, adoption of GDA for the administration of State minerals and petroleum legislation has already been implemented.

Costs for the State/Northern Territory administrators arising from the adoption of GDA include one-off costs of establishing infrastructure (eg computer graphic software referenced to GDA) and audit procedures for monitoring industry's compliance with the new regulatory requirements. There will also be one-off administrative costs associated with the implementation of transitional arrangements.

The ongoing costs will include those associated with monitoring and assisting with the application of GDA datum by industry to their reporting requirements, and the creation of instruments associated with the production of new titles, which will require some recalculation of co-ordinates.

The benefits to State/Northern Territory administrators include petroleum industry spatial data infrastructure which is nationally and internationally compatible including compatibility with other sectors of the economy thereby reducing the risk of environmental and safety hazards.

Petroleum Industry

While industry is presumed to be amply supplied already with GPS receiver systems, updated mapping products which are GDA compliant may be useful in some cases. Industry would face some administrative costs associated with changing from AGD to GDA datum reporting practices, but these would be almost entirely in the nature of checking documents before submission. One detail requiring checking would be that the datum is specified if and where geographic coordinates are cited. The other detail to check would be that the information is referenced to the GDA, although this would involve only new documents prepared after the changeover time, and then only those that are expressly prepared for a purpose under the Act. As time goes on, and company procedures are adjusted to the new system, progressively less checking will be required. It is not possible to put a dollar figure on these time costs, but they are judged to be minor.

The benefits for industry include the ability to use existing digital products (such as GPS receiver systems, computer hardware and software) more effectively by operating within a nationally and internationally compatible coordinate system.

Where a petroleum company needs to convert a coordinate from AGD to GDA and it does not have GDA compliant mapping products, it could use the freely available conversion software available on the Internet. Introduced as the National Transformation Grid (as per the 10 October 2001 Gazette Notice) this will give industry members access to an efficient "on-line" desk calculator. This product will be available on a permanent basis. Thus use of the free software can be a long-term solution to the needs of companies. It will not be necessary for companies to purchase mapping products for the express purpose of complying with the provisions of the Datum Regulations.

The change in datum used for reporting to regulators will involve no additional reporting requirements. Significantly, the petroleum industry is highly technically capable and has been aware of the Australian changeover in the mapping datum. Many operators are already applying GDA in their daily internal reporting practices.

Conclusion

The option of addressing the primary problem by implementing the adoption of GDA by amendment of PSL Act and regulations is preferred. Regulations are necessary in order to provide security, certainty and a smooth transition to the new datum.

The option of using regulations to address the secondary problem of what is to be done by industry-members preparing documents for submission to the regulator is also preferred.

Consultation:

The major parties consulted were the State/Northern Territory regulators and the petroleum industry.

States/Northern Territory

Consultation with the States/Northern Territory has largely taken place through a committee consisting of Commonwealth and State/Northern Territory administrators of petroleum legislation. The committee monitored the development of the Regulations and its members have consistently supported adoption of the GDA.

Petroleum industry

Peak petroleum industry bodies have been consulted about application of the GDA. The Australian Petroleum Production and Exploration Association has indicated it supports the adoption of GDA in Australia and advocates a consistent approach across the State/Northern Territory and Commonwealth jurisdictions.

Two individual companies have also commented on the application and implementation of the GDA and actively contributed to the development of the draft Regulations. One of them, an industry consultant specialising in spatial data systems, advised that the impact on business would be more major if the Commonwealth did not adopt GDA under the PSL Act, especially as Western Australia and New South Wales now apply GDA in their State legislation. These companies were the ones, mentioned under "Options", who advised that the practicalities of the new datum and the impact on industry needed more consideration. Their drawing attention to these points led to the formulation of the two additional draft regulations to address the secondary problem of what is to be done in documents prepared by industry-members.

Implementation and Review:

As described above, the PSL Act is jointly administered by the Commonwealth and the States/Northern Territory. After the commencement of the Regulations, new and renewed titles will be issued by governments with title area diagrams referenced to GDA. Transitional arrangements will be implemented by governments for relabelling existing title documents in the register held by each State and the Northern Territory: in some cases co-ordinates will be relabelled by reference to GDA and, in others, documents will be annotated to make clear they remain, until expiry, referenced to the old datum, AGD. These transitional arrangements will ensure there is no confusion or uncertainty about the co-ordinates used in title documents.

State/Northern Territory regulators have made a commitment to make their registers GDA compliant within six months after the commencement of the Regulations. The Department of Industry, Tourism and Resources has policy responsibility for coordinating the application of the GDA datum in offshore areas managed under the PSL Act. The Department will carry on this coordination function until full implementation occurs. An audit of the effectiveness of GDA implementation in the petroleum industry will take place six months after commencement of the Regulations.


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