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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to amend the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 (the Act) to:
• transfer regulatory responsibility for offshore greenhouse gas
wells and environmental management from the minister to the
National Offshore Petroleum Safety and Environmental Management Authority
(NOPSEMA);
• clarify the powers of NOPSEMA inspectors to determine whether
regulated entities are compliant with their obligations under
the Act and
associated regulations;
• ensure valid designation of certain areas as 'frontier areas' for
the purposes of the Designated Frontier Area tax incentive;
and
• make minor technical amendments
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Portfolio
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Industry, Innovation and Science
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Introduced
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House of Representatives on 28 March 2018
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Bill status
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Before the House of Representatives
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2.143 The committee dealt with this bill in Scrutiny Digest No. 5 of 2018. The minister responded to the committee's comments in a letter dated 22 May 2018. Set out below are extracts from the committee's initial scrutiny of the bill and the minister's response followed by the committee's comments on the response. A copy of the letter is available on the committee's website.[78]
Initial scrutiny – extract
2.144 Section 584 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) currently provides that, in a prosecution for an offence in relation to a breach of a direction given by the responsible Commonwealth Minister[80] under certain provisions of the OPGGS Act, it is a defence if the defendant proved that they took all reasonable steps to comply with the direction. The defendant bears a legal burden of proof in relation to this matter. Item 40 of Schedule 1 to the bill seeks to amend section 584 to include directions given by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and the Titles Administrator. This would have the effect of providing a defence to the offences of breaching a direction given under proposed sections 579A, 591B or 594A (to be inserted by this bill),[81] in relation to which the defendant bears a legal burden of proof.
2.145 Additionally, clause 23 of proposed Schedule 2B provides that it is a defence to a prosecution for refusing or failing to do anything required by a well integrity law[82] if the defendant proves that it was not practicable to do that thing because of an emergency prevailing at the relevant time. The defendant bears a legal burden of proof in relation to that matter.
2.146 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence. This is an important aspect of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove one or more elements of an offence interfere with this common law right. As the reversal of the burden of proof undermines the right to be presumed innocent until proven guilty, the committee expects a full justification each time the burden is reversed—with the rights of people affected being the paramount consideration.
2.147 The Guide further states that placing a legal burden of proof on a defendant should be kept to a minimum and, where a defendant is required to discharge a legal burden of proof, the explanatory material should justify why a legal burden of proof has been imposed instead of an evidential burden.[83]
2.148 In relation to the reversal of the legal burden of proof in item 40, the explanatory memorandum states that the burden has been reversed 'because the matter [that is, whether the defendant took reasonable steps to comply with a direction] is likely to be exclusively within the knowledge of the defendant...[particularly] given the remote nature of offshore greenhouse gas storage operations'.[84] For clause 23 of proposed Schedule 2B, the explanatory memorandum refers to paragraph 419, which provides a similar explanation (in relation to the evidential burden of proof—noted below).[85] In relation to the reversal of the legal burden of proof more generally, the statement of compatibility states:
[The reversals of the legal burden of proof are] consistent with the Guide, which states that where the facts of a defence are peculiarly within the defendant's knowledge it may be appropriate for the burden of proof to be placed on the defendant.[86]
2.149 It would appear to the committee that whether a defendant took all reasonable steps to comply with a direction, or whether it was not practicable for the defendant to comply with a well integrity law owing to an emergency, may be matters that are appropriate to include as offence-specific defences (as opposed to elements of the relevant offences)—and may justify reversing the evidential burden of proof.
2.150 However, it is not apparent why it is necessary to reverse the legal burden of proof in relation to those matters. It would appear that if the facts amounting to whether a defendant took all reasonable steps to comply with a direction, or whether it was not practicable to do a thing owing to an emergency, are peculiarly within the knowledge of the defendant, it would be sufficient to require the defendant to raise evidence in relation to those matters, and to require the prosecution, as usual, to disprove the matters beyond reasonable doubt.
2.151 The explanatory materials do not appear to provide a specific justification for the reversal of the legal burden. In this regard, the committee notes that, in relation to clause 23 of proposed Schedule 2B, the explanatory memorandum refers to paragraph 419, which provides a justification for reversing the evidential burden.
2.152 As the explanatory materials do not appear to adequately address this issue, the committee requests the minister's advice as to why it is proposed to reverse the legal burden of proof in the instances described above, including why it is not considered sufficient to reverse the evidential, rather than the legal, burden of proof.
Minister's response
2.153 The minister advised:[87]
The Offshore Petroleum and Greenhouse Gas Storage Amendment (Miscellaneous Amendments) Bill 2018 (the Bill) contains a number of offence provisions which have corresponding offence specific defences:
• it is a defence to the offence of breaching a direction given by NOPSEMA, if the defendant proves that they took all reasonable steps to comply with the direction (the breach of directions defence); and
• it is a defence to the offence of refusing or failing to do anything required by a 'well integrity law' if the defendant proves that it was not practicable to do that thing because of an emergency prevailing at the relevant time (the well integrity defence).
These defences operate as optional exceptions to the criminal responsibility regime established under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the Act).
...
Both of these defences are already substantively contained in the Act:
• Breach of Directions Defence: The inclusion of the breach of directions defence in the current Bill represents an expansion of an existing defence (section 584 of the Act) to reflect new measures in the Bill relating to the transfer of regulatory responsibility for greenhouse gas operations from the Minister to NOPSEMA.
• Well Integrity Defence: The inclusion of the well integrity defence is a mirrored application to a well integrity law of an existing defence for a failure to comply with OHS (clause 92 of Schedule 3) and environmental management laws (clause 18 of Schedule 2A). This is in connection with the measure in the Bill to create a new Schedule 2B to provide a complete and comprehensive suite of compliance powers relating to the well integrity function, which was transferred to NOPSEMA in 2011.
...
Both defences are likely to be used by companies with significant resources, who are more than capable of shouldering the legal burden if they wish to claim a defence. The industry is highly regulated and companies involved have chosen to voluntarily participate in this regulated environment on a for profit basis. In addition, in relation to the breach of directions defence, the penalties are generally 100 penalty units and do not involve imprisonment.
...
Merely Reversing Evidential Burden is Insufficient
Allowing for a reversal of the evidential burden of proof only would create internal inconsistencies in the Act and its established treatment of offences and defences. It is essential to avoid any perception by the offshore petroleum and greenhouse gas storage industries that the Commonwealth is 'soft' on compliance. Defences should be available only to those who have genuinely done everything in their power to avert the occurrence of an adverse event and can demonstrate that they have done so.
To provide the ability of a defendant to simply point to evidence that suggests a reasonable possibility that reasonable steps were taken to comply with a direction or that compliance with well integrity laws was not practicable in the face of an emergency would result in the regulator being unable to successfully and meaningfully take enforcement action in the case of an offence being committed, and this would undermine the legitimate objective in question.
In the aftermath of an event where one or more workers may have suffered serious injury or may have died, or where significant environmental damage may have occurred, it is appropriate that a titleholder should have to demonstrate, on the balance of probabilities, that the titleholder took all available action to prevent the occurrence, rather than merely to meet the evidential burden relating to the possibility of having done so.
Due to the remote occurrence of the regulated activities, the regulator is not able to, at the relevant time, independently assess and verify what is reasonable or practicable in the event of noncompliance. Accordingly, the defence would almost always succeed without the real ability of the prosecution to contest its veracity. The relevant facts are entirely within the defendant's knowledge and not at all within the regulator's knowledge. This puts the regulator at a significant disadvantage when attempting to establish the chain of causation of an adverse event and to meet a legal burden of proof that a defence cannot be relied upon. This would ultimately lead to suboptimal outcomes for OHS of offshore workers and protection of the marine environment.
Committee comment
2.154 The committee thanks the minister for this response. The committee notes the minister's advice that the relevant defences (the breach of directions defence and the well integrity defence) are likely to be used by companies with significant resources, which are capable of shouldering the legal burden of proof should they wish to claim one of these defences, and that the companies have chosen to participate in a highly regulated industry on a for profit basis. The committee also notes the minister's advice that the relevant defences should be available only to those who have genuinely done everything in their power to avert the occurrence of an adverse event and can demonstrate that this is the case.
2.155 The committee also notes the minister's advice that to permit a defendant to simply point to evidence in relation to the defences (that is, to only reverse the evidential burden) would impede the regulator's ability to take enforcement action. The committee notes the minister's advice that, owing to the remote nature of regulated activities, the regulator is not able, at the relevant time, to independently assess and verify what is reasonable or practicable in the event of noncompliance. The committee also notes the advice that, accordingly, a defence that only reverses the evidential burden of proof would almost always succeed, given that the regulator is in a poor position to test its veracity.
2.156 Finally, the committee notes the minister's advice that the facts relevant to the breach of directions defence and the well integrity defence are entirely within the defendant's knowledge and not at all within the regulator's knowledge. The committee notes the advice that this puts the regulator at a significant disadvantage when attempting to establish the chain of causation in relation to an adverse event—leading to suboptimal environmental and safety outcomes.
2.157 The committee requests that the key information provided by the minister be included in the explanatory memorandum, noting the importance of this document as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).
2.158 In light of the information provided, the committee makes no further comment on this matter.
[78] See correspondence relating to Scrutiny Digest No. 6 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest
[79] Schedule 1, item 40 and Schedule 15, item 13, proposed clause 23. The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(i).
[80] Pursuant to section 7 of the OPGGS Act, the 'responsible Commonwealth Minister' is the minister responsible for the administration of the Act, or another minister acting for or on behalf of that minister.
[81] See Schedule 1, items 27, 45 and 50.
[82] 'Well integrity law' is defined in clause 2 of proposed Schedule 2B, and includes Part 5 of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011, and the provisions of the OPGGS Act to the extent that the provisions relate to the integrity of wells.
[83] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp. 51-52.
[84] Explanatory memorandum, p. 33.
[85] Explanatory memorandum, p. 98.
[86] Statement of compatibility, pp. 11, 13.
[87] This is an edited extract of the minster's response which does not include details relating to human rights considerations . The full text of the minister's response may be accessed online: see correspondence relating to Scrutiny Digest No. 5 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest
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