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Offshore Petroleum - National Regulator

Speeches in Parliament
Rachel Siewert 25 Aug 2011

Senator SIEWERT (Western Australia— Australian Greens Whip) (13:21):  The Greens have taken a fairly strong stance, as people would be aware, on these issues and particularly since the Montara inquiry. The flaws in our current regulation of the offshore oil and gas industry were made extremely apparent with the Montara oil spill. As many of you know, I have been engaged with this issue since then and flew up to the Montara well to look at the spill at that time.

As the commission of inquiry found, it was the worst oil spill in the history of the offshore gas industry in Australia and the third worst in Australia's history. Oil and gas continued to flow unabated into the Timor Sea for 10 weeks, with patches of sheen covering up to 90,000 square kilometres. The oil made it into Indonesian waters and the inquiry confirmed that an oil sample that I sent, which Indonesian fishers had sent to me, was Montara oil. I continue to maintain that the Australian government, which was responsible for regulating this oilwell, should have taken leadership in ensuring that the issues in relation to the impact of the spill on subsistence fishers in Indonesia and their claims for compensation should have been dealt with by now. I have always maintained Australia should have taken a leading role in ensuring that happened. As it is, I understand that those fishers are still negotiating and have not been adequately compensated for their losses. We believe that legislation in the longer term should be enacted to ensure that people who are innocent bystanders and are adversely affected should not have to bear the costs. Oil blowouts offshore can have major and long-lasting effects such as loss of human life, pollution of the marine environment and coastal areas, as well as commercial losses for industries involved such as fisheries. The likelihood of blowouts may have been seen as low but this relies on the competence of the operator and the regulator in ensuring the integrity and the management of the wells.

In terms of responsibility for this particular spill the report from the inquiry could not have been clearer that PTTEPAA shortcomings led directly to the spill. The report said:
In essence, the way that PTTEPAA operated the Montara Oilfield did not come within a ‘bull’s roar’ of sensible oilfield practice. The Blowout was not a reflection of one unfortunate incident, or of bad luck. What happened with the H1 Well was an accident waiting to happen; the company’s systems were so deficient and its key personnel so lacking in basic competence, that the

Blowout can properly be said to have been an event waiting to occur.
The report went on to note that:
... not one of the five Montara wells currently complies with the company’s Well Construction Standards ... The inquiry also found that the regulatory environment
... totally inadequate, being little more than a ‘tick and flick’ exercise. In contrast what is needed is a regulator that actively
probes and inquires, that is not passive and that makes sure well operations management plans—WOMPs or 'womps' as they are called—are adequate and that their requirements are being met. The inquiry also found that the overall regulatory system needs improvement including ensuring adequate minimum standards of good oilfield practice such as at least two barriers in place for wells that have been properly tested and verified.
When you look at the environmental impacts, the report was also damning of the Montara incident. It found that it is unlikely that the full environmental consequences of the blowout will ever be known. This reflects the vast and remote area affected by the spill, the absence of solid, reliable baseline data on species and ecosystems and the slow response to putting in place the monitoring plan. The report said there was a failure of proper coordination across government agencies when it came to looking at environmental issues and there was a failure to share information. There was a lack of monitoring from the start of the spill and no monitoring was done on the subsurface water, in other words on the impact of dispersants and the dispersed oil on the marine environment. In particular we will never know the extent of the environmental damages because insufficient environmental baseline monitoring was done in the first place by the company, which the NT government allowed and ticked and flicked. The report noted that the adequacy of the monitoring plan has been lessened because of the significant delay in implementing scientific monitoring and inadequate water sampling, which has made it difficult to assess the impact of oil and gas dispersants.
The Greens welcome the commission of inquiry's report and its recommendations. We have been supportive of the government in its response to the inquiry, the legislative changes it has already made and the changes contained in the package of bills we are debating today. In particular we support the establishment of a single regulator for oilwell integrity,
environmental management and occupational health and safety. We support the Commonwealth having primary responsibility for the regulation of this industry in Commonwealth waters. I note my disappointment with the government of my own state who have been so slow in taking up this initiative and have been resisting the absolute necessity for a single national regulator of the offshore oil and gas industry. We also fully support the separation of regulatory functions from the administration of titles.
The effectiveness of the national regulator will ultimately be dictated by the way it operates and the funding allocated to it. It must not copy the culture of its predecessors and be a friend to industry. It must be truly independent and be a robust regulator by taking into consideration the interests of all Australians as its considers its work and not just look at the interests of the oil and gas industry. There also needs to be a high degree of accountability and transparency for this agency. It must be able to employ and retain highly trained workers, which means competing with the high-paying jobs in the resource sector, and it must have enough resources to be equipped to conduct its operations and audit compliance to the highest levels of quality, transparency and consistency. We have been reassured by the minister's commitment to experienced staff with the necessary degrees of expertise to undertake the necessary regulatory activities and to monitor the companies. We will be making sure that every government that uses this legislation is committed to the same.
This regulatory process that we are dealing with now in this package of bills is part of the government's response. The government has also committed to better coordination across the agencies because, as I have just highlighted, the commission of inquiry found there were problems. We will continue to monitor that with the government to ensure that we have regulatory processes and adequate responses to oil spills and that the rest of the promises they have made are put in place.
While the Greens are supportive in principle of this legislation, we also have some concerns and that is why I am seeking to move some amendments. We have a number of amendments and I will quickly go into what they do. This is a relatively quick summary and we will talk about it a bit more in committee. We believe the addition of an extra person to the advisory board for NOPSEMA, the regulator, is important. We understand that the minister has in fact agreed to this amendment that ensures there are a sufficient number of people on the advisory board to ensure that a person with environmental expertise is included. I will seek confirmation of that when we move the amendment. We believe it is essential that this person be included so that somebody on the board has experience in environmental management and has an environmental
background, given the expanded responsibilities of NOPSEMA.
I will also be moving an amendment about a prohibition on decisions and orders under the Offshore Petroleum Act. We want to make sure that they are not accredited under the Environment Protection and Biodiversity Conservation Act 1999. We do not want to see the role of the environment minister or the environment department being sidelined from assessing the environmental implications of offshore oil and gas operations. While government's proposed amendments to the regulatory regime do not in themselves address the role of the environment minister, we are deeply concerned that there is potential for a resources minister to seek to have the environment minister accredit NOPSEMA's processes under the EPBC Act. We want to make sure that this cannot occur under any circumstances into the future and that the proper role of the EPBC Act is retained.
An issue that I raised during the course of the inquiry, and which has been ongoing since then and before then, is the fact that PTTEP was allowed to acquire further leases and titles while it was being investigated, with the government knowing full well from the company's own submissions to the inquiry and from transcripts of the inquiry that there were serious concerns about its operations. The very fact that it had a spill obviously raised that issue. So I will be moving amendments to enable the government to choose not to grant a licence to companies where there are sufficient questions about their ability to manage oilfields and where they have caused a significant accident like the Montara accident. 
There is a similar amendment in relation to the titles administrator not approving the transfer of titles where the transferee is under investigation. These provisions are triggered when an entity is under investigation under the commission of inquiry provisions of part 9.10A.
The final amendment is to require the titles administrator to notify the environment minister when titles are vacated. This will allow the environment minister to easily know and consider marine areas for further protection when it is clear the area is not of interest to resource companies.
I will go quickly into several other issues that I think are pertinent to the discussion of this issue and have come out of the Montara PTT incident in particular. I know that there are potentially issues around workers compensation for workers injured during this period, and I understand there are at least two workers who continue to suffer from post-traumatic stress disorder as a result of the blow-out at the Montara well. They are in fact still fighting to receive fair and reasonable compensation. As I understand it, these workers were on the West Atlas rig off the north-west Australian
coast when the blow-out occurred and were involved in the emergency response. We all saw quite vividly the extent of the emergency response. I understand that these workers are yet to be compensated and that there is no responsibility claimed by the company that they are required to pay reparations to these workers. As a result of the incident, these workers have not been able to return to their usual employment in the offshore oil and gas industry and are now confronting the prospect of their current workers compensation payments running out, which leaves them facing potential financial ruin and possible further trauma. We urge the company involved, PTTEP, to look again into this matter and resolve it urgently, so that these workers who are already suffering do not have to suffer further.
The oil and gas industry plays an important role in our economy, but it has enormous potential to pose risks to human life and our environment, as we saw with Montara. To a certain extent, we in Western Australia escaped a bullet with the Montara leak, given that it occurred further offshore and that the prevailing weather was favourable to good oil spill response. With the level of oil and gas exploration and production that is going on in Western Australia—off our entire coast—there is the potential for us not to be so lucky in the future. In other words, we do not want to see an accident like this happen again and happen where oil and gas could end up on the Kimberley coast or on the rest of the coast of Western Australia—or any of Australia, for that matter. We have been very vocal in our opposition to the release of some acreages for oil and gas exploration, such as that in the Mentelle Basin, also known as the Naturaliste Plateau, which is only 83 kilometres off the coast of the Margaret River in the south-west of WA. There is very strong opposition to this in the area, which is one of the areas that has not yet been taken up by the industry. We believe that area and other areas like it should be put into the conservation estate and made a marine reserve so that we know they are protected in perpetuity. If we had had a spill of the size of the Gulf of Mexico spill in the Mentelle Basin, we could end up with oil on the beaches north of Perth and quite a way around the south coast. This is why we need robust oil and gas legislation and why we will be supporting the government's bill. But—and this is a clear message to government—we also need this as part of a package that protects important marine biodiversity, so it needs to go hand in hand with that process.
We also believe that we need to have put in place a process where the public gets to comment on the release of areas for the take-up of oil and gas exploration. In other words: when acreage is released a public process should be undertaken. We will continue to pursue that with government
Lastly, on the issues of marine protected areas: we strongly believe in and are deeply committed to a
proper, comprehensive, adequate and representative series of marine protected areas around the coast of Western Australia. I note that we were disappointed with the draft plans released just this week by the government for the north-west of Western Australia and the north of Western Australia—around the very area where a lot of oil and gas activity is happening in this country. We need to make sure that the important areas there are protected. The government's current plans do not do that. So we will continue to pursue that.
In summary, we support this legislation in principle. We have amendments that we believe enhance this legislation. I ask the government to reconsider our amendments. I recommend those amendments, which I will again talk to in committee, and meanwhile note the Greens' in-principle support for this legislation.

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