LEGISLATIVE NOTES

THE ESTABLISHMENT OF A NATIONAL OFFSHORE PETROLEUM SAFETY AUTHORITY Patrick Brazil and Peter Wilkinson** The Petroleum (Submerged Lands) Act 1967 (`PSLA (Cth)') has been amended by the Petroleum (Submerged Lands) Amendment Act 2003 to establish a National Offshore Petroleum Safety Authority (`NOPSA') which became operative as from 1 January 2005 (with Head Office in Perth). This gave effect to the Commonwealth Government's commitment to establish a single safety regime for the Australian offshore petroleum industry in `adjacent areas' of the continental shelf beyond the first 3 miles of the territorial sea1, and also in State and Northern Territory `designated coastal waters' defined to consist of the first 3 miles of the territorial sea, and other immediately offshore areas to the extent allowed by the new section 150XC of the PSLA (Cth)2. (These areas are illustrated in Figure 1 at the end of this article.) NOPSA is therefore relatively unusual in that it's functions cover both offshore areas operating under Commonwealth jurisdiction and offshore areas operating under State or Northern Territory jurisdiction.3 The creation of NOPSA is primarily intended to improve the way Governments provide for safety. In particular, the `safety case approach', which lies at the heart of the established regulatory scheme, is retained with some changes. Alterations have also been made to the general occupational health and safety provisions in Schedule 7 of the PSLA. There are other significant changes, the most important of which are referred to below. All these changes have been made in the context of the 1979 Offshore Constitutional Settlement between the Commonwealth and the States.4 They represent a co-ordinated and harmonised Commonwealth/State/Territory response to the exciting and exacting challenges presented by Australia's offshore petroleum activities. The `federal principle' of co-ordinating processes between general and regional governments in a federation5 has been well applied.

 ** 1 2 3 4

5

AO, Special Counsel, Phillips Fox Canberra. Manager, NOPSA Implementation Section, Department of Industry Tourism and Resources (Cth). PSLA (Cth) s 5A. Ibid., s 150XC. Ibid., s 150XE (a) and (b). See Patrick Brazil, `Offshore Constitutional Settlement: Case Study in Federalism' ANU Occasional Paper, 5 April 2001. The necessary Commonwealth legislation was enacted in 1980. See KC Wheare, Federal Government, (Oxford University Press, 1947) 11.


(2005) 24 ARELJ Establishment of a National Offshore Petroleum Safety Authority 91

1. OFFSHORE CONSTITUTIONAL SETTLEMENT (OCS)

From 1967, the offshore petroleum industry of Australia was regulated under a Petroleum Submerged Lands Act, as amended from time to time. That Act began its life as mirror Commonwealth/State legislation involving seven separate PSLAs, with all amendments needing to be passed by all State Parliaments as well as by the Federal Parliament. The High Court's 1975 decision in the Seas and Submerged Lands Act Case6 upholding the Whitlam Government's Seas and Submerged Lands Act 1973 broke the `mirror' by holding that the States had no constitutional rights below low water mark to the territorial sea or the subjacent soil. That outcome led to the 1979 OCS between the Commonwealth and the States, under which the States and the Northern Territory were given powers over, and property to, the seabed in the sea and the seabed over the territorial sea (then three miles in breadth).7 Under the OCS the PSLA (Cth) was amended accordingly in 1980, and the offshore areas adjacent to the respective States and the Northern Territory outside the first 3 miles of the territorial sea remained governed by the Commonwealth Act alone, but were brought under co-operative governance arrangements inserted in that Act establishing a `Joint Authority' in respect of the `adjacent areas' of each State and the Northern Territory, consisting of the Commonwealth Minister on the one hand, and respectively on the other hand of the Minister of the State or the Northern Territory Minister concerned (`the Designated Authority'), with the Commonwealth Minister prevailing on major matters where there was disagreement. However, Designated Authorities were able to apply the occupational health and safety (OHS) requirements of the adjacent State or Territory concerned out to the outer edge of the then 3-mile territorial sea and even beyond.

2.

SAFETY OF OFFSHORE PETROLEUM OPERATIONS: MOVE TO A SAFETY CASE REGIME

There is a proper public expectation that safety risks from major industrial activities, such as offshore petroleum operations, will be regulated and controlled. A safety regulator provides `independent' assurance to society, governments, and industry that operators have identified the risks to health and safety and have put appropriate measures in place to control these risks. This control can be exercised in a variety of ways, from a `licence to operate regime' at one end of the spectrum to a `safety case regime' at the other. A safety case regime can indeed be viewed as a type of licence to operate albeit with more discretion permitted by both the regulator and the regulated. Up until the early 1990s, safety in the offshore petroleum industry in Australia was, as already indicated, regulated by a mixture of State and Commonwealth legislation. This legislation prescribed specific laws that had to be complied with. In practice, it was the regulator that identified what was safe or not for the industry. Rapid changes in technology and operations meant that legislation was constantly trying to `catch up'.

6 7

New South Wales v Commonwealth (1975) 135 CLR 337. Coastal Waters (State Powers) Act 1980 (Cth) and Coastal Waters (State Title) Act 1980 (Cth) and the corresponding Acts for the Northern Territory .


92 Legislative Notes (2005) 24 AMPLJ

Safety case regime The safety case regime is based on the principle that the legislation sets the broad safety goals to be attained and the operator of the facility develops the most appropriate methods of achieving those goals by preparing a document which

· · ·

identifies the hazards and risks describes how the risks are controlled, and describes the safety management system in place to ensure the controls are effectively and consistently applied.

A safety authority then assesses safety cases and `accepts' a safety case if it is satisfied that the arrangements set out in the document demonstrate that the risks will be reduced to as low as is reasonably practicable. Once `accepted' the safety authority (in this case NOPSA) visits facilities to monitor the application of the safety cases in practice. The basic tenet is the premise that ongoing management of safety is a responsibility of the operator, but with an independent body to assess and accept the safety case proposed. Piper Alpha disaster (1988) The modern era of safety administration in Australia may be dated from the Piper Alpha disaster in which 167 people died in the UK sector of the North Sea in July 1988. It was immediately apparent that there were lessons to be learned from the UK experience. In October of that year, the then Commonwealth Minister of Resources, Senator Peter Cook, formed a Consultative Committee on Safety in the Offshore Petroleum Industry, to advise him on safety issues relevant to Australia. In 1992 a new Schedule 7 on `Occupational Health and Safety' was added to the PSLA (Cth) and in 1993 Petroleum (Submerged Lands) Occupational Health and Safety Regulations were made relating to advice, investigation and inquiries into `dangerous occurrences'. Further progress As indicated, an essential feature of a safety case regime is that the safety case must be produced in the knowledge that it will be scrutinized by a competent and independent regulator. It is this issue that was at the heart of the present legislative changes. In mid-1996 the then Commonwealth Minister, Senator Warwick Parer, commissioned a review of the progress made in implementing the safety case approach which was carried out by Dr Tony Barrell, a distinguished former Chief Executive of the UK's offshore petroleum regulator. Almost all operators raised the lack of consistency in the regulatory approach. Amongst other recommendations made by Dr Barrell were ones aimed at getting greater consistency with and between State and the Northern Territory Government regimes.


(2005) 24 ARELJ Establishment of a National Offshore Petroleum Safety Authority 93

3.

MOVE TO A SINGLE NATIONAL OFFSHORE PETROLEUM SAFETY AUTHORITY

Next steps ­ Independent Review Team In 1999 the Commonwealth Government commissioned a review of offshore safety management in response to the Government's 1998 commitment to review the Australian offshore safety case regime and Commonwealth concerns as to the adequacy of the current regulatory arrangements. A tripartite safety Review Steering Committee, drawing its membership from the National Oil and Gas Safety Advisory Committee (`NOGSAC') and the Australia New Zealand Minerals and Energy Council (`ANZMEC') Upstream Petroleum Sub-Committee, oversaw the review, ensuring its independence and continued focus. The steering committee agreed to a three phase process. Phase 1, which was a compilation of statistical and best practice information, informed Phase 2, which was the core of the review, comprising an independent evaluation of the Australian offshore legal and administrative arrangements relating to safety. This was conducted by an international team of offshore safety experts (the Independent Review Team), whose report was submitted to the Commonwealth on 30 March 2000 (Future Arrangements for the Regulation of Offshore Petroleum Safety: Australian Offshore Petroleum Safety Case Review, published by the (then) Department of Industry, Science and Resources). Phase 3 involved consideration of the implications of the Independent Review Team's recommendations and the development of preferred policy options by the Commonwealth. This was undertaken in close consultation with the Review Steering Committee and senior State/ Northern Territory officials. The primary conclusion reached by the Independent Review Team was: The Review Team is of the opinion that the Australian legal and administrative framework, and the day to day application of this framework, for regulation of health, safety and environment in the offshore petroleum industry is complicated and insufficient to ensure appropriate, effective and cost efficient regulation of the offshore petroleum industry. Much would require improvement for the regime to deliver world-class safety practice. In particular, the Independent Review Team found that:

·

· ·

there were too many Acts, directions and regulations regulating offshore petroleum activities, their boundaries are unclear and application is inconsistent, different sets of legal documents apply for each of the different State/NT and there are overlaps in legislation the State/NT safety regulators lacked regulatory skills, capacity and consistency and did not have a clear view of their role the Commonwealth did not have sufficient resources, technical expertise, credibility and authority to drive the required changes.


94 Legislative Notes (2005) 24 AMPLJ

The Team made three central recommendations:

· · ·

the current Commonwealth safety case regime's framework of legal documents should be revised; the current safety case regime's regulatory system should be restructured. In particular, it recommended that a national petroleum regulatory authority, similar to AMSA (the Australian Maritime Safety Authority), should be developed to oversee the regulation of safety in Commonwealth offshore waters.

The process for taking this forward was undertaken under the auspices of the Ministerial Council on Mineral and Petroleum Resources (`MCMPR'), which had superseded ANZMEC and was established in 2001 to deal with issues affecting the minerals and petroleum industries including safety. MCMPR consists of the Commonwealth Minister for Industry, Tourism and Resources and State/NT Ministers with responsibility for minerals and petroleum. At it first meeting in Melbourne on 4 March 2002, Ministers agreed to a work program to examine how best to improve offshore safety outcomes primarily through a single joint national safety agency. They agreed that the potential benefits from a single joint national authority covering petroleum activities in State/NT and Commonwealth waters included:

· · ·

efficiencies through economies of scale, less need to compete for expert resources and central administration of health and safety; uniform procedures and greater consistency in interpretation and application of regulations and guidelines; and reduced regulatory burden on industry through consistent safety regulation across jurisdictions.

At their second meeting held on 13 September 2002, MCMPR agreed to the formation of an independent national offshore safety authority. The separation of safety regulatory functions from other governmental activities such as the promotion of the development of the industry was also regarded as beneficial because it reduced the possibility of a real or perceived conflict of interest in government between these functions. To manage the development of such an authority, MCMPR commissioned a Standing Committee of Officials (SCO) to form a Steering Committee consisting of the Commonwealth (Chair) and the State/Northern Territory. An early question for the Steering Committee concerned the nature of the legal changes needed to form NOPSA. What form should the new law take? The Steering Committee recommended, and MCMPR agreed, that NOPSA should be formed by amending the PSLA (Cth). A principal advantage of this was that all governments were familiar with this legislation, albeit the safety provisions were recognised as being inadequate and in need of significant improvement. Thus NOPSA, although with reporting obligations to State/NT Ministers, as well as to the Commonwealth Minister, is established as a Commonwealth agency.


(2005) 24 ARELJ Establishment of a National Offshore Petroleum Safety Authority 95

Subsequent discussions with the States and the Northern Territory and stakeholders led to two Commonwealth Bills, one to make the substantive changes to enable the safety authority to be established (the Petroleum (Submerged Lands) Amendment Bill 2003), and a second to provide for cost recovery from the industry, (the Offshore Petroleum (Safety Levies) Bill 2003). The two resulting Acts received Royal Assent on 4 December 2003. As mentioned, NOPSA came into operation on 1 January 2005, with its Head Office in Perth. The 2003 amendments to the PSLA (Cth) had two main parts. Firstly, the role of NOPSA is set out including its structure and governance, and secondly, it makes amendments relating to substantive occupational health and safety provisions, including improvements to the occupational health and safety provisions in schedule 7 of the PSLA. 4. NOPSA'S ROLE Functions These are set out in the new Division 2 of Part IIIC of the PSLA (Cth) in section 150XE, as follows:

(a) (b)

(c) (d)

the functions conferred on it by or under this Act in relation to offshore petroleum operations in Commonwealth waters; the functions conferred on it by or under a State PSLA or the Territory PSLA in relation to offshore petroleum operations in the designated coastal waters of that State or Territory; the promotion of occupational health and safety of persons engaged in offshore petroleum operations; developing and implementing effective monitoring and enforcement strategies to secure compliance by persons with their occupational health and safety obligations under this Act and the regulations;

(i) (e)

(ii)

investigating accidents, occurrences and circumstances that affect, or have the potential to affect, the occupational health and safety of persons engaged in offshore petroleum operations in Commonwealth waters; and reporting, as appropriate, to the Commonwealth Minister, and to each responsible State or Northern Territory Minister, on those investigations;

(f) (g) advising persons, either on its own initiative or on request, on occupational health and safety matters relating to offshore petroleum operations; making reports, including recommendations, to:

(i) (ii) the Commonwealth Minister; and each responsible State or Northern Territory Minister;

(h)

on issues relating to the occupational health and safety of persons engaged in offshore petroleum operations; cooperating with:

(i) (ii) (iii) other Commonwealth agencies having functions relating to offshore petroleum operations; and State or Northern Territory agencies having functions relating to offshore petroleum operations; and the Designated Authorities of the States and the Northern Territory.


96 Legislative Notes (2005) 24 AMPLJ

Of relevance is the ability of the State and the Northern Territory to also ask NOPSA to exercise its powers in relation to petroleum safety onshore (`within the limits of the State or Territory' concerned) and in waters of the sea that are landward of the territorial sea baseline that are not designated coastal waters ­ see section 150XI (l). For example, off Western Australia's north western coast there are a number of islands landward of the territorial sea baseline, such as Varanus Island, on which and near which there are petroleum operations. It was viewed by industry and government alike as desirable for one regulatory regime to apply to these operations and an agreement has been signed between NOPSA and the Western Australian Government. There must be an agreement with the Commonwealth as to the fees payable by the State or Territory to NOPSA. Structure and governance At the time of deciding the form NOPSA would take, a review of the governance arrangements for statutory authorities was underway. Mr John Uhrig AC had been appointed in November 2002 by the Australian Government to conduct a review of the corporate governance of Commonwealth statutory authorities and office holders. The objective of the Review was to consider existing governance arrangements for statutory authorities and to provide options for Government to improve the performance and get the best from statutory authorities and office holders, and their accountability frameworks. The Review was asked to develop a broad template of governance principles and arrangements that the Government could apply to statutory authorities and office holders, and potentially beyond, to a wider range of public sector bodies. NOPSA's governance arrangements were developed in the knowledge that the Review was underway. The Commonwealth Government announced its response to the report in August 2004 and endorsed the identification of two templates designed to ensure good governance: one where governance can best be provided by `executive management' and the other where it can best be provided by a `board'8. Both templates detail measures for ensuring that the boundaries of responsibilities are better understood and that the relationship between Australian Government authorities, Ministers and portfolio departments is clear. In the context of the Uhrig Review, the NOPSA governance is similar to the `executive management' model and not the `board' type model. This is demonstrated by the explicitly advisory nature of the NOPSA Board as opposed to a `governance' type board, familiar in the private sector. Thus the CEO of NOPSA is established by section 150XX as a full-time operator, who is responsible for managing the NOPSA (sections 150XX and 150 XY), and anything done by the CEO in the name of NOPSA or on its behalf is taken to have been done by NOPSA (Section 150/XY(2)). The main function of the Board is to give advice, and make recommendations to the CEO of NOPSA about the operational policies and strategies to be followed by NOPSA in the performance of its function. Thus section 150XM of the PSLA (Cth) sets out the functions of the Board in terms of advising and making recommendations. It provides as follows:

8 The Review is available at <http://www. finance. gov. au/governance structures>.


(2005) 24 ARELJ Establishment of a National Offshore Petroleum Safety Authority 97

(1) The Board has the following functions:

(a)

(b)

to give advice, and make recommendations, to the CEO about the operational policies and strategies to be followed by the Safety Authority in the performance of its functions; to give advice, and make recommendations, to:

(i) (ii) (iii) (iv)

the Commonwealth Minister; and a responsible State Minister; and the responsible Northern Territory Minister; and the body known as the Ministerial Council on Mineral and Petroleum Resources;

about either or both of the following:

(v) (vi) policy or strategic matters relating to the occupational health and safety of persons engaged in offshore petroleum operations; the performance by the Safety Authority of its functions;

(c)

such other functions (if any) as are specified in a written notice given by the Commonwealth Minister to the Chair of the Board.

(2) (3)

A notice under paragraph (1)(c) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901. As soon as practicable after the Board gives advice, or makes recommendations, under paragraph (1)(b) to:

(a) (b) (c)

a responsible State Minister; or the responsible Northern Territory Minster; or the body known as the Ministerial Council on Mineral and Petroleum Resources;

the Board must give the Commonwealth Minister a written copy of that advice or those recommendations. The CEO must request the Board's advice on strategic matters (s 150XZ(1)) and `have regard' to that advice (s 150XZ(2)). Minister's powers MCMPR agreed that decisions on the broad policy framework within which NOPSA would operate would be made at governmental level, and operational strategy decided by the CEO on advice from the Board. In maintaining a clear line of authority from Ministers to the CEO, and to preserve the principles of the OCS, careful consideration was given to the power of the Commonwealth Minister to give `Policy Principles' to NOPSA about the performance of its operations (s 150XF) and `Directions' to NOPSA as to the performance of its functions or the exercise of its powers (s 150YX). Their directions must not relate to a particular facility but can relate to investigating a particular occurrence in relation to a facility located in NOPSA waters. The Commonwealth may also give `written policy principles' to NOPSA in accordance with section 150XF (1) but subject to subsection (2) of that section, which reads as follows:

(2)

The Commonwealth Minister must not give a policy principle that relates wholly or principally to the Safety Authority's operations in the designated coastal waters of one or more of the States and the Northern Territory unless the Commonwealth


98 Legislative Notes (2005) 24 AMPLJ

Minister has obtained the agreement of each responsible State and Northern Territory Minister concerned. Reporting relationships The reporting relationships between Ministers, the CEO and the advisory Board are inevitably complex given the joint Commonwealth/State/Northern Territory nature of NOPSA. The diagram in Figure 2 at the end of this article summarises the linkages.

5.

APPLICATION OF OCCUPATIONAL HEALTH AND SAFETY (OHS) LAWS AND OTHER LAWS

The 2003 Amendment Act provided for changes to the OHS provisions in Schedule 7 of the PSLA (Cth) and other important changes. A Working Group had been formed to examine this aspect of the legislation consisting of representatives of the States and the NT, and industry and trade union representatives under the chair of the Commonwealth, and a number of changes were recommended. All the recommendations were accepted and of particular importance were the recommendations to establish `identical OHS legislation in all Australian offshore waters,' and that `New OHS law should include ... the provision of duty of care requirements', and to extend the coverage of the safety case regime to specifically cover a class of vessels which lay offshore petroleum pipelines, namely `pipelay' barges. They are akin to mobile factories, often with large numbers of people on board. Move to identical OHS law in all jurisdictions As mentioned above, a finding of the Independent Review Team which reported in March 2000 was that there were too many Acts, directions and regulations regulating offshore petroleum activities, with unclear boundaries and overlaps and that different sets of State and NT laws applied to these activities. Although Schedule 7 of the PSLA (Cth) as it existed had provided for a common set of OHS laws in Commonwealth waters (namely State/NT adjacent areas), it was subject to `roll back'. Section 140H(2), until amended, provided for Schedule 7 not to apply if a law of the relevant State or NT provided `to any extent' for matters relating to OHS matters. All the State/NT jurisdictions had such Acts. This led to the variety of applicable legislation referred to by the IRT. To address this problem, section 9 of the PSLA (Cth), which deals with application of State laws in `adjacent areas' was amended to enable regulations to be made to exclude State OHS laws in its `adjacent waters' applying to a facility located in an `adjacent area'. Similar amendments were made to the counterpart `application of laws' provisions in section 11 of the PSLA (Cth) relating to the Northern Territory. A new Part 4B was inserted in the Petroleum (Submerged Lands) (Occupational Health and Safety) Regulations (Statutory Rules 2004 No. 273) listing the State/NT laws that would not apply in their adjacent areas from 1 January 2005.


(2005) 24 ARELJ Establishment of a National Offshore Petroleum Safety Authority 99

Revised `duties of care' An important change made by the Petroleum (Submerged Lands) Amendment Act 2003 is the widening of the `duties of care' in Schedule 7 of the PSLA (Cth). The duties of care in that Act, until amended, placed duties on employers, employees, manufacturers and suppliers in relation to plant and substances and persons erecting or installing plant in a workplace. An employer also had a duty of care to third parties who were not employees or contractors. While this may seem a comprehensive list of persons on whom duties of care are imposed, the position of `operators' of facilities on whom a duty had been placed to produce a safety case under the Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities Regulations 1993) was not entirely clear. For example did an individual contractor owe a duty of care to other parties on an offshore facility? Also, an `Operator' had a duty to produce a safety case which would set out the arrangements for how the facility would be operated safely, but did not have a clearly stated duty of care. This was regarded as anomalous. Since the time of drafting the original PSLA (Cth), a wide variety of contracting arrangements had become common in both the offshore oil and gas industry and more widely in industry in general. As a result of these perceived weaknesses in the PSLA duties of care, some State/NT regulators not unnaturally had preferred to use the more comprehensive (and more modern) duties in State/NT OHS law. As indicated, this was possible by virtue of Sections 9 and 11 and 140H and 140I of the PSLA as it then was. [This however led to those who operated in more than one jurisdiction, such as mobile offshore drilling units (`MODUs'), having to comply with broadly similar but different laws in different `adjacent areas' . Also, rather than try to identify every possible contracting arrangement, a simpler but more flexible arrangement was sought. In essence, the 2003 Amendment Act provided for common law duties to be replicated in the PSLA (Cth) to ensure that all those who have some control over activities should have responsibility for their actions. So, in addition to those persons with duties of care under the PSLA (Cth), duties were also placed on `operators' and `persons in control of parts of a facility or particular work at a facility' (see respectively new clauses 3 and 4 of Schedule 7). This was done by way of amendments of the PSLA (Cth) including a statement of the duties of an `operator'. Schedule 7, as amended, also places duties of care on operators of pipelines. 6. PARTICULAR AMENDMENTS TO THE REGULATIONS Numerous changes have been made to the following PSLA Regulations (however no changes have been made to the Petroleum (Submerged Lands) Environment Regulations):

· · · ·

the Petroleum (Submerged Lands) (Occupational Health and Safety Regulations) 1993 (`the OHS Regulations'); the Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities Regulations) 1996 (`the MoSoF Regulations'); the Petroleum (Submerged Lands) (Diving Safety) Regulations 2002 (`the Diving Regulations'); the Petroleum (Submerged Lands) (Pipelines) Regulations 2001 (`the Pipeline Regulations'), to the extent that they relate to occupational health and safety.


100 Legislative Notes (2005) 24 AMPLJ

The vast majority of the changes are consequential on the formation of NOPSA and merely substitute `Safety Authority' for `Designated Authority'. However given that these changes were needed, the opportunity was taken to make other amendments to remove ambiguity, overlap or inconsistency in the legislation, or to improve upon the provisions of the regulations. The following examples are noted in this article. Accident and incident reporting requirements The requirements for reporting accidents and incidents are to be found in the MoSoF Regulations. In addition, the Diving Regulations and Pipeline Regulations have been reviewed and have been improved in this regard. In particular-

· · ·

the definitions of what incidents and occurrences have to be reported, have been widened NOPSA has specified in a determination what matters a written incident report must address the requirement to notify `as soon as practicable' has been retained, although the phrase `but within 2 hours' has been deleted as this was judged unnecessary and unreasonable given that the first priority should be to control the incident.

The OHS regulations A number of provisions have been moved from the MoSoF Regulations to the OHS Regulations so that the majority of the prescriptive requirements are contained in the OHS Regulations. For example:

· ·

the old MoSoF Regulations in relation to possession of non-prescribed drugs, or intoxicants have been replaced by OHS Regulation 4B; leaving a facility if required to do so by a person in charge is now laid down by OHS Regulation 4C.

New provisions on asbestos were introduced to meet a national prohibition on the use of chrysotile asbestos with effect from no later than 31 December 2003, and were consolidated with previously existing prohibitions on crocidolite (blue) and amosite (brown) asbestos. The MoSoF Regulations 1996 A number of minor but important changes have been made to these regulations. However, it should be noted that by virtue of a change to the definition of `facilities' in clause 2A(1)(b)(iv) of Schedule 7 of the PSLA (Cth), vessels and structures for the laying of pipes for petroleum, commonly referred to as `pipelay barges' as mentioned above, will now require a safety case, subject to the transitional arrangements. Consents The provisions related to `consents' to construct, install and use facilities, have been removed. However, if State/NT Designated Authorities wish to retain these provisions, it is proposed to move them to the proposed Petroleum (Submerged Lands) (Resource Management) Regulations. At the time of writing, drafting has commenced.


(2005) 24 ARELJ Establishment of a National Offshore Petroleum Safety Authority 101

Safety cases There was no provision whereby the operator of an offshore petroleum facility was required to act in accordance with an accepted safety case and this requirement has been added. (regulation 49). Likewise the regulations did not make provision for acceptance of a safety case to be withdrawn (regulation 41). (It should be stressed that the provisions to withdraw the `acceptance' of a safety case would be used only in rare circumstances.) Terminology was often used inconsistently. Amendments have been made to rationalise the use of terms such as `demonstrate,' `specify,' `describe,' `as low as,' `as far as'. These amendments do not materially alter the regulatory requirements. The Petroleum (Submerged Lands) (Pipelines) Regulations 2001 (`the Pipeline Regulations') The cost-recovery provisions for pipelines are linked to `Pipeline Safety Management Plans'. The Pipeline Regulations do not currently refer to Pipeline Safety Management Plans but the following steps address both this, and ensuring the involvement of NOPSA in assessment and acceptance of the Plan, without imposing any new requirements on the licensees or operators of pipelines: A `Pipeline Safety Management Plan' is defined as being the parts of the Pipeline Management Plan that relate to OHS (regulation 4(1)). The Pipeline Regulations already require a Pipeline Management Plan, which must address risks to production, environment and OHS. State/NT Designated Authorities are required to rely on NOPSA for assessment of the OHS parts of the Pipeline Management Plan, and to take account of the views of NOPSA when deciding whether to accept the PMP. Pipeline operators are also now required to approve Diving Project Plans. 7. CONCLUSION Clearly these changes to the PSLA represent an important change to offshore petroleum legislation. Whilst there are many detailed technical changes to the safety requirements, the underlying system, based on the safety case concept, is retained and developed. The key changes are to be found in the system of administration of safety. A new national authority has been created, under Commonwealth law but reporting to both Commonwealth and State/NT Governments. Whilst there has been a significant change from the previous system, the underlying principles of the OCS appear to have been retained in the governance arrangements for NOPSA, but with NOPSA as the very significant new player. The complications of the regulatory system remain and are probably unavoidable but significant improvement and simplification have been achieved. We conclude by referring to the principles referred to in NOPSA's Fact Sheet No 1:

1.

An enhanced and continuing improvement of safety outcomes in the Australian offshore petroleum industry is a priority for Governments, industry and the workforce.


102 Legislative Notes (2005) 24 AMPLJ

2.

3.

4.

A consistent national approach to offshore safety regulation in both Commonwealth and State/NT waters is essential for the most cost-effective delivery of safety outcomes in the offshore petroleum industry. The safety case approach is the most appropriate form of regulation for the offshore petroleum industry to deliver world class safety by developing appropriate behaviour within the industry. Efficient and effective safety regulation requires:

(a) (b) (c) (d) (e) a legislative framework that is clear and enforceable and that requires operators to discharge their responsibilities for safety; competent and experienced personnel forming a critical mass of appropriate skills; structure and governance of the regulatory agency that demonstrates independence, transparency, openness and cost efficiency; an independent approach in implementing legislative responsibilities and in dealings with industry; and agreed performance criteria.

5.

6.

The industry and its workforce must be empowered to identify and report potential hazards and to ensure that appropriate control measures are implemented. Approval processes in safety, titles, environment and resource management must be streamlined and coordinated to ensure no undue delay to project development in the offshore petroleum industry.


(2005) 24 ARELJ Establishment of a National Offshore Petroleum Safety Authority 103

FIGURE 1


FIGURE 2 LINES OF COMMUNICATION

150XZ (1) CEO required to Request Strategic Advice 150XZ (2) Must have regard ALL Advice 150XZ (3) Must Inform

BOARD 150XM (1) (b) Gives Advice on OH&S & NOPSA

150XM (1) (a) Give advice and make recommendations 150XE (g) Reports

CEO 150YJ 150YV Reporting Commonwealth Minister Consultation and Agreement on Policy Principles (150XF (2), (3)) and Directions (150YX (7), (11)) Responsible State/NT Ministers

MCMPR

150XY (1) Accountability

Gives Policy Principles (150XF) and Directions (150YX)

150YW Request Reports or Information

NOPSA