The Offshore Petroleum and Greenhouse Gas Storage Amendment (Compliance Measures No. 2) Act 2013(Amendment Act) was passed on 17 May 2013.
The Amendment Actis part of a legislative regime to strengthen offshore petroleum regulations concerning compliance, safety, integrity and environmental management objectives under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGSSA).
The regime aims to safeguard against future uncontrolled releases of hydrocarbons. The stringent requirements place a statutory responsibility on operators to protect their workforce and Australia's environmental assets.
The Amendment Act introduces an express 'polluter pays' obligation, supported by mechanisms to ensure compliance and environmental performance of titleholders, including the new requirement for financial assurance.
The Amendment Act imposes a duty on titleholders, in the circumstances of a petroleum spill in Commonwealth waters, to:
The other amendments are designed to ensure compliance with the above duty, enabling NOPSEMA to:
Titleholders have strict liability to reimburse any entity (including states and territories), that incurs costs in carrying out these obligations.
The Amendment Act imposes a compulsory obligation to maintain financial assurance. Financial assurance is widely defined to include self-insurance, a bond, an indemnity or other surety, a letter of credit, a mortgage or any combination of these.
The assurance must be sufficient to meet potential costs and liabilities arising from carrying out petroleum activities, including costs of complying with any requirement under the OPGGSA or regulations. It is at NOPSEMA's discretion as to whether the level of financial assurance is sufficient and not unworkably complex.
Regulations are being contemplated to allow NOPSEMA's refusal or withdrawal of an approval for an environmental plan for a specific activity, where financial assurance is insufficient. Titleholders should engage with NOPSEMA to ensure suitable cover and types of assurance are obtained.
The additional mechanisms are aimed at achieving future behavioural change, rather than serving a purely punitive function.
Titleholders should consider the adverse consequences of these changes to their reputation. In particular, the advertised finding of guilt may give exposure to civil litigation and a negative reputation to the affected.
The Amendment Act expands the administrative actions regime for multiple titleholders. The OPGGSA regime provides, in the case of multiple titleholders, for the nomination of one titleholder to take all voluntary actions on behalf of the titleholder group.
Voluntary actions include actions permitted, but not required under the OPGGSA, such as making an application, giving a nomination and giving notice. Voluntary actions are submitted to the Joint Authority, the Titles Administrator or the responsible Commonwealth Minister.
Voluntary actions now also include the giving of plans and objections and actions made to NOPSEMA under legislative instruments. Nominated titleholders retain responsibility for these new categories, unless the nominated titleholder is changed by the relevant parties.
The increased scope of eligible voluntary actions will commence from Proclamation, enabling time for nominated titleholders to be informed.
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