Wednesday, 18 March 2020
Bills
Petroleum Legislation Amendment Bill 2020
Petroleum Legislation Amendment Bill 2020
Statement of compatibility
Mr PALLAS (Werribee—Treasurer, Minister for Economic Development, Minister for Industrial Relations) (13:21): In accordance with the Charter of Human Rights and Responsibilities Act 2006 I table a statement of compatibility in relation to the Petroleum Legislation Amendment Bill 2020.
In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006 (the Charter), I make this statement of compatibility with respect to the Petroleum Legislation Amendment Bill 2020.
In my opinion, the Petroleum Legislation Amendment Bill 2020 (the Bill), as introduced to the Legislative Assembly, is compatible with the human rights protected by the Charter. I base my opinion on the reasons outlined in this statement.
Overview of the Bill
The Bill amends the Petroleum Act 1988 (the Petroleum Act) to end the moratorium on carrying out petroleum exploration and production under that Act on 1 July 2021. The moratorium was introduced by the Resources Legislation Amendment (Fracking Ban) Act 2017 and is due to sunset on 30 June 2020.
The Bill also provides for submissions from the Victorian community to be taken into account in the making of certain decisions under the Petroleum Act, and to enable prescribed social, environmental and economic factors to be taken into account in the making of certain decisions under that Act.
The Bill also amends the Offshore Petroleum and Greenhouse Gas Storage Act 2010 (the OPGGS Act) to require the holder of a petroleum production licence under that Act to provide domestic consumers with the first opportunity to purchase petroleum recovered under the licence.
Human rights issues
A number of the provisions in the Bill affect the rights of authority holders. However, all affected authority holders are corporations. Corporations do not have human rights, and therefore no human rights are engaged in respect of these provisions.
Some provisions in the Bill may affect the rights of individuals. I discuss these below.
Right to privacy, right to reputation and right to freedom of expression
Section 13(a) of the Charter provides that a person has a right not to have their privacy, family, home or correspondence unlawfully or arbitrarily interfered with. Section 13(b) of the Charter provides that a person has the right not to have their reputation unlawfully attacked. An interference will be lawful if it is permitted by a law which is precise and appropriately circumscribed, and will be arbitrary only if it is capricious, unpredictable, unjust or unreasonable, in the sense of being disproportionate to the legitimate aim sought.
Section 15(2) of the Charter provides that every person has the right to freedom of expression. Section 15(3) of the Charter provides that special duties and responsibilities are attached to the right and that it may be subject to lawful restrictions reasonably necessary to respect the rights of other persons and for the protection of national security, public order, public health or public morality. The right to freedom of expression is broad and includes freedom from forced expression.
A number of provisions in the Bill engage the right to privacy; however, in my view, none of them limit the right. Clauses 10 and 12 of the Bill insert new sections 39A and 48A into the Petroleum Act respectively. These clauses require an applicant for a retention lease or a production licence to cause notice of the application to be published in a newspaper circulating generally in Victoria and on an internet site maintained by the applicant. Section 48B provides that a notice under section 48A must contain details of the area in respect of which the production licence is sought, state that any person may make a written submission to the Minister about the application during the prescribed period and contain any prescribed information.
Clauses 20 and 21 of the Bill insert new sections 161 and 163 respectively into the Petroleum Act which require the holder of an authority to give notice of any proposed petroleum operation or variation to an operation plan to any relevant person or organisation. A notice under new section 161 must contain sufficient information to allow the person or organisation to make an informed assessment of any impact that the petroleum operation may have on the activities or interests of that person or organisation and state that they may, within a reasonable period of receiving the notice, make a submission to the holder of the authority about the operation plan, and contain any prescribed information.
Clauses 10, 12, 20 and 21 of the Bill engage the right to privacy to the extent that ‘prescribed information’ that must be included in the published notices includes personal information (i.e. names of individuals and addresses). However, all current authority holders are corporations, and it is unlikely that an individual would be granted an authority under the Act. In the event that an individual was to apply for an exploration permit or production licence, the provisions would not unlawfully limit the individual’s right to privacy. In my view, the provisions are not unlawful or arbitrary as the aim of the public notification provisions is to ensure that the Victorian community has been reasonably consulted before the Minister makes a decision in relation to petroleum exploration or production in Victoria.
Clause 30 of the Bill inserts new sections 152A and 152B into the OPGGS Act. Section 152A makes it an offence for gas producers not to provide domestic consumers with a right of first access, on reasonable terms, to buy new gas that is discovered under production licences granted on or after 1 May 2018 and which cover offshore petroleum exploration release areas. If a person commits an offence under section 152A, the Minister may publish, in the Government Gazette and/or on an internet site maintained by the relevant Department, a notice stating the name of the gas producer, that they have committed the offence, when the offence was committed, and the penalty imposed.
New section 152A engages the right to privacy to the extent that the information published contains personal information (i.e. names of individuals, addresses). The provision also engages the right to reputation. However, all current gas producers licensed under the OPGGS Act are corporations, and it is unlikely that an individual would be granted a license under the Act. In the event that a license was granted to an individual, the provision would not unlawfully limit the individual’s right to privacy or amount to an unlawful attack on their reputation. The provision is not unlawful or arbitrary as it is clearly prescribed and serves an importance purpose of deterring gas producers from non-compliance with the scheme. Therefore, it does not limit the relevant rights.
Section 152A also requires gas producers to report to the Minister when they contract a sale of gas to liquid natural gas exporters. The notice must be in writing and contain any prescribed information. Clause 31 of the Bill inserts a new item 24 in Schedule 4 to the OPGGS Act which is a power to make regulations prescribing requirements for a notice to the Minister under new section 152A. In my view, this notice requirement does not reach the threshold required to engage the right to privacy, as even if the prescribed information includes personal information, mandatory reporting obligations are consistent with the reasonable expectations of individuals who operate a business within a regulated scheme.
New section 152B of the OPGGS Act empowers the Minister to investigate breaches under s 152A. Specifically, the Minister may direct a licensee, or a person to whom the licensee has offered to supply petroleum (the offeree), to provide information, documents or things that relate to the offer. New section 152B engages the right to privacy to the extent that the information that must be provided to the Minister includes personal information. However, the provisions are not unlawful or arbitrary. The information is necessary to ensure the effective operation of section 152A, which aims to ensure that Australian gas buyers are prioritised over gas exporters Moreover, the circumstances in which the information is required are clearly set out and confined, and the information will be managed as part of the existing information management framework for petroleum authority holders. This existing framework takes into account privacy requirements.
New sections 152A and 152B in the OPGGS Act may also engage the right to freedom of expression by requiring the provision of certain information, documents or things relating to an offer to supply petroleum. However, in my view, these provisions are reasonably necessary to ensure compliance with, and enable the effective enforcement of relevant provisions relating to the sale of gas and petroleum. Any person engaged in this sector would expect to be required to provide this information.
Any resulting limitations on the right to freedom of expression are therefore demonstrably justified in accordance with section 7(2) of the Charter.
New section 39B in the Petroleum Act requires an applicant for a retention lease to provide details of how the applicant has addressed, or proposes to address, any matter that has been raised in a submission to the Minister about the application. However, the provision aims to ensure that the Victorian community has been reasonably consulted before the Minister makes a decision to grant an authority allowing for the development of petroleum resources in Victoria. In my view, the provision therefore does not reach the threshold required to engage the right to freedom of expression, as the duty to assist is consistent with the reasonable expectations of individuals who operate a business within a regulated scheme.
Tim Pallas MP
Treasurer
Second reading
That this bill be now read a second time.
I ask that my second-reading speech be incorporated into Hansard.
Incorporated speech as follows:
The purpose of this Bill is to amend:
1. The Petroleum Act 1998 (Petroleum Act) to enable the orderly restart of the onshore conventional gas industry on 1 July 2021, on terms that will enhance community confidence in that industry.
2. The Offshore Petroleum and Greenhouse Gas Storage Act 2010 (OPGGS Act) to prioritise any new gas from future offshore production licences for domestic users.
The moratorium on onshore conventional gas in the Petroleum Act 1998 sunsets on 30 June 2020. Legislation about the future of onshore conventional gas must be passed before 30 June 2020 to prevent reputational and legal risks from allowing the moratorium to sunset without legislative provisions.
This Bill will end the gas moratorium from 1 July 2021, enabling onshore conventional gas exploration and production from that date.
To realise the orderly restart of the industry, the Victorian Government will:
• Improve community engagement and industry transparency obligations by amending the Petroleum Act
• Work with industry and community on the preparatory work to support licence applications consistent with our new regulatory approach
• Undertake social, environmental and economic impact assessments prior to releasing future onshore acreage.
The Victorian Government has listened to stakeholder views about the importance of community engagement throughout the process. This Bill will address these concerns by adding improved community engagement obligations to the Petroleum Act 1998, supported by transitional arrangements for existing authorities. Once made, the petroleum regulatory framework in Victoria will align with leading practice.
An orderly restart of Victoria’s onshore conventional gas industry would support jobs and enhance economic development, particularly in regional communities. The Victorian Gas Program estimates that up to 242 jobs, $312 million in gross regional product and $43 million in royalties could be generated each year during production.
An orderly restart will also contribute to ensuring Victoria’s energy security by increasing diversity of gas supply in the medium term as we transition to renewable energy. We are committed to reducing Victoria’s greenhouse gas emissions to net zero by 2050 and growing Victoria’s renewable energy industry. Gas has a continued role as a transition fuel and will continue to be part of Victoria’s energy mix over the medium term. It is both economically and environmentally sensible to tap into Victoria’s natural gas resources as a bridging fuel in our move to renewable energy.
The introduction of this Bill is supported by the scientific evidence presented by the Victorian Gas Program (the Program). The $40 million science-led Program has assessed the potential for onshore conventional and offshore gas in the Otway and Gippsland geological basins.
The Program’s geoscientific studies have concluded that there are likely to be onshore conventional gas resources of commercial interest in south-west Victoria and Gippsland, with potential to support regional jobs and enhance economic development over a number of years.
Environmental studies indicate that securing local gas supply for Victorians will not come at the cost of the state’s ground water supplies, agricultural industries, farming’s clean green reputation, or the environment.
A policy review of Victoria’s petroleum legislation and regulations further shows that the state has a robust framework for managing environmental and safety risks. This ensures an onshore conventional gas industry can operate safely.
It is important to note that the Bill does not relate to hydraulic fracturing (fracking) of unconventional gas or exploration and mining of coal seam gas. The Victorian Government is entrenching the fracking ban in Victoria’s Constitution Act 1975 to make it even harder for any future government to remove the ban—providing extra peace of mind for regional communities and farmers.
The Bill will also include amendments to Offshore Petroleum and Greenhouse Gas Storage Act 2010 to prioritise domestic gas consumption. Specifically, a legal obligation will be placed on gas producers that any new gas from future offshore production licences must be offered to domestic consumers, via a right of first offer (equal access) on reasonable terms.
I commend the Bill to the house.
Mr R SMITH (Warrandyte) (13:22): I move:
That the debate be now adjourned.
Motion agreed to and debate adjourned.
Ordered that debate be adjourned for two weeks. Debate adjourned until Wednesday, 1 April.