Bills Digest no. 139 2008–09
Offshore Petroleum and Greenhouse Gas Storage (Safety
Levies) Amendment Bill 2009
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Contact officer & copyright details
introduced: 19 March
Portfolio: Resources and Energy
Sections 1 to 3 on Royal
Schedule 1 Part 3 on
the day after Royal Assent
Schedule 1 Parts 1 and
2 on 1 January 2010.
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
The Offshore Petroleum and
Greenhouse Gas Storage (Safety Levies) Amendment Bill 2009 (the
Bill) amends the Offshore Petroleum and Greenhouse Gas Storage
(Safety Levies) Act 2003 (the Act) to:
- provide that pipeline licensees must pay a safety case levy for
- remove references to the pipeline safety management plan
For the policy background and basis for the legislation see the
Bills Digest for the Offshore Petroleum and Greenhouse
Gas Storage Legislation Amendment Bill 2009 No. 133, 2008-09 (the
primary Digest). This primary digest deals with occupational health
and safety (OH&S) policy issues affecting the operation of
offshore petroleum and greenhouse gas facilities.
The Bill removes references to the pipeline safety management
plan levy. The Explanatory Memorandum states that future amendments
to the Offshore Petroleum (Safety Levies) Regulations 2004
will raise a levy for pipelines as a safety case levy instead of the pipeline
safety management plan levy. The effect of the amendments in this
Bill is that a pipeline licensee pays the same levy as he or she
currently does. It is, in effect, a name change to facilitate
bringing offshore pipeline facilities within the operation of
safety regulations rather than under the separate Petroleum
(Submerged Lands) (Pipelines) Regulations 2001. This accords with
proposed OH&S reforms discussed in the primary Digest.
Currently, a safety case levy is payable by the operator of a
facility. Section 7 of the Act defines facility or a proposed
facility as having the same meaning as Schedule 3 of the
Offshore Petroleum and Greenhouse Gas Storage Act
2006. If a
facility is located or proposed to be located in Commonwealth
waters, a safety case levy is payable by the facility operator if
there is a safety case in force for that facility in other words,
the safety case has been accepted by the National Offshore
Petroleum Safety Authority (NOPSA). Similar arrangements apply for
designated coastal waters where State or Territory mirror
legislation is in place.
The safety case levy is payable annually. The levies are imposed
for a calendar year or part of a calendar year depending on when
the safety case comes into force in that year. The amount of the
safety case levy for the year, or part of the year, is worked out
based on the Offshore Petroleum (Safety Levies) Regulations
2004. The levy calculation is broadly similar for all
The purpose of the safety case levy is to recover the costs
incurred by NOPSA associated with its activities of monitoring
compliance with approved safety cases, conducting audits of
facilities and reviewing and assessing updates to existing safety
cases This will be payable by all operators of exploration,
production and support facilities on an annual basis whist there is
a safety case in force for that facility.  The existing annual pipeline safety
management plan levy was originally intended to cover the costs of
monitoring the safety of offshore pipelines and is calculated
according to the type of pipeline.
The Senate Standing Committee for the Scrutiny of Bills (the
Committee) reviewed the Bill and provided its comments on 13 May
Committee observed that the delayed commencement provisions for
Parts 1 and 2 of Schedule 1 (1 January 2010) was a longer period
than usual. The Committee suggested that where this is the case the
Explanatory Memorandum should provide an explanation. The Committee
noted that it would be desirable to commence the provisions at the
start of a calendar year to avoid unnecessary administrative
burdens on industry in adjusting the levies on a pro-rata
The Explanatory Memorandum states that the Bill would not have
any financial impact on the Australian Government budget. For the
pipeline licensee, there will still be a requirement to pay a levy
and it will be the same amount as currently paid on an annual
Schedule 1 Part 1 Safety case levy
Section 7 of the Act provides that if there is a safety case in
force in relation to a facility in Commonwealth waters a safety
case levy will be imposed on that safety case, payable by the
operator of that facility.
Item 1 proposes to substitute subsection 7(3)
of the Act extending it to include a pipeline licensee of pipeline
facility that is the subject of a pipeline license.
Section 8 of the Act provides that if there is a safety case in
force in relation to a facility in designated coastal waters of a
State or Territory a safety case levy will be imposed on that
safety case. Designated coastal waters is defined in
section 644 of the Offshore Petroleum and Greenhouse Gas
Storage Act 2006 as so much of the scheduled area for a State
or Territory that consists of the territorial sea; and any area
within the scheduled area for that State or Territory that is on
the landward side of the territorial sea subject to a petroleum
exploration permit under the repealed Petroleum (Submerged
Lands) Act 1967.
Item 4 proposes to substitute subsection 8(3)
of the Act extending the provision to include that a safety case
levy would be payable by the pipeline licensee of the facility that
is subject to a pipeline licence, in addition to the operator of a
facility in any other case.
Item 5 proposes to insert a definition of a
pipeline into subsection 8(8) of the Act to have the same meaning
as in the applicable State and Territory safety law and includes
proposed constructions or those being constructed.
Part 4 of the Act contains provisions concerning the pipeline
safety management plan levy. Item 10 of the Bill
proposes to repeal Part 4 of the Act.
Section 11 of the Act provides that the Governor-General may
make regulations under certain sections of the Act. Item 11
proposes to amend section 11 by removing references to
sections 9 and 10 currently contained in Part 4 which are repealed
by item 10.
Item 12 proposes that amendments in Part 2 of
the Bill would apply to a pipeline safety management plan, to the
extent that such a plan is in force at or after the commencement of
the provisions of the current Bill.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277
25 May 2009
Bills Digest Service
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