Bills Digest No.
25, 2022–23
PDF version [355KB]
Geoffrey Wade
Foreign Affairs, Defence and Security Section
24 October 2022
Key points
- This Bill amends the Customs Act 1901 to ensure the appropriate security of offshore electricity infrastructure through extending provisions which govern existing offshore infrastructure.
- The amendments to the Customs Act will allow the Australian Border Force to treat Offshore Electricity Infrastructure (OEI) on the same basis as sea and resources installations for customs purposes, and for the Anti-Dumping Commission to treat OEI on the same basis for the purposes of anti-dumping and countervailing matters.
- The Bill also amends the Offshore Electricity Infrastructure Act 2021 to provide for appropriate administrative arrangements for the appointment of an Offshore Infrastructure Registrar and ancillary staff.
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Contents
Purpose of the Bill
Structure of the Bill
Background
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Date introduced: 28
September 2022
House: House of
Representatives
Portfolio: Climate
Change, Energy, the Environment and Water
Commencement: The
day after Royal Assent
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at October 2022.
Purpose of the Bill
The purpose of the Offshore
Electricity Infrastructure Legislation Amendment Bill 2022 (the Bill) is to
amend the Customs
Act 1901 to effectively manage border security risks related to
offshore electricity installations and to amend the Offshore
Electricity Infrastructure Act 2021 (OEI Act) to provide for appropriate
administrative arrangements that will facilitate the appointment of the National Offshore
Petroleum Titles Administrator as the Registrar responsible for licensing
Offshore Electricity Infrastructure (OEI) participants.
The amendments to the Customs Act will allow the
Australian Border Force (ABF) to treat OEI on the same basis as sea and
resources installations for customs purposes, and for the Anti-Dumping
Commission (ADC) to treat OEI on the same basis as sea and resources
installations for the purposes of anti-dumping and countervailing matters. This
is aimed at ensuring that the ABF and the ADC can continue to secure the border
using existing controls that are currently administered in the offshore
environment.
The proposed amendments to the OEI Act are intended
to accommodate a recent change to the Administrative Arrangement Orders (AAOs),
which might otherwise impact the powers and identity of the Offshore
Infrastructure Registrar (the Registrar).
Structure
of the Bill
The Bill comprises two Schedules:
Schedule 1 – Amendment of the Customs Act
Schedule 2 – Amendment of the OEI Act.
Background
According to the Offshore
Constitutional Settlement, the states have responsibility for activities in
the zone of ‘coastal waters’ (onshore and as far as three nautical miles
seaward of the territorial baseline). The Commonwealth has responsibility for
‘offshore areas’ (those beyond three nautical miles). There has been a
long-standing framework for the exploration of petroleum and greenhouse gas
activities in Commonwealth waters through the Offshore Petroleum
and Greenhouse Gas Storage Act 2006 (OPGGS Act).
The Offshore
Electricity Infrastructure Bill 2021 was passed into law as the Offshore
Electricity Infrastructure Act 2021 on 2 December 2021, and commenced
on 2 June 2022. It is intended to support the development of an offshore
electricity sector in Commonwealth waters. It establishes a regulatory
framework to enable the construction, installation, commissioning, operation,
maintenance, and decommissioning of offshore electricity infrastructure
(collectively, offshore infrastructure activities) in the Commonwealth offshore
area. Offshore Electricity Infrastructure (OEI) includes offshore wind farms,
as well as tidal, wave, rain, solar, and geothermal power generation and
transmission facilities. (See the Parliamentary Library’s Bills
Digest for further information.)
The OEI Act:
- prohibits
unauthorised offshore infrastructure activities in the Commonwealth offshore
area
- permits
the Minister to declare specified areas suitable for offshore infrastructure
activities
- requires
the establishment of a licensing scheme and allows the Minister to grant
various kinds of licences authorising offshore infrastructure activities in
specified areas
- provides
for the protection of OEI in the Commonwealth offshore area
- establishes
the statutory authorities to administer and regulate the framework
- provides
for compliance and enforcement of the regulatory framework and
- provides
for the protection of worker safety through modified application of the Work Health and
Safety Act 2011 (Bills
Digest p. 5).
The Offshore
Electricity Infrastructure (Regulatory Levies) Act 2021 established an
offshore electricity infrastructure levy to be imposed on industry, with
details to be set out in future regulations.
The Offshore
Electricity Infrastructure (Consequential Amendments) Act 2021 amended
the Offshore
Petroleum and Greenhouse Gas Storage Act 2006 to (as currently
relevant) clarify that the National
Offshore Petroleum Titles Administrator may also be appointed as the
Offshore Infrastructure Registrar (see the Parliamentary Library’s Flagpost
for more information).
From March to April 2022, the Department
of Industry, Science, Energy and Resources consulted on Draft Regulations
and cost recovery implementation statement for the offshore electricity
infrastructure framework. The instruments have not yet been made.
Policy
position of non-government parties/independents
The Government, while in Opposition, ‘strongly
supported’ the original legislation (the Offshore Electricity
Infrastructure Bill 2021), with the then
Shadow Minister for Climate Change and Energy, Chris Bowen, noting: ‘One
example is offshore wind, which I'm very glad the Government has come, very
late to the party, and accepted our demands to legalise offshore wind in
Australia, it is going to be a jobs bonanza, through much of regional
Australia.’
Labor MP Anika Wells also supported the 2021 Bill, noting:
Offshore renewable energy also has the potential to expand
our local manufacturing capacity and expand scalable supply chain benefits for
small and medium enterprise in Australia, with the Blue Economy Cooperative
Research Centre estimating that manufacturing components for offshore winds
creates eight times more jobs than the construction of projects.
The Australian
Greens also supported the original legislation and the jobs it was slated
to bring. (See the Bills
Digest for the 2021 Bill for further information, pp. 9–10.)
To date, there appears to have been no formal statements by
non-government parties or independents on the current Bill.
Position of
major interest groups
Industry and employer groups were also generally
supportive of the original 2021 Bill, as was the Climate
Council. Various industry union groups, such as the Maritime Union of
Australia (MUA) and Electrical Trades Union of Australia (ETU) also voiced support
for the legislation, additionally advocating for a local content mandate. (See
the Bills
Digest for the 2021 Bill for further information, pp. 10–11.)
To date, there appears to have been no published
statements by stakeholders on the current Bill.
Financial
implications
The Government‘s Explanatory
Memorandum to the Bill (p. 6) notes that ‘The Bill is expected to have no
financial impact.’
Funding was provided for the
regulatory regime required under the original legislation. The Explanatory
Memorandum to the Offshore Electricity Infrastructure Bill 2021 noted, at
page 9:
As part of the 2020/21 Budget process, the Government
invested $4.8 million over two years to develop the offshore electricity
infrastructure regulatory regime, including preparing the legislative framework
and setting up administrative systems and processes. These funds have been
distributed between the Department of Industry, Science, Energy and Resources,
NOPTA, NOPSEMA and Geoscience Australia for these preparatory purposes.
Statement
of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[1]
In this assessment, there was specific examination of the Bill in respect of
the right of freedom of movement, the right to liberty and freedom from
arbitrary detention, the right to privacy, and the right to the presumption of
innocence.
Parliamentary Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights had no
comment on the Bill (p. 3).
Key issues
and provisions
The Bill amends the Customs Act to ensure the
appropriate regulation of goods and vessels that enter or exit areas off the
coast of Australia in relation to offshore electricity infrastructure. The Bill
also amends the OEI Act, to accommodate a recent change to the Administrative
Arrangement Orders (AAOs), which might affect the powers of the Offshore
Infrastructure Registrar (the Registrar).
Customs Act
Schedule 1 to the Bill amends the Customs Act.
Currently Installation is defined at
subsection 4(1) of the Customs Act to mean:
- a
resources installation or
- a
sea installation.
A resources installation is (broadly) either
a resources industry fixed structure (which is not able to moved, such as a pipeline)
or mobile unit (such as a vessel or a floating structure that is able to be
moved) that is used offshore in operations or activities associated with
exploring or exploiting the mineral and other non-living resources of the
seabed and its subsoil (subsections 4(1), (5) and (6) of the Customs Act).
A sea installation is (broadly) any man‑made structure
that, when in, or brought into, physical contact with the seabed or when
floating, can be used for an environment related activity, such as tourism, recreation,
exploring or exploiting the living resources of the sea, scientific activity or
transport activity (subsection 4(1) of the Sea Installations
Act 1987).
Item 3 of Schedule 1 will amend the
definition of Installation so that it will also include an offshore
electricity installation, which will be defined by item 4 as infrastructure,
a structure or an installation that is:
- offshore
renewable energy infrastructure, which, as defined in section 10 of the
OEI Act,
is fixed or tethered offshore infrastructure (such as an offshore windfarm)
which has one of the following purposes:
- exploring
for one or more renewable energy resources[2]
- assessing
the feasibility of exploiting a renewable energy resource
- exploiting
a renewable energy resource
- storing,
transmitting or conveying a renewable energy product or
- offshore
electricity transmission infrastructure, which is defined in
section 11 of the OEI Act as fixed or tethered offshore infrastructure
(such as an undersea cable and other infrastructure associated with the cable)
for storing, transmitting, or conveying electricity (including electricity not
generated from renewable resources).
There are two types of offshore electricity
installation in the Bill:
- an
Australian offshore electricity installation, which is defined by item 1 of Schedule 1 as
an offshore electricity installation that is deemed to be part of Australia
because of the operation of section 5C (discussed below) and
- an
overseas offshore electricity installation, which is defined by item
5 of Schedule 1 as an offshore electricity installation that:
- is
in the Commonwealth offshore area and
- has
been brought into that area from a place outside the outer limits of the area
but does not include an
Australian offshore electricity installation.
Section 5C of the Customs Act provides for certain
installations to be deemed to be part of Australia (and thus subject to customs
control). Currently these installations are resources installations that are
attached to the Australian seabed or sea installations that are installed in an
adjacent area or a coastal area. Item 8 will amend section 5C so that it
also covers an offshore electricity installation that is
installed in the Commonwealth offshore area.[3]
As provided in item 1, such an installation that is deemed to be part of
Australia under section 5C is an Australian offshore
electricity installation.
Item 10 inserts proposed subsection 5C(4) to
set out when an offshore electricity installation that is deemed to be part of
Australia ceases to be part of Australia for the purposes of the Customs Act.
This will occur when the installation is uninstalled for the purpose of being
taken to a place outside the outer limits of the Commonwealth offshore area, or
is uninstalled for a different purpose and then moved for the purpose of being
taken to a place outside the outer limits of the Commonwealth offshore area.
Once an overseas offshore electricity installation
is installed in the Commonwealth offshore area it becomes an Australian
offshore electricity installation. The installation of overseas
offshore electricity installations is dealt with by proposed section 5BA
of the Customs Act, inserted by item 7 of Schedule 1.
Proposed section 5BA provides for the Comptroller-General
of Customs to grant revocable permission for installation of an overseas
offshore electricity installation in the Commonwealth offshore area with any
number of conditions attached to that permission.
It also sets down the penalties applicable if the
conditions attached are not complied with, or if a person installs an overseas
offshore electricity installation in the Commonwealth offshore area without
permission.
Item 11 adds proposed section 33BA which provides
for a strict liability offence if a person uses an Australian offshore
electricity installation without permission.
This section also provides for the Comptroller-General of Customs
to issue revocable permission (subject to any conditions) for a person to
engage in specific activities in relation to the use of an Australian offshore
electricity installation, with violations of those conditions also constituting
an offence.
Section 49A of the Customs Act sets out when ships
or aircraft are deemed to be imported into Australia. A ship or aircraft that
is imported into Australia may be forfeited to the Commonwealth if it remains
in Australia for more than 30 days after a Customs notice is served. Current
subsection 49A(9) provides that a reference to a ‘ship’ in section 49A does not
include a reference to an overseas resources installation or an overseas sea
installation. Item 12 will repeal and replace subsection 49A(9) to also
provide that an overseas offshore electricity installation is not a ship for
the purposes of section 49A and therefore is not subject to forfeiture under
that provision. Instead, an overseas offshore electricity installation will be
deemed to have been imported into Australia when it becomes installed in the
Commonwealth offshore area (item 13) or when it is brought to a place in
Australia and is to be taken from that place into the Commonwealth offshore
area for the purposes of being installed (item 14). This will mean that an
overseas offshore electricity installation will be deemed to have been imported
into Australia in equivalent circumstances as apply to overseas resources
installations or overseas sea installations.
Section 61 of the Customs Act requires certain individuals,
including the master of a resources installation or the owner of a sea installation,
to facilitate boarding of the installation by Customs officers. Failure to do
so is a strict liability offence with a maximum penalty of 60 penalty units
($13,320).[4]
Item 17 repeals and replaces subsection 61(1), adding offshore
electricity installations to the list of facilities for which responsible
persons are required to facilitate boarding by authorised officers.
Item 26 adds proposed paragraphs 187(ea) and
(eb), adding Australian offshore electricity installations and overseas
offshore electricity installations (for which permission to install in the
Commonwealth offshore area has been granted under proposed section 5BA
(discussed above)) to the list of those installations which authorised officers
are permitted to board.
Item 30 adds proposed section 228C to the Customs
Act providing for the forfeiture of offshore electricity installations
which were overseas offshore electricity installations immediately prior to
being installed in a Commonwealth offshore area, and were installed without the
permission of the Comptroller-General of Customs, as required under proposed
section 5BA.
Item 32 adds to the definition of importer
in subsection 269T(1) to include those persons who are the beneficial
owners of goods brought from beyond the seas to an Australian offshore
electricity installation or goods on board an overseas
offshore electricity installation when it is installed in the Commonwealth
offshore area. The beneficial owner of an overseas offshore electricity
installation when it is installed in the Commonwealth offshore area is also
considered to be the importer of that installation.
Offshore
Electricity Infrastructure Act
Schedule 2 to the Bill amends the OEI Act.
Item 1 amends section 8, which sets out definitions
for the OEI Act, to define the Registrar’s Department as the
‘Department of State that the Registrar is an SES employee in.’ The Registrar’s
functions and responsibilities are set out at Part 1 of Chapter 5 to the OEI
Act and include keeping the Register of Offshore Infrastructure Licences.
Originally, it was envisaged that the Registrar for
Offshore Electricity Infrastructure (appointed under section 153 of the OEI
Act) would be the National Offshore Petroleum Titles Administrator (NOPTA,
established by Part 6.10 of the Offshore Petroleum
and Greenhouse Gas Storage Act 2006—see subsection 153(3) of the
OEI Act). The NOPTA is an SES employee of the Department of Industry, Science
and Resources (DISR) (see the Explanatory
Memorandum to the Bill, pp. 5–6). The OEI Act currently refers at
various places to the Regulator being an ‘employee in the Department’. In
accordance with section 19A of the Acts Interpretation
Act 1901, the Department in this context is the department specified in
the AAOs as administrating the relevant provision. In this case, the current
AAOs specify that the OEI Act is administered by the Department of
Climate Change, Energy, the Environment and Water (DCCEEW). This means that the
NOPTA is not an employee of ‘the Department’ referred to in the OEI Act.
The Bill makes various amendments to ensure that the NOPTA is still able to be
appointed as the Registrar, despite the machinery of government changes.
These legislative changes allow the Secretary of the relevant
Commonwealth Department (DCCEEW) to appoint an SES employee within any
Commonwealth Department as the Registrar (items 8 and 9), for the
Registrar’s powers or functions to be delegated to officers of any
Department (item 10), and for any Secretary to make certain
employees from their Department available to assist the Registrar (items 11 and
12).
Item 2 of Schedule 1 supplements the meaning of offshore
renewable energy infrastructure and offshore electricity
transmission infrastructure with proposed paragraphs 10(3)(e) and
11(3)(e) to allow for the exclusion of ‘any infrastructure, structure or installations’
as prescribed by the regulations from those meanings.
Item 5 adds proposed section 115A to the OEI
Act, allowing the Regulator (the National
Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA))
to publish on the Regulator’s website summaries of overall plans and management
plans submitted for approval under the licensing scheme.
Item 6 inserts proposed section 116A, providing
for regulations to be made to prescribe requirements for licence holders to notify
the Regulator of the commencement and completion of any offshore infrastructure
activity within the licence area.
Item 7 inserts ‘the Minister’ in place of ‘the
Regulator’ as the decision maker in terms of the form of financial security any
licence holder must provide (paragraph 117(3)(a)), when the financial security
is no longer required (paragraph 117(3)(c)) and the circumstances under which a
reduced financial security can be accepted (paragraph 117(4)(d)). As set out in
the Explanatory
Memorandum to the Bill:
Given that financial security must be provided to and is held
by the Commonwealth, and can only be recovered by the Commonwealth [section 119
of the OEI Act] it is more appropriate that the Commonwealth (rather
than the Regulator [NOPSEMA], which as a corporate Commonwealth entity is not
formally part of the Commonwealth) has the power to make decisions in relation
to financial security… The Minister still retains the discretion to delegate
any of their powers under item 7 to the CEO of the Regulator under paragraph
303(1)(a) of the OEI Act.
[1]. The
Statement of Compatibility with Human Rights can be found at page 8 of the
Explanatory Memorandum to the Bill.
[2]. Renewable
energy resource is defined at section 13 of the OEI Act as
any of the following from which energy may be obtained:
- wind and air flow;
- wind‑generated waves;
- tides;
- ocean currents;
- light or heat from the sun;
- rain;
- geothermal heat;
- a resource, event or circumstance
prescribed by the regulations.
[3]. Item
6 of Schedule 1 sets out when an offshore electricity installation
is taken to be installed in the Commonwealth offshore area.
[4]. Crimes Act 1914,
section 4AA and the Notice
of Indexation of the Penalty Unit Amount made under that section set
the current value of a penalty unit at $222.
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