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Offshore Petroleum and Greenhouse Gas Storage Amendment (Compliance Measures) Bill 2012

Introduced into the House of Representatives on 28 November 2012
Portfolio: Resources and Energy

Committee view

1.1        The committee notes that provisions in this bill for the sharing of information are a reasonable and proportionate limitation on the right to privacy. It also notes that requirements compelling the production of information or documents include sufficient safeguards to ensure there is no inconsistency with the right not to incriminate oneself in article 14(3)(g) of the International Covenant on Civil and Political Rights (ICCPR).

1.2        The committee has a number of concerns in relation to the imposition of reverse onus offences and the use of civil penalties in this bill and seeks clarification from the Minister about the effect of these before forming a view on whether these provisions are compatible with human rights.

1.3        The committee notes that where offences or civil penalties are imposed that may limit human rights, the statement of compatibility should individually analyse the impact of the provision on human rights.

Overview

1.4        This bill amends the Offshore Petroleum and Greenhouse Gas Storage Act 2006 to strengthen the regulatory regime of that Act. It is a response to a series of recent incidents in Australia and abroad involving serious incidents in the offshore petroleum industry (some involving the loss of life), in Australia and elsewhere. In particular, the bill responds to the June 2010 Report of the Montara Commission of Inquiry, which followed a blowout in 2009 at the Montara Wellhead Platform off the northern coast of Western Australia. The bill implements a number of recommendations proposed in that Report.

1.5        The major amendments include:

• the introduction of a civil penalty regime;
• increases to current criminal penalty levels under the Act;
• custodial penalties for occupational health and safety (OHS) offences under the Act; and
• the redrafting of the powers of the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) provisions to enable the sharing of information between entities under the offshore petroleum regime, and sharing of information with other appropriate Commonwealth, State and Northern Territory agencies.

Compatibility with human rights

1.6        The bill is accompanied by a self-contained statement of compatibility. This identifies the following rights as engaged by the bill: the protection against arbitrary interference with privacy (article 17 of the ICCPR); the presumption of innocence (article 14(2) of the ICCPR); and the right to minimum guarantees in criminal proceedings (article 14 of the ICCPR).

Right not to be subject to unlawful or arbitrary interference with privacy

1.7        The amendments in the bill will provide that information that can be shared may include personal information. The provisions regulating the use of such information are in addition to those which apply by virtue of the Privacy Act 1988. The explanatory memorandum notes that the amendments will enable:

• information obtained by NOPSEMA or a NOPSEMA inspector for a particular purpose, such as in relation to occupational health and safety, to be used by NOPSEMA for the purposes of the performance or exercise of any of its functions or powers under the Act and associated regulations;
• the entities with legislative functions and powers under the Act and regulations[1] to share information with each other, for use in or for the purposes of the performance of each entity’s functions and powers; and
• the sharing of information between NOPSEMA and other relevant Commonwealth, State and Northern Territory Government agencies, to assist or enable those agencies to perform their legislative functions and powers.

1.8        The committee considers that the provisions for the sharing of information for the purposes set out in the bill, being limited in scope and subject to the principles set out in the Privacy Act 1988, are a reasonable and proportionate restriction of the right to privacy and are adopted in pursuit of legitimate objectives.

Presumption of innocence

1.9        Subclauses 8(1) and (3) allows a NOPSEMA inspector to require a person to answer questions or produce documents or things, if the inspector believes on reasonable grounds that the person is capable of answering the question or producing the document or thing that is reasonably connected with the conduct of a petroleum environmental inspection. Clause 8(5) provides that it is an offence for a person to fail to comply with such a requirement, without reasonable excuse, with a maximum penalty of imprisonment for 6 months or 60 penalty units (or both).

1.10      Offences which provide for a justification or an excuse, and impose an evidential or legal burden on the defendant in relation to that justification or excuse, engage the presumption of innocence in article 14(2) of the ICCPR.

1.11      Such burdens are not necessarily inconsistent with the presumption of innocence provided that they are within reasonable limits which take into account the importance of the objective being sought and maintain the defendant's right to a defence. In other words, the provision must pursue a legitimate aim and be reasonable, necessary and proportionate to that aim.

1.12      Neither the explanatory memorandum nor the statement of compatibility addresses this issue in relation to clause 8(5). However, the burden imposed is only an evidential one, and the question of reasonable excuse is a matter that can be assumed to be peculiarly within the knowledge of the accused. However, the maximum penalty includes the possibility of a sentence of imprisonment of up to 6 months and a fine of up to 60 penalty units.

1.13        The committee notes that the maximum penalty of up to 6 months’ imprisonment (in addition to the possibility of a fine) raises issues as to whether the imposition of even an evidential burden on the defendant by clause 8(5) is inconsistent with the right to be presumed innocent, and whether the maximum penalty is proportionate to the seriousness of the offence (which raises issues under the right to be free from arbitrary deprivation of liberty in article 9(1) of the ICCPR).

Right not to incriminate oneself

1.14      The imposition of requirements to provide information or produce documents under pain of a criminal offence for failure to do so (the effect of subclauses 8(1), (3) and (5)) engages the right not to incriminate oneself guaranteed by article 14(3)(g) of the ICCPR. Subclause 8(8) provides explicitly that a person is not excused from answering a question or producing a document or thing on the ground that this would tend to incriminate the person or make the person liable to a penalty.

1.15      However, subclause 8(9) further provides that the answer or document, the answering of the question or production of the document, and nothing obtained as a direct or indirect consequence of answering the question or producing the document is admissible in any civil proceedings or criminal proceedings (other than a restricted number of offences involving fraud or providing false information).

1.16      The statement of compatibility notes that the ability to obtain information through the use of such powers can be critical to achieving the goals of the legislation:

NOPSEMA faces substantial difficulties in obtaining information about offshore petroleum activities for the purpose of monitoring compliance and in investigating the causes of incidents. Offshore operations are extremely technologically complex.  They take place far from land, and in the case of well operations, far below the seabed, making physical inspection difficult or impossible for an inspector.  In many cases, the inspector’s best recourse is to ask questions of those carrying out the operations or to have them produce operational records detailing, for example, maintenance schedules....  In an environment where compliance requires a major financial investment and where non-compliance can add considerably to the profits to be made, there should be nothing put in place that hampers the inspector’s ability to establish the facts and investigate whether there has been compliance.  Especially in an industry where non-compliance can result in incidents that have the potential to cause major environmental damage, an inspector must be able to follow-up any leads that are obtained from the answers given to questions.  To shut-off any line of inquiry would not be in the public interest, given the nature of the potential harm that could occur.[2]

1.17             The committee considers that, given the provision of use immunity and derivative use immunity by subclause 8(9) in relation to any information or document provided in response to the use of the powers conferred by clause 8, the provisions are not inconsistent with the right not to incriminate oneself in article 14(3)(g) of the ICCPR.

Civil penalties regime – whether rights relating to the determination of criminal charges are engaged

1.18      The bill introduces a civil penalty regime into the Act. The amendments are in response to report of the Montara Commission, which recommended a review to determine whether a civil penalty regime and/or substantial increases in criminal penalties should be introduced, and a subsequent Legislative Review. The adoption of a civil penalty regime involves the endorsement of a regulatory model which seeks to provide the regulator with a range of enforcement mechanisms. The explanatory memorandum notes:

The Legislative Review found that there is a strong need for a greater range of enforcement mechanisms to be considered for inclusion in the offshore petroleum regulatory regime, as a supplement or alternative to the existing criminal regime, in order to encourage improved compliance outcomes.  In addition, the Legislative Review considered strong evidence that regulators are best able to secure compliance when they have a range of graduated sanctions that can be imposed, depending upon the severity of the misconduct or breaches of statutory requirements. The Legislative Review concluded that the Regulator does not currently have available sufficient compliance and enforcement mechanisms in the middle range of regulatory responses, such as civil penalties, which are available to regulators of other comparable industry sectors within Australia and under like regulatory regimes internationally.[3]

1.19      The statement of compatibility for the bill states:

The Bill also provides for civil penalties to be enforced under Part 4 of the Regulatory Powers Act. The Regulatory Powers Act provides for a framework of standard regulatory powers exercised by agencies across the Commonwealth. The Regulatory Powers Act was, according to its Explanatory Memorandum tabled during introduction to Parliament, prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, and declared as being compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.[4]

1.20      However, the statement of compatibility accompanying the Regulatory Powers (Standard Provisions) Bill 2012 (which was still before the Parliament when the current report was completed) addresses the issue of compatibility of its provisions with human rights only in very general terms. It specifically noted:

As a law of general application, the human rights implications of its [Regulatory Powers (Standard Provisions) Bill 2012] provisions will need to be addressed on a case-by-case basis whenever the provisions are activated.

...

The Bill is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate. Furthermore, as the Bill is a Bill of general application, it will not engage any limitations on human rights until the Bill’s provisions are activated. When this occurs, new or existing legislation will need to include its own assessment of its engagement with human rights to ensure its compatibility. This therefore provides additional protections to human rights and freedoms and ensures that those clauses that new or existing legislation trigger in the Bill are necessary, reasonable and proportionate for that agency to carry out its functions.

Accordingly, it is necessary to consider the application of the general provisions relating to civil penalties in the Regulatory Powers (Standard Provisions) Bill 2012 as they are applied by the to the specific context of the present bill.[5]  

1.21      In its Sixth Report,[6] the committee made a number of comments in relation to human rights issues arising from the Regulatory Powers (Standard Provisions) Bill 2012. Because the present bill uses the civil penalty enforcement provisions of the framework Regulatory Powers (Standard Provisions) Bill 2012, the committee’s current review of the present bill’s provisions relating to civil penalties provide it with the opportunity to supplement its comments on the Regulatory Powers (Standard Provisions) Bill by examining its application in a specific context. That examination may also give rise to comments that are of more general application to the provisions of the Regulatory Powers (Standard Provisions) Bill 2012.

Civil penalties as criminal charges

1.22      The statement of compatibility acknowledges, referring to the committee’s comments in its Fifth Report,[7] that the imposition of a ‘civil penalty’ designated as such by domestic law may constitute the determination of a ‘criminal charge’ within the meaning of article 14 of the ICCPR.[8]

1.23      As the committee has noted, in determining whether the imposition of a penalty for particular conduct involves determination of a ‘criminal charge’, international jurisprudence has identified the following factors to be taken into account: the classification of the act in domestic law, the nature of the offence, the purpose of the penalty, and the nature and the severity of the penalty. Classification as ‘civil’ under Australian law is not determinative. Where a prohibition is general in application, where the penalty is punitive and intended to deter (rather than award compensation for loss), and any financial penalty is significant, it may well be classified as involving a criminal charge and penalty for the purposes of article 14 of the ICCPR.

1.24      The statement of compatibility describes the process that was adopted in identifying the criminal offences in relation to which a civil penalty provision would also be introduced, and what the appropriate penalty should be in relation to each civil penalty provision.[9] However, it does not specifically address the question in relation to each of the proposed civil penalty provisions whether they should be characterised as ‘criminal charges’ for the purpose of article 14(1) of the ICCPR.

1.25      In a number of instances, the bill provides that a civil penalty contravention will be constituted by the same conduct which may also amount to a criminal offence. An example is clause 6 of the proposed new Schedule 2A to the Offshore Petroleum and Greenhouse Gas Storage Act 2006, which provides:

A person commits an offence if:

(a) the person engages in conduct; and

(b) the conduct obstructs or hinders a NOPSEMA inspector in the exercise of the inspector’s powers under clause 4 or 5.

Penalty: 60 penalty units.

(2) A person is liable for a civil penalty if the person obstructs or hinders a NOPSEMA inspector in the exercise of the inspector’s powers under clause 4 or 5.

Civil penalty: 135 penalty units.

(3) Subclause (1) or (2) does not apply if the person has a reasonable excuse.

Note 1: In proceedings for an offence against subclause (1), the defendant bears an evidential burden in relation to the matter in subclause (3)—see subsection 13.3(3) of the Criminal Code. The same applies in proceedings for a civil penalty under subclause (2).

1.26      The same conduct gives rise to two different forms of liability, and the intention of each provision appears to deter. However, although a financial penalty is the only penalty available under both the criminal provision and the civil penalty provision, the civil penalty is more than double the maximum penalty that may be imposed for the criminal offence. To the extent that the magnitude of the penalty is relevant to deciding whether the civil penalty is also ‘criminal’, the more severe penalty for the civil penalty would appear to support a characterisation of such a provision as ‘criminal’.

1.27      There are many other examples in the proposed amendments in which the maximum penalty for a civil penalty contravention is a multiple of the maximum penalty available in relation to the corresponding criminal offence.

Applicability of criminal procedural guarantees to civil penalty proceedings

1.28      The provisions relating to the enforcement of civil penalties contained in Part 4 of the Regulatory Powers (Standard Provisions) Bill 2012 apply to the enforcement of the civil penalty provisions introduced by the bill by virtue of the proposed new section 611B of the Offshore Petroleum and Greenhouse Gas Storage Act 2006. If some or all of the civil penalties proposed by the bill are ‘criminal charges’ for the purposes of article 14(1) of the ICCPR, then the guarantees provided for in article 14(3)-(7) would be applicable to the proceedings in which a civil penalty order is sought. To the extent that clause 90 of the Regulatory Powers Bill provides otherwise (‘A relevant court must apply the rules of evidence and procedure for civil matters when hearing proceedings for a civil penalty order’), it would be inconsistent with article 14 of the ICCPR.

Double jeopardy

1.29      Clause 93 of the Regulatory Powers (Standard Provisions) Bill 2012 provides that:

Criminal proceedings may be commenced against a person for conduct that is the same, or substantially the same, as conduct that would constitute a contravention of a civil penalty provision regardless of whether a civil penalty order has been made against the person in relation to the contravention.

1.30      If proceedings in relation to some or all civil penalties are ‘criminal’, then this would appear to involve the potential of double trial or double punishment for the same conduct, contrary to article 14(7) of the ICCPR, which provides:

No one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of each country.

1.31      Clause 94 may limit the possibility by providing that the same evidence cannot be used in criminal proceedings against an individual if already used in civil penalty proceedings, but it is not clear whether the practical effect of this provision to is rule out the possibility of criminal proceedings for an offence where a civil penalty order has already been made in relation to the same conduct.

1.32             The committee intends to write to the Minister to seek clarification as to:

(a) why some or all of proposed civil penalty provisions which correspond to offences constituted by the same conduct and which are subject to pecuniary penalties that are significantly heavier than the maximum pecuniary penalty that may be imposed for the corresponding offence, should not be considered to involve ‘criminal charges’ under article 14 of the ICCPR and thus be required to  be dealt with in proceedings which observe the guarantees applicable to criminal proceedings (including the requirement that the case against the defendant be proved beyond reasonable doubt);  and

(b) if some or all of the proposed civil penalty provisions are properly characterised as ‘criminal’ for the purpose of article 14 of the ICCPR, why the operation of clause 93 of the Regulatory Powers (Standards Provisions) Bill 2012 should not be seen as inconsistent with article 14(7) of the ICCPR to the extent that it allows criminal proceedings for an offence to be brought against a person in respect of conduct which has already been the subject of a civil penalty order against the person.

Strict liability offences

1.33      The statement of compatibility refers to the inclusion in the bill of a number of strict liability offences:

There are a number of strict liability offences in the Bill. The OPGGS Act contains a range of strict liability offences given that, in many cases, fault may be difficult to prove due to the remote and complex nature of offshore operations and the prevalence of multiple titleholder arrangements.[10]

1.34      It is difficult to assess the consistency of specific provisions imposing strict liability without individual consideration of and justifications for each offence. Given that in some cases the same conduct may constitute a strict liability offence and a fault-based offence, an individualised explanation would be helpful in assessing the compatibility of these provisions with human rights. The explanatory memorandum and statement of compatibility provides such justifications in relation to a number of offences which impose legal or evidential burdens on defendants in relation to defences or excuses to particular offences.

1.35             The committee notes that in order for it to carry out an assessment of compatibility of specific offences with human rights, statements of compatibility should provide an individualised analysis of each provision.

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