The committee received evidence during the course of the inquiry that indicated that the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) was not regarded as a fully effective or engaged regulator by workforce stakeholders in the offshore petroleum industry.
The committee was informed that this perception had a detrimental effect on work health and safety (WHS) outcomes, with workers not feeling adequately supported by the regulator. For example Mr Michael Borowick, an Assistant Secretary at the Australian Council of Trade Unions (ACTU) submitted:
…NOPSEMA is poorly regarded by the workforce. This creates a poor safety culture where workers and health and safety reps do not have the confidence to call out safety issues, because they do not have confidence in the regulator. Workers are so scared that, if they raise an issue with NOPSEMA, their identity could become known. This is a problem confounded [compounded] by the growth in insecure work, which further discourages not only people volunteering as health and safety reps, but health and safety reps raising issues when they have them.
Additionally, Mr Peter Mooney, the State Organiser for the Victorian branch of the Electrical Trades Union (ETU) outlined the lack of faith his members have in the regulator:
Unfortunately, among our membership, NOPSEMA is seen as a toothless tiger. It is seen as a body that doesn't engage—it doesn't engage directly with OHS reps and it doesn't engage with the workforce—to the extent that our membership believes they [NOPSEMA] don't even take the time to come and speak to them [ETU members] about issues.
Mr Michael Doleman, International Executive Officer for the Maritime Union of Australia (MUA), argued that NOPSEMA was viewed by workforces as a captured regulator, an impression which severely undermined the trust and effectiveness of the regulator:
I have heard of the soft touch [regulator], we say they're captured by the big end of town in the oil and gas industry and are at their beck and call.
The key issues raised by witnesses leading to this perception include:
the effectiveness of NOPSEMA's stakeholder engagement;
the effectiveness of NOPSEMA's inspection regime;
the effectiveness of NOPSEMA's regulatory responses; and
perceived gaps in the jurisdictional coverage of industry specific WHS legislation between offshore petroleum industry and the maritime industry.
This chapter will look at each of these matters in turn.
Effectiveness of stakeholder engagement
The committee heard concerns from various submitters about the lack of meaningful stakeholder engagement from NOPSEMA, in particular with workforce stakeholders.
While industry participants expressed general satisfaction with NOPSEMA's approach, the ACTU submission exemplified the concerns of many submitters:
One of the objects of Schedule 3 of the OPGGS Act is 'to foster a consultative relationship between all relevant persons concerning the health, safety and welfare of members of the workforce at those facilities'. Yet multiple reviews of the NOPSEMA and its predecessor constituent body, the NOPSA [National Offshore Petroleum Safety Authority], has found poor stakeholder engagement and a failure to earn a social licence to regulate.
To illustrate this, the ACTU pointed to the 2015 Operational Review of NOPSEMA undertaken by the then Department of Industry and Science, which despite finding no indication of regulatory capture, identified a need for NOPSEMA to balance stakeholder engagement without compromising its regulatory independence, as well as build its social licence to regulate.
The ACTU summarised its frustration with NOPSEMA's engagement strategy with the offshore workforce:
The ACTU repeats the concerns that it has raised over many years in several reviews and inquiries into work health and safety in the offshore petroleum industry: the NOPSEMA is subject to regulatory capture by industry. Engagement with the workforce and its representatives is token at best. In contrast, best practice work health and safety regulation adopts a tripartite approach between the regulator, industry and the workforce and ensures participation by workers and their representatives in the management of work health and safety.
Specifically, a number of submitters raised concerns about the lack of workforce representation on the NOPSEMA Board (the board), which was viewed as a lack of commitment to a tripartite approach to health and safety issues in the offshore petroleum sector and ultimately an obstacle to NOPSEMA being seen as a trusted regulator.
The board is an advisory board of six individuals, with specific functions prescribed under section 654 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS) Act. These functions included advising and making recommendations to the CEO of NOPSEMA about the operational polices and strategies of NOPSEMA; and advising and making recommendations to the Commonwealth, state and territory petroleum ministers, and the Council of Australian Governments Energy Council, on the WHS of persons in offshore petroleum operations, the integrity of facilities and wells, environmental management, and NOPSEMA's performance.
On the matter of stakeholder representation, the board's submission stated:
The [OPGGS] Act provides for individual members to be appointed by the Commonwealth Minister and makes no provision for stakeholder representation on the Board. Board members are not intended to represent any particular stakeholder group or interest, they are appointed for their extensive industry and Government expertise so they may provide advice to the Government on strategies to improve safety and environmental management performance of the industry.
NOPSEMA advised that in appointing members to the board, the responsible minister may take a range of factors into account, including skills, experience, geographic location and gender:
Nominations are sought from candidates that have relevant skills and expertise appropriate to the needs of the Board and that would assist in delivering gender and occupational balance to its constitution. Current Board members demonstrate a broad mix of competencies to include:
detailed knowledge of the petroleum industry
extensive legal knowledge of legislation and operations of regulatory organisations
an understanding of the safety case approach in regulating major hazard industries
senior operational experience in a major hazard industry (onshore or offshore)
an understanding of the political environment within which NOPSEMA operates in particular the importance of its relationship with the COAG Energy Council.
NOPSEMA further noted that 'any changes to the Board's composition and functions are a matter for Government and NOPSEMA will work with any persons appointed as members'.
The current board chair, Ms Erica Smyth, advised the committee that she had spent a large part of her career seeking approvals for minerals extraction projects, including in the oil and gas industry. More recently, she has been a 'professional company director' for over a decade:
I'm now a professional company director and have been for the last 14 years, and I have been chair and non-executive director for ASX-listed government not-for-profit boards and advisory boards. I currently sit on about seven or eight boards or advisories of some sort.
All of Ms Smyth's co-board members have held senior executive roles or have held positions funded by major oil and gas corporations. Not one of the board members appears to have experience in WHS matters from a workforce perspective.
Mr Borowick argued that the composition of the NOPSEMA board was a clear example of NOPSEMA's ineffective engagement strategies and lack of commitment to a tripartite approach to health and safety issues:
We're told that it [the board] can't be tripartite—that it represents only people with particular skills and knowledge. Funnily enough, the government of the day can only seem to find five former offshore petroleum executives with the requisite skills and knowledge. It appears that, notwithstanding the numerous representations that we've made, the government hasn't been able to find merit in appointing anyone with a union background, because, principally, we're told there's no-one, according to their view, that has the requisite skills and knowledge to merit their appointment.
The Australian Workers' Union (AWU) also raised similar concerns about NOPSEMA's stakeholder engagement, highlighting that the composition of the board did not include any individuals with a background in the offshore workforce:
The NOPSEMA chief executive is advised by the NOPSEMA advisory board, which includes both independent academic representatives as well as ex-executives with a long history of working in the oil and gas industry. However, despite the several thousand employees [who have] worked in the industry, the workers employed in the sector have no representative on the NOPSEMA advisory board.
To alleviate the above concerns, the ACTU recommended that the OPGGS Act be amended to allow for equal industry and worker representation on the NOPSEMA board. In making this recommendation, the ACTU asserted that the board's advisory function made it an 'appropriate mechanism' by which the regulatory approach of NOPSEMA could be informed and guided by 'the unique experience of the workforce'.
The AWU made a similar recommendation, suggesting that the NOPSEMA board include at least one representative of workers, with the individual to be appointed in consultation with the ACTU, relevant unions and the workforce.
While acknowledging reassurances by NOPSEMA and the NOPSEMA board that board members are 'not intended to represent any particular stakeholder group or interest', the committee highlights that the current composition of the board only includes individuals with experience working for industry participants.
The committee finds it disturbing that, given the NOPSEMA board chair's statement that '...the way the board contributes is as a group of experts in their own fields providing challenge and advice to the CEO and to the minister', there are no individuals from the offshore workforce on the board to contribute their expert knowledge.
Furthermore, the committee observes that this board composition does not assist in challenging the perception held by the workforce that NOPSEMA and the board are 'captured' by industry. The committee is also concerned about the board being comprised of largely corporatised professional board members. In the committee's view this does not satisfy the need for a tripartite approach to effectively promote strong WHS practices across the industry.
As such, the committee is of the opinion that equal representation of industry and workforce participants on the NOPSEMA board is required to assist in addressing the lack of trust and perception of regulatory capture of NOPSEMA, particularly as experienced by workforce stakeholders.
The committee recommends that the Offshore Petroleum and Greenhouse Gas Storage Act 2006 be amended to provide for equal representation of industry and workforce participants on the National Offshore Petroleum Safety and Environmental Management Authority Board, with the latter representatives to be nominated by the Australian Council of Trade Unions.
Effectiveness of NOPSEMA's inspection regime
As part of its WHS regulatory functions, NOPSEMA conducts WHS inspections to monitor compliance with relevant laws, including ongoing implementation and compliance with accepted safety cases. According to NOPSEMA, the inspections are scoped and scheduled using a risk-based methodology, which takes into account matters such as relevant risks factors, previous performance and compliance history and current industry incident trends.
NOPSEMA's written submission elaborated on the inspection regime:
Given the complexity and high hazard nature of offshore petroleum operations, on most occasions advance notice of inspections is given to ensure that appropriate transport logistical arrangements are facilitated and that facility personnel and areas of activity are made accessible to NOPSEMA to carry out its functions. This approach is not unique within Government where arranged attendance and early notification is also practiced by others such as the Australia's Maritime Border Command before approaching any of Australia's security regulated offshore production facilities. NOPSEMA also conducts unannounced inspections, in the form of investigations which typically take place at regulated business premises where the situation warrants the formal collection of evidence.
NOPSEMA stated that the conduct of inspections considers 'normally attended production facilities' (i.e. those that provide accommodation for the workforce during routine operations) and mobile offshore drilling units as higher risk than other kinds of facilities, and that the minimum frequency for inspecting these facilities is typically twice per year.
NOPSEMA advised that it typically undertakes over 100 inspections per year which focus on targeted areas of WHS risk. It noted that this figure was the five year average number of inspections, calculated on data from 2013 to 2017.
NOPSEMA provided the committee with the following information in regard to its inspection model:
NOPSEMA has the legislative powers to require access to facilities at any time. In order to avoid disruption or inadvertent risk creation, NOPSEMA usually conducts planned inspections where the operators is provided notification of the inspection, and the main purposes/scope of the inspection prior to the inspection. If NOPSEMA detects a potential breach of compliance that could present a significant increase in health or safety risks, NOPSEMA may make arrangements for arrival on the facility at short notice.
NOPSEMA also informed the committee that:
NOPSEMA does not own helicopters to attend a facility unannounced; and
access to most offshore facilities requires two forms of transport (for example, a fixed wing aircraft to Karratha, Darwin or Broome, followed by a rotary transport out to the facility).
Since the establishment of NOPSEMA in 2012, operators of offshore petroleum facilities have always been advised of an inspection prior to NOPSEMA staff arriving on board the facility. NOPSEMA emphasised that 'this practice is the only realistic and safe approach when helicopter travel is involved to access a facility'.
Mr Niall Myles, Senior Vice President of the Australian Operating Unit of Woodside Energy also provided details on this process from an operator's perspective:
They [NOPSEMA inspectors] are required to come to site via helicopters provided by the operators. NOPSEMA will inspect each facility twice per year and they will flag to us the nature of those inspections. That's an important element of the inspection. Generally, when NOPSEMA are coming to the facility they're coming to look at the quality of the controls against major accident events, and that requires preparation and documentation from our safety management systems. So when they arrive on site we will be prepared with the right information in order to help them collate the documentation that they need. But that is not the extent of the inspection.
Unions raised concerns with NOPSEMA's planned inspections regime. For example the ACTU submission proffered two core reasons for its concerns about the model:
Currently, the NOPSEMA conducts planned safety inspections of offshore petroleum facilities at least twice per year, where practicable. The NOPSEMA will generally issue an inspection brief not less than two weeks prior to the inspection, which we are advised provides the duty holder with information as to what will be inspected. Our affiliates advise that their members have reported two serious problems with the planned inspection model. Firstly, the duty holder is able to cover up or hide issues before the inspector arrives. Secondly, if and when the NOPSEMA does perform an unannounced inspection, the duty holder often assumes that it was triggered by a report from an HSR and puts pressure on the HSRs for allegedly approaching the regulator.
The AWU submitted that that planned inspection regime allowed employers to unfairly game the system:
…by issuing an inspection brief that, as our members understand, includes a detailed scope of work of what will be inspected, management at the facility has a minimum of two weeks to prepare the site in effort to ameliorate potential breaches.
The AWU also argued that the planned inspection model and rarity of 'unscheduled' inspection allowed management to too easily identify and pressure Health and Safety Representatives (HSRs), should the HSRs raise safety concerns with NOPSEMA and trigger an 'unscheduled' inspection:
…an offshore facility will have approximately 1–3 HSRs on site at any one time. In addition, many of these HSRs are contracted by labour hire companies and as such are not protected by any employment contract restricting employers against wrongful dismissal. Any inspections occurring outside of a scheduled and customary inspection, as well as inspection briefs containing specific information on what breaches will be investigated, allows management considerable scope in identifying which representative has raised a breach with the NOPSEMA. Our members note that this provokes a culture of fear of persecution from management if a breach is to be raised by a HSR.
When asked for details on the unannounced inspections conducted, NOPSEMA responded:
If NOPSEMA takes the term unannounced to mean an inspection scope or issue is explored by a NOPSEMA OHS inspector, where the operator has no advance warning of this matter, NOPSEMA can confirm that for OHS inspections there are a number of matters a NOPSEMA OHS inspector will look into that the operator is not advised of in advance. These additional matters are included as additional scope items during the inspection and are documented in the inspection report. A review of all inspection reports from 2017 identified that 86% of 2017 inspections addressed matters not contained within the inspection brief provided to the operator.
During the public hearings NOPSEMA's CEO, Mr Stuart Smith gave evidence that NOPSEMA had undertaken at least seven offshore short notice inspections in the past three to five years where notification was provided to the operator within one to three days of the inspection.
After the hearing NOPSEMA clarified the number of 'short notice' inspections it has conducted since 2012:
Since 2012, NOPSEMA has conducted at least eleven (11) short notice inspections [emphasis in original text] where the operator has had five (5) days or less notification. Five of these were office-based inspections, and one was in response to a provisional improvement notice (PIN) issued by a HSR. Of these 11 inspections, one was in 2013, two were in 2015, six were in 2017 and two were in 2018.
Mr Myles, a Senior Vice President of Woodside Energy explained the kind of information an operator receives from NOPSEMA in the event of an unannounced 'ad hoc' inspection:
If, for reasons, there have been HSRs reporting directly to NOPSEMA through the communication protocols that are available, or if they have had other reasons for a line of inquiry, they will request of us an ad hoc inspection. They may only give us a very broad definition of what that investigation will be, and we will do everything in order to facilitate that inspection and visit.
As outlined earlier in this section, the committee received evidence from unions that one of the problems with NOPSEMA's planned inspection model was that it compounded a situation where offshore workers and HSRs were wary of raising WHS concerns with the regulator due to fears of negative repercussions from operators. This evidence was consistent with the material relating to concerns about the treatment and protections for HSRs that was discussed in chapter 3 of this report.
The ACTU described the situation offshore as one of 'a pervasive culture of fear and reprisal' in which workers believed that raising WHS issues and being seen speaking with NOPSEMA officials may cost them their jobs.
The committee had the following exchange with NOPSEMA representatives which clearly illustrates that the regulator is aware of the fear experienced by workers, due to the fact that workers often request clandestine meetings with NOPSEMA inspectors during inspections:
Mr Gunn: […] We'll [NOPSEMA inspectors] have informal meetings [with HSRs]. We have workers who say, 'Can I come and see you behind this door and have a chat?' That happens quite often.
CHAIR: You take their health and safety representatives on the inspections with you?
Mr Gunn: They're invited and they do come on inspections with us at the facility—
CHAIR: When the employer allows it. Why don't you insist that they come?
Mr Gunn: Because the act says that they can. We always tell the particular HSR and the operator that they're welcome to come.
CHAIR: But my question is: why don't you insist that they come?
Mr Gunn: It's voluntary.
CHAIR: They're health and safety representatives and you put them in the position where they have to defy their employer and come with you?
Mr Gunn: No, it's up to the HSR.
CHAIR: And you fly back. You do understand the reality of the workplace, don't you?
Mr Gunn: Yes. HSRs do attend and spend time with us at the facility, walking around—just us, the inspectors and the HSRs—during the course of the inspection, and we do a full walk-around. We meet with them privately and formally, and they attend the inspection with us.
CHAIR: At one of these facilities, how to meet privately with someone?
Mr Gunn: They say, 'Can you meet me after tea in my room or at the back of the control room?' They arrange the private meeting because obviously, as you can say, they don't want to be seen talking to—
Mr Gunn: Yes. That does occur […]
The ACTU recommended that in order to combat this fear of persecution and encourage HSRs to speak confidently with inspectors, better protections must be provided to HSRs during NOPSEMA inspections. It suggested making it compulsory for HSRs to accompany inspectors on inspections; and making it compulsory for NOPSEMA inspectors to meet separately and privately with HSRs during their offshore visits.
Another issue related to NOPSEMA's inadequate engagement with the workforce during inspections was highlighted when the committee received evidence that indicated that there were instances where there were no HSRs on board the facility during an inspection.
During the course of the inquiry NOPSEMA supplied the committee with nine confidential inspection reports that were prepared by NOPSEMA inspectors in response to the 2015 West Tuna platform battery fire.
While keeping the contents of the inspection reports confidential, the committee notes that of the nine inspections which were carried out on nearby installations in the six months following the West Tuna incident, three inspection reports note that 'no HSRs were on the facility at the time of the inspection'.
The committee was surprised to learn that since 2012, NOPSEMA has only carried out six short notice (i.e. less than five days' notice to operators) inspections on offshore facilities. On average this is one offshore short notice inspection per annum. The committee notes that NOPSEMA typically carries out over 100 inspections annually. This equates to approximately one per cent of NOPSEMA's inspections being carried out on short notice.
While the committee understands the logistical transportation constraints that must be taken into account when visiting offshore platforms, it considers this rate of unannounced inspections to be far too low.
Additionally, the committee is highly concerned with the evidence received from unions asserting that when NOPSEMA does perform an unannounced inspection of an offshore facility, the HSRs on that facility are then pressured by the operators for allegedly approaching the regulator.
The committee is also greatly troubled by the evidence from unions and NOPSEMA itself indicating that HSRs are afraid to speak with NOPSEMA inspectors, and that it is commonplace for HSRs to surreptitiously seek meetings with inspectors for fear of the repercussions arising from being seen talking to the regulator by management.
The committee considers this culture of fear and reprisal extremely detrimental to achieving positive health and safety outcomes in the offshore petroleum industry.
In light of these issues, the committee thinks it is critical that NOPSEMA undertake more unannounced, short notice visits to offshore facilities, as well as provide greater support and protection for HSRs to speak to inspectors. This would 'normalise' such inspections, for both operators and the workforce, and work to alleviate the fear HSRs experience of being pressured by operators for speaking with NOPSEMA. Such measures would ensure that workers feel protected enough to bring WHS concerns to the attention of the regulator.
Finally, the committee notes that of the nine NOPSEMA inspections carried out following the 2015 West Tuna incident, on three occasions there was no HSR present on the facility for the inspectors to consult with. The committee notes that NOPSEMA inspectors had some level of engagement with other members of the workforce during the inspections where no HSRs were present. Nevertheless, given the importance the committee places on effective engagement between NOPSEMA and HSRs, it is of great concern that NOPSEMA inspectors were not able to hear the safety concerns HSR may have raised in one-third of the inspections. It is unclear to the committee if this is situation is representative of NOPSEMA's broader inspection system, however if it is, it would demonstrate a major flaw in the inspection regime.
The committee recommends that NOPSEMA carry out regular, unannounced inspections as part of its standard inspection regime.
The committee recommends NOPSEMA and facility operators ensure that HSRs are present and fully engaged when NOPSEMA carries out its inspections by:
requiring HSRs to accompany NOPSEMA inspectors on their inspections; and
requiring NOPSEMA inspectors to meet separately and privately with HSRs during inspections.
Effectiveness of NOPSEMA's regulatory responses
The committee received evidence expressing dissatisfaction with NOPSEMA's regulatory responses and use of penalties.
The ACTU argued that the offences and penalties regime of the OPGGS Act are 'woefully inadequate' and that NOPSEMA had demonstrated an 'overreliance on the lower levels of the regulatory pyramid'. It asserted that this was demonstrated by the regulator's unwillingness to escalate its regulatory response to repeat offenders. The AWU also echoed these points.
The ACTU further argued:
The NOPSEMA needs to improve its strategic enforcement activity to achieve maximum impact. We note that the NOPSEMA Enforcement Policy provides that the NOPSEMA 'will consider prosecution action in circumstances where…there has been repeated non-compliance with the legislation.' We would like to see the NOPSEMA putting this policy into action and utilising its more serious available sanctions, including prosecution, where there is repeated non-compliance with the legislation. Such action would be more effective in achieving cooperative compliance.
The Victorian Government observed that the penalty provisions for non‑compliance under the OPGGS regulatory framework are significantly lower than under the model WHS Act and the Victorian OHS framework:
Penalties under the OPGGS regulatory framework should reflect the gravity of respective offences and should be sufficient to operate as effective deterrents. Victoria supports increased alignment between the OPGGS regulatory framework and the model WHS regulatory framework in regards to the penalty framework under those Acts.
Representatives of the ACTU also explained that the level of penalties 'are so insignificant relative to the shutdown costs that operators are financially better off risking a fine than stopping work for safety matters.'
Union witnesses drew upon a significant safety incident on the West Tuna platform in the Bass Strait in 2015 which had the potential to be a catastrophic situation in order to illustrate NOPSEMA's inadequate regulatory responses to such situations. Mr Dane Coleman a former offshore HSR with eight years' experience in the offshore petroleum industry, relayed his experience of the West Tuna battery room fire to the committee:
Mr Coleman: …My own situation in which I was involved was on West Tuna Platform. On 9 September 2015, I woke up to an alarm at approximately 0045 hours after a 12-hour shift on an ExxonMobil platform in the middle of Bass Strait. The winds were blowing 50 knots and there were eight-metre seas. The alarm was real. There was a fire in the battery room, an extremely critical room for the hydrocarbon industry. At 5.30 in the morning, the platform was de-manned of non-critical personnel by helicopters that were 45 minutes away. The escape capsules would not be launched into eight-metre seas. To give an indication, we were at the emergency evacuation assembly area. Some of the alarms that go off during the night are nuisance alarms. Every time we go down to that area, we look overboard and see what the sea state's like and if it's a realistic attempt to get away from the platform in a real incident. This one was real.
CHAIR: Just before you go on, we're at this stage where the incident is so serious that they're attempting to evacuate the platform.
Mr Coleman: Correct. Yes. With a number of the guys in the email of the incident report, we can see here that the company reduced their view on that by saying that it was a small fire isolated to the battery room… It was crew change day the day that I woke up and we were there assembling for this response. We were supposed to be heading home to see our families, yet we stayed over cycle to give the opposite shift a list of isolations and indications as to what had occurred during the night.
I returned after my week away, so I returned on 17 September , the following trip, to be constantly asked to re-use some of the equipment inside that battery room. The equipment had been exposed to an environment, for well over six hours, above a temperature of 90 degrees Celsius. These readings were taken from a thermo gun from the outside of a firewall of that room. To give an indication of how thick that firewall is, there's five millimetres of steel, batteries on the side of that, insulation and another five millimetres of steel. The temperature was still 96 or 97 degrees on the other side. It was very hot—extremely hot. The intense atmosphere inside that room had created carbon tracking along with molten lead and copper slagging across electrical connections due to a number of lead-acid batteries, with the combination of a short-circuit current of 2,100 amps exploding.
Mr Coleman continued to explain what happened in the aftermath of the fire:
…There were discussions of what we could do to that room. I was involved in the incident investigation and what outcomes we could come to. On 22 December  I sent an email to the battery manufacturer to force the company to at least listen to our concerns that the equipment in that room needed to be stripped out and replaced to prevent another catastrophe. The cause of the fire had been put down to a failure of maintenance, including the change out of expired batteries throughout ExxonMobil platforms right across Bass Strait. It wasn't an isolated incident. It was a failure to one of the batteries that led to the fire expanding across to the other batteries in that bank.
In one sense it could be considered lucky that the fire had occurred on West Tuna platform due to the make-up of the room itself. The ExxonMobil internal investigation process outlined battery expiry dates as a fix across all platforms. This still remains insufficient due to the potential of disastrous risk factors involved specifically with battery rooms across the other sites in Bass Strait. Pressurisation, ventilation alarms, isolation and fire ratings that were considered a fix on the West Tuna platform were not shared to all of the other platforms. This can only be put down to self-regulation of this industry.
Mr Peter Mooney of the ETU asserted that NOPSEMA did not conduct its own investigation of the West Tuna fire, but rather relied on the internal ESSO investigation:
…If you go to NOPSEMA's website, you'll actually see the fire incidents on West Tuna. They adopted the investigation carried out by Exxon Mobil, I believe, so they never had any direct involvement in interviewing employees who were on the platform and they didn't visit the platform.
He also expressed concern that NOPSEMA did not ensure that the recommendations from that investigation were implemented:
NOPSEMA never actually visited the actual platform after the incident or anything like that. They relied on Esso doing their own investigation, which they then adopted as the outcome from that. Recommendations came out of that, and they have not been back to any of the other platforms to check to see if that work had being done on those platforms to bring them up to that security. They don't check in with the health and safety representatives to see if that work has been done.
NOPSEMA disputed this characterisation of the situation and asserted that its inspectors did inspect the West Tuna platform in November 2015, several months after the fire. In an answer to a question on notice, NOPSEMA further detailed the actions it took after the incident:
The platform was shut down (i.e. production ceased and the facility was blown down) and NOPSEMA immediately commenced enquires with the operator into the incident and at the same time prioritised inspections of other Bass Strait producing platforms with regards to: “Control of electrical hazards. Focus on Battery room in response to [West Tuna facility] Battery room fire”.
In response to the West Tuna incident, NOPSEMA published a three page Safety Alert in November 2015, entitled 'Risks associated with electric storage batteries'. The document outlined 'key lessons' to take from the incident which involved a list of suggested actions for operators to take. For example:
Battery rooms should be provided with smoke and/or heat detection. In addition, provision of gas detection should also be considered for battery rooms.
When queried on what regulatory action it took as a result of the West Tuna incident and specifically the language used in the related Safety Alert, the following information was provided:
CHAIR: …Did you conclude that battery rooms should have gas detection systems? You say you are not a soft-touch regulator, but I assume—and I will read the report—that you did conclude that. But instead of then saying that everyone will put gas detection in their battery rooms you put out a safety alert—the only one for 2015, by the way—to say they should 'consider' putting it in. And then you tell me three years later that you put on several improvement notices because there was another incident. Why? Why when you concluded the first time didn't you just say as a regulator that the industry 'will' do this?
Mr O'Keefe: We operate on the basis of maintaining risks as low as is reasonably practicable. We are an objective based regime, not a prescriptive regime. We push the risk back to the owners of the facilities and have them demonstrate to us that, whatever they put in place, the risks are as low as reasonably practicable.
NOPSEMA later provided clarification on why it did not mandate specific actions in response to the West Tuna incident:
Under Australia’s objective-based regulatory regime NOPSEMA doesn’t mandate specific controls. The duty rests with the operator to ensure that all reasonable practicable steps are taken to ensure a facility is safe and without risk to the health of any person at or near the facility.
This response however appears to contradict NOPSEMA's own written submission which highlights NOPSEMA's more prescriptive compliance powers which it chose not to pursue after the West Tuna battery fire:
In circumstances of non-compliance not resulting in a fatality or serious injury, NOPSEMA proactively applies a wide range of enforcement options under the OPGGS Act. Options such as notices and directions are often pursued in preference to prosecution as these options can be more effective in lifting industry performance. Notices and directions may typically, for example, impose more timely legal obligations on duty holders to correct unsafe infrastructure, systems and behaviours.
The committee was disturbed to hear of NOPSEMA's timid response to the 2015 West Tuna platform fire, an event that required the emergency evacuation of non-critical personnel in eight metre seas and 50 knot winds. NOPSEMA's response is that it is oversees an objective-based regulatory regime; however, this ignores that fact that NOPSEMA has a range of enforcement powers for example the ability to issue notices and directions.
The committee considers NOPSEMA's tendency to opt for a 'guide dog' regulatory response too lax, in particular where an incident, such as the West Tuna battery room fire, could have resulted in catastrophic consequences.
The committee is of the opinion that NOPSEMA ought to strike a better balance in its regulatory responses and take a stronger stance where necessary.
The committee is of the view that publishing a non-enforceable document such as a Safety Alert with 'key lessons' and suggestions about safety improvements, as was done with the West Tuna incident, is not an adequate response to what could have been a disastrous situation, particularly when the same situation had the potential to occur on other nearby facilities with similar equipment.
The committee has been persuaded by the evidence received from union stakeholders and sees merit in the recommendations put forward by the ACTU to address these issues.
The committee recommends that the penalties in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 be significantly increased to bring them into line with best practice responsive regulation.
The committee recommends that NOPSEMA's Enforcement Policy be amended so that its response escalates for each instance of non-compliance by the same organisation or in respect of the same facility.
The committee recommends that NOPSEMA be directed to comply with the Enforcement Policy in respect of taking prosecution action where there has been repeated non-compliance with the legislation.
Perceived gaps in the jurisdictional coverage of WHS legislation in the maritime industry
The committee was informed by the ACTU that NOPSEMA's effectiveness as a health and safety regulator is hampered by the split between NOPSEMA's jurisdiction and that of the Australian Maritime Safety Authority (AMSA). The ACTU submission explained:
Currently vessels and facilities in the offshore petroleum industry often move between the NOPSEMA and the AMSA jurisdictions and the responsibility for regulating activities transfers between the two agencies.
The ACTU drew attention to the findings of the 2015 Operational Review of NOPSEMA (2015 review) which found that:
…some oil and gas facilities, such as floating production storage and offloading units, are floating vessels that can be classified as either a 'facility' under the OPGGS Act when being operated, or a 'vessel' under the Navigation Act at other times. It is essential AMSA and NOPSEMA work collaboratively to ensure effective management of maritime safety around oil and gas facilities.
The 2015 review also found that there were a number of issues which 'relate to a lack of clarity in the touch points between the OPGGS Act and the Navigation Act'. These included a lack of clarity of which regulator has control over a ship close to an offshore facility; and a lack of clarity of when a vessel swaps from a facility to a ship and the transfer of control on and off the riser.
In addition, the 2015 review detailed:
The [review] Panel also understands NOPSEMA and AMSA have previously held joint inspections of vessels' certification, however we understand these have now ceased. This is of concern. AMSA needs to ensure ongoing certification of vessels to comply with its obligations under the Navigation Act and the International Maritime Organisation (IMO) standards. Certification involves AMSA inspectors boarding an offshore facility, such as a floating production, storage and offloading unit to ensure the facility's maintenance is sufficiently adequate for certification when it ceases operation and again becomes a vessel, at which point responsibility changes from the OPGGS Act to the Navigation Act.
The 2015 review recommended that NOPSEMA and AMSA refresh their Memorandum of Understanding (MoU) and in doing so seek clarity on their commitments and responsibilities under their respective acts.
The ACTU observed that this recommendation had not been carried out.
In relation to the 2009 MoU between the two agencies, AMSA clarified:
NOPSEMA has established and maintains a strong and collegiate relationship with AMSA on a range of matters related to the functions and regulatory activities of each agency including the regulation of offshore safety. The relationship is firmly embedded in a number of ongoing bilateral activities, standing meetings and national plan arrangements. The extent of engagement maintained between NOPSEMA and AMSA, and the strength of the joint agency relationship if independent of the MoU.
The AWU and the Australian Institute of Marine and Power Engineers also emphasised the 'jurisdictional vacuum' between NOPSEMA and AMSA, as well as the findings of the 2015 review in their submissions.
In order to fix the perceived gaps in jurisdictional coverage, the three unions recommended a comprehensive review of the coverage of Australian safety regulation in the maritime industry be conducted. It was also recommended that NOPSEMA and AMSA work to update the 2009 MoU.
The committee considers it essential for NOPSEMA and AMSA to clearly articulate and agree upon their respective commitments and responsibilities in regard to their jurisdictional reach.
The committee considers that this clarity would assist in providing better outcomes for offshore WHS in both petroleum-extraction and related maritime activities.
The committee recommends the Commonwealth Government conduct a comprehensive assessment of coverage of Australian safety regulation, including offshore petroleum, in order to develop a coherent legislative reform package.
The committee recommends that NOPSEMA and Australian Maritime Safety Authority update their Memorandum of Understanding, with a particular focus on achieving clarity on the common areas and interactions between the two agencies and their legislations.