Liabilities of industry stakeholders for pollution caused in Australian waters*
S. BallMinter Ellison.
The APPEA Journal 51(2) 719-719 https://doi.org/10.1071/AJ10099
Published: 2011
Abstract
There is no doubt that the recent Montara and Deepwater Horizon oil spills were catastrophic; the clean-up continues and litigation is likely to drag on for several years. Who is held liable for the cost and clean up of an oil pollution event? Are these spills likely to change the field—if so, in what ways? Will the present contracting and insurance practices of Australian industry players be sufficient to protect them in the future?
Offshore petroleum and gas production activities are covered by a range of sometimes confusing international, federal and state or territory laws. Operators, directors, contractors, financiers, co-venturers and other stakeholders may all have legal responsibilities in relation to pollution and other environmental impacts of offshore exploration and production activities. The Montara Commission of Inquiry has not yet been released, but the 2009 Productivity Commission Report has already focused attention on these issues.
With reference to contracting practices in the Australian offshore petroleum and gas production industry—in particular indemnities and provisions purporting to limit or exclude liability—this paper outlines the potential extent of stakeholders’ liabilities under relevant international conventions, federal and state or territory legislation, and the common law. It considers the effect of anticipated changes to the operating environment in Australia and lessons to be learned after Montara. This paper will be of interest to any prudent investors, operators or others involved in the industry.
Simon Ball is a Partner in the Environment and Planning group at Minter Ellison Lawyers. Simon has extensive experience in advising on the obtaining of project approvals, environmental planning and protection, native title and mining and petroleum law. He regularly provides complex planning, environment and mining advice to both public and private sector clients. Prior to joining Minter Ellison, Simon held various positions at the Department of Primary Industries (Mineral Resources), including Principal Legal Officer and Senior Policy Officer. Simon is also a qualified Above Ground Mine Manager and has managed various quarries in the NSW construction industry. Simon’s unique background enables him to be able to provide practical legal advice with a strong practical and commercial focus. |
References
One of the criticisms of the current regime is the multitude of different legislative regimes and regulators governing offshore petroleum operations. Given the complexity of this topic this aspect of the environmental regulation of offshore petroleum operations will not be discussed in this paper and to simply matters this paper will only address those areas of our offshore areas where the Commonwealth has sole jurisdiction.Regulation 31(1) of the Environment Regulations.
Regulation 9(1) of the Environment Regulations; Division 2.3 of the Environment Regulations.
Regulation 11 of the Environment Regulations.
Regulations 9 and 11(4) of the Environment Regulations.
Regulation 17 of the Environment Regulations.
Regulation 19 of the Environmental Regulations.
Regulation 7 of the Environment Regulations.
Section 274(c)(v).
Regulation 8(1) of the Environment Regulations.
Regulation 6 of the Environment Regulations.
Produced formation water is water recovered from a reservoir in association with the petroleum.
Regulation 29 of the Environment Regulations.
Matters of national environmental significance include Commonwealth marine areas, world heritage areas, Ramsar wetlands of international importance, migratory species, nationally threatened species and nuclear projects.
Section 24 of the EPBC Act; a Commonwealth marine area includes any waters of the sea inside the seaward boundary of the exclusive economic zone.
According to the ‘Significant Impact Guidelines 1.1-Matters of National Environmental Significance’ issued by DEWHA, an action has, will have or is likely to have a significant impact on the environment in a Commonwealth marine area if there is a real chance or possibility that the action will, among other things, adversely impact on the Commonwealth marine area ecosystem or result in persistent organic chemicals, heavy metals, or other potentially harmful chemicals accumulating in the marine area such that biodiversity, ecological integrity, social amenity or human health may be adversely affected.
Section 23 of the EPBC Act.
Section 67 of the EPBC Act states that an action that a person proposes to take is a ‘controlled action’ if the taking of the action by the person without approval under Part 9 for the purposes of a provision of Part 3 would be (or would, but for section 25AA or 28AB, be) prohibited by the provision. Part 9 relates to the approval of actions and Part 3 relates to the requirements of environmental approvals and lists the areas of national environmental significance.
Section 67A of the EPBC Act. Under section 68 of the EPBC Act, a person proposing to take an action that the person thinks may be or is a controlled action must refer the proposal to the Minister for the Minister’s decision whether or not the action is a controlled action.
