THE CHANGING FACE OF GOVERNMENT REGULATION

Abstract

Significant changes are forecast in the approach of government to regulation of the upstream petroleum industry.

Prescriptive 'command and control' style regulation is still widely used but does not provide confidence that outcomes will be acceptable and has been criticised as a major contributing factor in the Piper Alpha disaster. Regulator capture, conflict of interest, over-regulation and high compliance costs are also cited as common problems with the existing system.

The trend toward greater community involvement in the regulatory process, smaller government and open and transparent decision making are adding pressure for change.

A new approach termed objective regulation is being developed in South Australia and involves:

establishment by government in dialogue with industry and the community of meaningful and measurable objectives in regard to environmental protection, safety etc.;preparation of codes of practice, guidelines and manuals designed to ensure objectives will be met; andintegration of management systems designed to assure achievement of objectives, including operator and regulator audits of outcomes and the effectiveness of the environmental and safety management system.

Objective regulation is aimed at reducing compliance costs, eliminating many approvals currently required, providing greater flexibility, achieving better outcomes and giving greater assurance that management policies are being implemented.

Involvement of community interest groups insetting and reviewing objectives should increase community confidence in the industry's ability to operate in an environmentally responsible and consistent manner. This should assist in reducing and hopefully reversing the trend towards increasing restrictions on access to land to which the industry has become increasingly subject.