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OFFSHORE PETROLEUM (SAFETY LEVIES) AMENDMENT REGULATIONS 2009 (NO. 1) (SLI NO 381 OF 2009)
EXPLANATORY STATEMENT
Select Legislative Instrument 2009 No. 381
Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003
Circulated by authority of the Minister for Resources and Energy,
the Honourable Martin Ferguson AM, MP
Offshore Petroleum (Safety Levies) Amendment Regulations 2009 (No. 1)
GENERAL OUTLINE
The regulations are made in accordance with section 781 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (the Principal Act) and section 11 of the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Act 2003 (the Safety Levies Act)
The purpose of the amendments to the Offshore Petroleum (Safety Levies) Regulations 2004 is to remove references to the pipeline safety management plan levy, to amend the safety case levy so that it covers pipelines and to extend coverage of safety levies to future greenhouse gas storage activities. The amendments also increase the unit value to work out the amount of safety levy payable. They also update the regulations to refer to and be consistent with the Principal Act and the Safety Levies Act.
The amendments to the regulations are consistent with amendments to the Principal Act and the Safety Levies Act which were amended on 8 October 2009, with effect from 1 January 2010, to remove provisions relating to the pipeline safety management levy. The amendments are also consistent with proposed changes to other regulations under the Principal Act which will see pipelines chiefly regulated under safety regulations. There is no additional cost to pipeline licensees under the proposed changes to make a pipeline safety management plan levy a safety case levy for pipelines.
The amendments increase the unit value, used as part of the formula to calculate safety levies, from $25000 to $26000. This represents an increase of four per cent in the unit value and is the first increase since 1 January 2005 when the Safety Authority commenced operations. The proposed increase is necessary to meet rising costs as the Safety Authority is fully funded by levies paid by industry. It does not receive funding from the Commonwealth Government. The Authority’s stakeholders support the increase in levies.
The amendments substitute references to the Petroleum (Submerged Lands) Act 1967 and the Offshore Petroleum (Safety Levies) Act 2003, with references to the Principal Act and the Safety Levies Act which were amended on 21 November 2008 to include greenhouse gas injection and storage activities.
Consultation on changes to the regulations occurred throughout 2009.
FINANCIAL IMPACT STATEMENT
These amendments do not have any financial impact on the Australian Government budget.
REGULATORY IMPACT STATEMENT
These amendments do not pose any new regulatory burden on the petroleum or greenhouse gas storage industries.
NOTES ON INDIVIDUAL CLAUSES
Clause 1, Name of Regulations
This clause provides that the Regulations may be cited as the Offshore Petroleum (Safety Levies) Amendment Regulations 2009 (No. 1).
Clause 2, Commencement
This clause provides for the commencement of the Regulations on 1 January 2010.
Clause 3, Schedule
This clause provides that the Offshore Petroleum (Safety Levies) Regulations 2004 are amended as set out in Schedule 1.
Clause 4, Transitional
This clause provides that the provisions of Parts 6 and 7 of the old regulations in force immediately before the commencement of the new regulations continue to apply in respect of an assessment that the levy is payable or not payable and for the payment or recovery of any levy payable. This is so that the Safety Authority is able to collect levy still owing at the commencement of the amended regulations.
Schedule 1 – Amendments
Item 1 – Regulation 1
This item changes the name of the regulations to the Offshore Petroleum and Greenhouse Gas Storage (Safety Levies) Regulations 2004 to be consistent with the Safety Levies Act, which was amended in November 2008 to add greenhouse gas activities.
Item 2 – Regulation 3, except the note
This item replaces regulation 3. For the following definitions: CEO, Commonwealth waters, designated coastal waters, OHS inspector, Safety Authority waters, State PSLA and Territory PSLA the amendments substitute references to Part IIIC of the Petroleum (Submerged Lands) Act 1967 (PSL Act – now repealed) with section 643 of the Principal Act. In the definition of ‘Safety Authority’ Part IIIC of the PSL Act is substituted with reference to Part 6.9 of the Principal Act.
This item also creates new definitions for ‘OPGGS Act’ (the Principal Act), the ‘OPGGS(SL) Act’ (the Safety Levies Act) and for ‘SMS’ (safety management system) and ‘SMS amount’. The SMS amount has been part of the formula for determining the levy payable since the introduction of the safety levies regulations but was not previously defined in the definitions section.
Item 3 – Regulation 3, note
This item removes the reference to the superseded Offshore Petroleum (Safety Levies) Act 2003 (OPSL Act) and replaces it with a reference to the Safety Levies Act.
Item 4 – Regulation 3, note
This item removes the reference to the pipeline safety management plan levy in the note contained in regulation 3. The current note states that any words and expressions used in the Safety Levy Regulations but which are not defined in regulation 3 have the same meaning given to those words and expressions in section 3 of the OPSL Act. The note provides examples of such words including ‘pipeline safety management plan levy’. The new note removes the reference to the pipeline safety management plan levy in line with the objectives of the amendments to have pipelines covered by the safety case levy.
Item 5 – Subparagraph 4 (2) (a) (i)
This item removes the reference to the pipeline safety management plan levy and replaces it with a reference to a safety case levy.
Item 6 – Subparagraph 4 (2) (b) (i)
This item removes the reference to the pipeline safety management plan levy and replaces it with a reference to a safety case levy.
Item 7 – Subregulation 4 (3), including note
This item updates the reference for the definition of ‘pipeline’ from sections 9 and 10 of the Safety Levies Act, which are to be deleted effective from 1 January 2010, to the definition in section 7 of the Principal Act. The reference to earlier Acts in the note is removed.
This item replaces regulation 6. Definitions in the regulation are now linked to definitions in the Principal Act or Safety Levies Act. The old regulation 6 linked definitions to section 5 of the OPSL Act. Definitions in that Act were then linked to the PSL Act. This item thus removes a step in checking the meaning of the definitions without changing the meanings of the definitions.
Item 9 – Subregulation 7 (1)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 10 – Subregulation 9 (1)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 11 – Regulation 11, Heading
This item removes a reference to the repealed PSL Act.
Item 12 – Subregulations 11 (1) and (6).
This items replaces a reference to subsection 150YR (1) of the PSL Act with an updated reference to subsection 686 (1) of the Principal Act.
Item 13 – Regulation 13
This item replaces regulation 13. References to section 6 of the OPSL Act are substituted with references to subsection 6(8) of the Safety Levies Act. No new definitions are added.
Item 14 – Subregulation 14 (1)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 15 – Subregulation 16(1)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 16 – Subregulations 18 (1) and (6).
This items replaces a reference to subsection 150YR (1) of the PSL Act with an updated reference to subsection 686 (1) of the Principal Act, which has superseded the PSL Act.
Item 17 – Regulation 20, excluding note
This item replaces regulation 20. It substitutes references to section 7 of the OPSL Act with references to subsection 7 (8) of the Safety Levies Act for the definitions of ‘facility’ and ‘safety case in force in relation to a facility’. The definition for ‘proposed facility’ updates the reference from section 7 of the OPSL Act to clause 3 of Schedule 3 of the Principal Act. This item directly links the definition of operator to the Principal Act rather than via the Safety Levies Act (see item 8 above).
This item also includes definitions for: major revision, minor revision, pipeline and pipeline licensee, which are currently in Part 6 of the regulations. This is part of the overall changes in the regulations to include pipelines under the provisions for the safety case levy for Commonwealth waters instead of under provisions for the pipeline safety management plan levy which are to be removed from the regulations (see item 61 below). In moving pipeline provisions into Part 4 of the regulations, the amount of levy for a pipeline will not change neither will who pays the levy nor when it is paid.
Item 18 – Regulation 20, note
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 19 – Regulation 20, note
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 20 – Subregulation 21 (1)
Item 21 – Subregulation 21 (1)
This item inserts into subregulation 21 (1) the words ‘for a facility other than a pipeline’ as safety case levies payable on those facilities are set at different levels to safety case levies on pipelines.
Item 22 – After subregulation 21 (1)
This item inserts subregulation 1A into regulation 21 setting out how the amount of levy is calculated for a facility that is a pipeline.
Item 23 – Subregulation 21 (2)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 24 – Subregulation 21 (3)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 25 – After subregulation 21 (3)
This item inserts subregulation 4 into regulation 21 which sets out that if a safety case for a pipeline is in force at the start of a year and no major revision of the safety case came into force during the previous year then no safety case levy will be imposed.
Item 26 – Subregulation 22 (1)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 27 – Subregulation 22 (1)
This item inserts into subregulation 22 (1) the words ‘or yearly’ after ‘quarterly’ as the levy on pipelines is paid yearly.
Item 28 – Subregulation 22 (1)
Item 28 inserts into subregulation 22 (1) the words ‘or licensee’ after each mention of the word ‘operator’ as the pipeline licensee is responsible for paying the levy due on a pipeline where for other facilities the operator is responsible for paying the levy.
Item 29 – Subregulation 22 (2)
Item 29 replaces subregulation 22(2). This item inserts the words ‘or yearly’ after ‘quarterly’ as the levy on pipelines is paid yearly. It also inserts the words ‘or licensee’ after the word ‘operator’ and the words ‘or licensee’s’ after the words ‘or operator’s’ because the pipeline licensee is responsible for paying the levy due on a pipeline.
Item 30 – After regulation 22
Item 30 inserts regulation 22A after regulation 22. This
regulation adds provisions from
Part 6 of the current regulations on when a safety case for a pipeline or a
revision of a safety case for a pipeline comes into force and provisions on
when a revision of a safety case is a minor revision.
Item 31 replaces regulation 23. The amended regulation removes the reference to the PSL Act in the heading to regulation 23. Also, in subregulation 23 (1), the reference to subsection 150YS (3) of the PSL Act, now repealed, is replaced with a reference to subsection 687 (3) of the Principal Act. This item also inserts provisions into subregulation 23 (2) to set out that a safety case levy is due and payable in annual instalments if the facility is a pipeline.
This item also amends the table in regulation 23. In items 1 and 2 of the table, in the ‘facility’ column, the words ‘or a pipeline’ are inserted after the word ‘facility’. For items 1 and 2, in column 4, the time when the levy instalment is due and payable is set to 30 days to simplify requirements for facilities that are not mobile facilities or pipelines. Items 5 and 6 are added to the table setting out when the pipeline levy is due and payable. The details for a pipeline are the same as in Part 6 of the current regulations.
Item 32 – Regulation 24, Heading
These items remove references to the PSL Act, which was repealed on 1 July 2008.
Item 33 – Subregulation 24 (1)
This item
replaces subregulation 24 (1). The item replaces the reference to subsection
150YS (3) of the PSL Act, now repealed, with a reference to subsection 687 (3)
of the Principal Act and adds the words ‘or a licensee’ after ‘operator’ to
ensure that notification arrangements cover all levy payers.
This item also amends the table in regulation 24. In items 1 and 2 of the table, in the ‘facility’ column, the words ‘or a pipeline’ are inserted after the word ‘facility’. For item 1, in column 4, the date when the operator is to be notified is proposed to be amended to make it the same as for item 3, column 4, and for item 2, the text in column 4 is proposed to be made the same as for item 4, column 4. This simplifies notification arrangements for facilities that are not mobile facilities or pipelines. Item 5 is added to the table setting out when the Safety Authority must notify the pipeline licensee that the levy is due and payable.
Item 34 – Subregulation 25 (1)
This item replaces the reference in subregulation 25 (1) to subsections 150YS (1) and (2) of the PSL Act, now repealed, with a reference to subsections 687 (1) and (2) of the Principal Act.
Item 35 – Paragraph 25 (1) (b)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 36 – Subregulation 25 (3)
This item replaces the words ‘the sum of 2 whole quarter amounts’ with the words ‘one quarterly instalment’ as billing requirements for mobile facilities will be reduced to a minimum of one quarterly instalment.
Item 37 – Subregulation 25 (5)
This item replaces the words ‘the sum of 2 quarterly instalments’ with the words ‘one quarterly instalment’ as billing requirements for mobile facilities will be reduced to a minimum of one quarterly instalment.
Item 38 – Regulation 26
This item inserts in regulation 26 the words ‘or licensee’ after the word ‘operator’ to cover all facilities in the provisions for adjustments to levy instalments.
Item 39 – Regulation 28, excluding note
This item replaces regulation 28. The references to section 8 of the OPSL Act are replaced with references to subsection 8 (8) of the Safety Levies Act. The item also inserts definitions for: major revision, minor revision, pipeline and pipeline licensee, which are currently in Part 7 of the regulations.
This is part of the overall changes to include pipelines under the provisions for the safety case levy for designated coastal waters instead of under provisions for the pipeline safety management plan levy which are to be removed from the regulations (see item 62 below). In moving pipeline provisions into Part 5 of the regulations, the amount of levy for a pipeline will not change neither will who pays the levy nor when it is paid.
Item 40 – Regulation 28, note
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 41 – Regulation 28, note
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 42 – Subregulation 29 (1)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 43 – Subregulation 29 (1)
This item adds into subregulation 29 (1) the words ‘for a facility other than a pipeline’ after the words ‘on a safety case’ as safety case levies payable on those facilities are set at different levels to safety case levies on pipelines.
Item 44 – After subregulation 29 (1)
This item inserts subregulation 29 (1A) after subregulation 29 (1) setting out how the amount of levy is worked out for a facility that is a pipeline.
Item 45 – Subregulation 29 (2)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 46 – Subregulation 29 (3)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 47 – After subregulation 29 (3)
This item inserts subregulation 4 into Regulation 29 which sets out that if a safety case for a pipeline is in force at the start of a year and no major revision of the safety case came into force during the previous year then no safety case levy will be imposed.
Item 48 – Subregulation 30 (1)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 49 – Subregulation 30 (1)
This item inserts into subregulation 30 (1) the words ‘or yearly’ after ‘amounts of quarterly’ as the levy on pipelines is paid yearly.
Item 50 – Subregulation 30 (1)
This item inserts into subregulation 30 (1) the words ‘or licensee’ after each mention of the word ‘operator’ because the pipeline licensee and not the operator is responsible for paying the levy due on a pipeline.
Item 51 – Subregulation 30 (2)
This item replaces subregulation 30 (2). It inserts the words ‘or yearly’ after ‘amounts of quarterly’ as the levy on pipelines is paid yearly. It also inserts the words ‘or licensee’ after the word ‘operator’ and the words ‘or licensee’s’ after the words ‘or operator’s’ because the pipeline licensee is responsible for paying the levy due on a pipeline.
Item 52 – After regulation 50
This item inserts regulation 30A into the regulations after regulation 30. This regulation adds provisions from Part 7 of the current regulations on when a safety case for a pipeline or a revision of a safety case for a pipeline comes into force and provisions on when a revision of a safety case is a minor revision.
Item 53 – Regulation 31
Item 51 replaces regulation 31. The reference to the PSL Act in the heading to regulation 31 is deleted. In subregulation 31 (1) the reference to subsection 150YS (3) of the PSL Act, now repealed, is replaced with a reference to subsection 687 (3) of the Principal Act. This item also inserts provisions in subregulation 31 (2) to set out that a safety case levy is due and payable in annual instalments if the facility is a pipeline.
This item also amends the table. In items 1 and 2 of the table, in the ‘facility’ column, the words ‘or a pipeline’ are inserted after the word ‘facility’. For items 1 and 2, in column 4, the time when the levy instalment is due and payable is set to 30 days to simplify requirements for facilities that are not mobile facilities or pipelines. Items 5 and 6 are added to the table setting out when the pipeline levy is due and payable. The details for a pipeline are the same as in Part 7 of the current regulations.
Item 54 – Regulation 32, heading
This item removes the reference to the PSL Act in the heading to regulation 32.
Item 55 – Subregulation 32 (1)
This item replaces subregulation 32 (1). The reference to subsection 150YS (3) of the PSL Act, now repealed, is replaced with a reference to subsection 687 (3) of the Principal Act and the words ‘or a licensee’ are added after ‘operator’ to ensure notification arrangements cover all levy payers.
This item also amends the table. In items 1 and 2 of the table, in the ‘facility’ column, the words ‘or a pipeline’ are inserted after the word ‘facility’. For item 1, in column 4, the date when the operator is to be notified is amended to make it the same as for item 3, column 4, and for item 2, the text in column 4 is made the same as for item 4, column 4. This simplifies notification arrangements for facilities that are not mobile facilities or pipelines. Item 5 is added to the table setting out when the Safety Authority must notify the pipeline licensee that the levy is due and payable.
Item 56 – Subregulation 33 (1)
This item replaces the reference in subregulation 33 (1) to subsections 150YS (1) and (2) of the PSL Act, now repealed, with a reference to subsections 687 (1) and (2) of the Principal Act.
Item 57 – Paragraph 33 (1) (b)
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 58 – Subregulation 33 (3)
This item replaces the words ‘the sum of 2 whole quarter amounts’ with the words ‘one quarterly instalment’ as billing requirements for mobile facilities will be reduced to a minimum of one quarterly instalment.
Item 59 – Subregulation 33 (5)
This item replaces in subregulation 25 (3) the words ‘the sum of 2 quarterly instalments’ with the words ‘one quarterly instalment’ as billing requirements for mobile facilities will be reduced to a minimum of one quarterly instalment.
Item 60 – Regulation 34
Item 56 inserts in regulation 34 the words ‘or licensee’ after each occurrence of the word ‘operator’ to cover all facilities in the provisions for adjustments to levy instalments.
Item 61 – Part 6
This item deletes the old regulations 36-41 which constitute Part 6 of the regulations and substitutes these regulations with a new regulation 36 and a new Part 6. The provisions on the pipeline safety management plan levy are incorporated through other items in these regulations into Part 4 of the regulations.
This item combines the old regulations 48 and 49 found in Part 8 of the regulations into the new regulation 36. It updates references from subsection 150YQ (1) of the PSL Act, now repealed, with references to section 685 of the Principal Act. It also replaces the reference to Schedule 7 of the PSL Act with a reference to clause 3 of Schedule 3 of the Principal Act. In subregulation 36 (3) the word ‘licensee’ is added to ensure the regulation also applies to fees for pipelines.
Item 62 – Parts 7 and 8
This item deletes Parts 7 and 8, the old regulations 42-49. Provisions relating to pipelines in Part 7 are now included in Part 5, due to the removal of the pipeline safety management plan levy and its replacement with a safety case levy for pipelines. Regulations 48 and 49, previously in Part 8, are combined into regulation 36 (see item 61 above).
The proposed changes to regulations 50, 51 and 52 will result in these regulations being relocated to Part 6 as regulations 37, 38 and 39 (see items 64-68 below).
Item 63 – Part 9, Heading
This item deletes the heading ‘Cost-recovery arrangements’. The old regulations 48 and 49 are incorporated into the new regulation 36, in the new Part 6.
Item 64 – Regulation 50
This item relocates regulation 50 as regulation 37 in Part 6.
Item 65 – Subregulation 51 (3)
This item deletes the reference to regulation 52 and replaces it with a reference to regulation 39.
Item 66 – Regulation 51
This item relocates regulation 51 as regulation 38 in Part 6.
Item 67 – Paragraph 52 (2) (c)
This item deletes references to regulation 50 and regulation 51 and replaces them with references to regulation 37 and regulation 38.
Item 68 – Regulation 52
This item relocates regulation 52 as regulation 39 in Part 6.
Item 69 – Schedule 1, heading
This item replaces, in the heading, references to regulations with references to specific subregulations. Subregulations 21 (1) and 29 (1) set out how the levy for facilities other than pipelines is calculated.
Item 70 – Schedule 1, clause 2.3
This item adds that if both offshore petroleum operations and offshore greenhouse gas storage operations are conducted on a facility, then the facility rating is an additional two rating points higher than the rating for a similar facility with only petroleum operations or only greenhouse gas storage operations.
Item 71 – Schedule 1, clause 2.3, table, item 1
This item deletes the word ‘production’ so that table item 1 is relevant to both petroleum and greenhouse gas facilities.
Item 72 – Schedule 1, clause 2.3, table, item 1
This item changes the facility rating from 9 to 12 as the largest facilities are increasingly complex requiring the Safety Authority to spend more time and resources to assess health and safety aspects. As set out in Schedule 1, the facility rating is one factor used to calculate the facility amount for the purpose of calculating the safety case levy set out in regulation 21.
Item 73 – Schedule 1, clause 2.3, table, item 2
This item deletes the word ‘production’ so that table item 2 is relevant to both petroleum and greenhouse gas facilities.
Item 74 – Schedule 1, clause 2.3, table, item 5
This item splits the old item 5 in the table into items 5 and 5A. The new item 5 is for vessels which lay pipes either for petroleum or for greenhouse gas substances and these have a facility rating of 5. Item 5A is for the other vessels previously in the old item 5 and the facility rating is reduced to 3.
Item 75 – Schedule 1, clause 2.3, table, item 7
This item adds the words ‘or injection’ so that the item can also be applied to greenhouse gas facilities.
Item 76 – Schedule 1, clause 2.6
Item 77 – Schedule 1, clause 3.1
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 78 – Schedule 2, clause 2
This item inserts the words “or a greenhouse gas substance” to the description of a vessel laying pipes.
Item 79 – Schedule 2, clause 3, note
This item removes the reference to the superseded OPSL Act and replaces it with a reference to the Safety Levies Act.
Item 80 – Schedule 3, heading
This item replaces, in the heading, references to regulations with references to specific subregulations. Subregulations 21 (1A) and 29 (1A) apply only to the safety case levy for pipelines.
Item 81 – Schedule 3, clause 2.2, note
This item replaces the words ‘pipeline management safety plan’ with the words ‘safety case’ in line with other changes in these regulations to replace the pipeline safety management plan levy with a safety case levy for pipelines.