The Commonwealth Government has tabled its independent statutory review of the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), carried out by Deloitte.
NOPSEMA is a Commonwealth corporate entity established under the Offshore Petroleum and Greenhouse Gas Storage Act 2006. The Act requires the Resources Minister to review the operation of NOPSEMA every five years.
Deloitte notes in the review that ‘with the recent decline in commodity prices, low industry confidence and the ongoing impacts of COVID-19, the role of the regulator in maintaining appropriate oversight and challenge to industry to maintain health and safety, well integrity, and environmental management practices is paramount’.
The review found NOPSEMA to be ‘appropriately focused in bringing about improvement in Occupational Health and Safety (OHS), well integrity and environmental management across the offshore oil and gas industry in accordance with its functions under 646 of the Act.’
Deloitte also considered NOPSEMA to be compliant with its obligations in administering the streamlined Endorsed Program under the Environment Protection and Biodiversity Act 1999.
The company said ‘NOPSEMA’s transformation of its approach to stakeholder engagement across the review period is commendable. Nevertheless, the level of trust and confidence in NOPSEMA requires further improvement, including the transparency over decision-making and enforcement.’
Some notable findings in the report were: ‘emerging capability gaps, which will become more pronounced going forward, in financial assurance and decommissioning. NOPSEMA should actively pursue the development of these capabilities as a priority.’ and ‘NOPSEMA’s suite of enforcement powers are adequate for its purpose and enables a graduated enforcement approach. However, NOPSEMA would benefit from being given the equivalent power to prosecute for a ‘section 27 offence’ (i.e. an officer of a corporation’s duty to exercise due diligence to ensure the corporation is complying with its obligations) as provided for under the harmonised Work Health and Safety (WHS) laws.’
Deloitte made a total of 31 recommendations and identified 21 opportunities for NOPSEMA’s improvement.
Tim Beshara, Manager of Policy and Strategy at the Wilderness Society welcomed the review’s findings. He warned that if NOPSEMA isn’t given the resources and powers to deal with the decommissioning wave, then the taxpayers and the environment will be bearing an enormous risk.
“We support the calls for individual responsible officers at oil and gas corporations being able to be prosecuted. As the Northern Endeavour and Nganhurra debacles have shown, the majors like Woodside can’t be trusted to deliver on their decommissioning promises and the juniors who takeover their ageing assets are woefully undercapitalised, risking leaving it all to the taxpayer.”
“NOPSEMA needs to be a strong cop on the beat that can issue more than speeding fines and they also need to be a forensic accountant who can see through the financial misdirection present in the provisioning for clean-up costs,” Mr Beshara said.
The 2020 NOPSEMA review can be found here. The government will respond to the review later this year.