CE EO prese entatio n A A302286 2 20 June 201 13 Saf fety y in t the A Aust trali ian Of ffsho ore Oil a and Gas s Ind dust try Pos st ‐ Pi iper r – A A Reg gula ator Ref flect tion P Piper 2 5 Conf ferenc ce 18 – 2 20 June e 2013 3 Aberde A een, Sc cotlan d National Nationa al Offshor re Petrole um Safety y and Env ironment al Manag ement Au uthority n nopsema.g ov.au
CE EO Presenta ation Piper 25 C Conference e Ladies an nd Gentlem men Thank yo ou for allow wing me t he opport tunity to s speak to y ou this mo orning; I a am privileged d to speak k at such a an importa ant event alongside e those wit th such ex xperience and expe ertise. I am the C Chief Exec cutive of N NOPSEMA A, an indep pendent st tatutory a authority w with the responsib bility for re egulating the safety y, well inte egrity and d environm mental managem ment of th he offshore e oil and g gas indust ry in Aust ralia. As C Chief Exec utive, I report to the Fede ral Minist er for Res sources an nd Energy. . I lead a t eam of 12 20 people spanning g the west and east coasts of Australia, with our headquar rters in Pe erth and a small offi ice also in Melbourn ne. I travelled d from my y home in Perth to b be part of f this impo ortant eve ent for thr ee reasons. To share w with you h how the g overnmen nts of Aus tralia and its regula ators have lear rned from experien ces in the North Se a and from m the Pipe er Alpha d disaster, to explain n how we have imp plemented d key reco mmendat tions of Lo ord Cullen’ ’s report and to sa ay thank yo ou for the e contribut tions arisi ng from t he Piper le egacy. I will also o reflect on n some of f the lesso ons and th emes from m a regula ator’s pers spective, with a vie ew to posi ing some challenge s for gove ernment, i ndustry a nd regula tors as we move e forward t to define the offsho ore petrol eum indu stry as on ne that is s safe for people an nd the env vironmen t in additi on to one e that brin gs econom mic benef it to the commun ities in wh hich it ope erates – es ssentially, an indust try we wo uld like ou ur children a and future e generati ions to be e part of. Over the last two d days much h has been n spoken a about the 1990 rep ort from L Lord Cullen wh hich called d for wide espread ch hanges in t the UK ind dustry and d also set in motion changes i internatio onally. For regulator rs and gov vernments s in Austra alia, influe ential recomme endations included: : The re quiremen nt for “goa al setting” regulatio n The ne eed for a s single regu ulator to r emove co onfusion a nd uncert tainty abo ut overlap pping juris sdiction a nd potent tially conf licting req quirement ts The im mportance of an inde ependent regulator r The ne eed for a p properly re esourced inspectora ate emplo oying a crit tical mass s of special list (comp petent) ins spectors And so w we, in Aust ralia, got to work. National Offsho ore Petroleum Sa afety and Environ nmental Manage ement Authority A302286 20 June 2013 2 of 13
CE EO Presenta ation Piper 25 C Conference e Australia a and the s safety cas se regime To put th he develop pment of t these arra angements s in conte xt, first a l little back kground to Austra alia’s legisl lative stru ucture – w we are a Fe ederation with a div vision of responsib bilities am mongst the e Federal G Governme ent and th ose of the e eight sta ates and territorie es. In 1979, b before Pip per Alpha, legislativ e power a and respon nsibility fo or offshor e petroleum m activitie es was div vided at a national a and state l evel. A de epartment t, called a Designate ed Author rity, mana aged regul ation and administ ration in c correspon ding state/ter ritory juris sdictions. The desig gnated aut thorities w were respo onsible fo or petroleum m acreage e release a and permi it allocatio on, offsho re activity y promotio on, sometime es major p project fac cilitation a as well as safety, we ells and en nvironme ntal managem ment regu lation. Following g the Culle en report, legislatio n in Austr ralia was a amended t to introdu uce the concept o of duty of care and clarify key y respons ibilities fu ndamenta al to a mo odern occupatio onal healt th and safe ety regime e. Further r progress was made e in 1996 with legislatio n to provi ide a firm legal basi s for the s safety case e for all of ffshore pe etroleum facilities. As a resu ult, by 199 96 a goal s setting reg gime and the assoc iated safe ety case p process had been n establish hed. The Aust ralian Gov vernment recognise ed that mo ore might be neede ed to achie eve an effective safety cas se regime . In 1999, it commis ssioned a review of f offshore safety in Australia to addres ss its conc cerns over r the adeq uacy of th he existing g regulato ry arrangem ments. The revie ew by inde ependent offshore s safety exp perts repo rted in 20 001 and co oncluded that: “…the e Australia an legal an nd admini istrative fr ramework k… for reg ulation of f healt h, safety a and enviro onment in n the offsh hore petro oleum indu ustry is comp plicated an nd insuffic cient to en nsure appr ropriate, e effective a and cost efficie ent regula ation of th he offshore e petroleu um indust ry.” It recomm mended a national petroleum m safety re egulatory authority y. National Offsho ore Petroleum Sa afety and Environ nmental Manage ement Authority A302286 20 June 2013 3 of 13
CE EO Presenta ation Piper 25 C Conference e Moving q quickly to reconfirm m the prior rity for im proving sa afety in Au ustralia's o offshore petroleum m industry y, in 2002 Federal, S State and Northern Territory y ministers s accepted d the revie ew recomm mendation ns by endo orsing the e “safety c case appro oach” and agreeing to the for rmation of f an indep pendent n ational of fshore saf fety autho ority. This was back ked by new w laws stip pulating th he duty of f operator rs to mana age offsho ore petroleum m safety. Further, t he regulat tory autho ority woul ld be fund ded by cos st recovery from the industry i t regulate ed. With the establish hment and d commen ncement o of the Nat tional Offs shore Pet roleum Safety Au uthority (N NOPSA) in n 2005, Au ustralia ha ad implem mented fo our key recomme endations s from Lor rd Cullen’s s report: “goal s setting” re egulation a and with i it the need d for oper rators to s submit a s afety case co overing al l aspects o of operati ons A singl e regulato or for Com mmonwea lth and co oastal wat ers An ind ependent t regulator r A prop perly resou urced and skilled ins spectorat e ‐ funded d by indus stry levies At this tim me and in this settin ng, I must again tha ank our int ternationa al counter rparts, in particula r the UK a and Norwa ay who as sisted wit h our esta ablishmen nt by shari ng their expertise e and expe eriences in n the deve elopment of our pro ocesses, p policies, an nd procedur res. We m ust also th hank indu stry and r regulators in the No orth Sea, particula rly the UK K, where m many of ou ur speciali sts develo oped their r knowled ge and expertise e. The know wledge, ex xperience e and expe ertise of th hose now w working with us in n Australia a is a form midable an d valuabl e legacy o of Piper A lpha and t the Cullen n Inquiry. Today, th he authori ty I head is known a as NOPSE MA and is s a special ist regulat tor focussed only on o offshore pe etroleum operation ns. More r recently w we have responsib bility for re egulating offshore g greenhou se gas sto orage activ vities. Consolida ating the safety cas se regime e in Austra alia As you ca an see, wit thin a sho ort space o of time the ere was su ubstantial progress in the structure e and impl ementatio on of offsh hore petro oleum reg gulation in n Australia a. As it turns out t, this was n’t enoug gh. Major a accidents in Austra lia and int ternationa ally, became t the unfort tunate cat talysts for further ch hange. National Offsho ore Petroleum Sa afety and Environ nmental Manage ement Authority A302286 20 June 2013 4 of 13
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