GovtResponse NOPSAReviewSept2010

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OFFSHORE PETROLEUM SAFETY

REGULATION INQUIRY (June 2009)
and
REVIEW OF THE NATIONAL
OFFSHORE PETROLEUM SAFETY
AUTHORITY OPERATIONAL
ACTIVITIES (March 2008)
GOVERNMENT RESPONSE
SEPTEMBER 2010
Final Government Response
Offshore Petroleum Safety Regulation Inquiry and 2008 Review of NOPSA Operational Activities
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Table of Contents

EXECUTIVE SUMMARY 3
OFFSHORE PETROLEUM SAFETY REGULATION INQUIRY
(NOPSA REPORT) 55
OFFSHORE PETROLEUM SAFETY REGULATION INQUIRY
(MARINE REPORT) 23
THE 2008 NOPSA OPERATIONAL REPORT 26
ACRONYMS AND ABBREVIATIONS 36
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EXECUTIVE SUMMARY
A safe and secure working environment is a key priority for the Australian Government.
Australia has a sound record in offshore petroleum safety, recognising that there is room
for improvement to achieve our goal of world’s-best safety practices. Last year the
National Offshore Petroleum Safety Authority (NOPSA) released the inaugural Offshore
Health and Safety Performance Report for 2007-08. The NOPSA statistics have indicated
increasing numbers of gas releases and personal injury rates which have failed to decline.
This is supported by statistics from the June 2010 Offshore Health and Safety
Performance Report which again show an increase in the number of hydrocarbon releases
when compared with previous years. These statistics serve as potential indicators for more
severe events. In summary, NOPSA's report indicated that the industry needs to improve
leadership, better manage ageing facilities, address skills shortages and minimise gas
releases.
Since the mid-1990s, the safety case regime in Australia has provided an assurance to the
community, governments and industry that risks to health and safety are identified and
appropriately addressed.
The 2009 reports of the Offshore Petroleum Safety Regulation Inquiry (OPSRI) and the
2008 Review into the Operational Activities of the National Offshore Petroleum Safety
Authority (NOPSA) recognise the good reputation of Australia’s offshore industry, the
effective implementation of the safety case regime and the robust establishment of
NOPSA which has developed many credible systems, competencies and publications.
The recommendations in the reports also recognise the changing environment now facing
the offshore industry.
The reports are:
 Better practice and the effectiveness of the National Offshore Petroleum Safety
Authority (June 2009) (the NOPSA Report);
 Marine Issues (June 2009) (the Marine Report); and
 The Review of the National Offshore Petroleum Safety Authority Operational Activities
(March 2008) (the Operational Review).
In preparing its response to the three reports, the Government recognised that there are
consistent themes from all stakeholders. The three reports provide recommendations and
findings that are specific to matters relating to clarity regarding the framework and
coverage of the legislation and regulations. Complementing this theme are those matters
that are specific to NOPSA. Administrative and operating policies and practices of both
NOPSA as the Regulator and the offshore petroleum industry have been identified in the
reports. Issues include a perceived lack of a consistent approach by the Regulator and
the need for more open and frequent interaction between the Regulator and the operator /
titleholder and other stakeholders.
The reports recognised the onus placed on operators by the safety case regime and
identified a number of recommendations aimed at assisting industry to ensure that risks
are appropriately managed and all legislative requirements are adhered to.
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The Government has set forward its response and associated implementation considerations
based on a clearly established case for action and against the following key principles:
1. The occupational health and safety regime for the offshore petroleum industry in
Australia is regulated under the Offshore Petroleum and Greenhouse Gas Storage
Act 2006 (the OPGGS Act). The regime is underpinned by duty of care
requirements that are set out in Schedule 3 of the OPGGS Act. The central duty of
care is a requirement imposed on operators to take all reasonably practicable steps
to ensure that the facility and all associated work is safe and without risk to the
health of any person at or near the facility. 1
2. The regulations under the OPGGS Act implement a safety case regime, under
which an operator must have had a safety case accepted by NOPSA before an
offshore facility may be constructed, installed or operated. The operator / titleholder
is obligated under the regime to demonstrate in the safety case how they intend to
acquit this duty of care. 2
The Government has developed this response to the Offshore Petroleum Safety
Regulation Inquiry and the 2008 NOPSA Operational Review following a period of
stakeholder consultations. In general, stakeholders were supportive of the direction of the
Government’s draft response, recognising that processes are underway that will address
major concerns. Processes include the Government’s proposed establishment of a single
national offshore petroleum regulator, the Government’s response to the Montara
Commission of Inquiry and the re-write of the Navigation Act 1912.
The Government has commenced work to address the issues arising from the reports,
specifically relating to the clear integration of integrity with safety and rapid growth in the
offshore petroleum industry. This includes clarifying and strengthening Australia’s offshore
OHS framework through the consolidation of the safety regulations and amendments
providing NOPSA with power to regulate non-OHS structural integrity matters.
Amendments also allow for early engagement by the Regulator to address health and
safety issues arising from the rapid growth in the industry and the incorporation of new and
often large-scale technologies. In addition, NOPSA is in the process of responding to
administrative and operating concerns raised in the Reports and issues in relation to
interaction with the industry and will provide a progress report to the Minister by the end of
2010.
1
Offshore Petroleum and Greenhouse Gas Storage Act 2006, Schedule 3, Part 2, Division 1,
Clause 9
2
Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities) Regulations 1996,
Part 1, Regulation 3
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Offshore Petroleum Safety Regulation Inquiry (NOPSA Report)

On 9 January 2009 the Commonwealth and Western Australian Governments through the
Minister for Resources and Energy, the Hon Martin Ferguson AM MP and the Minister for
Mines and Petroleum the Hon Norman Moore MLC announced a joint independent Inquiry
into the effectiveness of regulation for upstream petroleum operations. The terms of
reference included a focus on the 3 June 2008 gas pipeline rupture at the Apache Energy
Ltd operated facilities on Varanus Island.
On 22 May 2009, Apache Energy Ltd was successful in a Federal Court challenge to the
Panel’s use of documents provided by the Western Australian Department of Mines and
Petroleum that had been compulsorily obtained under the Western Australian Petroleum
Pipelines Act 1969.
In light of the Federal Court decision, the Terms of Reference for the Inquiry were altered
and Ministers agreed that the Panel would prepare a report for the Minister for Resources
and Energy covering better practice regulation and the role of the National Offshore
Petroleum Safety Authority (NOPSA) with associated recommendations. A separate
report, with recommendations, would be provided to the Minister on improving the
interface between NOPSA and the Australian Maritime Safety Authority (AMSA).
The two Reports, Better practice and the effectiveness of NOPSA (the NOPSA Report)
and Marine issues (the Marine Report), were provided to Minister Ferguson on 12 June
2009. The Minister released the reports at the 9th meeting of the Ministerial Council on
Mineral and Petroleum Resources (MCMPR) on 9 July 2009.
The NOPSA Report found that NOPSA has developed many creditable systems,
competencies and publications, recognising the important role of NOPSA in interacting
with, guiding, supporting and educating operators through the safety case process. Yet
over this period, there has been significant growth in the industry which has placed
additional pressure on NOPSA as the national offshore safety regulator.
RECOMMENDATION 1
We recommend powers should be conferred on NOPSA to enable it to effectively regulate
safety and integrity for all facilities and pipelines in the water and the WA islands which
export gas by pipeline. NOPSA’s authority should extend to the nearest valve on the
mainland above the shore crossing. (p. 17)
Proposed Response
Accepted with further consideration of the extent of NOPSA’s jurisdictional authority
Facility and pipeline regulation
This recommendation is consistent with Recommendation 7.1 of the Productivity

Commission Review of the Regulatory Burden on the Upstream Petroleum (Oil and Gas)
Sector (June 2009) (PC Review) which identified the dual regulation of pipelines and wells
as an unnecessary regulatory burden 3 . This recommendation has also previously been put
3
Productivity Commission 2009, Review of Regulatory Burden on the Upstream Petroleum
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forward by an Integrity Working Group, established under the upstream Petroleum and
Geothermal sub-Committee under the auspice of the Ministerial Council on Mineral and
Petroleum Resources (MCMPR) which was made up of Commonwealth, State and
Northern Territory officials and industry representatives in 2007 and the Operational
Report in June 2008.
An agreed position was reached by the Integrity Working Group who recommended that
the Petroleum (Submerged Lands) (Pipelines) Regulations 2001 be revoked; and the
Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities) Regulations
1996 be amended to provide for the management of pipelines. The Integrity Working
Group recommended that the amendment should include redefining facility to include
pipelines.
As part of the Government’s September 2009 amendment to the Offshore Petroleum and
Greenhouse Gas Storage Act 2006 (OPGGS Act), facilities have been redefined to
incorporate “Pipelines” as per the recommendation of the Integrity Working Group. The
Department of Resources, Energy and Tourism has also, through its process for
consolidation of all regulations under the Act, incorporated the management of pipelines
into the new and consolidated Offshore Petroleum (Safety) Regulations 2009, which
replace the Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities)
Regulations 1996 and the Petroleum (Submerged Lands) (Occupational Health and
Safety) Regulations 1993; and the Petroleum (Submerged Lands) (Diving Safety)
Regulations 2002.
For the purpose of the Offshore Petroleum (Safety) Regulations 2009 which came into
force on 1 January 2010, Pipeline Safety Management plans have been replaced by safety
cases.
The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment

(Miscellaneous Measures) Bill 2010, was originally introduced to the Australian Parliament
on 10 February 2010 and lapsed with the calling of the August Federal Election. The
Government will re-introduce this Bill as a priority. The amendments will provide NOPSA
functions and powers in order to strengthen its ability to carry out its existing regulatory
responsibilities by expressly including the oversight of the whole of structural integrity of
facilities (including pipelines), wells and well-related equipment. To ensure complete
coverage of this oversight role, the legislative amendment will include non-OHS structural
integrity. The Bill will also clarify that a titleholder has an OHS duty of care relating to wells.
Further work is required to determine the details of this function, through regulation,
including the delineation between resource security and management matters that may
also have a structural integrity aspect.
NOPSA Jurisdiction
This recommendation reflects the intent of the establishment of NOPSA, to provide a

nationally consistent safety regulation framework for Australia’s offshore petroleum
industry. Furthermore, Recommendation 7.2 of the PC Review states that States and
Territories should consider conferring powers on NOPSA to regulate OHS matters for all
(Oil and Gas) Sector, Research Report, Melbourne p.175

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State and Territory waters seaward of the low tide mark, including islands within those
waters 4 .
In order for a consistent regime to operate effectively and efficiently any conferral of
additional State and Northern Territory powers must mirror the functional obligation of the
OPGGS Act and relevant regulations.
The ability for the States and Northern Territory to extend NOPSA’s jurisdiction to waters
landward of the territorial sea baseline and/or to extend, for pipelines, to the nearest valve
on the mainland above the shore crossing is provided for in the Commonwealth OPGGS
Act. The Commonwealth recognises that this extension is at State and Territory discretion,
and also notes stakeholder OHS and integrity concerns about this extension, however the
Commonwealth is of the view that this issue requires further consideration and the
Department will work with stakeholders to formulate a final policy position.
This also incorporates the response to Finding 4 of the NOPSA Report and
Recommendation 5 of the Operational Review.
RECOMMENDATION 2
We recommend MCMPR continue to support a duty of care safety case regime for best
practice offshore petroleum industry regulation augmented to include regulation of
integrity. Since the safety case is at the centre of the duty of care co-regulatory regime,
we consider that the requirement for the implementation of the safety case at facilities
involved in the exploitation of petroleum resources should be provided for within the
OPGGS Act itself. (pg.19)
Proposed Response
Accepted in part
The Government accepts that continued support from MCMPR for a duty of care safety
case regime reflects current best practice offshore petroleum industry regulation.
The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment

(Miscellaneous Measures) Bill 2010, was originally introduced to the Australian Parliament
on 10 February 2010 and lapsed with the calling of the August Federal Election. The
Government will re-introduce this Bill as a priority. The amendments will provide NOPSA
functions and powers in order to strengthen its ability to carry out its existing regulatory
responsibilities by expressly including the oversight of the whole of structural integrity of
facilities (including pipelines), wells and well-related equipment. To ensure complete
coverage of this oversight role, the legislative amendment will include non-OHS structural
integrity. The Bill will also clarify that a titleholder has an OHS duty of care relating to wells.
The Government accepts that the duty of care regime in Schedule 3 of the OPGGS Act is
a ‘co-regulatory’ regime. However, the key principle of this response, as outlined in the
Executive Summary, is to reinforce the duty of care requirements that are set out in
Schedule 3 of the OPGGS Act. The duty of care is a requirement imposed on operators to
4
(Oil and Gas) Sector, Research Report, Melbourne p.179
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take all reasonably practicable steps to ensure that the facility and all associated work is
safe and without risk to the health of any person at or near the facility.
The Government acknowledges that responses to the draft Government response

highlighted the safety management responsibilities of other stakeholders (as per Division
1, Part 2, Schedule 3 of the OPGGS Act) including:
 Persons in control of parts of a facility or particular work;

 Employers;
 Manufacturers in relation to plant and substances;
 Suppliers of facilities, plant and substances;
 Persons erecting facilities or installing plant; and
 Persons at a facility in relation to occupational health and safety.
While the safety management responsibilities of the stakeholders are recognised,

compliance with the operator’s duty of care is the responsibility of the operator alone.
Responsibility is not shared with the Regulator.
There is a balance to be achieved between recognising both the duty of care responsibility
of the operator and the community’s reasonable expectation that the Regulator take
appropriate steps to properly assess the quality and content of the safety case,
compliance with the safety case, and the effectiveness of the safety case over time. The
Government is continuing to assess the most appropriate mechanism to achieve that
balance.
RECOMMENDATION 3
We recommend in relation to safety case development and compliance overall, that
NOPSA revise its approach to interacting with operators prior to the safety case
assessment process and subsequently and direct more resources into its advisory
functions. We further recommend that NOPSA develop and implement a formal plan for
supporting and guiding each operator prior to safety case acceptance, as well as for
ongoing compliance with that safety case, recognising the unique experience, capabilities
and assessed risk of that operator. Each plan needs to include advice, education and
liaison meetings with the operators. The plan needs to be continuously reviewed and
reassessed based on latest information, including the interaction with the operator.
Implementation should be reviewed at a senior level within NOPSA. (p 38)
Proposed Response
Accepted
It is important that the offshore petroleum industry has an understanding of, and
confidence in, the regulatory regime within which it operates. This recognises the role of
the Regulator in promoting and clarifying with industry, industry’s understanding of and
obligations under the OPGGS Act and associated regulations.
The Government notes that NOPSA has commenced work to address these issues, for
example, through the Safety Case Guidance Note project. NOPSA continues to be
responsible for improving interaction and consultation with stakeholders on this and other
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issues identified in these reports, including the response to Finding 7 of the NOPSA
Report and Recommendation 17 of the Operational Report.
In relation to the safety case framework, the Government considers that it would be
appropriate and timely for a review of safety case development, implementation and
ongoing compliance. Section 695 of the OPGGS Act states that the responsible
Commonwealth Minister must cause reviews of the operations of the Safety Authority 5 to
be conducted every 3 years. The first review was conducted in 2008. The next review is
due in 2011 and the Government proposes that this review include a review of policy
matters around the safety case framework, including development, content requirements
and implementation. In this context, consideration of interactions between the Regulator
and industry may also be considered as part of the next review.
The Chief Executive Officer (CEO) of NOPSA will be responsible for improving the
interaction between the Authority and its stakeholders. The Government will work with the
CEO to determine the process to undertake the 2011 review and will consult with
stakeholders to determine the most appropriate means of ensuring improvements in the
development, implementation and compliance with the safety case requirement.
RECOMMENDATION 4
We recommend that NOPSA review the risk assessment of pipelines. NOPSA should
focus, in particular, on the efficacy of anti-corrosion systems, and recognise potential
interference effects and major accident event (MAE) escalation risks associated with
adjacent pipelines and unlicenced pipes even if they fall outside its direct regulatory
responsibilities (p. 39).
Proposed Response
Accepted, in principle
NOPSA already examines risks to the offshore petroleum workforce within its jurisdiction
including potential interference effects and major accident event escalation risks
associated with adjacent pipelines and unlicensed pipes that fall outside NOPSA’s direct
regulatory responsibilities. However, NOPSA’s capacity to assess risks associated with
pipelines and other structures outside its jurisdiction is constrained by a number of factors.
Implementation of this Recommendation in full would require the conferral of powers on
NOPSA by legislation of the relevant State or Territory. The Commonwealth supports the
conferral of powers. However, this is a matter for State and Territory governments.
This is consistent with the response to Recommendation 1.
5
Offshore Petroleum and Greenhouse Gas Storage Act 2006, Chapter 6, Part 6.9, Division 9,
Section 695, p.760
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RECOMMENDATION 5
We recommend that NOPSA develop a robust risk assessment matrix for use in assessing
and responding to the changing risk associated with each facility and the operator.
Further, we recommend that NOPSA increase auditing frequency and duration to audit
each manned facility on average twice per year (covering each staff swing), but more often
if the risk matrix indicates this is necessary; and that audits should average several days
actually on major facilities. (p. 54)
Proposed Response
Accepted
A mature and robust risk management system is crucial for the effective administration of
regulatory activity. Through operational knowledge and learning a robust and dynamic risk
matrix is one that incorporates continuous improvement and changes accordingly.
Furthermore, a robust risk matrix provides the key platform for undertaking focussed audits
of facilities (both desk top and through visits) and enables the efficient and effective use of
finite resources.
This is a matter for the NOPSA CEO. The Government has asked the CEO to report by
the end of 2010 to the Minister for Resources and Energy on steps taken to implement this
recommendation. The advice of the Board may be sought by both the CEO and the
Minister.
This recommendation is consistent with the response to Recommendation 18 of the

Operational Report and Recommendation 7 and Finding 13 of the NOPSA Report.
RECOMMENDATION 6
We recommend that the OPGGS Act and its subsidiary regulations be amended to enable
NOPSA to have a broader range of graduated compliance tools including the ability to
impose a civil fine on an operator per day of non compliance with an improvement or
prohibition notice. Legislation should also be considered that would enable NOPSA to
make public, with appropriate safeguards, specific information concerning its enforcement
actions including the name of the operator, the breach, and the enforcement action
required including potential penalties. (p. 61).
Proposed Response
Further consideration required
The need for a more flexible compliance regime is one that requires further policy and
legislative consideration.
Specifically issues such as the level of fines (including trigger points), the administration of
fines collected by the Regulator and the effectiveness of civil fines in other OHS
jurisdictions will need to be considered. The effectiveness and appropriateness of
publishing enforcement orders will also need to be examined to ensure this doesn’t
mitigate against industry openness and the sharing of lessons learnt between industry
members, Governments, regulators and the community more broadly.
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This response incorporates the response to Recommendation 15 of the Operational
Report.
NOPSA and the Government will undertake further examination of the options available
and their benefits, if any, including practical and legal implications for the Regulator,
Government and industry. All options will be considered in consultation with stakeholders.
RECOMMENDATION 7
We recommend that the Management of Safety on Offshore Facility (MOSOF) regulations

be amended to explicitly enable assessment of safety culture, leadership, and
consideration of operator past history, motivation and current capacity in approvals of
safety cases. NOPSA should be able to audit against these criteria and challenge
operators on these issues. (p. 69).
Proposed Response
Accepted in part
No amendments to the Offshore Petroleum (Safety) Regulations 2009 are necessary.
The need to focus on organisational safety culture and leadership is an essential

consideration of best practice safety management. While the evaluation of safety culture
and leadership in particular can be very subjective, the issue of taking past performance
into consideration is not. NOPSA now has an established history, working over the last
five years with operators undertaking offshore petroleum activities in Australia. This
knowledge is important in ensuring that operators are committed to meeting their
legislative responsibility under the duty of care regime.
NOPSA has been progressively incorporating assurance of safety culture, including

Process Safety Culture as a themed promotional project in NOPSA’s 2009-2010 Annual
Operating Plan and continuing this theme in 2010-2011.
Noting that Industry Leadership in MAE Prevention is a focus of NOPSA’s 2009/10 Annual
Operating Plan, the Government will seek the consideration by NOPSA of a third National
Program around leadership and safety culture, incorporating operator past history,
motivation and current capacity in approval of safety cases. NOPSA will review this
recommendation in 2011/12 to determine whether there has been improvement or whether
a regulatory approach is required.
This recommendation is also consistent with the response to Recommendation 5 (robust

risk matrix) and consideration of Finding 13 of the NOPSA Report.
RECOMMENDATION 8
We recommend that NOPSA critically review its regulatory manning levels based on its
current workload and the recommendations for additional areas of focus and increased
auditing presented in this Report. To meet these requirements, we estimate that NOPSA
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requires up to 50 inspectors in total plus associated support staff to bring overall staffing
from about 55 to 75. The Department of Resources, Energy and Tourism should help
facilitate the necessary ongoing levy funding in consultation with industry. (p. 73)
Proposed Response
Accepted
The Government agrees that NOPSA is under resourced, reducing its capability to enforce
the regime effectively. This is an ongoing challenge for the Authority with continuing
difficulties obtaining suitably qualified and skilled candidates. NOPSA currently remains
under optimal staffing levels.
This is a matter for the NOPSA CEO to address on an ongoing basis. The recruitment of
appropriately skilled staff during periods of high activity in the industry will continue to be a
long-term challenge for the Authority. The Government has asked the CEO to report by
the end of 2011 to the Minister for Resources and Energy on steps taken to implement this
recommendation and ongoing issues with respect to resourcing.
This recommendation incorporates the response to Finding 15 and 16 of the NOPSA

Report.
RECOMMENDATION 9
We recommend that MCMPR liaise with Ministers with environmental and planning
responsibilities, and if necessary COAG, to ensure that environmental requirements for oil
and gas projects are not imposed subsequent to safety assessments and do not increase
the risk of major accident events. (p. 76)
Proposed Response
Accepted in-principle
The Government will implement this recommendation through the Chair of the Ministerial
Council on Mineral and Petroleum Resources (MCMPR) writing to the Chair of
Environment Protection and Heritage Council and working with other Ministerial Councils
in relation to the establishment of a single national regulator.
The Government notes that this recommendation is also consistent with recommendations
arising from the PC Review, recognising the parallel but potentially inconsistent workings
of occupational health and safety and environmental regulatory processes.
As per recommendation 10.7 of the PC Review 6 , on 5 August 2009 the Minister for
Resources and Energy announced the Government’s intention to establish a single
national regulator in Commonwealth offshore areas from 1 January 2012, with the option
for states and the Northern Territory to confer their powers for state coastal and inland
waters and islands to the national regulator. The Government’s preferred model is
consistent with the industry's view that the safety of people, the integrity of facilities, the
6
(Oil and Gas) Sector, Research Report, Melbourne, p.292
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protection of the environment, and day to day operations must be regulated in an
integrated way, with resource management issues regulated separately.
RECOMMENDATION 10
We recommend that the Commonwealth and States/Northern Territory legislate to
establish a properly resourced and empowered independent national safety investigation
capacity to investigate serious oil and gas industry (including pipeline) incidents including
near miss events that could have led to a major accident event. We further recommend
that the regulatory investigatory powers under the OPGGS ACT be reviewed in the context
of powers for the proposed independent national safety investigator, noting that the
regulator must retain those investigatory powers necessary in order to fulfil its legislative
functions. (p. 82).
Proposed Response
Accepted in part
The Government recognised that there was an administrative gap in the provisions of the
OPGGS Act where, until October 2009, there were no general powers available to conduct
an inquiry into any offshore incidents. The OPGGS Act allows for an investigation by
NOPSA into occupational health and safety; and by the Minister as the Designated
Authority for offshore areas in Commonwealth waters which would be limited to
considering whether or not it was appropriate to exercise one or more of the specific
statutory powers available in that capacity.
The Minister for Resources and Energy introduced an amendment to the OPGGS Act to
enable the responsible Commonwealth Minister to appoint a Commissioner to conduct a
Commission of inquiry into the operational, human and regulatory factors where a
significant offshore petroleum or greenhouse gas incident, or a ‘near miss’ has occurred.
This amendment was passed by Parliament on 17 September 2009 and received Royal
Assent on 8 October 2009.
The inquiry powers will enable governments, regulators and the industry to be fully
informed of all matters surrounding an offshore incident. This will enable all stakeholders
to learn from these incidents and initiate appropriate changes (legislative and operational)
to prevent similar future incidents. Furthermore, an appointed Commissioner, under the
OPGGS Act, for the purposes of undertaking a Commission of Inquiry, has the power to
seek assistance from investigative agencies such as the Australian Transport Safety
Bureau, if deemed appropriate.
In November 2009, the Minister exercised his powers and appointed Mr David Borthwick
AO PSM as the Commissioner conducting the Commission of Inquiry into the August 2009
uncontrolled release of oil and gas from the Montara Wellhead Platform in the Timor Sea.
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Findings
FINDING 1
We note that the NOPSA Board should function as envisaged in the legislation and that
this function should be clarified in writing by the Commonwealth Minister and reinforced by
the Department to the Board and NOPSA CEO. We consider that any lack of clarity in the
OPGGS Act with regard to the role of the NOPSA Board should be resolved and that a
budget be made available by NOPSA to support research related to the Board’s advisory
role and the holding of four to six meetings annually. We also consider that to avoid
confusion with governance Boards, the Board should be explicitly renamed an Advisory
Board. (p. 11)
Proposed Response
Accepted in part
The Government is of the view that Section 654 of the OPGGS Act, which relates to
functions of the Board, provides a clear statement of the Board’s role and responsibilities.
The Government supports the functions of the NOPSA Board, which are advisory in
nature, as set out in the OPGGS Act. The independent advisory function of the Board
provides the Government, NOPSA, State and Territory Petroleum Ministers and the
MCMPR with a valuable resource to assure that policy and operational elements are
robust and achievable.
This Recommendation is consistent with Recommendation 7.5 of the PC Review 7 which

seeks consideration of whether it is appropriate to have a Board for NOPSA and if so,
clarification of the role of the Board.
In responding to concerns raised by stakeholders and the Board itself relating to the need
for clarity as to the Board’s role and functions, the Minister for Resources and Energy
provided the NOPSA Board with a “Statement of Expectations”. The Statement of
Expectations sets out the Minister’s expectations which are in accordance with the
OPGGS Act.
The Minister for Resources and Energy has advised the CEO of NOPSA and the Board of
his expectation that the CEO of NOPSA will work constructively with the Board and
develop and agree annual budgets and support for future Board activities and work
priorities.
This response incorporates the response to Recommendation 16 of the

Operational Report.
FINDING 2
We note that with the relevant division of DOCEP now transferred to DMP, it would be
timely to revise the NOPSA/DOIR/DOCEP MOUs. We also note that both parties should
be proactive in fulfilling their obligations under MOUs and cooperating closely. (p. 13)
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15
Proposed Response
Accepted
The efficient and effective operation of NOPSA relies on clarity between the legislative
interfaces of both the OPGGS Act and jurisdictional responsibilities. The Government
notes, however, that, while there is a case for MOUs that deal with cooperative working
arrangements between jurisdictions, there is no legislative basis for NOPSA to provide
regulatory services to other jurisdictions.
The Government has asked the CEO of NOPSA to review and consider the
appropriateness of all MOUs and report to the Minister for Resources and Energy by the
end of 2010 on ongoing issues and options with respect to improving cooperative
arrangements with other jurisdictions.
The CEO of NOPSA has advised that a review of MOUs will be included in the Annual
Operating Plan for 2010-2011.
FINDING 3
We note the importance of further work to improve industry performance on safety critical
maintenance and backlogs. NOPSA should drive and monitor industry progress on this
through its Facility Integrity national program and through facility audits. (p. 15)
Proposed Response
Accepted
As the Regulator, NOPSA’s role in a performance-based regime is to provide independent

assurance that health and safety risks are properly controlled by the operator.
In June 2009 the Minister for Resources and Energy released the inaugural Offshore
Health and Safety Performance Report for 2007-08, which was prepared by NOPSA. The
Report, an important initiative of the Authority, indicates that the industry needs to improve
leadership, better manage ageing facilities, address skills shortages and minimise gas
releases.
In the inaugural report NOPSA has specifically highlighted facility integrity and lifting
operations as areas of concern. These areas can be addressed by ensuring that all
procedures, maintenance and workforce training reflect a commitment to compliance as
well as a strong and embedded safety culture.
NOPSA has implemented two National Programs for Facility Integrity and Lifting
Operations to focus industry attention on key safety issues and to facilitate comparisons
with international practices. The intent of the national program on facility integrity has
been to influence the number of hydrocarbon releases, a key forward indicator for a major
accident event.
The Government has asked the CEO of NOPSA to consider and implement further
strategies to address this challenge, including a more extensive facility audit program.
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This is consistent with the response to Recommendation 5.
FINDING 4
We also note that Commonwealth legislative drafting is underway to include overall facility
integrity in NOPSA’s responsibilities and urge that this be progressed as a matter of
urgency. While this is underway, other jurisdictions should prepare to mirror the legislation
to enable NOPSA to regulate facility integrity in designated coastal waters as soon as the
Commonwealth legislation is passed. (p. 17)
Proposed Response
Accepted with further consideration as per the response to Recommendation 1 of the
NOPSA Report
As per the response to Recommendation 1 of the NOPSA Report, the Government

reiterates that NOPSA was established to provide a nationally consistent safety regulation
framework for the offshore petroleum industry. Responsibility for structural integrity needs
to be provided uniformly in Commonwealth waters and in State and NT coastal waters.
FINDING 5
We note the recent agreement that separate industry or hazard specific laws relating to
OHS should only be maintained where objectively justified. We believe that separate
legislation is justified for the offshore oil and gas industry but that in line with the national
OHS review’s recommendation, the content and operation of all laws in the petroleum and
gas industry that affect OHS should be reconsidered with the aim of achieving as much
consistency with the content and operation of the harmonised principal OHS laws as is
appropriate. (p. 19)
Proposed Response
Noted
The Government is committed to the implementation of nationally consistent legislation

and regulation for occupational health and safety. The establishment of NOPSA was in
itself the reflection of an all-of-government agreement to establish a single safety regulator
for offshore petroleum activities in Australia. The Department of Resources, Energy and
Tourism will monitor progress of the OHS Review and take into account any
recommendations in its policy and rule making responsibilities for offshore petroleum
activities.
The Government encourages the industry to consider the development of industry-wide

guidelines or a code of practice to provide direction on the requirements to be met by
industry in relation to the competency of high-lift operators.
The Government will remain involved in this issue through the Department of Resources,
Energy and Tourism, the Department of Education, Employment and Workplace Relations
and Safework Australia.
17
FINDING 6
We note that there would be value in undertaking a gap analysis between documentation
associated with the UK HSE and its Offshore Division and the material available through
NOPSA to assist NOPSA in identifying an appropriate quantum and focus for its own
guidance material. (p. 24)
Proposed Response
Noted
The Government supports the need for appropriate guidance material to be provided by
NOPSA, including clearly identifying operator/titleholder and regulator responsibilities and
duties, as provided for by Australia’s offshore occupational health and safety legislative
regime.
This is an operational matter for the CEO of NOPSA. The Government has asked the
CEO of NOPSA to review and address any identified gaps in guidance material, taking into
account the UK HSE as a benchmark in this area. The CEO of NOPSA is to report by the
end of 2010 to the Minister for Resources and Energy on this matter.
FINDING 7
We note that NOPSA could consider establishing an appropriate forum for consultants and
those personnel within operators that undertake safety case development. This forum
could be via APPEA and should be used for education, promotion and discussion of safety
case issues. (p. 24)
Proposed Response
Noted
The promotion of occupational health and safety of persons engaged in offshore petroleum
operations is a legislated function of NOPSA. 8
The Government notes that NOPSA and APPEA have collaborated on a Health and Safety
Representatives Forum which has been held every 18 to 24 months. The Forum provides
an opportunity for offshore workplace health and safety representatives from all
jurisdictions to meet, exchange information and develop strategies to assist in the
management of offshore safety issues from a workplace point of view.
As per the Government’s response to Recommendation 3 of the NOPSA Report, the CEO
of NOPSA will be responsible for improving the interaction between NOPSA and its
stakeholders.
8
The Offshore Petroleum and Greenhouse Gas Storage Act 2006, Section 646
18
FINDING 8
We note that NOPSA/operator liaison meetings have a number of benefits when held at
least quarterly. More frequent or less frequent meetings may be appropriate depending on
the culture and responsiveness of each operator. We also note that where a facility is
managed by a contractor (i.e. who is the operator) and the titleholder or contract holder
exerts a strong influence on the health and safety culture and performance of the
operators, NOPSA should consider whether they should also be more routinely involved in
liaison meetings. (p. 27)
Proposed Response
Accepted
The Government notes that the OPGGS Act makes the operator responsible for the health
and safety of persons at or near the facility. However, in circumstances where the safety
culture is strongly influenced by an entity other than the facility operator (eg the titleholder),
NOPSA is able to review the continued registration of the facility operator.
CEO of NOPSA to review the frequency of operator meetings and the inclusion of those
not directly operating, but influencing, operator culture and performance, for example,
titleholders and contractors. NOPSA has developed a revised Operator Liaison process
and will report to the Minister for Resources and Energy by the end of 2010 on
implementation of this matter and any ongoing issues.
FINDING 9
We note that where a standard is applied within the safety case regime, the operator
should be aware of, and act on, any changes or revisions to the standard. This may
include reviewing the safety measures to ensure ALARP 9 continues to be met. Where a
new standard becomes less prescriptive good industry practice indicates that the operator
should review its systems and define measures as appropriate to meet safety
requirements. We also consider that NOPSA should have ready access to all relevant
standards and proactively review revisions. (p. 36)
Proposed Response
Accepted
The Government notes that it is very important for NOPSA to maintain access to and have
knowledge of all relevant and current standards, including, but not limited to, the
International Standards Organisation and Australian Standard series. In addition,
NOPSA’s experience and role make it appropriate that it be involved in the revision and
development of relevant standards.
CEO of NOPSA to make sure that systems are in place to ensure the Authority is able to
develop and maintain knowledge of relevant and current standards, and that it is able to
9
ALARP – As Low As Reasonably Practicable
19
participate in standards revision and development processes, as appropriate. The CEO is
to report by the end of 2010 to the Minister for Resources and Energy on this matter.
FINDING 10
We note that if a validation report has been required to support a regulatory approval, the
regulator should ensure that the complete report is received and considered as part of the
approval process. The regulator should also be able to speak directly to the validation
team to discuss further any issues raised within the report. This may require amendment
to legislation to ensure that the regulator can engage in confidential discussions with the
validator without the operator present. (p. 37)
Proposed Response
The Government notes that the Inquiry outlined a number of policy options and potential
issues relating to validations. To assist in forming a view on this issue, the Government will
consult with stakeholders further and seek advice from the CEO and Board of NOPSA,
and the Department of Resources, Energy and Tourism.
FINDING 11
We note that having identified control measures, the onus is on the operator to manage
the issue. We consider, however, that NOPSA should expand its assessment policy to
require it to use previously gathered information during the assessment process, and that
if necessary the legislation should reflect this requirement. (p. 38)
Proposed Response
Accepted in part
The expansion of the assessment process to take into consideration operational

knowledge and understanding as a result of previously gathered information would be
consistent with the response to Recommendations 3 (stakeholder interaction), 5 (risk
matrix development) and 7 (consolidation of operator culture, history etc) of the NOPSA
Report.
CEO of NOPSA to review the Authority’s operational policies, including the use of
previously gathered information to inform the assessment process.
The Government is of the view that this can occur without legislative provisions.
FINDING 12
We note that it is important to target compliance not only considering the inherent risk of a
facility and operational process but also the safety culture of a particular operator. (p. 42)
20
Proposed Response
Consistent with the response to Recommendation 5 of the NOPSA Report, the

Government agrees that a mature and robust risk management system is crucial for the
effective administration of regulatory activity. Through operational knowledge and
learning, a robust and dynamic risk matrix is one that incorporates continuous
improvement and changes accordingly.
Consistent with the response to Recommendation 7 of the NOPSA Report, the

Government recognises that the evaluation of safety culture and leadership can be very
subjective. The issue of taking past performance into consideration, however, is not.
NOPSA now has an established history, working over the last five years with operators
undertaking offshore petroleum activities in Australia. This knowledge is important in
ensuring that operators are committed to meeting their legislative responsibility under the
duty of care regime.
The CEO will be responsible for addressing this finding within the context of the
Government’s response to Recommendations 5 and 7 of the NOPSA Report.
FINDING 13
We note that NOPSA should ensure that its inspection activities are appropriately
focussed on the operator’s effective implementation of its policies and systems and that
these concerns should also be addressed in liaison meetings. NOPSA should implement a
robust strategy for assuring itself that the operator is complying with its safety case based
on issues raised from previous inspections and meetings with the operator. Corporate and
themed audits should also be a part of this approach. (p. 63)
Proposed Response
Accepted
Consistent with the Government’s response to Recommendation 7 of the NOPSA Report,

a robust strategy to ensure compliance with the Safety Case based on previous
inspections and meetings will provide additional assurance that operators are effectively
meeting their legislative requirements.
This is an operational matter for the CEO of NOPSA and will be implemented in the
context of the response to Recommendation 5 of the NOPSA Report.
FINDING 14
We note that NOPSA should increase its advisory and promotional functions by engaging
with operators more, and in a more targeted fashion, in the early stages of the safety case
and PSMP process. (p. 68)
21
Proposed Response
Accepted
Consistent with the Government’s response to Recommendation 3 of the NOPSA Report,

the Government notes that NOPSA has an important role in ensuring that the offshore
petroleum industry has an understanding of and confidence in the regulatory regime within
which it operates.
This is an operational matter for the CEO of NOPSA and will be implemented in the
context of the Government’s response to earlier Recommendations and Findings of the
NOPSA Report.
FINDING 15
We note that there is significant merit in a NOPSA position being created in Canberra,
closely linked with RET, to handle liaison with Commonwealth stakeholders, assist the
Board, and drive the policy agenda, including facilitating legislative change. (p. 71)
Proposed Response
Noted
The Government has taken steps, through the provision of a Statement of Expectations to
the Board and through discussions between the CEO of NOPSA, the Board of NOPSA,
the Department of Resources, Energy and Tourism, and the Minister for Resources and
Energy, to facilitate closer and more constructive working relationships between NOPSA
and the Department. The Government is of the view that a Canberra-based NOPSA
position is not required, but that it is important for the CEO of NOPSA to work closely and
constructively with both the Secretary and Resources Division Head of the Department of
Resources, Energy and Tourism.
The Government notes that NOPSA is a regulator. NOPSA is not a policy-making or rule-
making Authority, nor do its functions include a legislation development role. The Minister
and the Department may, from time to time, request or receive advice from the CEO
and/or the Board of NOPSA, and will properly take that advice into account in the
formulation of policy and the development of necessary legislation or regulation.
The Government is of the view that it is a very important principle of the overall regulatory
regime for offshore petroleum safety that there is institutional separation of policy and rule-
making processes; approval, compliance and enforcement processes; and investigation
processes for major incidents.
FINDING 16
We note that NOPSA has recently added the position of investigator (currently vacant). We
support creation of this position and observe that this person needs to be trained and
experienced in compliance and enforcement investigations and preparation of evidence
briefs to the DPP. (p. 82)
22
Proposed Response
Noted
Employment, induction and training of NOPSA employees are matters for NOPSA. The
CEO of NOPSA will implement this recommendation in the context of the response to
Recommendation 8 of the NOPSA Report.
23
Offshore Petroleum Safety Regulation Inquiry (Marine Report)

In December 2008, during Tropical Cyclone Billy, two incidents occurred involving ship-like
floating facilities, the Karratha Spirit and Castoro Otto, which were engaged in the
exploitation of petroleum resources off the northwest coast of Western Australia. As an
addendum to the wider Offshore Petroleum Safety Regulation Inquiry (OPSRI), the Inquiry
Panel considered the effectiveness of the regulatory regime for occupational health and
safety (OHS) and integrity as it applied to the Karratha Spirit and Castoro Otto and the
effectiveness of the interface between the National Offshore Petroleum Safety Authority
(NOPSA) and the Australian Maritime Safety Authority (AMSA). In particular, the OPSRI
examined the interrelationship between maritime legislation and offshore petroleum
legislation and possible unintended consequences from the disapplication of the
Navigation Act 1912.
This, the Marine Issues report (the Marine Report) was released, along with Better practice
and the effectiveness of NOPSA (the NOPSA Report), by the Minister for Resources and
Energy, the Hon Martin Ferguson AM MP, at the 9th meeting of the Ministerial Council on
Mineral and Petroleum Resources (MCMPR) on 9 July 2009.
The Marine Report identified potential gaps in both OHS and regulatory coverage and less
than optimal interface issues. The Marine Report recommended an increased cooperative
role between AMSA and NOPSA but did not find that regulatory interface issues were
central to the two incidents reviewed. The Marine Report also recommended consideration
of a rewrite of the Navigation Act 1912.
The Government notes stakeholder comments in relation to the recommendations in the

Marine Report were raised primarily about maintaining marine standards when a vessel
becomes a facility. They sought to ensure compliance with IMO and ILO standards and
the continued application of International Maritime Conventions to vessels that are
facilities. Suggestions included providing powers of inspection and enforcement to AMSA.
The Department of Resources, Energy and Tourism (RET) provided a submission to the
re-write of the Navigation Act 1912 Discussion Paper outlining issues with the possible
application of two regulatory regimes at the time when a vessel is functioning as a facility
and the provision of inspection and enforcement powers for a second regulator at that time
and suggesting a possible way forward on issues identified in the Marine Report, as per
the response to the recommendations in the Marine Report.
RET is continuing to work on these issues with Department of Infrastructure and

Transport, the Australian Maritime Safety Authority, the Department of Education,
Employment and Workplace Relations and NOPSA.
RECOMMENDATION 1
We recommend that the Commonwealth undertake legislative change that will ensure that
when any floating facility reverts to a ‘navigable form’, the relevant provisions of the
Navigation Act and the OHSMI Act will apply regardless of any voyage criteria. This will
help to ensure that all Australian seafarers are covered.
24
Proposed Response
Accepted
This recommendation is supported by Recommendation 7.4 of the PC Review 10 which

seeks to clarify occupational health and safety regulations under the OPGGS Act to
ensure that there is complete clarity about which petroleum-related sea going vessels
must be regulated under the safety case regime.
The Department of Resources, Energy and Tourism is working closely with NOPSA, the
Department of Infrastructure, Transport, Regional Development and Local Government,
the Australian Maritime Safety Authority and the Department of Education, Employment
and Workplace Relations on options for addressing any unintended consequences
resulting from the disapplication of the Navigation Act 1912.,
This recommendation is being considered in conjunction with the response to

Recommendation 2 of the Marine Report. In order to maintain the integrity of the offshore
petroleum health and safety regime, the changeover in command structure must take
place at the same time as the changeover in health and safety regime – i.e. when the
changeover between marine vessel and petroleum facility takes place.
All aspects of safety on board FPSOs and FSOs are routinely assessed during joint
NOPSA/AMSA inspections, but RET agree that it is necessary to formalise these
requirements to ensure that they are implemented and that compliance is monitored and
enforced.
RET has asked AMSA to identify any substantive requirements of the international
maritime regime in its application to ship-like petroleum facilities at present lacking express
recognition in the safety case regime under the OPGGSA. The implications of this
recommendation for foreign flag floating facilities will also be investigated.
This incorporates the response to Recommendation 2 of the NOPSA 2008 Operational

Report.
RECOMMENDATION 2
We recommend that the MOSOF Regulations be amended to ensure that the safety case
for a floating facility specifically identifies when command structure changes occur (which
may be well before departing the site and associated zone). We also recommend that the
OPGGS Act be amended so that a vessel becomes a facility when any part of it comes
within 500 metres of the site and continues to be a facility until no part of the vessel
remains within 500 metres of the site.
10
(Oil and Gas) Sector, Research Report, Melbourne, p. 183
25
Proposed Response
The Government considers that, in order to maintain the integrity of the offshore petroleum
health and safety regime, the changeover in command structure must take place at the
same time as the changeover in health and safety regime – ie when the changeover
between marine vessel and petroleum facility takes place. This transition point is specified
in clause 4 (7) of Schedule 3 to the OPGGS Act:
In determining when a vessel or structure that has the potential to be used for one or more
of the purposes referred to in paragraph (1)(b) or (5A)(b) is in fact being so used, the
vessel or structure is taken:
(a) to commence to be so used only at the time when it arrives at the site where it is to be
so used and any activities necessary to make it operational at that site are begun; and(b)
to cease to be so used when operations cease, and the vessel or structure has been
returned either to a navigable form or to a form in which it can be towed to another place.
Stakeholders were divided over the point at which a vessel becomes a facility. The
Government agrees that clarification is required of the point at which the transition occurs.
The proposal that it take place when the vessel is 500 metres from the operations site
does not meet the intent of clause 4 Schedule 3 and has implications for the command
structure and vessel and crew safety, particularly in an emergency sail-away situation.
The implementation of this recommendation is complex and continues to be actively

considered.
The Government does not propose re-application of the Navigation Act to vessels that are
facilities.
RECOMMENDATION 3
We recommend that AMSA should have a role in assuring continuing marine standards
that are not inconsistent with OPGGS Act provisions and that AMSA needs defined
powers to assist NOPSA in minimising risk in the offshore petroleum industry. Potential
mechanisms for achieving this outcome include: providing AMSA with defined powers and
obligations under the OPGGS Act, thereby ensuring that the Authority becomes an
effective inspector/regulator of vessels while they are deemed to be facilities; or revising
the current Commonwealth maritime legislation disapplication provisions of the OPGGS
Act with the aim of achieving the same goal. If it can be readily achieved and is an efficient
regulatory option, we believe the first option is preferable.
Proposed Response
The Department of Resources, Energy and Tourism is reviewing the consequences of the
disapplication of the Navigation Act and exploring potential mechanisms to ensure
maintenance of seaworthiness and readiness to sail-away of vessels that are facilities, in
consultation with DITRDLG and AMSA. The review will also incorporate the response to
26
Recommendation 7.3 of the PC Review 11 which recommends the clarification of the role of
the Navigation Act for floating production, storage and offloading (FPSOs) vessels when
they are operating under the safety case regime.
The implementation of this recommendation is complex and is under active consideration

in the context of the re-write of the Navigation Act 1912. The Department of Resources,
Energy and Tourism (RET) provided a submission to the re-write of the Navigation Act
1912 Discussion Paper outlining issues with the possible application of two regulatory
regimes at the time when a vessel is functioning as a facility and the provision of
inspection and enforcement powers for a second regulator at that time.
The submission included a proposal for discussion around a possible addition to the safety
case content requirements under the OPGGS (Safety) Regulations. That is, the safety
case for a facility that is intended to be a navigable vessel when it ceases to be a facility
must state what IMO Convention Certificates (relating to safety) are applicable to it when it
is a vessel and describe how it will maintain the currency of those certificates while it is a
facility, so that it will be ready to operate as a vessel when required. NOPSA would
maintain regulatory oversight of this requirement.
The Government does not propose re-application of the Navigation Act to vessels that are
facilities.
RECOMMENDATION 4
We recommend the Commonwealth consider a plain English rewrite of the Navigation Act
1912 with the aim of producing a modern, performance-based Act.
Proposed Response
Accepted
The Minister for Infrastructure, Transport, Regional Development and Local Government
has announced the Government’s intention to rewrite the Navigation Act 1912 to recast the
Act in plain language, reflect contemporary conditions and practices and provide
confidence and certainty for industry.
11
27
The 2008 NOPSA Operational Report

A review of the operational effectiveness of NOPSA is a requirement under Section 695 of
the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (previously Clause 150Z
of the Petroleum (Submerged Lands) Act 1967). The Review was completed and tabled in
Parliament in June 2008. The next operational review is due to commence in January
2011.
While the Government has already acted on the report, the Government made a decision
to combine its formal response to the Operational Review with the formal response to the
Offshore Petroleum Regulatory Inquiry.
The establishment of the national regulatory regime has now embedded solid governance
and operational processes, and has worked to build understanding by all stakeholders
involved in the regime (including the regulator, company management and the offshore
workforce) of their roles and responsibilities under the legislation.
The recommendations of the Independent Review Team focussed on the broad issues
that arose during the first three years of NOPSA with respect to achieving the common
goal of improving safety outcomes for the industry. This response examines the feasibility
of the recommendations and where possible, the most appropriate ways to implement any
changes NOPSA can undertake to further improve governance, procedures and
communication with stakeholders.
RECOMMENDATION 1
NOPSA should develop guidelines in consultation with stakeholders to provide clarity and
consistency to the process which ultimately will result in better safety outcomes.
Proposed Response
Accepted
Consistent with Recommendation 7 of the Operational Report, the offshore petroleum

industry needs to have confidence in the regulatory regime in which it operates. NOPSA
has a role in promoting and clarifying with industry its understanding of its obligations
under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) and
associated regulations.
This is a shared responsibility between all stakeholders. Consultation and interaction

between all stakeholders is recognised as one of the critical themes arising from the
Offshore Petroleum Safety Regulatory Inquiry. Guidelines must also be consistent with
the legislative framework of operations, as per the response to Recommendation 14 of the
Operational Report. This issue will be included in the 2011 NOPSA Operational Review
required to be undertaken under the OPGGSA. The Terms of Reference will include a
review of the safety case framework.
As noted in Recommendation 3 of the NOPSA Report, NOPSA is responsible for

promoting and developing, in consultation with its stakeholders, guidance notes for clarity
and the CEO is responsible for improving the interaction between the Authority and its
28
stakeholders. NOPSA has commenced work to address these issues through, amongst
other activities, the Safety Case Guidance Note project.
RECOMMENDATION 2
The consequences of the disapplication of the Navigation Act 1912 should be analysed,
the actual consequences identified and unintended consequences addressed.
Proposed Response
Accepted, with further consideration required
This recommendation is supported by Recommendation 7.3 of the PC Review 12 which

seeks to clarify whether any significant regulatory uncertainty results from the decision that
the Navigation Act would not apply to Australian registered vessels and floating
production, storage and offloading vessels when these are operating under the safety case
regime. The consequences of the disapplication of the Navigation Act are not fully
understood by all stakeholders.
The Department of Resources, Energy and Tourism is reviewing the consequences of the
disapplication of the Navigation Act by Section 640 of the Offshore Petroleum and
Greenhouse Gas Storage Act 2006 in consultation with DITRDLG, AMSA and other
stakeholders. Any implications of this review for the Navigation Act 1912 will be
considered in the context of the current process that is in train to rewrite that Act. The
review will also consider the manner in which foreign registered vessels and floating
production, storage and offloading vessels operating in the Australian industry cope with
the regulatory burdens imposed by their flag States.
This response incorporates the response to Recommendation 1 of the Marine Report.
RECOMMENDATION 3
The regulations pertaining to vessels of opportunity or their interpretation should be

changed to facilitate a risk based approach to regulation. This approach will be consistent
with the approach taken in other jurisdictions.
Proposed Response
The Government agrees with the Review team it is not appropriate that vessels carrying
out operations that are essentially ordinary marine operations should be brought within the
NOPSA regime, either as ‘facilities’ or as ‘associated offshore places’, with the result that
the Navigation Act 1912 and the Occupational Health and Safety (Maritime Industry) Act
1993 are disapplied in relation to those vessels.
12
29
In support of the Government’s position, the consolidated health and safety regulations
(Offshore Petroleum (Safety) Regulations 2009), which came into effect on 1 January
2010, specify those offshore vessels or structures that are exempt from the definition of
facility or associated offshore place. Schedule 3 to the Act provides for the regulations to
specify these exemptions. However, this provision only applies to those petroleum
activities being undertaken in Commonwealth waters. This amendment can only apply in
state and territory coastal waters when the consolidated safety regulations have been
mirrored and enacted by each jurisdiction, a step the Government will encourage through
the Ministerial Council on Mineral and Petroleum Resources (MCMPR).
These provisions were made in consultation with NOPSA, who reviewed a number of the
vessel activities which determine whether vessels engaged in Offshore Petroleum related
activities are subject to the Offshore Petroleum and Greenhouse Gas Storage Act 2006,
and other key industry stakeholders.
RECOMMENDATION 4
The exploration/production operator making all major decisions related to petroleum

activities (i.e. selection of rig, well design and selection of service companies) should be
made responsible for demonstrating to the regulator that drilling operations can be
conducted safely. Where the drilling contractor owns the rig and conducts the day-to-day
management of safety on the rig, this duty can be described in a rig specific Safety Case
that is owned by the drilling contractor. This rig specific Safety Case does not have to be
submitted for every well/well operation.
Proposed Response
This recommendation arises from concerns that the legal burden falls to the facility
operator when the titleholder has ownership of well data and design which has a
significant impact on the safety of a drilling operation and is often also in effective control
of the drilling operations. Recent amendments to the OPGGSA have introduced a duty of
care for titleholders with respect to the design of facilities (Schedule 3 Clause 13A).
The Department of Resources, Energy and Tourism continues to consult with NOPSA and
other stakeholders to review the implications and consider options to address this issue.
The process may also by informed by the Government’s response to the Montara
Commission of Inquiry.
RECOMMENDATION 5
Coverage of the regime should be increased to cover the complete hydrocarbons

production system from wells through to custody transfer point or reasonable
physical/technical system boundary. If NOPSA is also to be responsible for Carbon
Capture and Storage it needs to be resourced to ensure that this does not detract from
NOPSA's current responsibilities.
30
Proposed Response
Consistent with the response to Recommendation 1 and Finding 4 of the NOPSA Report,
current changes to the OPGGS Act, the Government support this recommendation in-
principle, particularly in relation to pipelines and with ongoing consultation in relation to
wells. NOPSA’s jurisdictional boundary at the territorial sea baseline will have to be
observed, however, unless states/NT choose to extend that boundary and legislate
accordingly. As noted earlier, the ability for the States and Northern Territory to extend
NOPSA’s jurisdiction to waters landward of the territorial sea baseline and/or to extend, for
pipelines, to the nearest valve on the mainland above the shore crossing is provided for in
the Commonwealth OPGGS Act, but must be actioned by the States and Northern
Territory to take effect.
In relation to greenhouse gas storage activities, as a cost recovery agency NOPSA will
need to ensure that its future activities relating to greenhouse gas storage are identified
and costed accordingly.
Supporting this requirement the Offshore Petroleum and Greenhouse Gas Storage (Safety
Levies) Amendment Regulations 2009, which came into effect on 1 January 2010, among
other matters, prescribes fees for greenhouse gas titles. The fees for greenhouse gas
titles are set at similar levels to the fees prescribed for petroleum titles, setting out a fee
structure for the administration of greenhouse gas titles.
RECOMMENDATION 6
Because some issues related to emergency response are beyond any single operator and
usually occur outside the title area, there is a need for the representatives of the offshore
industry to work together with other governments, interested and involved parties to
develop the strategies to be utilised and the emergency planning model that will satisfy the
requirements of all parties.
Proposed Response
Noted, with further consideration required
The reviews and this Government response are concerned specifically with occupational
health and safety of the offshore petroleum workforce at petroleum facilities. The reviews
are therefore confined to risks to the workforce that arise, and must be dealt with, at or
near the facility. Emergency response and emergency planning are requirements of the
Safety Case for all operators and an essential element of any safety culture. The
involvement of all stakeholders ensures that emergency planning and response
mechanisms are fully effective.
Emergency procedures and processes are critical for the health and safety of personnel
during any emergency, whether it is managed on the facility or whether an evacuation
(medical or full) is implemented.
31
There was a significant health and safety and environmental incident following
uncontrolled release of hydrocarbons from the Montara Wellhead Platform on 21 August
2009. While the workforce was evacuated safely and there were no injuries in this
instance, the incident had the potential to escalate to a fire and explosion situation rapidly
with attendant loss of life, as was evidenced by the 20 April 2010 uncontrolled release at
the BP operated Macondo field in the Gulf of Mexico. Further, the June 2008 fire and
explosion at Apache Energy’s Varanus Island could also have escalated and involved far
worse consequences. These major incidents serve to highlight the need to ensure the
emergency planning and response model is appropriate to deal with major incidents.
The Government supports better industry and government coordination and consultation,
particularly where it can improve safety for the offshore petroleum industry. The
Department of Resources, Energy and Tourism is working with NOPSA, DITRDLG, AMSA,
APPEA and other stakeholders in reviews of current arrangements and will consider
options to address this issue. The process may also by informed by the Government’s
response to the Montara Commission of Inquiry and AMSA’s review of the response to the
Montara incident.
RECOMMENDATION 7
Improved and agreed guidelines for Safety Case application and assessment, including
suggested structure and content, would alleviate many current problems related to Safety
Case processes.
Proposed Response
Accepted
As per Recommendation 1 of the Operational Report, NOPSA has a role in promoting and
clarifying with industry its understanding of and obligations under the OPGGS Act and
associated regulations.
NOPSA has commenced implementation of this recommendation with the launch of a

model Safety Case Guidance Project in October 2008. This project has a long term focus
which will progressively deliver guidance notes on safety case preparation. Further
information is available on the NOPSA website (www.nopsa.gov.au). Guidance notes on
The Safety Case in Context, Safety Case Lifecycle Management and Safety Case Content
and Level of Detail were published in June 2009.
The response to this recommendation will be considered as part of the review of safety
case development, implementation and ongoing compliance, which will be the focus of the
2011 Operational Review of NOPSA, undertaken in accordance with the legislation
establishing NOPSA. This review is outlined in the response to Recommendation 3 of the
NOPSA Report.
This is an operational matter and the CEO of NOPSA is responsible for continuing this
process.
32
RECOMMENDATION 8
The initial acceptance of a new facility Safety Case should be in conjunction with
inspection of a facility upon commencement of operations.
Proposed Response
Noted, with further consideration required
The Government notes stakeholder comments in relation to the need for pre-acceptance
inspections.
This is an operational matter for the CEO of NOPSA. The carrying out of inspections by
NOPSA staff is a matter for the CEO. Consistent with the response to Finding 13 of the
NOPSA Report, the CEO is responsible for ensuring that the framework guiding the
Authority’s inspection activities and audits is utilising NOPSA resources effectively and
focussing on the highest priority activities.
RECOMMENDATION 9
There is a need for industry in consultation with NOPSA to establish a priority programme
of accredited education modules in the Safety Case regime targeting stakeholders in the
regime at their respective levels to improve the understanding of the Safety Case and
correspondent responsibilities.
Proposed Response
Accepted
The Government notes that the proposal is that industry will establish accredited
educational modules, in consultation with NOPSA. The promotion of occupational health
and safety of persons engaged in offshore petroleum operations is a legislated function of
NOPSA. 13 NOPSA already has a number of appropriate forums in which it engages,
educates and promotes the occupational health and safety regime of Australia’s offshore
industry with a variety of stakeholders.
This is a matter for industry to take forward. NOPSA will provide advice and support as
appropriate. The Minister has asked the CEO of NOPSA to consider this recommendation
further, in consultation with APPEA, and report back by the end of 2010 on future plans.
RECOMMENDATION 10
As professional competency is one of the key pillars of any Safety Case, commitment to
training for current and future needs remains a fundamental requirement for achieving best
practice outcomes in safety. Industry should be encouraged to build on its training
commitment now being made to achieve a competent and fully accredited workforce over
the next five years.
13
The Offshore Petroleum and Greenhouse Gas Storage Act 2006, Section 646
33
Proposed Response
Accepted
Industry continues to work constructively with NOPSA on appropriate training and

education initiatives, in the interests of best practice safety outcomes for the offshore
petroleum industry.
Consistent with the response to Recommendation 9 of the Operational Report, this is a

matter for industry to take forward. NOPSA will provide advice and support as appropriate.
The Minister has asked the CEO of NOPSA to consider this recommendation further, in
consultation with APPEA, and report back by the end of 2010 on future plans.
RECOMMENDATION 11
The current KPI measures used by the Regulator and industry need to be reassessed and
the performance indicators need to be related to the risk profiles of the industry. The
industry needs to develop the indicators, which need to be agreed and measured by the
industry in discussion with other stakeholders. The KPI's selected should be published in
comparison with the worldwide offshore industry and with other industries. NOPSA should
continue discussions with Australian Safety and Compensation Council (ASCC) with a
view to adopting their goals.
Proposed Response
NOPSA collects and summarises data on the safety performance of the industry and on its
own regulatory performance, updating and publishing quarterly a set of charts of significant
key performance indicators. Based on this information, NOPSA published its first annual
Offshore Health and Safety Performance Report in August 2009. The value of having
clear and measurable KPIs is noted.
The Minister has asked the CEO of NOPSA to review the KPIs as recommended and
consider this recommendation further, in consultation with APPEA and ASCC, and report
back by the end of 2010 on future plans. The advice of the NOPSA Board could also be
sought.
RECOMMENDATION 12
The industry should develop in conjunction with the Regulator a process for addressing the
need to maintain the risk profile of a facility moving into extended life operation at the
same risk profile as when it was within design life.
34
Proposed Response
Noted
A mature and robust risk management system is crucial for the effective administration of
regulatory activity. This recommendation provides industry with the opportunity to make a
reciprocal commitment to that made by NOPSA in Recommendation 5 of the NOPSA
Report, to examine the risk profile for facilities.
It is noted that the ALARP principle applies to all operations and there is no diminution of
this requirement in extended life operations compared with design life operations.
RECOMMENDATION 13
The industry should provide advice to NOPSA on where the regulations do not provide
sufficient clarity and consider developing broad policy/process guidelines in consultation
with the regulator to provide clarity and consistency. Regulators should not take personal
views or preferences.
Proposed Response
Noted
The response to this recommendation and Recommendation 14 of this report reflects one
of the critical themes coming out of the Reports, which is the importance of ongoing
consultation and interaction between all stakeholders.
The Government notes that it is important that the industry has an understanding and
confidence in the regulatory regime within which it operates. The Government will look to
NOPSA and the offshore petroleum industry to consider this recommendation as part of
ongoing stakeholder consultations. The CEO of NOPSA is responsible for improving the
interaction between the Authority and its stakeholders.
RECOMMENDATION 14
NOPSA should complete the next revision of Safety Case guidelines in consultation and
agreement with stakeholders and continue its program to achieve consistency with a firmer
hand from the CEO and management.
Proposed Response
Accepted in part
Consistent with the response to Recommendation 1 and as per the response to

Recommendation 7 of this report, the Government will look to NOPSA and the offshore
petroleum industry to consider this recommendation as part of ongoing stakeholder
consultations.
This response recognises that NOPSA has in place a long-term Safety Case Guidance
Project, and is responsible for continuing to develop and promote Safety Case guidance
35
notes, in consultation with stakeholders. While broad agreement with stakeholders is
desirable, as the responsible regulator, NOPSA must make final decisions on guidance
notes.
RECOMMENDATION 15
NOPSA should use encouragement as the primary tool of enforcing compliance provided
willingness to improve is exhibited by the players.
Proposed Response
Noted
The response to this recommendation is incorporated into the response to

Recommendation 6 of the NOPSA Report.
Encouragement is one important and desirable tool available to the regulator, but it would
be inappropriate for NOPSA to be fettered in its enforcement responsibilities.
RECOMMENDATION 16
The role of the advisory Board, namely to give advice to Ministers and NOPSA when
asked, should be made clear to Board members and all stakeholders. The Board and
NOPSA should consider the need for a clear description of who does what based on the
legislated responsibilities of the NOPSA CEO.
Proposed Response
Accepted
The role of the NOPSA Board in providing advice is clearly established through the
Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act).
The Government supports the functions of the NOPSA Board as an advisory Board. The
independent advisory function of the Board provides the Government and NOPSA with a
valuable resource.
As per the response to Finding 1 of the NOPSA Report, relating to the need for clarity as
to the Board’s role and functions, the Minister for Resources and Energy has provided the
NOPSA Board with a “Statement of Expectations”. The Statement of Expectations sets out
the Minister’s expectations in accordance with the Board’s roles, functions and
responsibilities set out in the OPGGS Act.
RECOMMENDATION 17
The Safety Case proponent should be allowed some flexibility to involve appropriate
experience matched with the proposed workforce competencies to enable the Safety Case
to be developed with value adding processes. Subsequent to the hiring of the workforce
36
and preferably before the commencement of operations a review of the Safety Case
should take place with the new workforce to ensure they understand the accepted Safety
Case, its risks and Safety Management Plan.
Proposed Response
Accepted
Recognising the intent of this recommendation to instigate mechanisms to educate the

workforce as early as possible in the development of the Safety Case, this
recommendation is supported as per the response to Recommendation 3 of the NOPSA
Report.
The CEO of NOPSA is responsible for improving the interaction between NOPSA and its
stakeholders.
RECOMMENDATION 18
NOPSA should consider an audit regime that targets Greenfields operations at
commencement of operations.
Proposed Response
Accepted
The Government’s response to Recommendations 3, 5 and 7 of the NOPSA Report and

Recommendation 8 of the Operational Report, in relation to risk assessment, auditing and
early and increased engagement with stakeholders deals with this recommendation.
RECOMMENDATION 19
NOPSA should consider establishing a small forum for consultation consisting of

representatives of relevant stakeholders. The representatives should have standing, with
authority to participate in decision making and take on commitment on behalf of their
stakeholder group.
Proposed Response
Noted
Forums for consultation are already in place through NOPSA and APPEA initiatives.
Implementation of risk-management and a strong safety culture have been discussed in
responses to a number of recommendations.
The Government is of the view that the advisory role identified in the Operational Report is
a function of the NOPSA Board.
37
RECOMMENDATION 20
As all stakeholders have responsibility for safe outcomes, decisions regarding target
subjects for safety promotion need to have the support of all stakeholders including
NOPSA and the workforce. Industry, which ultimately has the responsibility for managing
risk as well as funding the promotion, should take a leadership role in implementation.
Proposed Response
Noted
APPEA and NOPSA have a range of initiatives in place relating to safety promotion and
these initiatives are supported by the Government.
38
APPENDIX A
Acronyms and Abbreviations
ACEPT Australian Centre for Energy and Process Training

ALARP As low as reasonably practicable
AOP Associated Offshore Place
ASCC Australian Safety and Compensation Council
ATSB Australian Transport Safety Bureau
CEO Chief Executive Officer
COAG Council of Australian Governments
DA Designated Authority
DMP Department of Mines and Petroleum Resources (WA)
DOCEP Department of Consumer and Employment Protection (WA)
DOIR Department of Industry and Resources (now WA DMP)
DPI Department of Primary Industries (Victoria)
FSA Formal safety assessment
HSE Health and Safety Executive (United Kingdom);
HSR Health and safety representative
IADC International Association of Drilling Contractors
KPI Key performance indicator
MAEs Major accident events
MAH Major accident hazard
MCMPR Ministerial Council on Mineral and Petroleum Resources
MHF Major hazard facility
MOSOF Commonwealth Petroleum (Submerged Lands) (Management of
Safety on Offshore Facilities) Regulations 1996
NOPR National Offshore Petroleum Regulator
NOPSA National Offshore Petroleum Safety Authority
OHH Occupational health hazard
OHS Occupational Health and Safety
OPA Offshore Petroleum Act 2006
OPGGS Act Offshore Petroleum and Greenhouse Gas Storage Act 2006
PC Productivity Commission
PMP Pipeline Management Plan
PSLA Commonwealth Petroleum (Submerged Lands) Act 1967
PSMP Pipeline Safety Management Plan
QRA Quantitative risk assessment
RET Department of Resources, Energy and Tourism (Commonwealth)
SFAIRP So far as is reasonably practicable
SMS Safety Management System
WA PSLA Western Australian Petroleum (Submerged Lands) Act 1982

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1

OFFSHORE PETROLEUM SAFETY

The reports are:

Offshore Petroleum Safety Regulation Inquiry (NOPSA Report)

Facility and pipeline regulation

This recommendation is consistent with Recommendation 7.1 of the Productivity

The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment

This recommendation reflects the intent of the establishment of NOPSA, to provide a

(Oil and Gas) Sector, Research Report, Melbourne p.175

The Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment

The Government acknowledges that responses to the draft Government response

 Persons in control of parts of a facility or particular work;

While the safety management responsibilities of the stakeholders are recognised,

This is consistent with the response to Recommendation 1.

This recommendation is consistent with the response to Recommendation 18 of the

We recommend that the Management of Safety on Offshore Facility (MOSOF) regulations

No amendments to the Offshore Petroleum (Safety) Regulations 2009 are necessary.

The need to focus on organisational safety culture and leadership is an essential

NOPSA has been progressively incorporating assurance of safety culture, including

This recommendation is also consistent with the response to Recommendation 5 (robust

This recommendation incorporates the response to Finding 15 and 16 of the NOPSA

This Recommendation is consistent with Recommendation 7.5 of the PC Review 7 which

This response incorporates the response to Recommendation 16 of the

As the Regulator, NOPSA’s role in a performance-based regime is to provide independent

As per the response to Recommendation 1 of the NOPSA Report, the Government

The Government is committed to the implementation of nationally consistent legislation

The Government encourages the industry to consider the development of industry-wide

The expansion of the assessment process to take into consideration operational

Consistent with the response to Recommendation 5 of the NOPSA Report, the

Consistent with the response to Recommendation 7 of the NOPSA Report, the

Consistent with the Government’s response to Recommendation 7 of the NOPSA Report,

Consistent with the Government’s response to Recommendation 3 of the NOPSA Report,

Offshore Petroleum Safety Regulation Inquiry (Marine Report)

The Government notes stakeholder comments in relation to the recommendations in the

RET is continuing to work on these issues with Department of Infrastructure and

This recommendation is supported by Recommendation 7.4 of the PC Review 10 which

This recommendation is being considered in conjunction with the response to

This incorporates the response to Recommendation 2 of the NOPSA 2008 Operational

The implementation of this recommendation is complex and continues to be actively

The implementation of this recommendation is complex and is under active consideration

The 2008 NOPSA Operational Report

Consistent with Recommendation 7 of the Operational Report, the offshore petroleum

This is a shared responsibility between all stakeholders. Consultation and interaction

As noted in Recommendation 3 of the NOPSA Report, NOPSA is responsible for

This recommendation is supported by Recommendation 7.3 of the PC Review 12 which

This response incorporates the response to Recommendation 1 of the Marine Report.

The regulations pertaining to vessels of opportunity or their interpretation should be

The exploration/production operator making all major decisions related to petroleum

Coverage of the regime should be increased to cover the complete hydrocarbons

NOPSA has commenced implementation of this recommendation with the launch of a

Industry continues to work constructively with NOPSA on appropriate training and

Consistent with the response to Recommendation 9 of the Operational Report, this is a

Consistent with the response to Recommendation 1 and as per the response to

The response to this recommendation is incorporated into the response to

Recognising the intent of this recommendation to instigate mechanisms to educate the

The Government’s response to Recommendations 3, 5 and 7 of the NOPSA Report and

NOPSA should consider establishing a small forum for consultation consisting of

Acronyms and Abbreviations

ACEPT Australian Centre for Energy and Process Training