That the bill be now read a second time.

The purpose of the bill is to implement a cost-recovery regime via the collection of safety levies from the

petroleum industry. This will enable the adequate funding of the regulator to provide for services rendered in

relation to occupational safety and health laws under the Petroleum and Geothermal Energy Resources Act 1967

and the Petroleum Pipelines Act 1969. In Western Australia the responsibility for administering safety legislation

in the onshore petroleum and geothermal energy industry rests with the Resources Safety division of the

Department of Mines and Petroleum.

Petroleum is a high-risk industry that requires complex technical safety assessments, inspections and audits to

ensure the safety and health of workers. Indirectly, safety requirements also protect the community and help

ensure continuity of supply. The revenue generated by the safety levies will enable Resources Safety to fund

existing activities as well as expand services through the recruitment of specialist safety and risk analysts, and

other safety and health initiatives. Whilst the petroleum industry considers that it already operates to a high level

of safety, petroleum accidents have high consequences, including the potential to cause multiple fatalities and

injuries, significant economic impacts through loss of supply, and environmental damage. Recent significant

incidents, fortunately, did not result in fatalities, but had serious economic and environmental impacts.

To enhance the role of the Resources Safety division as a leading-practice safety regulator, the state government

has determined that the necessary resources will be funded through the phased implementation of cost recovery

from the relevant industry sectors. This was announced in September 2009, beginning with mines safety—

implemented in April 2010—followed by petroleum safety and dangerous goods safety. Providing adequate

funds to regulate a growing and highly profitable industry has been an issue over a number of years. The demand

from industry for qualified people has inevitably led to a loss of staff from the regulator as they have moved to

better paid positions in the private sector.

If funding issues continue, it would result in a reduction in compliance monitoring activities, which could lead to

an increase in the frequency of accidents. Additionally, the inability to effectively deliver appropriate safety

regulatory services to industry may lead to infrastructure integrity being compromised. This would impact on

business and supply. The safety levies will enable the department to offer competitive industry-style salary

packages necessary to attract and retain staff with the required technical expertise, and to fund future safety and

health initiatives.

The objectives in developing cost-recovery principles for petroleum and geothermal energy safety are to ensure,

to the greatest possible extent, a fair and equitable distribution of the cost of administering onshore petroleum

and geothermal energy safety regulation, with minimal administrative burdens for industry and the regulator.

Many cost-recovery methods have been examined. Throughout development of the levies, consultation has

occurred via the Australian Petroleum Production and Exploration Association Ltd, the Australian Pipeline

Industry Association and petroleum industry representatives on the Ministerial Advisory Panel on Best Practice

Safety Regulation. The model was modified as a direct result of this consultation. The approach selected was

based on cost-recovery levies used for offshore petroleum by the National Offshore Petroleum Safety

Authority—NOPSA—which are already accepted by industry. The levies have been developed to be as fair and

equitable as practicable and will equate to only 0.0002 per cent of the total sales by Western Australia’s

petroleum industry during 2010, which was $22.9 billion. It is appropriate that industry as the user should pay to

ensure that it is effectively regulated, particularly in view of the anticipated expansion of the industry for the

foreseeable future, as the demand for energy resources continues to grow throughout Australia and

internationally.

The main provisions of the bill before the house are briefly outlined as follows. Part 1 of the bill sets out the

short title, the commencement provision and the terms used throughout the bill; part 2 sets out the structure of

the two safety levies payable; part 3 sets out the main provisions for the assessment and recovery process for the

safety levies; part 4 sets out the process for objections to the levies and the review process for objections; part 5

sets out the chief executive officer’s powers to require information and records from persons; and part 6 deals

with other matters, including the establishment of an agency special-purpose account to house the levy funds, a

provision for delegation of powers and the regulation-making power.

Despite the global economic situation, the resources industry in Australia has continued to develop and expand,

developing new resource areas. Continuing growth of the petroleum and geothermal energy industry will place

further pressure on the government’s already strained resources to deliver safety services. The cost-recovery

approach encapsulated by the bill will enable the safety regulator to provide services commensurate with what

industry expects and needs.

I commend the bill to the house.

Debate adjourned, on motion by Mr W.J. Johnston.