Industry's obligations to meet community expectations

Article published in the Regulator | Issue 1: 2018

To quote Mr Jaggers in Great Expectations, “take nothing on its looks, take everything on evidence. There is no better rule.” The evidence before the offshore petroleum industry and government is that community expectations continue to grow, the pace of technological change is increasing, and new risks associated with petroleum operations are emerging. How industry and government respond to this evidence and the degree to which the industry is able to adapt through continuous improvement, will ultimately determine its future success.

As a technically complex industry, offshore petroleum faces challenges across its operations to raising the bar through continuous improvement. Despite the various community misgivings of ‘big oil’ one might see flash across our screens via Twitter and Facebook, progress has been made. The driver of this success has been one simple question, what more could be done? At the most basic level, this question forms the basis of an objective-based regulatory regime, the very type adopted by Australia with the introduction of the safety case approach in 1996.

From tragic beginnings following the 1988 Piper Alpha disaster in the North Sea, objective-based regulation of offshore petroleum was established in the hope that such a disaster would never be repeated. Objective-based regulation is centred on continuous improvement, and recognises that the party creating the risk is best placed to manage and mitigate the risk, by having the knowledge, decision-making authority, and on-the-ground control and resources.

As Australia’s national offshore petroleum regulator, NOPSEMA administers the objective-based regulatory regime under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and associated Regulations. The regime is administered by highly experienced and qualified experts from specialised backgrounds including safety, engineering, and environmental science. Strengthening NOPSEMA’s position is the independence from political and economic concerns, provided through the legislation.

Our regulatory approach recognises that no two petroleum activities are the same, just as no two operating environments are the same. Through permissioning documents, duty holders make commitments specific to their activities, which are assessed by NOPSEMA as to their appropriateness. If accepted, these commitments act as conditions of approval, to which duty holders are held to account through NOPSEMA’s targeted inspection and compliance programs.

While NOPSEMA seeks to bring about positive change through advice and promotion, recent actions confirm that the issuance of general directions and notices also have an important role in bringing about significant improvements relatively quickly. Prosecutions always remain an option, but an objective-based regime should seek the most effective compliance actions to ensure risk and impact are minimised as quickly as possible.

It is no longer good enough to tick a box and be content that all is well. Just as the UK determined that another Piper Alpha type incident was a risk too great to take, the Australian community does not, and offshore petroleum should not, accept anything less than a regulatory approach that seeks every opportunity to improve worker safety, reduce environmental impact, and demonstrate a genuine commitment to achieving this by continually raising the bar.

Great expectations they may be, but anything less is simply unacceptable. 

What is a permissioning document?

A permissioning document under the Offshore Petroleum and Greenhouse Gas Storage Act is an Environment Plan, a Safety Case or a Wells Operations Management Plan. A permissioning document defines the range of activities that are allowed to be conducted, and specifies the control measures that must be applied to each activity. Such arrangements include:

  • the control measures that are implemented to reduce risk to as low as reasonably practicable

  • the performance standards used to ensure control measures perform their required function

  • the design standards and specifications that have been adopted

  • the features of activities or facilities that constrain the extent of the operational boundaries.