Petroleum Legislation Amendment Bill 2018 – Northern Territory to introduce 'appropriate person' test

Jan 2019 |

Background

In a further step towards lifting the moratorium on hydraulic fracturing of onshore unconventional reservoirs in the Northern Territory, the Territory government introduced the Petroleum Legislation Amendment Bill 2018 (NT) (Bill) into Parliament on 29 November 2018.

As part of its commitment to enact the 135 recommendations arising out of the Independent Scientific Inquiry into Hydraulic Fracturing,1 the draft Bill proposes the introduction of the following changes to the legislative regime:

  1. The introduction of a broad right for any person to seek judicial review of a decision made by the regulator under the Petroleum Act or the Petroleum (Environment) Regulations;
  2. A requirement for applicants for a permit or licence to be 'appropriate persons'; and
  3. A requirement for the holders of permits and licences to comply with Codes of Practice (to be prescribed under Regulation), and the potential for penalties to be imposed for breach of such Codes.

Right to seek judicial review

The Bill proposes that any person may seek judicial review by the Supreme Court of certain decisions or determinations under the Petroleum Act and the Petroleum (Environment) Regulations. If enacted, a person will no longer need to be directly affected by the relevant decision or determination to have the decision judicially reviewed.

Schedule 1 of the Bill provides an extensive list of the decisions or determinations made under the Petroleum Act which will be subject to the extended right to seek judicial review. The decisions include:

  1. various decisions relating to exploration permits and production licences, including decisions to grant, refuse, cancel or extend the term of a permit or licence, or to vary, suspend or waive conditions on a  permit or licence;
  2. decisions regarding show cause notices;
  3. retention licence decisions; and
  4. decisions regarding the transfer of an interest, or surrender of an interest, in a petroleum interest.

It is also proposed that broad rights of review be afforded in respect of decisions made under the Petroleum (Environment) Regulations, including a decision:

  1. to approve or refuse to approve a plan of operations;
  2. that revision is required for a plan; and
  3. to revoke approval of a current plan.

'Appropriate person' test

The Bill also proposes the introduction of a new requirement for the Minister, when determining whether to grant a permit or licence, to be satisfied that the applicant is an 'appropriate person'. In making such a determination, the Bill sets out a number of factors of which the Minister must have regard, including:

  1. in the Minister’s opinion, that the person is of good repute, having regard to character, honesty and integrity;
  2. whether the person has demonstrated the financial capacity to comply with the person’s obligations under the licence or permit;
  3. whether the person is in a partnership with a person who the Minister does not consider to be appropriate; and
  4. any other matters the Ministers believes to be relevant.

Despite the above factors, the Minister is able to disregard the listed requirements depending on the seriousness of the contravention, length of time since the contraventions, and other considerations the Minister deems relevant.

Codes of Practice

The Bill also introduces provision for the development and enforcement of various Codes of Practice governing petroleum operations. A breach of a Code of Practice will result in an offence being committed.

The Inquiry’s final report recommended the development of Codes of Practice relating to:

  1. minimum requirements for decommissioning onshore shale gas wells;
  2. minimum requirements for integrity of onshore shale gas wells; and
  3. continuous monitoring and reporting of methane emissions from onshore shale gasfields and wells.

Way forward

The Bill has been referred to the Economic Policy Scrutiny Committee, which will return the Bill to the Parliament by 12 March 2019.

Submissions to the Committee are due to close by 30 January 2019.

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1 https://frackinginquiry.nt.gov.au/inquiry-reports?a=494286

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