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Senator the Hon Robert Hill
Leader of the Government in the Senate
Minister for the Environment

Australian Petroleum Production & Exploration Association
(APPEA) National Conference


Canberra Convention Centre
11 March 1998

Introduction:

The first step to delivering national prosperity in a responsible way, is fully accepting our capacity to inflict irreversible harm on the global environment. And achieving this responsible outcome can be harder than it sounds, because human intervention may not always appear significant.

For example, human CO2 emissions may only be a small fraction of the total -- but to quote BP Chief Executive, John Browne, "it is that small fraction which might upset the equilibrium... You could think of it as placing even a small weight on a weigh-scale which is finely balanced."

Recognising the fragility of the natural balance, our capacity to influence it, and the desirability of maintaining it long-term, was central to our successful approach to Climate Change in Kyoto late last year -- as was a realistic appreciation of what Australia's economy could and could not afford in the short-to-medium term.

Kyoto capped off a significant year of economic and environmental repair for the Australian government.

By the end of 1997, the $1.1 billion Natural Heritage Trust was facilitating on-the-ground environmental repair on a scale never before seen in this country. On the economic front, inflation and interest rates were at their lowest levels for decades, and the government had almost repaired the $10.3 billion budgetary hole it inherited.

I want to focus today on three issues you can expect to dominate the national environment policy agenda in 1998, and which will also have implications for your industry:

  1. Beginning with Climate Change, we must meet our Kyoto commitments with a robust domestic greenhouse response, including full implementation of the $180 million package of measures announced by the Prime Minister late last year;
  2. Secondly, on Legislative Reform, we're rewriting Commonwealth environment laws to enable the federal government to discharge its current and emerging responsibilities for environmental protection in a much more efficient way; and
  3. Third, we will be finalising Australia's first ever comprehensive National Oceans Policy based on a multiple-use framework which enhances marine environmental protection, whilst at the same time providing certainty to marine-based industries.

This is not an exhaustive list, but I'll limit myself to these three matters today, due to their obvious relevance to the petroleum industry. And, I look forward to the same constructive contribution on these issues which APPEA has made to the Greenhouse Challenge, and the bi-lateral agreement with the Biodiversity Group of Environment Australia.

Climate Change: Post-Kyoto:

I want to begin my discussion of Climate Change by setting the records straight. You may have heard that the Australia team "won 8-nil in Kyoto with some last minute heroics," but this is a bit misleading. In fact, when agreement was reached in Kyoto, it was not a "full-time whistle."

Addressing climate change is a long term challenge. Kyoto will not even get us to half time - but it did settle some of the ground rules.

One was "differentiation," a central tenet of Australia's negotiating position. Within a framework of differentiated commitments which reduce developed country emissions by 5.2% relative to 1990 levels, it was agreed that a fair Australian contribution was to significantly reduce from 43% to 8% our projected growth in emissions by the budget period ending 2012.

This was a good outcome which enabled us to be part of an historic global assault on one of the most difficult environmental problems. But, contrary to what you may have heard, Australia won no free ride in Kyoto.

At the second "Earth Summit" at the UN General Assembly last June, I said Australia sought only "Equality of effort between annex 1 countries." This is essentially what we got in Kyoto. And, for the reasons the government spelt out again and again last year, plus 8% will be as hard, if not harder, for us to achieve than minus 8% will be for the European Union.

And, with the energy sector contributing close to half of Australia's emissions, no other sector will have a more pivotal role.

In the late 1940s, oil company ads said "The better you live, the more oil you use." Fifty years on, you wouldn't hear of an ad like that (although the less enlightened might long for it!)

And, while fossil fuels will undoubtedly remain the dominant source of world energy well into the 21st century, I now hear major petroleum industry figures embracing energy-efficiency, and even suggesting "that in 50 years time, renewable energy could supply half the world's needs."

That's a sign of the times, and a sign that now is the time for our energy sector to grasp the golden opportunities to invest in emissions reduction.-- whether in the form of greenhouse sinks, operational energy-efficiency gains, or the development and commercialisation of renewable energy technology.

Where they haven't done so already, one immediate action that APPEA member companies can take, is to sign an individual agreement with the Greenhouse Challenge. The industry worked with us to achieve a fair Kyoto outcome. We now want to work with you in the same spirit to ensure we meet that commitment.

Legislative Reform:

As with Climate Change, we will be seeking your co-operative involvement, as we reform Commonwealth environmental law.

As many of you will agree, the Commonwealth's environment regime has not kept pace with best practice, and requires significant reform. As a result, the legislation - especially key statutes which are over twenty years old - are now showing their age.

In late February I released a Consultation Paper on Commonwealth environmental legislative change. The proposals identified therein are designed to produce an efficient, responsive regime which embraces contemporary approaches to environmental management.

The new laws should enhance the conservation and sustainable use of our natural resources in a manner that delivers certainty for all stake-holders, and eliminates unnecessary duplication and delay. Our goal is to build a framework which promotes sustainable development into the twenty-first century.

The reforms will provide significant benefits for your industry. For example:

  1. The existing indirect triggers - such as foreign investment decisions - are to be abolished. These triggers often occurred late in the project development phase, creating delay and hindering seamless integration of State and Commonwealth processes. Foreign investment approvals will no longer be delayed by environmental processes.
  2. The indirect triggers will be replaced by environmental criteria ('matters of national environmental significance') which reflect an appropriate role for the Commonwealth. These criteria - defined in the Consultation Paper - were given in-principle approval by the Prime Minister, Premiers and Chief Ministers at the COAG meeting in November last year. The application of these criteria will ensure certainty in relation to which projects trigger Commonwealth environmental processes. In particular, the Commonwealth will no longer be involved in matters raising environmental issues of only local or state significance.
  3. Proponents will be able to trigger the environmental assessment process. After referral by a proponent, the legislation will require an early, binding decision by the Commonwealth on whether its assessment process will apply.
  4. The reforms will ensure that, during the assessment process, decisions must be made within set time-frames.
  5. A transparent legislative framework for the accreditation of State processes that meet appropriate standards will be included. For the first time, the legislation will allow the Commonwealth to accredit State systems and State decisions. We are moving beyond case-by-case accreditation.

I am confident that the proposed reforms will deliver significant benefits for industry. I am equally confident that the reforms, including Australia's first Biodiversity Conservation Act, will enhance environmental protection and promote ecologically sustainable development in Australia. For example:

I look forward to receiving your thoughts on the proposed reforms.

Oceans Policy:

Lastly, I want to discuss Oceans Policy.

Our land is not only "girt by sea," as the national anthem says. Since the entry into force of the Law of the Sea Convention in 1994, Australia is girt by more sea for which it is responsible than ever before -- more than just about any other nation.

We now administer almost 11 million square kilometres of it:

It is apt, therefore, that during the International Year of the Ocean, we should adopt a comprehensive National Oceans Policy which effectively meets Australia's substantial maritime management commitments in a way which is sustainable over the long term.

Australia has well established regimes for managing specific ocean sectors such as shipping, fisheries, oil and gas, and marine protected areas. However, we lack the synchronised and comprehensive planning and management regime which can resolve conflicts and competing interests, and identify gaps. A National Oceans Policy will help to fill this hole.

In 1997, we engaged in exhaustive consultations with the wide variety of stake-holders including APPEA, and during 1998, we expect to finalise the Oceans Policy, following a 2 to 3 month period to allow public comment on a draft policy.

Again, without pre-empting the draft policy, you can expect a number of things which will be of relevance to petroleum exploration.

Finally, we anticipate significantly more opportunities for the petroleum industry and other stake-holders to work with government, environmental groups, and the community at large to develop innovative off-reserve solutions which boost marine conservation, without compromising your bottom line.

In that context I am pleased to indicate today that the Commonwealth government will be working with APPEA, the Western Australian government and other stake-holders to establish voluntary conservation arrangements in Commonwealth waters surrounding the Montebello and Barrow Islands region off the North West Shelf.

This work will provide governments and industry with an historic opportunity to develop a conservation strategy which, through the implementation of off-reserve measures, will protect a region that industry itself has identified as being of significant environmental value. For example, it is an area that contains significant populations of humpback whales, dugongs, various endangered and vulnerable turtle species, and threatened sea and shore birds.

I would like to acknowledge the work done by companies in the region over the last 30 years in conserving endangered and vulnerable species on these islands. Your willingness to extend conservation into the marine environment is a significant step in harmonising the multiple economic and conservation values of the region.

As I mentioned, we will also be seeking to involve the Western Australian government in developing off-reserve management arrangements so that we can ensure that the conservation measures that the State is developing for its waters compliment actions that we might pursue within the Commonwealth's jurisdiction.

It is just one of many examples where collaboration is replacing conflict as a result of the our joint agreement -- which we see as a benchmark and affirmation for how industry and government should work together.

APPEA/Environment Australia Framework Agreement:

I said our biodiversity group had a bilateral agreement with APPEA. Today we are extending our bi-lateral agreement to incorporate Environment Australia as a whole.

All areas of Environment Australia will now be committed to closer cooperation and communication with your industry association on issues of mutual interest and concern.

The general principles set out in the framework agreement ensure that the interests of all Australians in enhancing, protecting and valuing our natural and cultural heritage will be a central part of the petroleum industry's thinking, planning and action.

This is a reciprocal arrangement. For our part, Environment Australia is committed to hearing, recognising and addressing the legitimate concerns of the industry in any relevant policy and program processes.

A general commitment to cooperation and communication will be fleshed out through specific work plans and joint collaboration on areas of mutual interest, whether these are aimed at protecting biodiversity, improving project approval processes, or ensuring that development can proceed while protecting the natural and cultural values of the environment.

Like all good partnerships, we now recognise our mutual interests and can accommodate our individual concerns.

Conclusion

In closing, the government has set itself an agenda for 1998 which includes some very important environment policy items. This presents significant challenges and opportunities for the petroleum industry, which we expect to continue to be of great strategic and economic importance to Australia, well into the next century.

From the government's perspective, our environmental agenda items have one thing in common -- they aim to improve Commonwealth protection of environmental quality, without unduly compromising Australia's economic prospects.

To that objective, we are confident that the agreement we are now to sign also heralds a step forward, a mutual appreciation of our respective goals and the best chance of delivering national prosperity in an environmentally responsible way.

Commonwealth of Australia