FAILED - Detailed Report on proposed NSW offshore legislation 2023, page-2

Chair’s foreword

In his second reading speech to explain and describe his Private Member's Bill that he was

putting forward, the Member for Pittwater made two important declarations about his Bill –

that it was driven by politics and that it was intended to tackle one particular petroleum

exploration project known as “PEP-11”. I commend the Member for his honesty, but also

caution that those two qualities rarely make for good legislation

Petroleum Exploration Permit 11 (PEP-11) was originally granted (by the Commonwealth

Government) in 1991 and was renewed in 2012. That Permit was set to expire in 2021. During

2020, the proponent sought a two-year extension to their Permit. This application for

extension sat as a 'live' request throughout 2021 and was not dealt with by the

Commonwealth Government until March 2022, in the lead up to the federal election of 2022,

at which time the then Prime Minister, the Hon. Scott Morrison MP, in his capacity as then

'secret' Minister for Industry, Science, Energy and Resources announced refusal of the

application for a two-year extension of the Exploration Permit. The proponent successfully

challenged that decision of the then Prime Minister in the Federal Court, on the grounds of

bias, and the new Commonwealth Government were required to undertake a new

consideration of the extension application (from February 2023). This renewed consideration is

still currently underway.

Politically, the question of PEP-11 did play out during the Federal Election of May 2022. But the

political campaigning that surrounded PEP-11 did not end there. It continued right through to

the NSW State Election of March 2023. At some point during that State election campaign, the

NSW Liberal Party made a commitment, 'if re-elected', to take action that they had not taken

in the previous 12 years 'to ban the drilling for offshore gas in New South Wales'. What was

overlooked was the reality that the Exploration Permit in question was in Commonwealth

waters (more than 3 miles from the coast) and was a question for a Commonwealth

Government, not a State Government. This point was made by the retiring Member for

Pittwater and twice Planning Minister for NSW, the Hon. Rob Stokes MP when he commented

that 'it’s nothing to do with the State …The only way to ensure PEP 11 can never return is to

change federal law – PEP 11 is outside State waters'.1

This insightful comment by the Hon. Rob Stokes is at the crux of this inquiry – what is the limit

to the powers of the State with regards to coastal waters (3 miles), and at what point does a

State seeking to make laws that would affect Commonwealth waters (more than 3 miles off

our coast) cross into a constitutional crisis.

In short, based on a variety of legal advice received by the Committee, the constitutional

conflict rises from the moment of the second reading speech for the Bill. Concerningly, the Bill also

jeopardises the Offshore Constitutional Settlement. This is a Commonwealth-State

settlement agreement that has been in place for more than 40 years and affects the

interactions of each State of Australia and the Commonwealth Government when it comes to

the waters off the coast of Australia. It is for these reasons that the Committee has

recommended that the Bill should not be supported