MMR - The ALP will lose the new PEP11 court case

Prejudice - "to unfairly influence someone so that an unreasonable decision is the result"

SUMMARY

Neither Madeleine King or Ed Husic was ever going to approve the PEP11 NOPTA applications.
This is because prior to 21st October 2021, the ALP enshrined a policy to refuse PEP11.
ALP policy is established through it's internal process known as "caucus".
Once a policy is adopted by caucus, all ALP MPs are expected to abide by the party position when making public comments, making decisions, and casting their vote in Parliament.
The penalties for an ALP MP breaching caucus are severe. Loss of portfolio, disendorsement, and explusion from the party are likely outcomes.
So when in February 2023, the Federal Court quashed Scott Morrison's decision, it was a "fait accompli" that the ALP too would refuse the PEP11 applications.
The quashing of the Morrison decision was because the judge was comfortable that Morrison was biased, as he had made a public indication of his intent to refuse the PEP11 application.
The ALP have far exceeded Morrioson's actions, they have made it public that they have made it ALP policy to refuse PEP11.

THE NEXT COURT CASE CANNOT BE WON BY THE GOVERNMENT, AND IN MY OPINION IT WILL NOT MAKE IT TO DISCOVERY.

Evidence of policy - 211021 - Hansard Albanese PEP11 caucus.pdf


FOR THOSE WHO WANT TO KNOW MORE

Why is this important?
The decision by the ALP to make cancelling PEP11 their policy not only pre-dates the Federal Court case, it pre-dates the ALP forming Government.
So, when in 2023, the judgment on the Scott Morrison case dictated that the PEP11 application was to be remitted to the Joint Authority to be determined in accordance with the law, the ALP already had a policy in place that prevented them from complying with the judgement. They had broken the law on day one.

Why is that illegal?
The Judge in the Morrison case cited two legal principles:-
1. The law'sconcern about apprehended bias arises out of the general principle that judicial andadministrative processes should not just be impartial, they must be seen to be impartial
2. the test for apprehended bias is an objective one which is aboutwhat a hypothetical observer might think.

The ALP were not impartial, they did not bring an open mind to the decision making process. Their actions in creating a policy to refuse the PEP11 applications BEFORE being entrusted to participate in an administrative process makes the next court case indefensible.

Right of Veto vs Merits based decision
At least one journalist has used the term "vetoed" in describing Ed Husic's decision.
The role of the Responsible Minister in the Joint Authority decision making process does not carry a right of veto.
Such a decision cannot be arbitrary.
The Joint Authority are entrusted with making a merits based decision where such a decision must be made in accordance with the law.
The PEP11 applications are an administrative process under the OPGGS Act.
A decision of the Joint Authority must be based on the guidelines under the Act.
Putting the apprehended bias to one side, Husic's decision has been reverse engineered to suit a predetermined outcome, rather than a decision based on the merit of the applications. His decision will not survive Federal Court scrutiny.

Weighting
The advice of the regulator, NOPTA, ought to carry the most weight.
In April 2020, NOPTA issued it's advice on the first application - 200429 New draft Instrument - NOPTA's advice dated 29-04-2020.pdf
In late 2023, NOPTA re-issued that advice, and whilst it has not yet been made public, there has not been any material event since that would give rise to a change in NOPTA's view. NOPTAs advice in April 2020 was to approve the application.
At the same time in late 2023, NOPTA issued it's advice on the second application. Whether accidently or otherwise, Ed Husic provided Advent with a copy of the NOPTA advice in September 2024. In a subsequent announcement to the ASX, the company confirmed that NOPTA's advice on the second application was to approve.
To reinforce this point, when NOPTA provided it's original advice back in 2020, it provided a pro forma approval letter for Keith Pitt to sign and a new draft instrument. It did not consider it necessary or appropriate to provide a draft refusal letter.
In October 2023, new draft instruments were also provided to Madeleine King.

Options for the Joint Authority
Whilst NOPTA's advice should carry the most weight, the Joint Authority is not bound to abide by NOPTA's recommendation.
However, valid grounds are required to "overrule" the NOPTA advice.
Again, to take this course, these grounds cannot be arbitrary.

Grounds for refusal
Husic's grounds for refusal are very similiar to Scott Morrison's. This is automatically a red flag.
The centrepiece is "public interest". Whilst this is debateable, what constitutes public interest is grey, DISER documentation discovered during the Federal Court proceedings in the Morrison case show that Public Interest alone is insufficient grounds to refuse the applications.




Therefore, in order to refuse the application, it was necessary for both Morrison and Husic to "find" and provide a supplementary reason to include in the decision in order to activate public interest as a reason for refusal.

Finance
The two key documents to consider are as follows:-
Offshore-Petroleum-Exploration-Guideline-Work-bid-after-July-2019.pdf
DISER advice December 2021 (Financial Capacity) extract.pdf

Under the workbid, evidence of prior ability to raise capital is the test in the absence of proof of funds held.
PEP11 related companies have an excellent track record of raising funds through both BPH and MMR. Bounty also had proven it's track record.
At the time of Husic handing down his decision, associated companies held over $10M combined. This amount represents a significant % of the total estimated cost of the drill.
The DISER advice shows that it is "open" to the Responsible Minister to consider financial capacity as part of the merit of the applications.
However, the definition of "open" is that should the Minister cite such concerns, evidence would need to indicate that such a concern is valid.
Apart from the obvious apprehended bias, a reasonable person could not conclude that Husic has evidence of such inability.
Should this ever get to Court, Advent will rely on the reasonable person test and use the Pathfinder precedent to refute Husic's claims.
Pathfinder decision.pdf

Reasonable person test
As described by Judge Jackson in the Morrison case, this test can be described as "what a hypothetical observer might think"

Judge Jackson is not a fool.
Judge Jackson will be discusted that the ALP had an illegal policy to refuse PEP11 applications, a blatant disregard for the law.
Judge Jackson will be angry that the ALP did not comply with his previous judgement.
Judge Jackson will be angry that almost two years has elapsed since he handed down that judgement.
Judge Jackson will see through the amateurish efforts of Husic to "invent" supporting arguments to justify the refusal.
Judge Jackson will conclude that a reasonable person would consider that Advent has demonstrated evidence of it's capacity to finance their obligations under the PEP11 instrument.
I disregard the Husic reference to incorrect calculations, actual costs can vary based on fluctuations in rig rates which are volatile depending on supply and demand. The instument defines the expected cost.

Application of policy
The OPGGS Act is Commonwealth legislation, a national regime.
PEP11 is located in Commonwealth waters and is administered under Commonwealth legislation.
The Responsible Minister is obligated to administer the legislation consistently across the regime.
Refusal of the PEP11 applications is not consistent with other applications decided across the regime.
Refusal represents an inconsistent application of policy, refer the Pathfinder decision.

NEXT STEPS
Advent will consult with it's lawyers in relation to it's options.
It isn't clear as to the exact timing of the lodgement of the new case.
But there will be a new case.
Once lodged, I doubt it will make it to discovery given the existence of the ALP policy.
Discovery in the "decision in 45 days" case was only approx. 3 months after lodgement.

So, my MMR and BPH are going into the bottom drawer safe in the knowledge that this is far from over.

Not advice
DYOR.
GLTAH.