Safety in the Australian Offshore Petroleum Industry

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Introduction

Occupational health and safety have become a key concept in organizational management due to the many environmental hazards that face organizations. Occupational risks that prevail in organizations have to be minimized as much as possible so as for employees to work in a safe environment for better delivery. Occupational risks do cause harm to organizational employees that present themselves through physical injuries, maladies and in extreme cases, death. Occupational health risks are more prevalent in active industries like the mining industries than they are in service industries. However, categories of occupational risks vary from one industry to another. The most important thing to note is that these risks prevail in all industries. Australia Offshore Petroleum industry is one of the industries in Australia is an example of industries that have been diagnosed with occupational and safety issues (Australian Government, 2011). This report analyses occupational health and safety in Australia with the major focus on the offshore petroleum industry. The paper gives an overview of the industry and occupational health and safety observance in the industry in the past few years. The analysis also focuses on the legislative and regulatory environment in relation to occupational health and safety. The report also gives analytical views concerning how the laws on occupational health and safety should be applied to the offshore petroleum industry in the country.

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Overview of occupational health and safety of the offshore petroleum industry of Australia

Australia has an extensive offshore petroleum industry that is critical to the performance of the Australian economy. Therefore, occupational health and safety are a concern of not only the government of Australia but all Australians. Therefore, the control of the industry is paramount exercise of the Australian government. This is done through the enforcement of regulatory mechanisms to ensure that all safety issues are addressed. The offshore petroleum industry of Australia has often been in the headlines because of occupational health and safety issues that have been prevalent in the industry (Bills and Agostini, 2009).

Occupational risks have been prevalent in the industry, in spite of the presence of regulatory bodies which are required to safeguard and ensure the maintenance of safe working environments in organizations. This could be a pointer to either leakage in occupational health and safety standards in Australia or sub-standard regulatory mechanisms by regulatory organs. The latest incidence in Australian industry is the recent death of employees on Stena Clyde, which is one of the offshore oil drilling plants in Australia (NOPSEMA, 2012). The employees were reported to have died on the 20th of August from the accident that occurred at the plant. This is one of the major accidents to be witnessed in the Offshore petroleum industry of Australia since the 2008 fatal accident that occurred at Karatha Spirit in the year 2008. This can also be argued to be a signal of the impending health and safety issues in the offshore petroleum industry of Australia. Strong incites into this can only be developed from a deeper look into occupational health and safety issues in the industry (Bills and Agostini, 2009).

The safety of the offshore petroleum industry of Australia: The current state

As earlier noted, the offshore petroleum industry of Australia has been subjected to regulation in order to raise the level of safety of both the external and internal environments. Internal environment is very important since it directly impacts the people who work in the organizations. These people are responsible for bringing about positive organizational performance. Internal regulation addresses occupational health and safety issues with the ultimate objective being to provide a safe working environment that is either risk-free or has minimal health hazards. Occupational health as safety has continued to inform the agenda of the offshore petroleum industry of Australia with many people advocating for the general safety of the industry (Australian Government, 2011). More concerns about health and safety of the offshore industry have been raised over the last three years because of the work-related deaths that happened in one of the Offshore petroleum plants in Australia in the year 2008. With the increased concern about the safety of the offshore petroleum industry, the regulation of the industry has been more tightened. This has been a precursor to safety in the industry. With increased voices, the regulatory bodies are forced to be proactive in their mandates or otherwise be sanctioned by the populace (Georgiou, Harrison and Iverson, 2012).

The regulation of the offshore industry operations has been based on policy recommendations that were made by an international team of safety experts on offshore industry operations. These recommendations were made back in the year 2000. The review sought to simplify the regulatory environment which was deemed to be complicated for implementing safety regulations. There were many regulations, acts and directions resulting in too much fragmentation hindering application and implementation. Of the highest concern was the incapacitation of state as well as territory regulators because of the fragmented legislation. The recommendations guided the Australian government in establishing the regulatory body to help in overseeing the regulation of safety in the offshore petroleum industry. This body is known as the National Offshore Petroleum Safety Authority abbreviated as NOPSA (Australian Government, 2011). The body was established in the year 2005 to aid in regulating occupational health and safety in offshore areas. The sanity that has existed in offshore operations is attributed to this regulation body. In addition, other regulatory bodies have been responsible for holding a safe environment and are answerable to the government of Australia. The body has been compelling the players in the offshore petroleum industry to adhere to the safety standards that are critical in eliminating risks (Parliament of Australia, 2011).

The number of occupational health risks was brought down in offshore petroleum industry. Only minor fatalities were reported in years that followed the formation of NOPSA. Major occurrences in offshore operations have been seen from the year 2008 when major occupational health threats have occurred in several offshore petroleum plants. Therefore, the Australian government has done well in observing occupational health and safety in the offshore petroleum industry. This is corded to the big range or gap in which occupational health and safety issues happen (Georgiou, Harrison and Iverson, 2012).

Safety concerns are addressed in both the offshore and offshore petroleum industries of Australia. However, the regulatory mechanism for implementing OHS differs for onshore and offshore industries. Safety regulation of offshore operations has been harmonized through a national regulator of petroleum which was created to oversee this function. Occupational health and safety regulations are enacted within a controlled environment in the offshore petroleum industry. On the other hand, onshore petroleum operations are regulated by occupational health and safety regimes that are applicable in each of the Australian states and territories.

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Many risks have been seen in offshore operations, in the recent years prompting legislation to help in enforcing risk reduction measures in offshore operations. These include the BP Mocondo blowout that took place in the year 2010. The recent Stena Clyde accident at Victoria Coast painted a negative picture of Australia. This is in regard to the effects caused on the confidence of the people in respect to the regulation of the offshore industry (Bills and Agostini, 2009).

OHS legislative and regulatory environment for offshore petroleum industry

According to Hunter (2011) the regulation of offshore facilities in Australia is conducted by different regulatory bodies depending on the location of the facility. For firms that are located more than 200 nautical miles away from the seashore, they are often governed by external legislation. All other facilities, which are situated up to 200 nautical miles off the coast of Australia, are governed by internal regulators. Occupational health and safety legislation on offshore petroleum operations has been undergoing changes so that they can be responsive to the emerging safety cases. The more the number of offshore drills, the higher the capacity of regulation so that all issues appertaining to occupational health and safety are observed by these operators (Parliament of Australia, 2011).

The prevailing legislation on occupational health and safety issues has been born out of many amendments to different pieces of legislation that were developed in early years. Most of the legislation on occupational health and safety used currently in Australia is derived from the offshore petroleum and Greenhouse Gas Storage Act of 2006. Subsequent amendments to this act necessitate adjustment in regulatory policy frameworks on occupational health and safety of firms. This piece of legislation spearheaded the regulatory mandate of NOPSA which is now referred to as NOPSEMA. Aspects of environmental management were added to NOPSA to form the NOPSEMA. This was done at the beginning of the year 2012. NOPSEMA has jurisdiction over all offshore operators that perform their work 200 nautical miles and below from the seashores of Australia. The existing environmental legislation has, however, remained intact, irrespective of the formation of NOPSEMA and is still distinct from the operational health and safety regime. Therefore, the occupational health and safety regime is still intact (Hunter, 2011).

The primary role of NOPSEMA has entailed the regulation of the environment for companies that want to engage in offshore operations as well those companies that are already operating. This agency ensures that companies undertaking offshore petroleum exploitation comply with the set compliance standards of promoting health and safety within the industry. The agency also ensures that occupational health and safety standards are observed by the companies as they observe other environmental protection obligations. Any new company, which wants to engage in offshore operations, must receive ratification from NOPSEMA which assesses the capacity of the company to meet the set safety standards. NOPSEMA only has jurisdiction over firms that are operating within a 200 square mile radius. This gives the agency power because it limits its machinery to a certain number of offshore operators. The budget of the agency becomes more sustainable for engaging the operators so as to enhance best practices (NOPSEMA, 2012).

NOPSEMA is also liable to ensure that all the operators on offshore petroleum industries become fully answerable and responsible for all the risks that emanate from their plants. This mandate entails the duty to bring to book a company that breaches the environmental, as well as organizational health and safety. New operators are bound by the Petroleum Act of 2009 to present their environmental plans to NOPSEMA which assesses the plan and notifies these operators on assessment outcomes. This agency gives opportunities to operators to improve their plans if they are considered to be unsatisfactory according to the standard that is acceptable to the agency. NAPSEMA cuts across all the states and territories of Australia meaning that it has a broader jurisdiction over all the operators in Australia. This is a positive pointer to a more regulated environment because of the absence of conflicts that arise from conflicting policies from regulators. This also paves way for coordination of efforts by both the operators and the government together with the agency so that positive goals of occupational health and safety can be attained (NOPSEMA, 2012).

Harmonization or no harmonization of the policies of OHS laws

A debate has been raging on whether to harmonize the occupational health and safety laws in Australia. The argument is that there is a need to harmonize all OHS legislation so that it can cover all the states as well as territories of Australia including the common waters of Australia that are not bounded by many pieces of legislation. Proponents of the debate base their theses on a number of points. Currently, Australia has two territories and six states meaning thus it is hard to implement legislation touching on similar developments in different dimensions (Australia Retailers Association, 2009). Occupational health and safety laws ought to be communized to all organizations in Australia regardless of the places where organizations are located so long as they are located within the country. This brings ease in the application and coordination of policies concerning the legislation. The first supportive point for harmonization of OHS laws is that the exercise will help to reduce the cost of operations of firms. Firms that are operating in either more than one state or territory are forced to incur extra costs of compliance with OHS laws (Australian Department of Commerce, 2012).

According to Australian Government (2011), organizations operating in different territories are forced to apply force to acquire several licenses to show their compliance with OHS laws. This means that for each line that will be acquired, there will be an increase in cost of operation of the firm which further hinders the accomplishment of other activities. This may hinder the ability to implement the safety standards as stipulated in the laws because most funds are spent on compliance. This is backed by the argument that firms with cross-state and cross territory operations are forced to comply with the legislation as practiced in each state or territory of Australia. According to the Australian Department of Commerce(2012), the implication for this piece of legislation as practiced now is that there are eight sets of legislation. This is derived from the total number of states and territories in the country. In addition, there is the federal government and parliament legislation which add to the number of legislation fragmentations. This means that this piece of legislation can easily lose objectivity because of the seemingly many interpretations that will be made by the respective authority in the implementation. States and territories have sets of other laws, which are related to organizational health and safety. These laws focus on specific legal issues on specific activities within the states like mining. With the presence of these sub-legislations, there is a high probability of hindering the implementation of the major sets of laws as carried out in OHS laws (Hunt, 1989).

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Conclusion

Occupational health and safety are one of the most crucial issues affecting modern organizations because of the many risks that emanate from exploitation of opportunities by firms. This topic remains elusive in Australia and especially the offshore petroleum industry. This has been fueled by the many health risks that have been predisposed to employees working in the industry. Over the past few years, many accidents have happened in different offshore plants causing an alarm over the safety of employees in offshore petroleum firms operating in the country. Australia has been active in containing the occupational risks that are facing employees working in the offshore petroleum industry by formulating and implementing policies and legislation on health and safety in the country. These pieces of legislation are bearing results but at the same time are faced with a number of challenges concerning implementation. The OHS laws, for example, are found to be challenging because they have to be applied differently in different states and territories.

Reference List

Australian Department of Commerce, 2012, Frequently asked questions – harmonized OSH laws Statement from the WorkSafe Western Australia Commissioner. Web.

Australian Government, 2011, Operational Effectiveness of the National Offshore Petroleum Safety Authority. Web.

Australia Retailers Association, 2009, Exposure Draft of the Model Occupational Health and Safety (OHS) Act. Web.

Bills, K., and Agostini, D 2009, Offshore Petroleum Safety Regulation: Varanus Island Incident Investigation. Web.

Georgiou, M, Harrison, S, & Iverson, C 2012, OHS Harmonisation: current state of play, King & Wood Mallesons, Web.

Hunt, D, C 1989, The Offshore Petroleum Regimes of Canada and Australia, Faculty of Law, University of Calgary.

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Hunter, T 2011, Australian offshore petroleum regulation after the Varanus Island explosion and the Montara blowout– drowning in a sea of federalism, Australian & New Zealand Maritime law journal, Vol. 25 no. 1 PP.70-85.

NOPSEMA, 2012, From the CEO. The regulator, Issue 4. Web.

NOPSEMA 2012, The HSR Handbook: A guide for health and safety representatives in Australia’soffshore petroleum industry. Web.

Parliament of Australia, 2011, Offshore Petroleum and Greenhouse Gas Storage Amendment (National Regulator) Bill 2011. Web.

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