PETROLEUM AND GEOTHERMAL ENERGY (TRANSITIONAL LICENCES) AMENDMENT BILL

Committee Stage

In committee (resumed on motion).

Clause 1.

The Hon. M. PARNELL: Just while the minister is sorting himself out, for the benefit of the chamber I would like to let members know that, whilst I do have some questions, the vast majority of them are on clause 1. The bill has only six clauses and a schedule, and most of what I have to ask I think is appropriately asked at clause 1. I just put that on the record in case members are getting overly anxious about the pace at which this important bill is progressing.

In his second reading explanation the minister says that it has been drawn to the state's attention that there are potential unintended consequences arising from the transitional provisions of the Petroleum and Geothermal Energy Act. When we were debating this earlier today, the minister was asked about when it was drawn to the government's attention, and the minister provided some answers there. My question of the minister is: which mining companies have approached the government expressing their concern about the situation as it exists today and asking for legislative reform?

The Hon. I.K. HUNTER: My advice is that this is a process that we embarked upon and not at the instigation of any companies.

The Hon. M. PARNELL: I did ask whether any companies had asked for the legislation, but just to clarify: is the minister saying no mining company has expressed any concern, up until now, about the status quo?

The Hon. I.K. HUNTER: We have tried our hardest but all I can say is that to the best of our knowledge, no. My advisers have no knowledge of it and I have no knowledge of it.

The Hon. M. PARNELL: I thank the minister for his answer. In the minister's second reading explanation, directly following the sentence I read earlier, he stated:

The state has concerns that if the proposed amendments are not made many petroleum production licences could be found to be flawed on the basis of the unintended legislative effect.

What the minister has effectively said is that these concerns rest in the minds of the government and its officials and they, apparently, at least to the best of the minister's knowledge, do not exist in the minds of the executives of mining companies. I would like to pursue that a little bit further. In the two years since the industry (Santos in particular) has been aware of this problem, is the minister aware of any of them having notified the Stock Exchange that circumstances exist or have arisen that could give rise to difficulties for those companies, in particular in relation to their share prices? Is the minister aware of any company that has notified the Stock Exchange that there is a problem?

The Hon. I.K. HUNTER: Not to my knowledge.

The Hon. M. PARNELL: I thank the minister for that answer.

The Hon. I.K. Hunter interjecting:

The Hon. M. PARNELL: We will get there, minister. I will explore this a little further. The minister is not aware of any companies having told the Stock Exchange that there is a problem. Is the minister aware of whether any of these companies have gone public in any other way with their concerns? Have they expressed concerns through newsletters or through industry representative bodies? Is there any evidence—

An honourable member interjecting:

The Hon. M. PARNELL: Twitter, as the honourable member interjects. Is the minister aware of any communications from the mining industry, its representative groups or persons connected with it, drawing attention to a problem that needs fixing?

The Hon. I.K. HUNTER: Mr Chairman, just late in I have been handed some advice that tells me that Santos has raised this issue with the government and the opposition. That is all I know.

The Hon. M. PARNELL: Does the minister's advice say when that was raised?

The Hon. I.K. HUNTER: It does not.

The Hon. M. PARNELL: Is the minister aware of whether any of the companies—and I will pause at this point. We do not know who all these companies are. My colleague the Hon. Tammy Franks asked about the 200 licences—we have more answers.

The Hon. I.K. HUNTER: Perhaps I could assist the honourable member on this. I have been given some advice over the meal break in this regard: I am advised that there were 196 transitional petroleum production licences, 193 of those were or are held by the Santos-led Cooper Basin producers, comprising PPL 6 through to 20, 22 through to 61, 63 through to 167 and 169 to 201. The remaining three were, or are, held by Air Liquide, PPL 21, and the Origin Energy-led JV, subsequently sold to Adelaide Energy, PPLs 62 and 168.

The Hon. M. PARNELL: What I take from the minister's response is that 98.5 per cent of the licences coming up for renewal are in fact Santos or Santos related. My next question is on the same theme. We know it is Santos, but the minister has mentioned some other companies as well. The minister is not aware of them having raised it with the Stock Exchange or in any other forum. He believes Santos has raised it with the government but he cannot say when. He does not know whether it was before or after the bill. I would ask further: is the minister aware of whether Santos, in particular, or any of its related companies, or any of the other three companies that he mentioned, have been denied finance, or have any of them had their credit ratings affected by the alleged uncertainty surrounding their licences, uncertainty that has been known for two years?

The Hon. I.K. HUNTER: How would I know that?

The Hon. M. PARNELL: I will answer the minister's question for him. He would know it because he said Santos has raised this with the government. He does not know when and he does not know what they said. If the minister has no idea about whether any company has been denied finance, then I will let that sit.

Putting all that information the minister has just offered us together, I could probably summarise it in one question: what evidence does the government have that there is any harm or material disadvantage at all that will befall these oil and gas companies if this legislation is not passed until the next sitting week of parliament?

The Hon. I.K. HUNTER: In response to the honourable member's question, as he knows, it has been drawn to the state government's attention that there are potential unintended consequences arising from the transitional provisions of the Petroleum and Geothermal Energy Act. The government has concerns that if the proposed amendments are not made many petroleum production licences could be found to be flawed on the basis of unintended legislative effect.

It is also my advice that SANTS has also suggested that the bill is unlikely to seriously impact on the petroleum industry, but we do not accept that suggestion. The petroleum sector has operated for decades under South Australia's straightforward regulatory regime, which offers security of title, a competitive royalty regime and expeditious land access that is fair to Aboriginal people and sustainable for development.

South Australia competes nationally and internationally for billions of dollars of petroleum investment, and the state's hard-won reputation as a safe and reliable investment destination cannot be underestimated. As a consequence, any factor which damages the state's reputation should be a cause for great concern. The proposed bill seeks to ensure that industry confidence in the state remains and that fair and equitable outcomes are achieved for native title claimants, who will continue to have the benefit of the right to negotiate in relation to all new licences granted.

The Hon. M. PARNELL: Minister, in relation to the government's concerns that you have just outlined—concerns about the potential validity of licences—to what extent will those concerns be different in three weeks' time from what they are now and from what they were two years ago, when this was first raised? I really need to know why we are doing this now. How different will the situation be in three weeks compared to the situation today? Are there particular licences coming up that are of particular concern? What is the difference between doing it now or doing it in three weeks?

The Hon. I.K. HUNTER: The difference is that we know about it now and we need to be seen to be acting now. It is not a situation that we can let hang for three weeks. The state needs to be seen to be correcting an error that occurred in the legislation in, I think, 2000.

The Hon. M. PARNELL: What does the minister say to the claim that the real intention of this legislation is to kill the proceedings before the Federal Court?

The Hon. I.K. HUNTER: In response to the honourable member, I just reject his assertion.

The Hon. M. PARNELL: The minister might reject the assertion that the reason for the legislation is to kill the federal court case: does the minister accept that the outcome of this legislation would be to kill the court case?

The Hon. I.K. HUNTER: The court will apply the law as it stands on the date it considers the matter, is my advice.

The Hon. M. PARNELL: That is a very roundabout way of the minister saying yes. The minister wants the law that applies as at 8 October to be very different from the law as it may apply now. I want to change tack slightly and to ask the minister about the assumption that the minister says has existed for some 10 years. I will use the words of the minister in the other place just to be more accurate. He said in the lower house, in closing the second reading debate:

All parties had assumed for the past 10 years, since the Petroleum and Geothermal Energy Act was enacted, that licences created under earlier legislation could be renewed without the right to negotiate applying.

The key things there are that all parties had assumed and the length of time being 10 years. First, I do not think all parties had assumed it; I think the government might have assumed it, and I will let that pass as a comment. I did not assume it. I have some form in this area, being one of only two people in this place who voted against the serious and organised crime bill, and subsequently bits of it were found to be invalid when it went to the High Court. So, I do not see myself as someone who has assumed for the past 10 years.

I will say that I have not put my mind to it a great deal over those last 10 years—I have in the last two days, however. In relation to the fact that it is 10 years, does the minister believe that, the longer an assumption is held, the more valid it is and the more deserving it is of correction? I draw the minister's attention to the doctrine of terra nullius, which managed to last for about 200 years before we realised that it was a load of codswallop.

The Hon. I.K. HUNTER: What can I say to that? I am not a lawyer.

The Hon. M. PARNELL: Okay; we will leave that there. Depending on the minister's answer, this is my final question under clause 1. It has been suggested to me that there are serious questions about the constitutional validity of this legislation. I also understand that retrospective legislation does not of itself cure constitutional invalidity. What specific advice does the government have on this matter?

The Hon. I.K. HUNTER: My advice is that counsel and the Crown Solicitor's Office have foreseen no constitutional problems.

The Hon. T.A. FRANKS: The minister will be pleased that we are running out of questions; however, one incredibly important question is along the lines of a previous question asked by my colleague, the Hon. Mark Parnell: what advice on this bill has the government received that it in fact complies with the Racial Discrimination Act?

The Hon. I.K. HUNTER: My advice, from similar advisers—Crown Solicitor's Office and, I imagine, counsel—is that there is no impact from that legislation.

The Hon. T.A. FRANKS: I understand there are 20 native title claims in South Australia as of June this year. It has been outlined that this bill will directly affect the Yandruwandha/Yawarrawarrka claim. Does it affect the other 19, which are as follows:

Adnyamathanha No. 1

Adnyamathanha No. 3

Antakirinja Matu-Yankunytjatjara

Barngarla

Dieri Native

Dieri No. 2 Native

Eringa

Eringa No. 2

Eringa No. 3

Far West Coast

First Peoples of the River Murray and Mallee Region

Gawler Ranges

Kaurna Peoples

Kokatha Uwankara

Nauo-Barngarla

Ngadjuri Nation

Ngarrindjeri and Others

Nukunu

Ramindjeri

The Arabunna Peoples

The Wangkangurru/Yarluyandi

Tjayiwara Unmuru

Wirangu No. 2

The Hon. I.K. HUNTER: My advice is the legislation will apply throughout the state, but it is important to understand that the areas that are prospective petroleum are relatively limited in our state.

The Hon. T.A. FRANKS: On that, I advise the minister that I was in fact contacted by somebody who is involved with one of the other claims, and is a well-respected legal professional in this state, and he believes that the claim in which he is involved is affected by this bill. So, will the minister rule in or out that none of these other claims will be affected, or specify which ones are?

The Hon. I.K. HUNTER: I do not have the benefit of that advice.

Clause passed.

Clause 2.

The Hon. M. PARNELL: This is the clause that relates to retrospectivity which I referred to in my second reading speech, but I will partly blame the shortage of time we had to put our thoughts together, and now believe I might not have made myself as clear as I would have liked. In a nutshell, this question of retrospectivity cuts both ways.

The government's view, as I understand it, is that doing nothing would, in effect, be to retrospectively change the status quo, or what the government thought was the status quo for the past 10 years, by giving certain Aboriginal people rights that the government believed they did not have. To cure the retrospectivity that comes from doing nothing, the government is proposing explicit retrospective legislation. That, in a nutshell, is the way I am thinking of it.

In terms of the first scenario I put, which was the idea of retrospectively changing the status quo by doing nothing, my question is: what is wrong with that? What is wrong with allowing these Aboriginal people to have the right to formally negotiate, and what is the government afraid will happen if Aboriginal people are given native title rights to negotiate? What is the main fear? The minister has talked about business confidence, and he has talked about the potential invalidity but, at its heart, what is wrong with, in 2012, allowing Aboriginal people to start negotiating over their traditional lands with these mining companies?

The Hon. I.K. HUNTER: My advice is that native title claimants have a right in relation to all new grants but there is a need to preserve the status quo in relation to pre-existing rights.

The Hon. M. PARNELL: What the minister is effectively saying, I think, in that answer is that the modern, more sympathetic laws will apply to new people who are applying for petroleum production licences, for example, but the government does not believe they should apply to what they consider are old licences. I put it to the minister this way. The licences, as I understand it, are primarily delineated by area. They are not delineated by the scope of activity, they are not delineated by the volume of gas that you are allowed to find and exploit, and they are not delineated by the number of roads that you are allowed to bulldoze.

In effect, activities taking place on the land now might be 10 times or 100 times more significant than they were 10 years ago. So, I will ask the question of the minister in a different way. Why should that not trigger the ability of traditional owners to renegotiate? Why is it not fair for oil and gas companies to have to negotiate with traditional owners under the provisions of the Native Title Act when they materially change their operations or undertake new ventures, albeit on the same area of land as their older licences?

The Hon. I.K. HUNTER: One response to such a hypothetical situation raised by the honourable member is that with modern techniques the impacts are less than they used to be in the past.

The Hon. M. PARNELL: A new area has arisen. The reason we are not going to allow Aboriginal people to negotiate is because environmental impacts are lower? Can the minister clarify that is exactly what he meant?

The Hon. I.K. HUNTER: I always get nervous when the honourable member tries to put words into my mouth. He has wrongly ascribed my intention. It really comes back to the sanctity of contracts and the continuity of rights. That is the issue. He raised a hypothetical situation and I raised a similar hypothetical situation that modern technologies have less impact than older technologies. That is all it was.

The Hon. T.A. FRANKS: Typically, bills come to us with commencement upon proclamation or on a set date. Why does this clause contain the words 'commencement on assent'?

The Hon. I.K. HUNTER: I am advised that this is not an unusual procedure. There is no more work to be done. Once this bill is passed there are no regulations to be made, and so it can proceed with assent.

Clause passed.

Remaining clauses (3 to 6), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. I.K. HUNTER (Minister for Communities and Social Inclusion, Minister for Social Housing, Minister for Disabilities, Minister for Youth, Minister for Volunteers) (15:55): I move:

That this bill be now read a third time.

The Hon. M. PARNELL (15:55): I will make a brief contribution at the third reading to say to the council that, despite his attempts to answer the questions that we have put to him, the minister has not really answered the fundamental question that addresses the concern that the Hon. Kelly Vincent, the Hon. Tammy Franks and I had about the way in which this bill has been progressed through this chamber.

What is very clear from the minister's answers is that we have this panic of the government's own making that is not borne out by one skerrick of evidence from the mining industry that its livelihood, its share price, its ability to produce or that anything it is doing is under threat by this bill going through the normal process and being debated in the fullness of time rather than being rushed through today—not one skerrick of evidence to justify why we are rushing this through today. The outrage that I expressed at the start of this debate is not abated. This is an appalling process. The government, I think, should be ashamed that it has sought to bulldoze this legislation through parliament for purposes that are not supported by any of the evidence.

In terms of the actual merits of the bill, we still maintain our opposition to what the government is trying to do here. The government is effectively saying that reconciliation in this state is not worth the paper it is written on anymore. Given an opportunity to actually redress some of the wrongs of the past and at least allow some native title claimants to test the water in the courts as to the meaning of the legislation, the government is not even prepared to allow them that right; whether it is that it is too scared of the likely outcome or whether it is for other reasons, we do not know because we did not get straight answers from the minister.

From the Greens' perspective, we will be voting against the third reading of this bill, and we will be dividing on it as well.

The Hon. S.G. WADE (15:58): I just wanted to speak briefly at the third reading to reflect on the process again. Clearly, the opposition supports the bill. In spite of the fact that we were only given notice that the government wanted it through within one week—I think that the leader of opposition business in the House of Assembly only got notice on Monday night; I was not given it until Tuesday morning—we agreed to support the bill and agree to it receiving passage in the same week.

At least one crossbench member has commented on the fact that the opposition cooperated with this fast consideration. I do regret the fact that the government did not address this issue some months if not years ago, and this legislation could have been considered in an orderly fashion. However, what we did do to try to minimise the impact on crossbenchers was three things: first of all we opposed consideration of the bill on Wednesday morning so that crossbenchers and the opposition had more time to prepare; we insisted on offers of briefings for the crossbenchers, not just ourselves; and we have resisted suggestions that there might be a guillotine imposed.

I regret that the Legislative Council has been shown disrespect yet again by an arrogant government, but the opposition does what it can.

The Hon. K.L. VINCENT (15:59): I will just very briefly sum up. For reasons that I feel I have made quite clear today, I am not comfortable with the bill passing this week. I have not had adequate time to consider its true ramifications and I feel that I would be in blatant breach of my responsibility to the state as a member if I were to let it pass today. I concede that that is going to happen anyway, but I will certainly be voting against the third reading of this bill for that reason.

The council divided on the third reading:

Majority of 11 for the ayes.

Third reading thus carried; bill passed.