Review of the Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999
The deadline for submissions on the public consultation on Review of the Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999 closed on 27 July 2012.
Questions and answers
What are the Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999?
The Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999 (HSE(PEE)R) are made under the Health and Safety in Employment Act 1992 and administered by the Department of Labour.
The HSE(PEE)R provide for the safe exploration for, and production of, petroleum resources and apply to every petroleum operation under the control of an employer at which employees carry out duties relating to petroleum operations. A core principle of these regulations is that the employer is responsible for identifying and assessing hazards taking ‘all practicable steps’ to manage them.
Why is the Department of Labour reviewing the HSE(PEE)R?
Oil and gas make an important contribution to the New Zealand economy and there is the potential for that contribution to grow in the future.
As part of the responsible development of our oil and gas resources, a robust health and safety regulatory regime must be in place to ensure that operators maintain safety to minimise the risk of a major accident and the regulator provides assurance that this is being done.
This review is timely given:
- the Government’s intention to increase petroleum exploration and production investment in New Zealand;
- the fact that companies are increasingly operating in deeper waters and more complex environments (globally); and
- recent high-profile major accidents, such as the 2010 Deepwater Horizon incident in the Gulf of Mexico, which have raised questions globally about the adequacy of existing regulatory approaches.
What is the purpose of the review of the HSE(PEE)R?
The aim of this review is to update the HSE(PEE)R to be more consistent with international best practice and developments in light of recent, high-profile major accident events. The review proposes changes to the regulations that are designed to minimise the risk of major accidents in the upstream petroleum sector both onshore and offshore by:
- placing general and specific duties on operators in relation to wells, installations, and activities carried out on installations;
- improving the regulation of wells (from initial design through to final plugging and abandonment);
- improving the Department’s oversight of petroleum operations;
- enhancing the existing safety case regime for offshore installations; and
- extending the safety case regime to onshore production facilities.
What does the review involve?
The Department has been looking at the adequacy of the duties and regulatory approaches set out in the HSE(PEE)R. The proposed changes are set out in the discussion document Review of the Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999. The Minister of Labour is now encouraging operators, unions, industry groups, and individuals to comments on the proposed changes.
All submissions must be made by 5:00pm, Friday 1 June 2012.
All submissions will be considered by Department of Labour officials. The Department will then provide advice to Government on any proposals to amend the regulations. Once Government has considered the advice and made its decisions the revised regulations will be drafted by the Parliamentary Counsel Office. Subject to final Cabinet approval, the revised regulations are expected to come into effect in November 2012.
How have the draft proposals been developed?
The draft proposals have been developed by the Department of Labour in consultation with the Ministry of Economic Development, Maritime New Zealand, Ministry for the Environment, Environmental Protection Authority, Ministry of Transport, Te Puni Kōkiri, and The Treasury.
The draft proposals have been peer reviewed by two independent subject matter experts, with significant regulatory and industry experience.
The feasibility of the draft proposals was tested at an early stage with representatives from the Petroleum Exploration and Production Association of New Zealand (PEPANZ), the Engineering, Printing and Manufacturing Union (EPMU), and the Maritime Union of New Zealand (MUNZ). It should be noted however that some proposals have been modified by the Department since that earlier engagement.
What other work has been undertaken by the Department to strengthen the regulation of upstream petroleum operations?
The Department established a High Hazards Unit in 2011 to improve its capability and capacity to operate effectively in the mining, petroleum, and geothermal industries. All positions in this unit have now been filled.
What other work is being undertaken by other agencies to strengthen the regulation of upstream petroleum operations?
The Government is currently making a number of changes to strengthen the broader regulatory regime. Specific measures include:
- Reviewing the Crown Minerals Act 1991 to refresh the regulatory regime for the petroleum and minerals sectors. This is to enable these sectors to make a bigger contribution to New Zealand’s economic growth, while ensuring that exploration and production activities are undertaken in line with international standards.
- The Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill that is currently before the House. The Bill sets up a new regime for managing the environmental effects of activities in the exclusive economic zone and continental shelf – the area beyond 12 nautical miles from New Zealand’s coastline. It will also allow the Environmental Protection Authority (EPA) to regulate seabed mining and some petroleum activities. The Bill is expected to be enacted in 2012.
- The Ministry of Transport is reviewing the liability insurance requirements for the offshore petroleum industry.
This work is intended to ensure that New Zealand has a world leading system for managing mineral and petroleum exploration and extraction that balances the economic benefits with safety and environmental concerns.