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Friday, November 20, 2009

The Lessons of Montara

In the aftermath of the catastrophic Montara OilSpill,it is time for Australia to take stock.

  • The Australian Federal Government have put in place an inquiry, headed by a public servant, which is almost certain to hold the Australian government blameless.
  • Government sourced media reports seemed in the main sourced from the oil based interests at the centre of the disaster(Atlas & PTTEP Australia).
  • The Area licensee Thai based PTTEP, has been issued further concessions by the Minister for Resources.The company took some 10 weeks to plug the well and notify of finally capping Montara 13 January 2010-6 months after the initial leakage.
  • A report 13 Jan 2010 has organisation NOPSA slamming the Northern Territory Government for failing to have adequate monitoring equipment in place to ensure compliance. Montara is situated in Western Australian waters.
  • Reports of Feburary 11th are that further license concessions have been granted to PTTEP, prior to completion of the inquiry.
  • Further revelations to the glacial inquiry process provide a accounts of numerous systemic failures and safety breaches by the drilling operator, possibly due to inappropriate direction from PTTEP. The fact that such breaches could occur point to the fact that Australian Governments at State and federal levels have inappropriate legislation or monitoring or compliance regimes in place.

While there is a general consensus to apportion blame to well owner PTTEP and its contractors there has been some commentary also on the Australian Federal and State governments post disaster roles. There has been little public consideration of the legal framework which govern extractive operators at National or International levels.

The post event reports from federal government show that a yawning void exists in terms of compliance monitoring. There is no mention from government of inspections of operations prior to the event. Lack of response to the question, put Nov 2009 to the Environment and Natural Resources ministries entitles us to believe that there simply weren't any. Further checks of legislation show scant regard given to ensuring disaster management or environmental remedial obligations are placed on the extractives operator.

Australians must seek:
  • Laws compelling ALL Extractive Industries to maintain adequate mitigation technology within close proximity to mitigate all extractive process failures, prior to commencement of process as a precondition of extractive all processes.
  • No exemptions regime.
  • Immediate Resumption of extractive process license area, plus all mitigation costs as breach penalty.
  • Reduction of "Super Profits" Tax to compensate for extractive compliance costs.
  • Broadening of "Super Profits" Tax to include non extractive businesses, such as banks and financial institutions. Consolidation of "Super Tax revenues" as "Future Fund" modelled on Norways oil based example.
Without strong legislation, it can be argued that extractive industry management have a duty of care to shareholders to operate their extractive processes at the lowest cost legally available to them: if a company is not legally obliged to use the latest, most failsafe technology available, the company directors are arguably duty bound to use a cheaper,older technology, if the failure risk is manageable,on purely the basis of cost.

This style of legislation is