Analysis of Montara oil spill reports begins

Legal analysis of the Montara oil spill inquiry reports have started to emerge.  One of the first is by Allens Arthur Robinson (AAR).  It does not discuss safety specifically but in many people’s minds Montara was not an occupational safety disaster as no one was injured.  To many the explosion has far more relevance as an environmental or process safety matter but considerable benefit can be gained by realising the Montara oil disaster was a substantial near-miss.

AAR looks at broader impacts of the Australian government’s response to the disaster.  AAR states that “we can expect to see moves by the Federal Government towards establishing a national regulator.”  Why should such a move only apply to offshore petroleum exploration?  If there is considerable administrative and regulatory advantages in a single petroleum exploration regulator, why not apply the same approach to the regulation of workplace safety?

AAR also identifies that business was allowed to self-regulate in this particular industry and that self-regulation did not work (where have we heard this before?) and that prescriptive legislation and increased governmental oversight can be expected.

“The inquiry focuses on moving regulation from the current ‘objective approach’, where operators have to achieve the aims of ‘good oilfield practice’, to a ‘prescriptive approach’, where regulators take a more active role in setting, monitoring and enforcing operational practices.  The practical effect of these recommendations is likely to be a decrease in flexibility for operators.”

The legal firm also notes that action is being taken against the company as a whole and not just one particular site.  It states there was:

“..a strong response by the Federal Government in relation to a company, rather than the specific operation” and

“This should be noted by all oil and gas operators.”

This type of response to an incident has already been applied in the OHS context with enforceable undertakings against John Holland Rail and the New Zealand Department of Education and Early Childhood Development, amongst others.

Australian media is already publishing the mea culpas of PTTEP Australasia, the owners of the oil rig.  Overseas media is beginning to question the bona fides of PTTEP which is not surprising when a spokesman for the company admits that

“there were certainly deficiencies in the competency of those involved….”

There are also many more, and more broadly applicable, lessons for those who were supposed to regulate the companies and who allowed for a “tick and flick” management process.

Kevin Jones

reservoir, victoria, australia

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