FEDERAL COURT OF AUSTRALIA

Tipakalippa v National Offshore Petroleum Safety and Environmental Management Authority (No 2) [2022] FCA 1121

SUMMARY

In accordance with the practice of the Federal Court in cases of public interest, importance or complexity, the following summary has been prepared to accompany the orders made today. The summary is intended to assist the public’s understanding of the outcome of this proceeding. It is not a complete statement of the conclusions reached by the Court. The only authoritative statement of the Court’s reasons is the published reasons for judgment, which will be available on the internet at the Court’s website. This summary is also available there.

This proceeding concerns an application for judicial review of a decision (Decision) of a delegate of the first respondent, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). NOPSEMA is an independent statutory authority established under s 645 of the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth). NOPSEMA regulates offshore petroleum activities in Australian waters and its functions relevantly include accepting an environment plan pursuant to reg 10(1)(a) of the Offshore Petroleum and Greenhouse Gas Storage (Environment) Regulations 2009 (Cth). By the Decision purportedly made under reg 10(1)(a), NOPSEMA accepted an environment plan (the Drilling EP) submitted by the second respondent, Santos NA Barossa Pty Ltd, under reg 9 of the Regulations. NOPSEMA may only accept an environment plan it if is “reasonably satisfied” that the plan meets the criteria specified in the Regulations, including that the plan demonstrates that the “titleholder” (in this case Santos) has carried out the consultations required by the Regulations and in particular reg 11A.

The legal effect of NOPSEMA’s acceptance of the Drilling EP, assuming it to be valid, was that Santos was permitted to carry out the petroleum activity detailed by the Drilling EP (Activity). Without such an acceptance the carrying out of the Activity would constitute an offence of strict liability under reg 6 of the Regulations.

The Activity under the Drilling EP is part of a wider project known as the “Barossa Project”, the focus of which is an offshore gas-condensate field in the Timor Sea known as the “Barossa Field”. Santos intends to exploit that field using a floating production storage and offloading facility, subsea production system, supporting in-field infrastructure and a gas export pipeline connected to an existing Bayu-Undan pipeline in Commonwealth waters.

Through the Barossa Project, Santos proposes to exploit an area of the Barossa Field referred to in the Drilling EP as the “Operational Area” located approximately 300 km north of Darwin and 138 km north of the Tiwi Islands. The Barossa Project aims to provide a new source of natural gas for approximately 20 years to Santos’ existing onshore Darwin Liquefied Natural Gas facility at Wickham Point.

Under the Drilling EP, Santos proposes to conduct a “drilling and completions campaign”, which entails the drilling and completion of up to eight production wells using a semi-submersible mobile offshore drilling unit. The Activity is intended to take place between 2022 and 2025.

The Tiwi Islands are located in the Timor Sea approximately 80 km north of Darwin. The Tiwi Islands comprise two main islands, Bathurst Island and Melville Island and several smaller islands. The traditional owners of the Tiwi Islands are comprised of eight clans, one of which is the Munupi clan. The traditional land of the Munupi clan extends to the northern most reaches of the Tiwi Islands located on the north-western peninsula of Melville Island. The traditional land of the Munupi clan is the geographically closest land to the Operational Area.

The applicant, Dennis Murphy Tipakalippa, is an elder, senior law man and traditional owner of the Munupi clan. He lives on the Tiwi Islands, was raised there, and has always lived at Pirlangimpi and at his homelands in the northern beaches of Munupi country.

Mr Tipakalippa complains that he and other traditional owners of the Tiwi Islands were not consulted by Santos in relation to the Drilling EP. Broadly speaking, his principal claim relies upon reg 11A(1) which provides that in the course of preparing an environment plan a “titleholder” (in this case Santos) must consult each “relevant person”, being a person “whose functions, interests or activities may be affected by the activities to be carried out under the environment plan”.

Mr Tipakalippa claims that he and other traditional owners of the Tiwi Islands, have “sea country” in the Timor Sea to the north of the Tiwi Islands extending to and beyond the Operational Area. Their asserted rights to that sea country are based upon longstanding spiritual connections as well as traditional hunting and gathering activities in which they and their ancestors have engaged. Mr Tipakalippa claims that those interests and activities were referred to in the Drilling EP. In circumstances where the Drilling EP did not show that Mr Tipakalippa, others of the Munupi clan or indeed any of the traditional owners of the Tiwi Islands were consulted, Mr Tipakalippa claims that NOPSEMA could not have been “reasonably satisfied” (as was required by reg 10(1) read with regs 10A(g) and 11A of the Regulations) that the Drilling EP “demonstrates” that Santos “has carried out the consultations” required by reg 11A.

Mr Tipakalippa’s claim raises the question of whether a precondition to the valid acceptance of the Drilling EP was infected by legal error. The relevant precondition is that NOPSEMA is “reasonably satisfied” that the Drilling EP meets the criteria set out in reg 10A, a sub-set of which is the consultation criteria in reg 11A of the Regulations.

The applicable legal principles which I am required to apply to answer that question are complex and are explained in the Court’s reasons for judgment. It is important, however, to appreciate at the outset, that Mr Tipakalippa had to establish more than that NOPSEMA came to a wrong conclusion in relation to whether consultation with him and other traditional owners of the Tiwi Islands was carried out by Santos in accordance with the Regulations. Broadly stated, Mr Tipakalippa had to demonstrate that NOPSEMA failed to proceed reasonably and on a correct understanding and application of the Regulations.

For the reasons given in the Court’s reasons for judgment, Mr Tipakalippa has established that NOPSEMA was not lawfully satisfied that the Drilling EP met the criteria required by the Regulations and, in particular, that NOPSEMA failed, in accordance with the Regulations, to assess whether the Drilling EP demonstrated that Santos consulted with each person that it was required by the Regulations to consult with. As my reasons explain, the task that NOPSEMA was required to perform could not have been performed in accordance with the Regulations on the information provided by Santos in the Drilling EP. Furthermore, there was material in the Drilling EP that NOPSEMA was bound to consider which NOPSEMA did not consider.

The consequence of NOPSEMA not being lawfully satisfied that the Drilling EP met the criteria required by the Regulations is that a necessary precondition of the acceptance of the Drilling EP by NOPSEMA did not exist and the acceptance (or permission) given by NOPSEMA was legally invalid. NOPSEMA’s decision to accept the Drilling EP must therefore be set aside.

BROMBERG J

21 SEPTEMBER 2022, MELBOURNE