Opportunities and Challenges for the
a joint paper by the Oil Industry International Exploration and Production Forum (E&P Forum) and the United Nations Environment Programme Industry and Environment Centre (UNEP IE) covering Environmental management, which was published in 1997,  and:
a joint International association of Oil and Gas Producers (OGP) and International Petroleum Industry Environment Conservation Association (IPECA) paper covering the industry and sustainable development, which was published in 2002. 
Given the JPDA is predominately surrounded by Australian waters, the performance of the industry in Australia is of some interest in terms of regional comparability. The Australian Petroleum Production and Exploration Association (APPEA) publish annual Safety statistics and like the global industry associations, is in the process of developing environmental indicators.
Environmental performance is covered in their annual report for the first time in 2002. The following graphs show the general downward trend in the key safety performance indicators as reported in the latest APPEA Health, Safety, Environment and Social Responsibility Report.  A single fatality was recorded in 2001, which, whilst unacceptable, is significantly better than the 101 globally and 13 regionally.
Figure 9 – Australian Lost Time Incident Frequency Rates
Figure 10 - Australian Total Recordable, Medical Treatment and Alternative Duty Incident Frequency Rates
Whilst the frequency rates are generally higher than the region’s average this may be a function of the strong reporting culture that has been developed in Australia which arguably has lead to a more complete data set compared to other countries in the region.
To provide some context to the Oil and Gas sector’s performance in terms of lost time incidents Figure 11 highlights how well this sector performs in Australia.
Figure 11 - Australian Lost Time Incident Frequency Rates across selected industries 2000 - 2001
As mentioned previously, environmental performance indicators are only a recent addition and the 2002 APPEA report is the first to contain any environmental data which precludes any trend analysis at this stage. It is encouraging to note that in 2001 only 1 tonne of oil was spilt offshore for every 75 million tonnes produced  (or 0.0133 tonnes per million tonnes produced) which compares very well with the global figure of 27 tonnes per million tonnes produced (see Figure 8).
With only one producing field (Elang Kakatua / Kakatua North (EKKN)) and the Bayu Undan field in the process of installation, there is limited data available. To-date there have been no fatalities for either project although there was a single fatality in 1994 on an exploration drilling rig in PSC area 91-01. The EKKN development has sustained a single Lost Time Incident (in December 2001) since start-up in 1998 and the Bayu Undan development has a Lost Time Injury Frequency Rate of 0.68 for the entire project (onshore and offshore) to-date. [slide 17] Environmentally, there has been only one significant spill (approximately 1 tonne of oil-based drilling mud from the MODU drilling at the Bayu Undan Well Head Platform) although an immediate search of the adjacent sea was unable to detect any traces of the spill and the report was based on a mass balance basis, ie fluid unaccounted for.
The opportunities and challenges for regulating HSE in the JPDA are, in the authors view, twofold and inseparably intertwined: to continue to develop a regulatory regime and organisation to ensure world class HSE performance; whilst maintaining the attractiveness of the area to future explorers and current producers in terms of a regionally consistent HSE regulatory framework. [slide 18]
As mentioned previously, there have already been opportunities for improvement identified in the existing legislation for HSE in the JPDA and efforts to make the changes needed, have started. The opportunity exists to make use of recent advances in Australia legislation (such as the Management of Environment regulations and Diving regulations) to strengthen and simplify the existing regulations and directions and further progress the goal setting regime. Such an approach would also dovetail with (as discussed later) the challenge to ensure a regime that is consistent with adjacent areas.
Similarly, the need to develop an HSE department, staffed with appropriately trained and experienced Timor-Leste nationals is acknowledged as a significant challenge and plans are already in place to achieve such an aim. This is a particularly important challenge given the widely acknowledged agreement that a suitably competent regulator is key to the success of a Safety Case regime [6 & 16]. In light of the availability of people with appropriate experience and skill-base on which to build, this presents an opportunity for the development of Timor-Leste HSE regulatory expertise in the long term.
Irrespective of maritime boundary issues which must remain unrelated to the regulation of the HSE aspects of the petroleum industry in the JPDA, the ability of regulators and oil companies to effectively interact across jurisdictional boundaries in order to optimise both HSE performance and costs, presents a challenging opportunity for the JPDA. [slide 19-20] This is not a new issue, both in terms of past and current interaction by companies with interests inside and outside of the JPDA and in the wider global context. Even within Australia, this is an issue to a certain extent with each state and territory having its’ own Designated Authority and associated regulations all with subtle variations and interpretations. This issue comes to the forefront when considering how Mobile Offshore Drilling Units (MODUs) move between jurisdictions and in situations where pipelines or flowlines cross jurisdictional boundaries.
In Australia this issue has been acknowledged and through an independent review  and subsequent report to the Commonwealth,  a process of rationalising the legislation and nationalising the regulation of offshore safety is now underway. This issue has also been recognised in the North Sea where MODUs regularly work in both the UK and Norwegian sectors and need to comply with two different sets of legislation, potentially adding significant cost and duplication of effort to both the companies and regulatory authorities. In 2002 the UK Health and Safety Executive and the Norwegian Petroleum Directorate jointly commissioned Smedvig Offshore AS to undertake a study of the regulatory requirements in the two sectors to identify the differences and make recommendations on a way forward. 
As it stands today, there are already opportunities for small discoveries to be commercialised through tie-backs to existing infrastructure outside of the JPDA. Such proposals could involve up to three regulatory jurisdictions (Northern Territory of Australia, Western Australia and the future Designated Authority) all with their own regulations and interpretations thereof. Fortunately there is a significant degree of commonality between the regulations in use to the extent that the operator need only make a single round of submissions to address the requirements of all three regulators.
Whilst it would be speculation to suggest that if this commonality did not exist, it could impact on the economic viability of such a development, tripling the effort required to ensure regulatory compliance. This would undoubtedly have some impact on costs both in the initial development phase and in terms of ongoing compliance.
For existing developments regional commonality is a potential issue more from a personnel portability perspective. Developing and implementing an effective HSE management system inescapably incorporates legislative compliance and therefore a clear understanding by workers of the regulations and expectations of regulators. The ability of companies to move personnel between jurisdictions would undoubtedly be impacted by significantly different regulatory regimes Additional training (obviously dependent on the role of the personnel) may be required to ensure their understanding of the differing requirements. Arguably, for activities across multiple jurisdictions this, and the ability to maintain a single HSE management system (and in fact Safety Case and potentially significant portions of Environment Plans), would be attractive to both existing producers, and potential explorers and developers in the JPDA who may have existing interests in adjacent waters.
From a regulatory perspective regional consistency provides the opportunity to build on the successes, learn from the failures and share ideas and experiences in the knowledge that they can be applied across jurisdictions with relative ease. For the JPDA, this presents a significant opportunity in terms of having access to a large pool of regulators with extensive experience and skills working within a comparable regulatory framework. To date this has already proven useful in terms of the assistance provided by the Western Australian regulator for both a specific risk assessment study and the provision of the basis for the development of the HSE management system currently under development within the Joint Authority as well as regular consultation, communication and assistance from other Australian regulators.
In conclusion, the offshore petroleum industry does present a number of risks to the health and safety of its workers and the environment in which they are located. An appropriate HSE regulatory regime can be effectively managed as the last decade’s performance improvements have shown. For the JPDA, there is a challenging opportunity to ensure world class HSE performance and, through sound and well considered governance, attract new players by providing a regionally consistent regime that can optimise the efforts of the regulators and the companies in this shared goal. [slide 20]
1 Western Australian Department of Minerals and Energy (2001) Piper Alpha [Online] Available at http://www.dme.wa.gov.au/minpetrol/safety/piperalpha.htm accessed 18/12/2001.
2 Conway. D., Salazar, V and Byrd. S. (1999) Piper Alpha: The Disaster and Beyond [Online] Available at http://www.owlnet.rice.edu/~univ113/disasterweb.html accessed 2/1/2002
3 United States Environmental Protection Agency (1999) Exxon Valdez [Online] Available at http://www.epa.gov/oilspill/exxon.htm accessed 17/12/2001
4 Exxon Valdez Oil Spill Trustee Council (1999) Exxon Valdez Oil Spill Restoration Plan – Update on injured resources and services March 1999. Alaska, Anchorage: Exxon Valdez Oil Spill Trustee Council
5 Exxon Valdez Oil Spill Trustee Council (2001) 2001 Status Report. Alaska, Anchorage: Exxon Valdez Oil Spill Trustee Council
6 Wilkinson, P (2002) Safety Cases: Success or Failure? [Online] Available at www.ohs.anu.edu.au/publications/pdf/seminar_paper_2.pdf accessed 14/2/03
7 Carpignano. A, Romagnoli. R., and Vivalda. C. (1999) Moving towards an international approach to safety case development Proceedings Off-shore Mediterranean Conference OMC '99 Ravenna 24-26 March 1999, editor OMC srl, 1999, pp. 879-885.
8 International Maritime Organisation (c1999) Safety Management [Online] Available at http://www.imo.org/HumanElement/mainframe.asp?topic_id=182 accessed 15/2/03
9 International Association of Classification Societies (2003) International Safety Management (ISM) Code list 31/12/02 (b) [Online] Available at http://www.iacs.org.uk/whitelist/wlindex.htm#DOWNLOAD accessed 12/2/03
10 McHolick, B. (1999) Safety in a Low Cost Environment - Problem or Opportunity? As presented at the National Oil and Gas Offshore Safety Conference, 26 - 27 May 1999. Advanced Manufacturing Technology Centre, Perth W.A.
11 International Association of Oil and Gas Producers (2002) Safety Performance of the Global E&P industry - 2001 [Online] Available at http://www.ogp.org.uk/publications/index.html accessed 2/2/03
12 International Association of Oil and Gas Producers (2002) Summary of Environmental Performance Indicators – paper – 2001 data [Online] Available at http://www.ogp.org.uk/publications/index.html accessed 2/2/03
13 E&P Forum, and UNEP IE (1997) Environmental Management in oil and gas extraction and production – An overview of issues and management approaches. [Online] Available at http://www.ogp.org.uk/publications/index.html accessed 2/2/03
14 OGP & IPECA (2002) The oil and Gas Industry from Rio to Johannesburg and beyond – Contributing to sustainable development. [Online] Available at http://www.ipieca.org/intro/publications.html accessed 2/2/03
15 Australian Petroleum Production and Exploration Association (2002) Health, Safety, Environment and Social Responsibility Report – 2001 [Online] Available at http://www.appea.com.au/whats_happening/index.html accessed 25/1/02
16 Australian Commonwealth Department Of Industry, Science And Resources - Offshore Safety and Security, Petroleum and Electricity Division (2001) Australian Offshore Petroleum Safety Case Review - Future Arrangements For The Regulation Of Offshore Petroleum Safety [Online] Available at http://www.industry.gov.au/content/controlfiles/display_details.cfm?ObjectID=3203C03ECD21-4829-A6CA882FA73F4CD0 Accessed 17/1/03
17 Australian Commonwealth Department Of Industry, Science And Resources - Offshore Safety and Security, Petroleum and Electricity Division (2000) Stakeholder Survey - Report of the Independent Review Team [Online] Available at http://www.industry.gov.au/content/controlfiles/display_details.cfm?ObjectID=3203C03ECD21-4829-A6CA882FA73F4CD0 Accessed 17/1/03
18 Smedvig Offshore AS (2002) Regulatory Requirements project 2001-2002 (NPD vs HSE) [Online] Available at http://www.npd.no/NR/rdonlyres/.../Totalreport.pdf accessed 10/2/03.
The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)