**3. Regulation to enable hydraulic fracture stimulation in the public's interest — The South Australian approach**

Onshore petroleum exploration and development activities in South Australia are adminis‐ tered by DMITRE under the South Australian PGE Act. The PGE Act has a number of aspects that are considered a comparative advantage without precedent in other Australian legislation [3]. High level objectives of the PGE Act include:

**•** Under a lead agency approach … approval of most, if not all, aspects of an application would rest with one designated agency. This agency …would maintain control of the process and in most cases, would consult with other relevant agencies, such as an environmental agency, rather than formally refer the application to a separate agency for assessment. In some limited circumstances where impacts are considered to be significant, a formal referral may take place. By maintaining control of the approval process the lead agency approach is able

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**•** South Australia's one-stop-shop (through DMITRE), 'is widely seen as a model for other

**•** With appropriate governance, experience in South Australia suggests that [lead agencies] can achieve an appropriate balance between enforcing legislative provisions and expediting

Properly resourced one-stop-shops (lead agencies) transparently facilitate the delivery of all co-regulatory objectives and requirements, and hence earn trust from the industry, coregulatory agencies and the public. A one-stop-shop approach enables stewardship of

Through this approach DMITRE works closely with its co-regulatory agencies, such as the South Australian Environment Protection Authority (EPA), Department of Environment, Water and Natural Resources (DEWNR), SafeWork SA, Department of Health, Department of Planning, Transport and Infrastructure (DPTI) and Aboriginal Heritage to deliver an efficient application of all relevant laws and regulations applicable to the petroleum and geothermal

The PGE Act has been designed to enable a one-stop shop approach such that in complying with the objectives of the PGE Act, upstream petroleum operations' compliance with obliga‐ tions under other legislation will also be facilitated. These concurrent legislation and require‐

**•** The Commonwealth's *Environmental Protection, Biodiversity and Conservation Act 1999* (EPBC Act) internationally important flora, fauna, ecological communities and heritage places defined in the EPBC Act as matters of national environmental significance. The Common‐ wealth Government Department of Sustainability, Environment, Water, Population and

**•** South Australia's *Environment Protection Act 1993* (EP Act), and relevant policies that provide the regulatory framework to protect South Australia's environment, including land, air and water. This legislation was the result of the streamlined integration of six Acts of Parliament and the abolition of the associated statutory authorities. South Australia's EPA provides

**•** South Australia's *National Parks and Wildlife Act 1972* (NP&W Act), which is the cornerstone for protecting natural environments within parks and regional reserves in the State. The DEWNR provides stewardship for this Act. The NP&W Act is significant as it is a key part

Communities (SEWPaC) provides stewardship for the EPBC Act;

to streamline approval processes and minimise time delays.

approval processes in parallel rather than in series.

jurisdictions to emulate';

industries in South Australia.

stewardship for this Act;

approvals.

ments include:


It is important in this discussion to highlight that in the context of the PGE Act the definition of environment (under s. 4 of the PGE Act) is broad, and includes:


This definition of environment is consistent with the *Environment Protection Act 1993* [4] definition, and is broad to ensure that potential impacts on all natural, social and economic aspects of the environment are identified, considered, and appropriately addressed through the environmental assessment and approval provisions of the PGE Act.

A key lesson learnt by DMITRE in post-event investigations of significant incidents is that regulators must have relevant and up-to-date capabilities (competence and capacity) to be trusted to act in the interests of the many stakeholders involved in upstream petroleum industry activities. This includes protecting natural, social and economic environments; effectively managing the risks of regulatory capture [5]; and providing expeditious approvals. As the regulator of upstream petroleum and geothermal energy activities in South Australia, administering the PGE Act, DMITRE strives to maintain a one-stop-shop or lead agency approach.

This approach has been discussed by Australia's Productivity Commission [6] which concluded:

**•** One-stop-shops (lead agencies) are the most efficient regulatory approach when well managed without capture;

**•** Under a lead agency approach … approval of most, if not all, aspects of an application would rest with one designated agency. This agency …would maintain control of the process and in most cases, would consult with other relevant agencies, such as an environmental agency, rather than formally refer the application to a separate agency for assessment. In some limited circumstances where impacts are considered to be significant, a formal referral may take place. By maintaining control of the approval process the lead agency approach is able to streamline approval processes and minimise time delays.

that are considered a comparative advantage without precedent in other Australian legislation

**•** Sustain trusted practical, efficient, effective and flexible regulation for upstream petroleum, geothermal and gas storage enterprises, and the construction and operation of transmission

**•** Encourage and maintain competition in the upstream petroleum and geothermal sectors; **•** Minimise environmental damage and protect the public from risks inherent in petroleum

**•** Sustain effective consultation processes with people affected by regulated activities, and the

It is important in this discussion to highlight that in the context of the PGE Act the definition

**•** The external manifestations of social and economic life which includes aspects such as

This definition of environment is consistent with the *Environment Protection Act 1993* [4] definition, and is broad to ensure that potential impacts on all natural, social and economic aspects of the environment are identified, considered, and appropriately addressed through

A key lesson learnt by DMITRE in post-event investigations of significant incidents is that regulators must have relevant and up-to-date capabilities (competence and capacity) to be trusted to act in the interests of the many stakeholders involved in upstream petroleum industry activities. This includes protecting natural, social and economic environments; effectively managing the risks of regulatory capture [5]; and providing expeditious approvals. As the regulator of upstream petroleum and geothermal energy activities in South Australia, administering the PGE Act, DMITRE strives to maintain a one-stop-shop or lead agency

This approach has been discussed by Australia's Productivity Commission [6] which

**•** One-stop-shops (lead agencies) are the most efficient regulatory approach when well

**•** Ensure as far as reasonably practical the security of supply of natural gas.

**•** Organisms and ecosystems – this includes native vegetation and fauna;

the environmental assessment and approval provisions of the PGE Act.

of environment (under s. 4 of the PGE Act) is broad, and includes: **•** Land, air, water (including both surface and underground water)

[3]. High level objectives of the PGE Act include:

**•** Buildings, structures and cultural artefacts;

**•** Productive capacity or potential;

**•** The amenity values of an area.

approach.

concluded:

managed without capture;

human health and wellbeing; and

pipelines, in the State;

242 Effective and Sustainable Hydraulic Fracturing

public in general; and

and geothermal operations;


Properly resourced one-stop-shops (lead agencies) transparently facilitate the delivery of all co-regulatory objectives and requirements, and hence earn trust from the industry, coregulatory agencies and the public. A one-stop-shop approach enables stewardship of approval processes in parallel rather than in series.

Through this approach DMITRE works closely with its co-regulatory agencies, such as the South Australian Environment Protection Authority (EPA), Department of Environment, Water and Natural Resources (DEWNR), SafeWork SA, Department of Health, Department of Planning, Transport and Infrastructure (DPTI) and Aboriginal Heritage to deliver an efficient application of all relevant laws and regulations applicable to the petroleum and geothermal industries in South Australia.

The PGE Act has been designed to enable a one-stop shop approach such that in complying with the objectives of the PGE Act, upstream petroleum operations' compliance with obliga‐ tions under other legislation will also be facilitated. These concurrent legislation and require‐ ments include:


of the co-regulatory approval regime for minerals and energy (including unconventional gas) resource exploration and production in South Australia;

**3. Transparency.** The regulatory decision-making processes are visible and comprehensible to all stakeholders and industry performance in terms of compliance with the regulatory

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**4. Flexibility.** The level of regulatory scrutiny, surveillance and enforcement needed to ensure compliance is determined on the basis of individual company compliance capa‐

**6. Efficiency.** The compliance costs imposed on both government and the licensee by the regulatory requirements are minimised and justified. Negative impacts on communities are minimised, and licensees remain liable for the cost of their impacts. Furthermore, an appropriate rent (Royalty) is paid to the community from the value realised from the

The above listed Regulatory Principles can be achieved through the following regulatory

**•** Regulatory objectives and assessment criteria for those objectives are developed through broad stakeholder consultation involving industry, government agencies and the commun‐ ity to ensure acceptance and credibility in the environmental objectives to be achieved

**•** Regulators and licensees maintain trustworthy capabilities (competence and capacity)

**•** Effective, informative stakeholder consultation by both project operators and regulators is initiated well ahead of land access. This drives operators to explain their planned activities and any potential risks, seek feedback on areas of interest or concern for the community, and establish relationships and terms for land access with stakeholders well before applying for activity approval from DMITRE, e.g. before any particular activity 'gets personal'

**•** Provide public access to details of risks, reliable research to reduce key uncertainties and

**•** Timely notice of entry with sufficient operational details to effectively inform stakeholders

**•** Potentially affected people and organisations can object to land access – while the regulator and prescribed dispute resolution processes do not support, and hence minimise, vexatious

**•** Fair compensation to affected land-users for costs, losses, and deprivation of land use due

**•** Reduction of risks to low or as low as reasonably practicable (ALARP), while also meeting

**•** Licensees monitor and report (to the regulator) on the efficacy of their risk management

support risk management strategies so the basis for regulation is contestable

**•** Fair and expeditious dispute resolution processes

community expectations for overall outcomes

processes, and the regulator probes same

**5. Practicality.** The regulatory objectives are achievable and measurable.

development and production of its natural resources.

objectives is clear to all stakeholders.

bility and the outcomes to be achieved.

strategies.

objections

to operations


Compliance with these pieces of legislation is facilitated through collaborations and working arrangements between DMITRE and the government agencies that administer these Acts, to ensure that the Statements of Environmental Objectives (SEO) that must be complied with for specific activities are consistent and in keeping with the relevant objects of each of these Acts
