Barrow Island Act 2003

The Act defines several key concepts that structure its operation. The Agreement (section 3) means the Gorgon Gas Processing and Infrastructure Project Agreement set out in Schedule 1, and includes that Agreement as varied from time to time in accordance with its provisions and by the 2013 variation agreement. The reserve means Class A reserve No. 11648 comprising the whole of Barrow Island, reserved under the Land Administration Act 1997 (LA Act) section 41 for the conservation of flora and fauna. Gas processing project purpose is defined inclusively and covers the conveyance by pipeline of gas or a product of gas processing; the provision of support facilities and services for any gas processing project on Barrow Island or for purposes of the Barrow Island lease; the provision of emergency shelter facilities; and any other purpose ancillary or beneficial to a gas processing project purpose (section 3). Uncleared land (section 9(2)) means land that is not cleared at the time of the grant of a lease, licence or easement in relation to that land. The cumulative cap of 332 hectares of uncleared land is a critical limit, and the 2013 variation agreement raised it from the original 300 hectares (Schedule 2, clause 3).

The Barrow Island lease is the petroleum lease dated 27 February 1967 granted under the Petroleum Act 1936 and includes that lease as renewed, substituted or varied. The Barrow Island lessee is the lessee under that lease. The Act creates a hierarchy of consent for granting leases, licences and easements on the reserve: the LA Act Minister may grant them for a gas processing project purpose, but must obtain the consent of the BI Act Minister for many administrative actions (such as grant, fixing duration, accepting surrender, ordering forfeiture - section 6(2) for leases; section 7(2) and (4) for licences; section 8(4) for easements). The CALM Act Minister must consent to any condition that relates to or affects the conservation of flora and fauna on the reserve (sections 6(3), 7(3), 8(3)). Certain provisions of the LA Act (sections 12, 14, and in some cases 44 and 18) are disapplied for these grants, allowing them to be made despite the reserve status.

For carbon dioxide disposal, carbon dioxide is defined as gases consisting predominantly of carbon dioxide recovered during gas processing on Barrow Island (section 3). Part 5A introduces a specialised liability regime. Key terms include CO2 injection operations (the disposal of CO2 by injection into the formation, with infrastructure and monitoring, in accordance with the Agreement and the section 13 approval); common law liability (liability for damages awarded by a court or settled with prior approval, not arising from failure to act in good faith, malice, fraud or recklessness); independent third party (a person who is not the State, the Commonwealth, any Joint Venturer, or a related entity); and liability assumption date (the day declared by the BI Act Minister after the Commonwealth representative is satisfied of matters listed in section 14B(2) and a CO2 injection site closure notice has been issued). The formation has the meaning given in the section 13 approval. Leakage means physical leakage of CO2 from the formation into the atmosphere, biosphere or hydrosphere other than as predicted in the section 13 approval.

The Act directly affects the Joint Venturers named in the Agreement, originally ChevronTexaco Australia Pty Ltd, Texaco Australia Pty Ltd, Mobil Australia Resources Company Pty Limited, and Shell Development (Australia) Proprietary Limited, and as varied by the 2013 variation agreement, Chevron (TAPL) Pty Ltd, Mobil Australia Resources Company Pty Limited, Shell Development (Australia) Proprietary Limited, Osaka Gas Gorgon Pty Ltd, Tokyo Gas Gorgon Pty Ltd, and Chubu Electric Power Gorgon Pty Ltd (Schedule 2). The Joint Venturers are the primary holders of rights and obligations under the ratified Agreement, including obligations to submit proposals (clause 7), implement approved proposals (clause 9), pay Net Conservation Benefits (clause 11), reserve gas for domestic supply (clause 17), and comply with environmental requirements (clause 14). They are also the beneficiaries of the State indemnity in Part 5A, which covers common law liability to independent third parties after the liability assumption date.

The Barrow Island lessee (the holder of the 1967 petroleum lease) is affected because the Act permits the grant of leases, licences and easements on the reserve only where the Barrow Island lease has been surrendered or is no longer in force in respect of that area (section 6(4)). The Barrow Island lessee’s consent may also be required under the Barrow Island lease for certain actions in relation to licences (section 7(2)). The BICC (Barrow Island Coordination Council) participants, which include the Joint Venturers and the Barrow Island lessee, are affected by the requirement that any person operating a gas processing project must be a participant in the Council after it is formed (section 15(3)), and by the requirement that the State must require as a precondition to any grant of tenure that the grantee is a BICC participant (Schedule 1, clause 13(i)).

Government officers and ministers are directly affected. The BI Act Minister (the Minister administering the Barrow Island Act) has a central role in granting approvals for CO2 injection (section 13), consenting to various actions under Part 3, and declaring the liability assumption date (section 14C). The LA Act Minister grants leases, licences and easements but requires consent from the BI Act Minister and the CALM Act Minister. The CALM Act Minister’s consent is required for conditions affecting conservation. The Commonwealth representative (the Commonwealth Minister for offshore petroleum or another notified official) is engaged in the Part 5A indemnity process, being responsible for certifying satisfaction about the behaviour of injected CO2 (section 14B). Independent third parties - natural persons or entities not connected to the State, Commonwealth, or Joint Venturers - are the potential beneficiaries of the indemnity, as they may bring common law claims for loss or damage caused by CO2 injection. Other persons who may be granted leases, licences or easements on the reserve (such as third parties admitted as BICC participants) are also affected, as they must comply with the modified LA Act provisions and the conditions of their tenure.

The Act imposes a range of duties and confers significant rights. The central duty is the requirement to obtain the BI Act Minister’s approval before injecting carbon dioxide underground for disposal; doing so without approval attracts a $50,000 penalty (section 13(1)). An applicant must provide detailed particulars about the reservoir, injection methods, volume, composition, confinement capability, and technical advice (section 13(2)). The Minister may impose conditions, including payment of money, indemnification of the State, and transferability restrictions (section 13(6)). The Minister must not grant approval without consulting the LA Act Minister, the CALM Act Minister, and any other notified person (section 13(5)).

The Joint Venturers have a duty under the ratified Agreement to submit detailed proposals for the Project by a specified date (clause 7(1)), and to implement approved proposals (clause 9). They must pay Net Conservation Benefits of $40 million (indexed) into a special purpose trust account under the CALM Act (clause 11). They must reserve sufficient gas from the Title Areas to deliver 2000 petajoules to the mainland (clause 17(1)), and submit proposals for a domestic gas project (Domgas Project) (clause 17(2)). They must comply with the Environmental Protection Act 1986 (clause 14) and use local labour, professional services and materials where reasonably practicable (clause 15). They must also form and operate the Barrow Island Coordination Council (clause 13) and pay DCLM’s management costs up to specified indexed annual caps (clause 12).

The State has a duty to grant leases, licences and easements in accordance with the Ratifying Act and approved proposals (clause 16(1)). The first long term lease must be for 60 years, and the State must offer further tenure to the Joint Venturers before offering it to others (clause 16(2)). The State must not impose discriminatory taxes or charges (clause 19), and must not resume project assets without the Joint Venturers’ consent (clause 29). The State also has a duty to indemnify the Joint Venturers for common law liability to independent third parties after the liability assumption date, subject to satisfying the conditions in Part 5A (section 14D). The Treasurer must pay indemnity amounts from the Consolidated Account (section 14E).

Rights held by the Joint Venturers include the right to assign, mortgage, charge, sublet or dispose of their rights to an Associated Entity as of right, or to others with the Minister’s consent not unreasonably withheld (clause 21(1)). They have a right to refer disputes to arbitration under the Commercial Arbitration Act 1985, except where the Minister has a discretionary power (clause 30). They have a right to be consulted and to submit new or revised proposals if the Minister defers or conditions approval (clause 8(3)). The State has a right to remedy defaults itself and recover costs if the Joint Venturers fail to remedy after 180 days (clause 25(4)).

The Act creates one criminal penalty: a maximum fine of $50,000 for injecting carbon dioxide into an underground reservoir or subsurface formation for disposal without the BI Act Minister’s approval (section 13(1)). This is a straightforward offence provision; the Act does not specify daily penalties for continuing contravention, nor does it provide for imprisonment. Enforcement is likely to be through prosecution in the ordinary courts, although the Act does not create any specific enforcement body.

Beyond the criminal penalty, the Act relies on contractual enforcement mechanisms under the ratified Agreement. The Agreement gives the State a right to determine the Agreement if the Joint Venturers make a material default that is not remedied within 180 days after notice, or if they abandon or repudiate the Agreement, or if any Joint Venturer goes into liquidation (other than for reconstruction) and the interest is not assigned within three months (Schedule 1, clause 25(1)). The State must specify the nature of the default in its notice (clause 25(2)). If the Joint Venturers contest the default, they must refer the matter to arbitration within 60 days; if the award is against them, they have a reasonable time fixed by the award to comply (clause 25(3)). If the default remains unremedied after 180 days or after the arbitration time, the State may itself remedy the default by entering the Joint Venturers’ land and using their plant and equipment, and the costs become a debt payable on demand (clause 25(4)). The Act also provides for forfeiture of leases granted under Part 3: the BI Act Minister’s consent is required for the LA Act Minister to order forfeiture of a lease (section 6(2)(g)) or cancellation of an easement (section 8(4)(b)), and the LA Act Minister may order forfeiture under the LA Act section 35(3).

The Act provides a protection from liability for wrongdoing for persons acting in good faith in the performance or purported performance of a function under the Act (section 17A). An action in tort does not lie against such a person. However, the State is not relieved of any liability it might have for another person having done anything as described. This protection applies even if the act was capable of being done whether or not the Act had been enacted. It covers omissions as well as acts (section 17A(4)). This provision was inserted in 2015 alongside the indemnity regime. There are no other civil penalties or infringement notices under the Act. The primary enforcement mechanism for the Act’s non-criminal obligations (such as the cap on uncleared land, the requirement to obtain approvals under other laws, or compliance with the Agreement) appears to be contractual remedies available to the State under the Agreement, as well as potential directions from the Minister and ultimately termination of the Agreement.

The Act has a complex relationship with other statutes. It overrides other laws where necessary to give effect to the Agreement: the Agreement operates and takes effect despite any other Act or law (section 5(3)); however this is not absolute. Other laws continue to apply. Section 14 expressly provides that the grant of a lease, licence, easement or section 13 approval does not affect the requirement to obtain under any written law (including the Petroleum Pipelines Act 1969 as modified by section 11) any licence, permit, lease, approval, consent, registration, reservation, exemption or other authorisation to do an act that would be unlawful without it. This means the Act does not provide a blanket exemption from environmental, planning, or other regulatory approvals.

The Act modifies the Land Administration Act 1997 in significant ways for the purpose of granting tenure on the reserve. It disapplies LA Act sections 12 and 14 (which require parliamentary approval for certain dealings with Class A reserves) for leases, licences and easements under the Act (sections 6(6), 7(6), 8(5)). It also disapplies section 18 (which prohibits unauthorised use of Crown land) for grants to parties to the Agreement (sections 6(7), 7(7), 8(6)). It modifies the consent requirements so that the LA Act Minister must obtain the BI Act Minister’s consent for many administrative actions, and the CALM Act Minister’s consent for conservation conditions. For easements, it redirects references in the LA Act Part 8 to the management body so they refer to the BI Act Minister (section 8(2)). The LA Act continues to apply otherwise, but these modifications are critical for enabling the project.

The Act affects the Petroleum Pipelines Act 1969 by extending its definition of “petroleum” to include carbon dioxide, and by treating pipelines for conveying carbon dioxide to a place on Barrow Island for disposal in an underground reservoir as falling within the definition of “pipeline” (section 11). The Petroleum Pipelines Act 1969 then applies to those pipelines.

The Act intersects with the Conservation and Land Management Act 1984 through the requirement that the CALM Act Minister consent to conditions affecting conservation, and through the special purpose trust account for Net Conservation Benefits established under CALM Act section 69 (Schedule 1, clause 11(5)). The Act also references the Aboriginal Heritage Act 1972, deeming the Joint Venturers to be “the owner of any land” for the purposes of section 18 of that Act in relation to approved proposals (Schedule 1, clause 4(5)). It interacts with native title laws, providing that nothing in the Agreement exempts the State or the Joint Venturers from compliance with laws relating to native title (Schedule 1, clause 2(2)). The Government Agreements Act 1979 is also relevant: section 15 provides that any gas processing project on Barrow Island must be the subject of a Government agreement as defined in that Act, and section 5(3) of the Act provides that the Agreement operates without limiting or otherwise affecting the application of the Government Agreements Act 1979.

For rating purposes, section 16 declares that any part of the reserve used for a gas processing project purpose is not being used or held for a public purpose for the interpretation of the Local Government Act 1995 section 6.26(2)(a)(i). This ensures that such land can be rated. The Act also provides that nothing in Part 3 affects the operation of the LA Act section 45(3) (section 10(2)), which deals with the vesting of land. Finally, the Act implicitly interacts with the Environmental Protection Act 1986, as the Agreement requires that approved proposals be consistent with EP Act approvals (Schedule 1, clause 8(1)(d)).

The Barrow Island Act 2003 has been amended by five subsequent Acts. The original Act received Royal Assent on 20 November 2003 and commenced on the same day, except for section 12 (which was deleted before it ever commenced). The first amendment was by the Petroleum Legislation Amendment and Repeal Act 2005 (No. 13 of 2005), which deleted section 12 (which had not yet come into operation) and made a minor amendment to section 2 by deleting subsection (2). The deletion of section 12 is noted in the compilation table - the section had not commenced. That amendment came into operation on 28 March 2007.

The next amendment was by the Petroleum Amendment Act 2007 (No. 35 of 2007), section 90, which amended section 7 (Licences affecting reserve) by substituting a reference to reflect changes in the Petroleum Act. This commenced on 19 January 2008.

The Barrow Island Amendment Act 2013 (No. 24 of 2013) was a substantial amendment. It amended the long title (to reflect the inclusion of the 2013 variation agreement), the definition of “the Agreement” in section 3 to include the 2013 variation agreement, section 5 to ratify the 2013 variation agreement, section 9 to increase the cap on uncleared land from 300 to 332 hectares, and inserted Schedule 2 containing the 2013 variation agreement. The 2013 variation itself increased the Gas Processing Area from 300 to 332 hectares and amended corresponding provisions in Schedule 1 (clauses 1, 5(1), and 22(1)). This amendment received Royal Assent on 18 December 2013 and commenced the next day (except sections 1 and 2 which commenced on assent).

The Barrow Island Amendment Act 2015 (No. 13 of 2015) inserted the entire Part 5A (Indemnification by State for long-term liability resulting from underground disposal of carbon dioxide), comprising sections 14A through 14F. It also inserted section 17A (Protection from liability for wrongdoing). The new sections 14A-14F commenced on 9 May 2015, but section 17A was given retrospective effect to 20 November 2003 (the date the original Act commenced), as provided by section 2(b) of the amending Act. This retrospective operation is significant because it means the statutory tort protection applies from the beginning of the Act, potentially covering actions taken long before the amendment.

The most recent amendment came from the Land and Public Works Legislation Amendment Act 2023 (No. 4 of 2023), Parts 4 Division 1, which amended sections 6 and 8 of the Act. This amendment commenced on 10 August 2023. The nature of these amendments is not detailed in the source, but they are listed in the compilation table. A further potential amendment is noted in the uncommenced provisions table: the Petroleum Legislation Amendment Act 2024 (No. 17 of 2024), Part 5 Division 1, which had received Royal Assent on 14 May 2024 but had not yet commenced as of the compilation date. The content of that uncommenced amendment is not specified.

The Act itself references no litigation, and no cases are named or discussed in the text of the legislation. The source material contains no judicial decisions, tribunal rulings, or arbitral awards. This is consistent with the Act’s nature as a ratification statute that establishes a contractual framework with an arbitration clause. The Act and its associated Agreement (Schedule 1) provide for arbitration of disputes under the Commercial Arbitration Act 1985 (WA) (Schedule 1, clause 30). However, whether any arbitration has occurred is not a matter disclosed by the legislative text. The indemnity provisions in Part 5A, inserted in 2015, may give rise to future disputes about the scope of common law liability and the State’s obligation to indemnify, but no such litigation is recorded in the Act.

The Act does not purport to create any private rights of action other than the indemnity. The protection from liability in section 17A may have been enacted in response to potential tort claims against persons exercising functions under the Act, but again the source does not mention any litigation. The absence of litigation history in the Act is notable; it suggests that the contractual governance mechanisms have operated without court intervention to date, or that any disputes have been resolved privately or through arbitration. For the purposes of this deep dive, it must be stated that the Act does not provide any references to litigation history.

Several features of the Act could catch practitioners off guard. The most important is the interaction between the override provision in section 5(3) and the savings for other approvals in section 14. Section 5(3) says the Agreement operates and takes effect despite any other Act or law. But section 14 clarifies that the grant of a lease, licence, easement or a section 13 approval does not affect the requirement to obtain other authorisations under any written law. A reader might incorrectly assume the Act exempts the project from all other regulatory requirements; it does not. Environmental approvals under the EP Act, pipeline licences, and other permits remain necessary.

The cap of 332 hectares of uncleared land (section 9) applies cumulatively to all leases, licences and easements granted under Part 3. This is a hard limit that cannot be exceeded. The definition of uncleared land is key: it is determined at the time of each grant and refers to land that was not cleared at that time. This means that once cleared, land is not counted again, but the total area of uncleared land at the time of each grant must not cause the cumulative total to exceed 332 hectares. The 2013 variation increased the cap from 300 to 332 hectares, but any future increase would require further legislative amendment.

Another potential trap is the interaction between the Barrow Island lease and the grant of tenure under Part 3. Section 6(4) prohibits the LA Act Minister from granting a lease that would coincide with or overlap the area of the Barrow Island lease unless that lease has been surrendered or is otherwise no longer in force in respect of that area. This means the Joint Venturers (or the Barrow Island lessee) must surrender the relevant part of the petroleum lease before a surface lease for gas processing can be granted over the same area. The Act provides a mechanism for partial surrender of the Barrow Island lease at any time with the Governor’s consent (section 6(5) modifying the Petroleum Act 1936 section 66).

For carbon dioxide injection, the approval under section 13 is separate from any approval under the Petroleum Pipelines Act or other laws. The Minister must consult the LA Act Minister, the CALM Act Minister, and any other person notified under section 13(3)(b) before granting approval. Failure to consult may invalidate the approval. Also, the section 13 approval is subject to conditions, conditions regarding payment, indemnification and transferability. The approval itself includes the collateral deed and the CO2 disposal management plan (see definition of section 13 approval in section 14A). Any variation of the approval must comply with condition 19 of the original approval.

The Part 5A indemnity is not automatic. It applies only after the liability assumption date is declared by the BI Act Minister, which in turn requires a notice from the Commonwealth representative that the Commonwealth is satisfied about seven matters listed in section 14B(2). Those matters include that the injected CO2 is behaving as predicted, there is no significant risk of leakage or adverse impact on geotechnical integrity, environment, other resources, or human health and safety, and that no injection has occurred for at least 15 years since the CO2 injection cessation date. The liability assumption date cannot be before the day the notice is published in the Gazette (section 14C(2)). Even after that date, the indemnity only covers common law liability to independent third parties, and only for loss or damage attributable to an act done or omitted in carrying out CO2 injection operations under the authority of the section 13 approval. It does not cover liability arising from bad faith, malice, fraud, or recklessness. It also does not cover liability to related entities.

The protection from liability in section 17A applies only to a person acting in good faith in the performance or purported performance of a function under the Act. The State is not relieved of its own liability for another person’s acts. The section has retrospective effect to 2003 (per the 2015 amendment). This could affect tort claims that arose before the section was enacted. However, the statutory protection only covers functions under the Act, not all activities on Barrow Island.

Finally, section 18 requires a review of the Act if the Agreement ceases under certain provisions (clause 4(1) or 8(6) of the Agreement). Practitioners should be alert to the possibility that a cessation of the Agreement could trigger a legislative review that might result in significant changes or repeal.

Compliance with the Barrow Island Act 2003 requires careful attention to its layered regulatory structure. For any person proposing to inject carbon dioxide underground on Barrow Island (which would include the Joint Venturers), the first step is to obtain a section 13 approval from the BI Act Minister. The application must be in the form and manner approved by the Minister and must include the position, size, capacity and geological structure of the proposed reservoir; the rate, volume, composition and expected duration of disposal; the injection methods; the confinement capability; and technical advice and data (section 13(2)). The applicant must pay the prescribed fee (if any). The Minister may require further information and may require that certain persons be informed of the application. The applicant must be prepared for a consultative process involving the LA Act Minister, the CALM Act Minister, and any other notified person. The Minister may impose conditions, including financial conditions. The applicant should also ensure that it has obtained any necessary approvals under the Petroleum Pipelines Act 1969 (as modified by section 11) and under the Environmental Protection Act 1986, since section 14 preserves those requirements.

For any person seeking to use land on the reserve for a gas processing project purpose (including the Joint Venturers and third parties), the appropriate process is to apply to the LA Act Minister for a lease (under section 6), licence (under section 7) or easement (under section 8). The applicant must demonstrate that the proposed tenure is for a gas processing project purpose as defined in section 3. The LA Act Minister cannot act without the consent of the BI Act Minister to issues such as grant, duration, renewal, extension, surrender, forfeiture, removal of fixtures, options, and conditions (for leases, section 6(2); for licences, section 7(2) and (4); for easements, section 8(4)). The CALM Act Minister must consent to conditions affecting conservation of flora and fauna (sections 6(3), 7(3), 8(3)). The applicant should also check whether the area of uncleared land proposed, when added to all existing grants, would exceed 332 hectares (section 9). The applicant must ensure that the land is not within the area of the Barrow Island lease unless that lease has been surrendered or is no longer in force in respect of that area (section 6(4) for leases). For someone who is a party to the Agreement, LA Act section 18 (prohibition on unauthorised use of Crown land) does not apply (sections 6(7), 7(7), 8(6)). For someone who is not a party to the Agreement, the BI Act Minister’s consent is required for any LA Act section 18(7) approval (sections 6(2)(e), 7(4)(a), 8(4)(a)). Additionally, the State must require that any grantee become a participant in the Barrow Island Coordination Council as a precondition to grant (Schedule 1, clause 13(i)).

For the Joint Venturers specifically, compliance extends far beyond the Act itself to the Agreement. They must submit complete detailed proposals by the deadlines (clause 7), implement approved proposals (clause 9), pay Net Conservation Benefits (clause 11), reserve gas for domestic supply (clause 17), use local labour and materials (clause 15), and participate in the Barrow Island Coordination Council (clause 13). They must also indemnify the State against third party claims arising from their work (clause 27), subject to the exception for State negligence. They must comply with all conditions of the section 13 approval and the collateral deed. If the Joint Venturers wish to assign their rights, they must do so in accordance with clause 21, including executing a deed of covenant in favour of the State if required.

For the State, compliance involves ensuring that the BI Act Minister, LA Act Minister, and CALM Act Minister each perform their statutory roles. The BI Act Minister must consult as required before granting section 13 approvals, must not declare a liability assumption date unless the preconditions in sections 14B and 14C are met, and must carry out a review if the Agreement ceases under clause 4(1) or 8(6) (section 18). The Treasurer must make payments under the indemnity from the Consolidated Account (section 14E). The LA Act Minister must not grant tenure that would exceed the uncleared land cap or that would overlap the Barrow Island lease without the necessary surrender.

Finally, any person exercising a function under the Act should be aware of the statutory protection in section 17A. They should act in good faith to avail themselves of that protection. They should also keep records of all communications and consents, as the Act provides for disclosure of information to the Commonwealth representative (section 14F) and the Minister may require information at any time.