Offshore Minerals (Retention Licence Fees) Regulations 2018

Administered by Department of Industry, Science and Resources

Legislation au F2018L01249 Regulations In force Legislative Instrument

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EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Resources and Northern Australia,
Senator the Hon Matt Canavan

Offshore Minerals (Retention Licence Fees) Act 1994

Offshore Minerals (Retention Licence Fees) Regulations 2018

Purpose and Operation

The Offshore Minerals (Retention Licence Fees) Act 1994 (the Act) imposes annual fees in respect of retention licences granted under the Offshore Minerals Act 1994 (the OM Act). The purpose of the fee is to compensate the Designated Authorities (state and Northern Territory governments) for the costs of day-to-day administration of the Offshore Minerals legislation on behalf of the Commonwealth.

Section 9 of the Act provides that the Governor-General may make regulations prescribing matters either required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Subsection 4(1) of the Act provides that a retention licence holder must pay a fee to the Designated Authority in respect of each year of the term of the licence. Subsection 4(2) provides that the amount of the fee is to be calculated in accordance with the regulations. Subsection 4(3) provides that the amount of the fee is not to exceed $1,000 for each block covered by the licence at the beginning of the year.

The Offshore Minerals (Retention Licence Fees) Regulations (the sunsetting Regulations), which are due to sunset on 1 October 2018, prescribe an annual fee of $200 for each block covered by the licence.

The Department of Industry, Innovation and Science (the department) has conducted a review of the sunsetting Regulations and determined that they should be remade without substantive change. To date, only a few licences have been granted under the OM Act. It is not proposed to increase the retention licence fees as the states and the Northern Territory currently incur negligible costs in administering mining activities in Commonwealth offshore areas.

A review of the current fee has determined that a lower amount would not be sufficient to appropriately compensate the Designated Authorities for their activities in the event that a retention licence is granted in future, noting that the fee would need to cover ongoing regulatory activities in relation to the licence, such as monitoring and enforcement. At the same time, the amount is considered not to be onerous for retention licence holders in the context of overall costs incurred in offshore mineral exploration activities, and noting that the Act enables a fee of up to $1,000 for each block covered by the licence to be charged.

The purpose of the Offshore Minerals (Retention Licence Fees) Regulations 2018 (the 2018 Regulations) is to remake the sunsetting Regulations in substantially the same form with amendments to ensure consistency with current drafting practices, including simplifying language and correcting references where necessary.

Subsection 33(3) of the Acts Interpretation Act 1901 relevantly provides that where an Act confers a power to make an instrument of a legislative character (including regulations), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions to repeal, rescind, revoke, amend, or vary any such instrument. The 2018 Regulations also repeal the sunsetting Regulations.

A provision-by-provision description of the 2018 Regulations is set out at Attachment A.

Consultation

State and Northern Territory governments were consulted during the drafting of the 2018 Regulations. Jurisdictions were advised of the proposal to remake the sunsetting Regulations with no substantive change at the March 2018 meeting of the Upstream Petroleum Resources Working Group of the Council of Australian Governments’ Energy Council, with comments sought by 11 April 2018. No comments were received.

The offshore minerals industry in Australia is relatively small. In order to consult with the industry, and ensure broader awareness of the proposal to remake the sunsetting Regulations, information about the proposal and an invitation to comment were published on the department’s Consultation Hub. Interested stakeholders were also advised through an issue of Australian Petroleum News. Comments in relation to the proposal were sought by 13 April 2018. One submission was received; however, the content of the submission related to matters outside the scope of the sunsetting Regulations.

Regulatory Impact

The Office of Best Practice Regulation (OBPR) has confirmed that a Regulation Impact Statement is not required for the 2018 Regulations. The OBPR reference is ID 22729.

Statement of Compatibility with Human Rights

Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires the rule-maker of a legislative instrument to which section 42 (disallowance) of the Legislation Act 2003 applies to cause a statement of compatibility to be prepared in respect of that legislative instrument. A Statement of Compatibility with Human Rights has been prepared to meet that requirement and is set out at Attachment B.


Attachment A

Details of the Offshore Minerals (Retention Licence Fees) Regulations 2018

Section 1 – Name

This section provides that the name of the instrument is the Offshore Minerals (Retention Licence Fees) Regulations 2018 (the 2018 Regulations).

Section 2 – Commencement

This section provides that the 2018 Regulations commence on the day after the instrument is registered on the Federal Register of Legislation.

Section 3 – Authority

This section provides that the 2018 Regulations are made under the Offshore Minerals (Retention Licence Fees) Act 1994 (the Act). The applicable provisions that provide authority are subsection 4(2) and section 9 of the Act.

Section 4 – Schedules

This section is a machinery provision that enables the Schedule to the 2018 Regulations to operate according to its terms.

Section 5 – Definitions

This section provides for the definitions of terms used in the 2018 Regulations.

Section 6 – Amount of retention licence fee

This section provides that, for the purposes of subsection 4(2) of the Act, the prescribed annual fee is $200 for each block covered by the licence.

Schedule 1 – Repeals

This Schedule provides that the whole of the sunsetting Offshore Minerals (Retention Licence Fees) Regulations is repealed.

 

Attachment B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Offshore Minerals (Retention Licence Fees) Regulations 2018

These Regulations are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Offshore Minerals (Retention Licence Fees) Regulations 2018 (the 2018 Regulations) are a legislative instrument for the purposes of the Legislation Act 2003.

The 2018 Regulations are prepared under subsection 4(2) and section 9 of the Offshore Minerals (Retention Licence Fees) Act 1994, and repeal and remake the Offshore Minerals (Retention Licence Fees) Regulations (the sunsetting Regulations), due to sunset on 1 October 2018.

The sunsetting Regulations prescribe the annual fee amount payable by licence holders in respect of retention licences granted under the Offshore Minerals Act 1994. A review of the sunsetting Regulations determined that the Regulations are still required. The 2018 Regulations remake the sunsetting Regulations without substantive change.

Human rights implications

The 2018 Regulations do not engage any of the applicable rights or freedoms.

Conclusion

The 2018 Regulations are compatible with human rights, as they do not raise any human rights issues.

 

Senator the Hon Matt Canavan

Minister for Resources and Northern Australia

 

Overview

The Offshore Minerals (Retention Licence Fees) Act 1994 was enacted to address the need for annual fees to be paid in respect of retention licences granted under the Offshore Minerals Act 1994. These fees are intended to compensate the Designated Authorities, namely the state and Northern Territory governments, for the costs associated with administering offshore mineral legislation on behalf of the Commonwealth. The Act was introduced by the Australian Parliament, with the purpose of ensuring that the costs of administering offshore mineral activities are covered and that the Designated Authorities are adequately compensated for their efforts. The Minister for Resources and Northern Australia, Senator the Hon Matt Canavan, issued the Offshore Minerals (Retention Licence Fees) Regulations 2018 to remake the existing regulations that were set to sunset, ensuring the continuation of these fees without substantive changes. The 2018 Regulations were designed to maintain the annual fee of $200 for each block covered by a retention licence, a figure determined to be sufficient for covering the current and future administrative costs while remaining reasonable for licence holders. The regulations were made after consulting with the relevant state and Northern Territory governments, as well as the offshore minerals industry, although no substantive changes were proposed or received based on the feedback. The 2018 Regulations were also reviewed to ensure they met current drafting practices and repealed the previous regulations to facilitate a smooth transition. This legislative instrument remains compatible with human rights, as it does not engage any of the applicable rights or freedoms.

Scope and Application

The Offshore Minerals (Retention Licence Fees) Act 1994 applies to retention licence holders under the Offshore Minerals Act 1994, requiring them to pay an annual fee to the designated state and Northern Territory authorities for the costs associated with the administration of offshore mineral exploration activities. These fees compensate the authorities for their regulatory activities, such as monitoring and enforcement, related to the offshore mineral retention licences. The Act mandates that the annual fee cannot exceed $1,000 per block covered by the licence, a limit set to ensure the fees are reasonable for retention licence holders while adequately compensating the designated authorities. The Act's regulatory scope extends to the Commonwealth, as it is a federal law, and its application is limited to the financial obligations of retention licence holders as specified by the accompanying regulations. The Offshore Minerals (Retention Licence Fees) Regulations 2018, which implement the Act, were remade without substantive change to ensure consistency with current drafting practices and to repeal the previous sunsetting regulations, which were set to expire on 1 October 2018. The regulations specify that the annual fee remains $200 for each block covered by the licence, a figure determined to be sufficient for compensating the authorities without being onerous for the licence holders.

Key Provisions

The Offshore Minerals (Retention Licence Fees) Act 1994 sets forth the framework for the imposition of annual fees in relation to retention licences granted under the Offshore Minerals Act 1994. Specifically, section 4(1) of the Act requires that retention licence holders must pay a fee to the Designated Authority (state and Northern Territory governments) for each year of the term of the licence, with the fee amount calculated in accordance with the regulations. Section 4(2) specifies that the fee should not exceed $1,000 for each block covered by the licence at the beginning of the year. The Offshore Minerals (Retention Licence Fees) Regulations 2018, which were made to replace the sunsetting Regulations, prescribe an annual fee of $200 for each block covered by the licence. This fee structure aims to compensate the Designated Authorities for the costs of administering the Offshore Minerals legislation on behalf of the Commonwealth. The 2018 Regulations also ensure consistency with current drafting practices by simplifying language and correcting references where necessary. Under the Act, retention licence holders are obligated to pay the prescribed annual fee to the Designated Authority. Failure to comply with these fee payment obligations can result in legal consequences, although specific penalties for non-payment are not detailed in the Act itself. The Regulations provide a framework within which these obligations are to be met, ensuring that the Designated Authorities receive appropriate compensation for their administrative efforts. There are no explicit provisions in the Act detailing specific offences, penalties, or civil/criminal consequences for breach of the fee payment obligations. However, it is implied that non-compliance could lead to legal actions aimed at enforcing payment or other remedial measures. The Act enables the Designated Authorities to take appropriate action to ensure compliance with the fee requirements, although the exact nature of these actions is not specified within the text.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.