New regulations will be made under the Health and Safety in Employment Act 1992 to ensure that health and safety concerns are a priority for operators in the oil and gas production sector.

Acting Minister of Labour Christopher Finlayson made the announcement last week, stating that the changes will help address regulatory deficiencies highlighted in the Pike River Royal Commission's recent report and help align regulatory standards in New Zealand's petroleum exploration and extraction sector with those that apply in the United Kingdom and Australia.

The new regulations will apply from June 2013 to operators carrying out petroleum exploration and extraction activities, and will require:

  • operators (both onshore and offshore) to get the Ministry of Business, Innovation and Employment to approve a safety case before starting operations;
  • smaller scale, lower risk onshore production installations to prepare an overview of the health and safety measures in place to protect those at, or near the installation (in lieu of a safety case);
  • all operators to report 'near miss' incidents that could have led to a major accident; and
  • all operators to implement arrangements for independent and competent persons to examine the design, construction, and maintenance of all wells within their inventory.
  • The regulatory regime will apply to a well's whole lifecycle to ensure it is designed, modified, commissioned, constructed, equipped, operated, maintained, suspended and abandoned in a way that ensures operators reduce risks to a level that is as low as is reasonably practicable.

The announcement coincided with the release of an interim report on fracking by the Parliamentary Commissioner for the Environment, in which the Commissioner noted that light-handed regulation can be problematic in a high-risk industry such as oil and gas.

A summary of the main recommendations of the Pike River Royal Commission, including those relating to health and safety regulation, can be found in the previous edition of Watching Brief, here.