The Board and management have discussed possible areas of improvement and this will feed through into our budgeting process to ensure that resources are properly allocated. This approach will help to ensure that APIA remains focused on providing valuable services to its members.
An important Board decision last year was the review of APIA’s Sponsoring Membership category. The Chief Executive explains the details of this change in her report. The Board decided APIA should address the requirements of our Owner members and make changes that would bring the smaller Owner members into the Sponsoring Membership category. We feel that it is important for members have a level of membership that provides them with value and properly reflects their position in the industry. In this category, this is reflected in events such as the Owners’ Forum in Canberra last October which was a tremendous success and which I am sure will be repeated in the future.
In the meantime, the Secretariat has been very busy dealing with the energy reform process, which will introduce a single, national economic regulator for the industry. After a Productivity Commission report released in June 2004 – which the pipeline industry reluctantly supported – further reports were ordered by various levels of government, each calling for input from industry. Then the exposure draft of the National Gas Law was delayed by six months (with a due implementation date of 1 July 2007) because of the law’s “drafting complexity”. When it was finally released late last year, industry had six weeks to conduct a review and lodge a substantial submission. APIA’s Regulatory Affairs Committee undertook this significant task and APIA provided a thorough and detailed response to the Law on 22 December. APIA also provided a response to the draft Rules on the 12 January.
The draft law was not good news for industry! Problems stemmed not only from the intent of the law but from the way that it was structured and from the drafting itself. The Chief Executive, accompanied by relevant members of the Committee, has lobbied Federal Industry Minister Ian Macfarlane and all State Ministers, as well as Ministerial advisers and Departmental officials. APIA called for major changes, including confirming that regulatory obligations will not be applied to unregulated pipelines; moving a large number of matters from the Law to the Rules to better reflect the division of responsibilities between the regulator, the rule maker and the policy maker (government); an improvement to the Merits Review (appeals) process; a reduction of the intrusive information-gathering powers; major changes to the sections relating to “light-handed” regulation (which were basically unworkable as proposed in the draft); as well as the general “workability” of the legislation.
Ministers were initially reluctant to accept that the legislation would need to be changed. But after numerous representations by APIA, including a meeting with Minister Macfarlane, which I attended, the Minister and his State counterparts recognised the reasonableness of APIA’s case and agreed that changes should be made, with a significant number of APIA’s propositions being accepted.
Then the debate turned again to timing. Industry argued for further delay to allow full consultation – consultation which should have occurred during the development of the draft. APIA again undertook a lobbying campaign with State Ministers and officials, and eventually – in early March – officials convinced all Ministers that industry should be more involved in the new draft. At the time of writing, it is expected that an extension to the timetable of a further three months will be announced in April. While industry is not generally happy about further delay, and therefore further uncertainty, APIA is firmly of the view that it is better to take more time to get this National Gas Law right, because it is likely we will live with it for some time.
While the introduction of new legislation impacts directly on APIA’s Owner members, all members rely on future investment in pipelines. Without the right economic imperatives – including an option for lighter-handed regulation – a lack of investment in pipeline infrastructure in the years and decades to come will be detrimental not only to APIA members but also to the economy and ultimately the community at large.
APIA has achieved much already and I am sure members will continue to support the ongoing work by APIA and the Regulatory Affairs Committee to ensure the best possible legislation is introduced.
Mark Harper
APIA President