In a significant development for the oil and gas industry, the Federal Court of Australia recently provided a declaration that foreign workers onboard vessels owned by Swiss contractor Allseas Construction S.A. (Allseas) were deemed not to be within Australia's 'migration zone' defined by section 5 of the Migration Act 1958 (Cth) (Act) and therefore not required to hold relevant working visas: Allseas Construction S.A. v Minister for Immigration and Citizenship  FCA 529 (Allseas Decision).
Further implications of the decision are that Australian labour laws do not apply to the Allseas foreign workers.
Allseas holds an Engineering Procurement Construction Installation Pipeline contract with Chevron Australia. The contract requires Allseas to undertake various pipe-laying activities throughout the Gorgon and Jantz gasfields off the North West of Western Australia. The Gorgon and Jantz gasfields are within the definition of an Australian 'seabed' as defined by the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth).
Under the contract with Chevron, Allseas is to provide the management, installation, engineering and design, procurement, transportation, load out, sea fastening, pre–pipe laying and post–pipe lay surveys, fabrication, construction, installation, testing and all associated activities for offshore pipeline installation for the Gorgon project.
In the performance of its contract with Chevron, various workers are (or will be) engaged by Allseas to work on two vessels owned by subsidiary companies of Allseas. The two vessels are the Lorelay (which has already been engaged) and the Solitaire (which will be engaged from November 2012).
The workers on the vessels include vessel management teams (employed by the vessel entities) and other construction crew that were provided by Poseidon Personnel Services S.A., which was also a subsidiary of Allseas. Australian manning agents are to provide some supplementary Australian labour onboard the vessels.
The practical question arising in the case is whether the foreign workers aboard the Lorelay had in fact entered Australia (and whether they would enter Australia) onboard the Solitaire. If they entered the migration zone within the meaning of the Act then certain provisions concerning their visas and their employment conditions apply.
The Minister for Immigration and Citizenship (Minister) sought to argue that when the pipeline (which extends to the Australian seabed) comes into contact with the vessels containing the foreign workers (or when the foreign workers come in contact with the pipeline joints after being welded as part of the pipeline stretching to the seabed) the vessels (and all crew) or alternatively the foreign workers in contact with the pipeline joints enter the migration zone.
The Minister contended that even if other personnel were not in contact with the pipeline, the preferable construction of the Act is that all of the people then onboard the vessel will be within the migration zone.
The 'migration' zone under section 5 of the Act means:
"the area consisting of the States, the Territories, Australian resources installations and Australian sea installations, and to avoid doubt, includes:
- land that is part of a State or Territory at mean low water; and
- sea within the limits of both a State or a Territory and a port; and
- piers or similar structures, any part of which is connected to such land or to ground under such sea; but does not include sea within the limits of a State or Territory but not in a port."
It was common ground that but for the connection via pipe being laid to the Australian seabed, the vessels do not enter the migration zone by virtue of the fact that the vessels did not enter the area defined as Australia's 'low water mark' within the definition.
The definition of 'Australian resources installations' in section 5 of the Act requires that an 'Australian resources installation' must first be a 'resources installation'. A 'resources installation' is defined further in section 5 of the Act to mean either a 'resources industry fixed structure' or a 'resources industry mobile unit'.
Firstly, the court held the vessels cannot be resources industry fixed structures because they are able to be moved as single entities and do move.
Secondly, the court held that neither vessel can be a resources industry mobile unit because:
"The vessels do not drill or obtain substantial quantities of material from the sea bed; and Section 5(13)(b) of the Act excludes vessels that are used or to be used wholly and principally in 'manoeuvring a resources installation, or in operations relating to the attachment of a resources installation to the Australian seabed'."
The court held that by reason of section 5(10) of the Act the pipeline is itself a 'resources installation'. Consequently, the vessels used primarily in manoeuvring a pipeline or in operations relating to the attachment of a pipeline to the Australian seabed will fell within the exception provided for in section 5(13)(b). The Lorelay and the Solitaire will therefore fall within the exception.
In addressing the Minister's argument, McKerracher J stated at :
"I accept Allseas' argument that it would not make sense for the Act to, by s 5(13)(b), exclude pipelay vessels from the definition of 'resources installation', and hence from the 'migration zone', only to then provide that the vessels and/or some or all of the persons aboard those vessels may nonetheless enter the migration zone by reason of the vessels or persons aboard the vessels coming into contact with the pipeline in the course of manoeuvring the pipeline or attaching it to the seabed (ie in doing the very thing which attracts the exclusion in the first place)."
Further, the court held that the Minister's alternative construction, which turns on a foreign worker touching one end of the pipeline to enter the 'migration zone', was not persuasive. At  the court stated:
"... a worker, though standing aboard a vessel expressly excluded from the definition of a resources installation, would enter and leave the migration zone by touching and then not touching the pipeline while a worker standing alongside but not touching the pipeline would not be in the migration zone at all."
The court held the Parliament could not be assumed to have intended such an absurd result. Further there is no policy rationale that could warrant it.
Implications for foreign vessels and workers engaged on offshore oil and gas projects
Potentially, foreign workers may be engaged by foreign employers on foreign vessels on Australian offshore resources projects without being subject to Australian laws such as migration legislation, the Fair Work Act 2009 (Cth) and potentially other laws relating to employment.
The Federal Government's approach to offshore oil and gas projects is to extend as far as possible the application of Australian laws to regulate the activities of foreign companies.
This is often achieved by cumbersome legislative arrangements that are at best ambiguous. The intent of the Federal Government is to enforce its laws on offshore projects, even in circumstances where there may be arguments that it does not have the jurisdictional reach.
The Maritime Union of Australia has already signalled its intention to lobby the Federal Government to make legislative changes to ameliorate the effect of the Allseas Decision.
There is no indication as yet as to whether the Federal Government will seek to appeal the Allseas Decision. If however amendments to the Act are mooted it will be interesting to see how the legislature proposes to overcome international law and jurisdictional hurdles that may be placed in front of them.
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