The Association’s Executive Director, Mr Barry Jones, said the new APPEA standards (copy attached) outlined an industry wide process for managing business “in a way that is economically, socially and environmentally responsible in a world where dynamic systems are the norm.”
“The “APPEA Principals of Conduct” will be backed by explanatory notes setting out the Australian upstream oil and gas industry’s accumulated wisdom in dealing, for a number of years, with making decisions in a dynamic world and in the context of a triple bottom line management ethic,” Mr Jones said.
“We cannot avoid change. It is a fact of life. We have to adapt to it”, he said.
Mr Jones said the key for successful investment in a dynamic world was to avoid shocks that flowed from change.
“If change can be handled by a smooth transition and as a normal part of business, investment is facilitated. If change is created by shock-waves, there is policy and at times sovereign risk where bans and exclusions infringe on existing property rights,” he said.
“Trying to manage socially responsible development by processes of prescriptive regulation and targeting is like King Canute trying to stop the tide.
“The world we operate in, with its human, economic, cultural, biological and atmospheric diversity is not static. It never has been. Trying to preserve some aspect of the world by freezing it at a point of time and picking winners in an economic development sense, is, in most cases, contrary to common sense. It does not create a benchmark for future reference or facilitate better conservation.
“It’s strange the way we conduct public debate – we often talk about the issue of climate change as a mater of concern but climate has never been steady state and has always been subject to wide variations. The trick is to separate climate related variations from the underlying trends. We talk about preservation of biodiversity but we believe in the theory of evolution.”
Mr Jones said the unfortunate thing about current public policy debate on sustainable development in a number of jurisdictions was that it failed to recognise that in a dynamic world, the concept of triple bottom line management had to be dynamic.
“Targets and timetables don’t work. Prescriptive, stifling, regulation doesn’t work. Bans and exclusions don’t work. All these policy tools do is deliver policy shocks when they are implemented and stagnation when they are achieved,” he said.
“On the other hand, development on the basis of continuous improvement and risk management based on sound science/economics does work. It delivers for investors and society. It is a process that generates a smooth transition from good, to better, to even better. The hurdle never stops rising – only the rate of its rise changes.
“Maybe it’s time we all took note of a recent comment by the UK Energy Minister. He said ‘I think there is a real danger of target-setting becoming a substitution therapy for actually doing something.”
Mr Jones said sustainable development should be about government setting broad goals, industries developing principles of conduct and companies investing on the basis of good corporate governance, sound risk assessment and a commitment to raise the hurdle through a process of continuous improvement”.
