Under international law, Australia has sovereignty over a band of waters called the ‘territorial sea’, which at present extends up to 12 nautical miles from the territorial sea baseline. The baseline is normally the low water mark. Many activities take place in the territorial sea, including mining for oil, gas and other minerals, fishing, shipping, and management of marine parks, navigation and shipwrecks. This raises the question of how to divide management of resources and responsibilities in the territorial sea between the Commonwealth and the states.
In 1975, the High Court determined in the Seas and Submerged Lands Case that the Commonwealth has sovereignty over waters to the edge of the territorial sea, including the seabed beneath these waters.
Following this decision, the Commonwealth and the states undertook negotiations resulting in the 'Offshore Constitutional Settlement', which deals with Commonwealth and state jurisdiction in the waters to the edge of the territorial sea. The settlement also includes arrangements on managing oil, gas and other seabed minerals, the Great Barrier Reef Marine Park, other marine parks, historic shipwrecks, shipping, marine pollution and fishing. In general, the states have responsibility for areas up to three nautical miles from the territorial sea baseline, which are termed 'coastal waters'.
The settlement is not set out in one single document but is found in the legislation that implements it. The legislation generally extends the arrangements to the Northern Territory.