On 21 February 2013 the European Parliament and the Council (representing EU governments) reached a political agreement on the European Commission's legislative proposal on the safety of offshore oil and gas activities in the European Union.
As previously reported the proposed law is to take the form of a Directive rather than a Regulation so that the means of effecting the legislation is left to Member States. Many of the proposed requirements are already in place in respect of activities on the UKCS and had been considered following the 2011 Maitland Review of health and safety and environment standards for the UK offshore oil and gas regime. The changes likely to be of immediate interest relate to the extent of environmental liability regime exposure and proposed obligations in respect of notification of non-EU incidents, and the Commission’s work to promote the implementation of the highest safety standards worldwide.
The European Parliament and Council are expected to formally approve the proposed legislation in the coming months.
Political agreement reached on EU proposal for offshore safety
- Oil and gas companies will be fully liable for environmental damage caused to protected marine species and natural habitats. For environmental damage to waters, the geographical zone will be extended to cover all EU marine waters including the exclusive economic zone (about 370 km from the coast) and the continental shelf where the relevant coastal Member State exercises jurisdiction. For water damage, the present EU environmental liability regime is restricted to territorial waters (about 22 km offshore).
- Each licensing authority will be required to satisfy themselves that only operators with proven technical and financial capacities necessary to ensure the safety of offshore activities and environmental protection are authorised to explore for, and produce oil and gas in EU waters. It is reported that this includes "liability for potential economic damage where such liability is provided for by national law". In respect of previously undrilled areas public participation is “foreseen prior to the start of exploratory drilling campaigns”.
- Independent national competent authorities responsible for the safety of installations will verify arrangements for safety, environmental protection and emergency preparedness of rigs and platforms and the activity conducted. If minimum standards are not in place Member States will take enforcement action. The ultimate recourse is cessation of drilling or production operations.
- Before exploration or production commences companies will have to submit a report to the competent authority on major hazards for their installation, containing an individual risk assessment and risk control measures and an emergency response plan.
- Technical solutions proposed by the operator must be verified by an independent verifier prior to and periodically after the installation is put into operation.
- Comparable information will be publicly available on industry performance standards and the activities of the competent authorities (published on their websites). The confidentiality of whistle-blowers is to be protected.
- Operators registered in Member States will be required to submit reports of major accidents overseas in which they have been involved to enable key safety lessons to be studied.
- Those operating in the EU will be required to demonstrate the application of the same policies for preventing major accidents overseas as in their EU operations.
- Companies will prepare emergency response plans based on their rig or platform risk assessments and must have resources to implement them. Periodic testing will be conducted. National emergency plans must take full account of the plans.
- Offshore inspectors of Member States are to share best practices and contribute to developing and improving safety standards. (The EU Offshore Authorities Group has been recently established to facilitate the exchange of experiences and expertise between national authorities and the Commission).
For details of the Commission’s original legislative proposal click here
For details of the UK Government’s Response to the Maitland Report click here
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