The Outer House has refused permission to Greenpeace (the “petitioner”) to bring a petition for judicial review against the Secretary of State for Business Energy and Industrial Strategy (“BEIS”) and the OGA (the “respondents”). The petition sought to challenge the OGA’s consent to an offshore field development project (the “Development Project”) and BEIS’ agreement to that consent. The petitioner also sought a court declaration that the Offshore Petroleum Production and Pipe-lines (Assessment of Environmental Effects) Regulations 1999 (the “1999 Regulations”) failed to fully transpose the Environmental Impact Assessment Directive (the “EIA Directive”).
The offshore licence for the field in which the Development Project is situated requires consent to be sought for drilling for oil. This consent is granted by the OGA, however the application for consent must also be accompanied by an environmental impact assessment (“EIA”) which is considered by BEIS. Once BEIS has reviewed the EIA and provided approval to the OGA, the OGA then decides whether or not to grant consent to the licence holder(s). The OGA is primarily concerned with the technical and financial issues in question, rather than environmental issues – the latter are for BEIS to consider.
The petitioner used two separate processes to challenge the decision.
One is a statutory challenge to the grant of field development consent under the 1999 Regulations. There is a procedure under Regulation 16 which provides a basis for an aggrieved party to apply to the Court for an order quashing consent in respect of such a development project. That process is ongoing.
The other process was an application for judicial review which the petitioner brought as it was concerned that its statutory challenge would fail because the 1999 Regulations had failed to properly implement the EIA Directive.
In particular, the petitioner was concerned that, because the 1999 Regulations fail to transpose the EIA Directive and as there is no mention of the EIA Directive in Regulation 16, the Court would be confined to considering the statutory challenge in terms of the 1999 Regulations alone. That could mean that the petitioner would be denied the opportunity to challenge BEIS’ decision on the EIA, because Regulation 16 does not refer to the EIA Directive.
Lord Boyce of Duncansby disagreed, and held that there was nothing to prevent a petitioner seeking to make such a challenge under Regulation 16; insofar as the 1999 Regulations fail to implement the EIA Directive, the EIA Directive has direct effect and therefore the Court will apply the terms of the EIA Directive in any action under Regulation 16. That means there is no need for the petitioner to be concerned about the failure to fully implement the EIA Directive in the 1999 Regulations.
The Court also considered whether an appeal under Regulation 16 (which provides for applications in connection with the “grant of consent”) may relate to both the agreement of the Secretary of State for BEIS and the consent of the OGA, or has a narrower scope so that it allows challenge only to the OGA consent itself (which would then exclude the EIA considerations). It was held that the agreement of BEIS is such an integral part of the consent process that it is “a condition precedent to the OGA granting consent”. The BEIS decision dealt with precisely the environmental issues that the 1999 Regulations were designed to address and therefore it would be incoherent if any challenge under Regulation 16 could not address the BEIS decision as well as the OGA decision. The petitioner therefore had to be able to challenge the BEIS decision as well as the OGA decision in its Regulation 16 application and, indeed, BEIS appears to have conceded this point.
Consequently, since the issues which the petitioner was concerned about in relation to its statutory appeal mechanism (namely the fact that the EIA Directive had not been fully implemented and the assertion that the BEIS decision could not be challenged under Regulation 16) were not going to materialise then the judicial review was unnecessary – the petitioner could simply proceed with its statutory appeal.
The Scottish action followed on from judicial review proceedings in the High Court in England, which were settled by way of a consent order and in connection with which the Secretary of State for BEIS accepted that the 1999 Regulations failed to properly transpose the EIA Directive into UK law. As a result there is an ongoing consultation as part of a review of the 1999 Regulations and the implementation of the EIA Directive. Accordingly, Lord Boyce of Duncansby held that it would not be “an appropriate use of the supervisory jurisdiction” of the Court to consider the matter.
There have been a number of attempts in recent years by environmental groups to bring challenges to regulatory decisions in the oil & gas industry through court proceedings. They have had some, although not universal, success. Although this particular application for permission to proceed by way of judicial review was unsuccessful, it seems likely that these groups will continue to bring these issues before the Court and regulators and industry companies will need to continue to be ready to respond.
A full copy of the Court’s decision can be found here.