On 18 December 2012 the Department of Energy and Climate Change (DECC) published a response (the “Response”) to the findings of an independent review of health and safety and environment standards for the UK offshore oil and gas regime (the “Maitland Review”). The Maitland Review, published in December 2011, was chaired by Professor Geoffrey Maitland of Imperial College and was commissioned by ministers following regulatory scrutiny at UK, EU and international level following the Deepwater Horizon incident. The Maitland Review panel was tasked with recommendations from official reports relating to Deepwater Horizon, their relevance to the UK and to inform any modifications to the present regime as necessary. The Response follows the efforts of a steering group considering the Review’s proposed dialogue with comprising DECC, the HSE, the MCA and Oil and Gas UK. Announcements in respect of implementing measures are anticipated in 2013. We shall report on the implications of some of the key determinations shortly.
The key points arising out of the Maitland Review
The Maitland Review acknowledged amongst other points the strength and robustness in the existing regime, the high regard held for UK regulators both domestically and internationally and the extent to which pro-active efforts by the industry and regulators have been made to further enhance measures since Deepwater Horizon. However, the review also identified areas which could be improved setting out recommendations for further action aimed at improving the effectiveness of the existing system.
Main areas for improvement
26 proposed recommendations for improvements were identified in the Maitland Review. Some of the recommendations have been accepted in full; others partially accepted; while for some recommendations both regulators and industry have determined that safety issues may best be achieved through an alternative approach. Where appropriate clear timelines for delivery have been set. Each area had numerous recommendations. The key recommendations together with a brief indication of the Government response are outlined below on a non exhaustive basis. Reference should be made to the Response itself for full details of any alternative approaches proposed.
1. The assured implementation of safety and environmental management systems:
- Recommendation 2.1: The development of the concept of the “Environmental Assurance Plan” is presently being considered by industry – this may involve the use of the Environmental Statement or the Environmental Management System as live tools to facilitate continuous goal setting approach and improvement. (Accepted in full)
- Recommendation 2.1: The identification and consistent treatment of more generic aspects of environmental assurance documents to ensure focused attention on areas of localised or specific risk. (Accepted in full)
- Recommendation 2.2.1: Industry taking a greater ownership role of existing regulatory requirements including the review of contractual arrangements for preparing and updating documents and devising tools to progress improvement in assessment and protection. (Partially accepted)
- Recommendation 2.3: The regular review and revision of guidance documents relating to offshore environmental impact assessment, enforcement and regulatory activities. (Accepted in full)
- Recommendation 2.4: The independent periodic review of a selection of approved Environmental Statements and Oil Pollution Emergency Plans (focusing on high risk wells). (Partially accepted)
- Recommendation 2.6.1: Regular testing of the deployment of capping devices and requirements for maintenance, testing, training and verification. (Alternative approach suggested)
- Recommendations 2.7.1 and 2.7.2: R&D regarding subsea application of dispersants and associated guidelines. (Accepted in full)
2. Improved learning and processes for disseminating best practice:
- Recommendation 4.2.1: The industry should agree principles to ensure concerns about proprietary information and legal exposure do not prevent rapid knowledge sharing amongst operators which could help mitigate against serious incidents. (Accepted in full)
- Recommendation 6.1.1: Regulators to work with industry to develop competency guidelines for different offshore job functions and audit processes. (Accepted in full)
- Recommendation 7.2.1: Operating companies to take steps to ensure safety representatives are provided with appropriate training (above the minimum), are involved in safety cases and encouraged to report process safety concerns. (Accepted in full)
3. Further integration of regimes with the existing regulatory system
- Recommendation 9.2.1, 9.2.2 and 9.2.3: More formal mechanisms should be established to ensure seamless working between regulators. The preferred option is the creation of a joint “Competent Authority” similar to the mainland. (Partially accepted and alternative approach suggested)
4. Clarification of the command and control structures in the event of a spill
- Recommendation 3.1.1: The point at which command responsibility for the containment/clean-up operation should transfer from operator or contractor to the Government should be clarified. (Partially accepted and alternative approach suggested)
- Recommendation 3.2: The establishment of a communication function to brief media and Government in the event of an incident of national significance. (Partially accepted and alternative approach suggested)
- Recommendation 3.4.1: More frequent contingency exercises and smaller scale exercises (Partially accepted)
5. Robust arrangements to cover liabilities in the event of spills
- Recommendation 8.1: The requirement to submit to DECC independent third party verification by an insurance expert of both the estimated costs and the ability to pay including the suitability of insurance cover to meet costs prior to consent being provided to drill a well. (Not accepted. Alternative approach suggested – See our Law Now on Financial Responsibility Guidelines)
- Recommendation 8.2.2: Third party costs for high risk deepwater wells should be revised upwards. The costs should cover a 90 day release. (Partially agreed and alternative approach recommended)
- Recommendation 8.3: DECC should discuss ecosystem/biodiversity damage with industry with a “view to introducing provision to cover this aspect”. The suggestion is that the provision may be a charge in the event of an incident to fund long term remedial work. (Not accepted. Alternative approach suggested- will be addressed in 2014 as part of the review of the Environmental Liability Directive or as a result of the proposed EU Offshore Safety Directive)
- Recommendation 8.4: The urgent adoption of a clear claims and compensation procedure taking into account evaluations of the Deepwater Horizon claims. (Fully accepted)
6. Intensified R&D to develop improved avoidance, capping, containment, clean up and impact monitoring of major offshore oil spill incidents.
- Recommendation 11.1.1: The industry should work with operating and service companies to identify potential technology solutions to lower the risks of deepwater drilling, monitor compliance, improve best drilling practice, oil spill remediation and clean-up. (Fully accepted)
- Recommendation 11.1.2: Regulators should encourage the development and implementation of new technology addressing offshore safety and environmental concerns. (Fully accepted)
- Recommendation 11.1.3 and 11.1.4: Regulators should identify key offshore safety and environmental technology gaps. Government should make this a priority area for joint-industry government project funding. (Fully accepted)
The Response makes clear that it is work in progress. A new senior oversight group, comprising DECC, the Health & Safety Executive and the Maritime and Coastguard Agency, will supervise the successful implementation of the Response.
Please click here for a copy of the report of the Maitland Review.
Please click here for the Response to the Maitland Review