Our previous posts on the Offshore Safety Directive (“OSD”) discussed some of the anticipated new regulatory requirements as well as what companies and the UK Government need to be considering to get ready for the OSD’s implementation. We will be looking further into some of the tricky issues once the HSE and DECC’s hotly anticipated consultation paper and draft statutory instruments have been published, hopefully this month.
The forward thinking amongst you will already be asking “what’s next?”. “Quite a lot” is the answer. With further reforms on the horizon in both the civil and criminal liability spheres, the OSD appears to be only the EU’s first step in reforming our offshore environmental and safety regimes in response to the Macondo disaster.
The offshore oil and gas industry will be subject to common rules governing a range of safety and environmental management issues (the OSD), together with a common liability regime to govern marine remediation in the event of a major spill (the Environmental Liability Directive). There are, however, two other important areas of legal liability that the OSD does not cover and that remain a matter of national law within the EU:
- criminal liability (e.g. punitive fines imposed by courts or custodial sentences for senior managers); and
- liability to pay damages (e.g. compensation to fishermen for economic losses caused by an oil spillage, or to coastal businesses for losses caused by coastal pollution).
This may change. The European Commission is required to:
- report to the Parliament and Council by 31 December 2014 on the availability of financial security instruments, and on the handling of compensation claims;
- examine the appropriateness of bringing certain conduct that leads to a major offshore accident within the scope of Directive 2008/99/EC on the protection of the environment through criminal law and report on its findings by 31 December 2014; and
- report by 19 July 2015 on its assessment of the effectiveness of liability regimes in the EU in respect of damage caused by offshore oil and gas operations.
The Commission commissioned initial research on these areas whilst the OSD was still being negotiated, with Maastricht University completing its report on civil liability and financial security for offshore oil and gas activities on 28 October 2013.
The reports the Commission is preparing will be accompanied by legislative proposals where appropriate. Offshore oil and gas companies in the EU would be well advised to keep a close eye on these developments. It may be through this route that we see the establishment of a more US-style regime for levying fines and imposing liability following offshore spills.