10.3 Environmental protection in the petroleum industry

10.3.1 Introduction whole, the world is witnessing an internationalization of environmental controls, as international law-making The Oil and Gas (O&G) industry, by its very nature, is on environmental matters is becoming more environmentally intrusive. Various environmental centralized, thus reducing the room for standard problems arise throughout the entire petroleum cycle, setting at the individual state level. including upstream and downstream phases, but they International regulations, primarily in the form of especially occur at the stage of O&G Exploration and various international treaties, often directly or Production (E&P) and transportation. The indirectly determine (through the process of national international petroleum industry is encountering implementation), both the content of national increasing pressure from governments and civil regulations, and the general conduct of states and the society for continued enhancement of its performance industry. At the global level, there is a large group of from the point of view of limiting its impact on the binding instruments as well as numerous soft law environment. (non-binding) type documents of relevance to the oil Posing a serious challenge to the O&G industry and gas industry. The most important of these will be are: a) demands for significant reduction of hazardous discussed in this paper, which will provide an in-depth wastes at source; b) more stringent regulation of analysis of some selected areas of international discharges and emissions from petroleum production environmental regulation of particular concern to the installations and refineries; c) stricter controls of oil E&P activities. This will be followed by a more transportation by ships and pipelines; and d) general overview of the national environmental legal rehabilitation of the production sites upon frameworks and industry-specific environmental abandonment and increased energy efficiency. At the management practices. same time, international petroleum companies are exposed to a rapidly growing body of international and national regulations, standards and various guidelines, 10.3.2 Environmental impact as well as to risks associated with environmental of the petroleum industry litigation. Three main levels of regulation can be identified O&G activities always entail certain environmental within the complex and intertwined web of effects, or impacts, at local, regional and even global environmental norms and standards that currently level. These impacts vary depending on the type of exist: international (global and regional); national; and activity – petroleum E&P, transportation by ships or corporate self-regulation in the form of industry-wide pipelines, refining, processing of crude oil and gas or individual company guidelines. The balance products and burning of fossil fuels for energy between various levels of regulation and their relative production, as well as its scale, location (onshore or importance primarily depends on the type and nature offshore) and the nature and sensitivity of the of activity in question. The higher the potential for surrounding environment. international implications – whether in the form of Petroleum E&P activities are accompanied by a pollution or any other transboundary effect – the more variety of operational discharges, some of which are prominent the role played by international law. On the more harmful than others. At the E&P stage, most of

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the impact is relatively localized, but may acquire a submarine petroleum pipelines’ construction and transboundary dimension in the case, for example, of operation have the potential for a variety of an offshore development. Seismic operations and environmental impacts, from the destruction of exploratory drilling are usually associated with noise, habitats and clearance of vegetation during the vibration, various disturbances of the local construction, to oil spillages and leakages resulting environment – including vegetation and wildlife – soil from possible pipeline ruptures due to natural and erosion and changes in surface hydrology. Onshore man-related causes. The impact of thousands of activities may require construction of roads and construction workers on the local environment during vegetation clearance over significant territories. several years of construction can be massive. During exploration drilling, discharges are mostly Trenching for buried submarine pipelines creates composed of drilling fluids and cuttings, which may major impact on the benthos environment and habitats. contain hydrocarbons and surface-active chemicals. Impact on wetlands and surface water bodies may be Similarly, produced waters at varying degrees of particularly serious. salinity are discharged. Disposal of waste, atmospheric At the stage of processing oil and gas, petroleum emissions and discharges of effluents, containing oil, refineries and petroleum distribution systems generate chemicals and other harmful substances is a common a series of different kinds of hazardous wastes. environmental problem. These may also contain Refining operations produce wastes from each step of hydrocarbons and residual treatment fluids. Although the refining process: both water and sludges impact during this stage of operations is usually contaminated with petroleum, hazardous waste relatively minor and confined in terms of time and containing persistent and toxic contaminants, spent space, it can be substantial in sensitive areas. catalysts (which often contain heavy-metal Impact becomes more pronounced during constituents), as well as atmospheric emissions such as production activities, as this phase involves active benzene, toluene and other toxic air pollutants. recovery of hydrocarbons from producing formations. Finally, petroleum processing – especially burning Operations at the development and production stage of the fossil fuels – is the major source of criteria air often result in increased discharges. This stage is also pollutants: Particulate Matter (PM), carbon dioxide characterized by growing risks of accidental pollution (CO2), nitrogen oxides (NOx), carbon monoxide (CO), by oil, soil and water contamination from spillage and hydrogen sulphide (H2S), and sulphur dioxide (SO2). leakage. In particular, these emissions lead to two principal Rehabilitation, restoration, reinstatement, environmental problems: long-range transboundary air reclamation of the petroleum E&P sites – including pollution causing acid rain; and more importantly, the disposal of offshore oil platforms – are among the global warming as a result of build-up of the so-called most technically and economically serious problems greenhouse gases in the atmosphere. The latter is a which face the petroleum industry in the long-term problem of a truly global proportion, of concern to perspective. As oil fields approach the end of their both international community and global petroleum productive life, the question of what to do with industry. existing structures has to be addressed. Thus, the main environmental media affected by Decommissioning covers: a) cessation of well various oil and gas activities include the atmosphere, operations; b) removal of plant and equipment; aquatic environment (both freshwater and marine), c) removal or partial removal of any fixed or floating terrestrial ecosystems – especially structures; d) removal or stabilization of drill cuttings; environmentally-sensitive, including wild fauna and e) decommissioning or removal of pipelines; f ) and flora. The primary sources of atmospheric emissions rehabilitation of the seabed, along with any related include combustion processes, gas flaring, fugitive onshore activities (e.g. recycling or stabilization of gases from loading operations, and particulates from waste). Although decommissioning, as such, does not other burning sources. Waste streams from E&P pose serious threats to the environment, abandoned operations, including produced water, drilling fluids, offshore installations can create obstacles for other process and drainage water and so forth affect the uses of the sea – primarily navigation and fishing aquatic environment. Potential impact on terrestrial activities – and their complete removal is seen as the ecosystems, including soil, plant and animal best solution in the majority of cases. communities, arise from construction, contamination At the transportation stage of oil and petroleum as consequence of spills and solid waste disposal, and products, the operational pollution by discharges of other physical disturbances. Consequently, various oily waters and drainage from ships, as well as oil petroleum activities constituting the entire spills resulting from collisions or other accidents hydrocarbon fuel cycle are exposed to environmental involving oil tankers is of primary concern. On-land or regulations – international and national – that deal

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with specific areas of the global environment, such as at the end of the life of petroleum resources, an annual water, air, biodiversity and others. sustainable yield equal to the income portion of the receipts from petroleum resources (Gao, 1998). The overall objective of this approach is to save a portion 10.3.3 International environmental of the state’s wealth for future generations by, among legal frameworks relevant other things, creating petroleum trust funds and to the petroleum industry similar financial mechanisms. The principle of prevention. Protection of the International legal principles environment is better achieved by preventing environmental harm than by remedying or International law plays an increasingly important compensating for such harm. Not only is harm role in determining the response to the energy-related sometimes irreversible, but preventive measures are environmental problems by governments, industry and usually more effective and less costly than ex post international institutions. Some basic concepts that facto action. They are also most efficient when aimed emerged at the international level and that have been at the sources of environmental impact. The preventive endorsed in numerous global and regional agreements approach is applicable to all actors wherever the and accepted at the national level, provide the legal consequences of the activities may be felt. This foundation that individual countries and petroleum principle does not require the prevention of all companies have to follow or take into account while possible harm, but rather imposes an obligation to enacting, enforcing or complying with relevant minimize detrimental consequences of permissible national legislation. These concepts have crystallized activities through regulation. The principle of into a set of legal principles that are governing the prevention is usually implemented by means of petroleum industry’s operations worldwide. application of minimum standards (emission controls, Sustainable development. This is commonly emission limit values, environmental quality standards defined as “Development that meets the needs of the and objectives) or use of the Best Available Techniques present without compromising the ability of future (BATs) or Best Environmental Practices (BEPs). BAT generations to meet their own needs”. Economic is understood as the latest stage of development (state development and environmental conservation should of the art) of processes, facilities or methods of be mutually supportive and should be pursued operation, which indicate the practical suitability of a nationally and internationally. The concept of particular measure for limiting emissions and waste. sustainable development calls for integrating Techniques include both the technology used, and the environmental considerations into developmental way in which the installation is designed, built, policies, programmes and specific projects. It implies maintained, operated and dismantled. BEP refers to that natural resources should be exploited in a wise or the application of the most appropriate combination of optimal manner. Sustainable development is about environmental control measures and strategies. ensuring that the petroleum industry contributes Environmental impact assessments are also widely lasting benefits to society through the consideration of employed to identify potential threats to the social, environmental, ethical and economic aspects by environment so that preventive measures can be taken. maximizing its broader contributions to society while The precautionary principle. Precaution requires minimizing its negative impacts. While a particular taking appropriate action, to anticipate, prevent and petroleum development may not be sustainable monitor the risks of potentially serious or irreversible because the reserves will deplete over time, it can still environmental harm from human activities, even make a valuable contribution to a society’s overall without scientific certainty. The precautionary pursuit of sustainable development by creating approach is linked with the principle of prevention, but employment and paying taxes and royalties that can is designed to apply to a situation of scientific contribute to government services. With respect to uncertainty by reversing the traditional burden of non-renewable natural resources, including petroleum, proof. It calls for action even when there is no full which are finite by definition, a concept of scientific knowledge about the precise degree of risk quasi-sustainability has been advanced. In essence, of potentially serious or irreversible environmental this means, that petroleum development should be damage. The precautionary principle’s relevance to the aimed at ensuring the maximum recovery of the petroleum activities is obvious. resource while minimizing adverse effects on the The ‘polluter pays’ principle. The costs of environment. More generally, quasi-sustainability is preventing, controlling and reducing pollution understood as a compensating investment in a (harm to the environment) are to be borne by those sustainable substitute in such a manner as to provide, responsible for causing such harm and the

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consequential costs. The principle is primarily an The European Community environmental legal economic one aimed at internalizing the costs of framework represents probably the most extensive and pollution control, clean-up and protection measures. comprehensive body of environmental principles, Implementation of the ‘polluter pays’ principle is rules, standards and procedures at the regional level. usually achieved at the national level through the While the general objectives and principles of the EC use of various economic instruments, such as law are set out in the European Community Treaty, the taxation, charges, insurance, civil liability and Community policy on the environment has been compensation. progressively developed in six action programmes, The variety of international regulatory instruments addressing among other key areas; a) sustainable of relevance to the petroleum industry is extremely management of natural resources; b) climate change; broad. Their scope and emphasis differ depending on c) integrated pollution control and prevention of the nature of activities regulated, type of the protected waste; d) reduction in consumption of non-renewable environmental media, geographical reach, number of energy. These policy objectives are reflected in more the countries involved and so forth. Along with truly than 250 environmental directives, regulations and global conventions, especially dealing with protection decisions, which affect – either directly or indirectly – of the marine environment, biodiversity and the petroleum industry. atmosphere, there are geographically limited regimes Among the most important EC instruments is the adopted either under the auspices of the United 96/61/EC Directive on Integrated Pollution Prevention Nations (UN), such as the UN Economic Commission and Control (IPPC Directive), which is aimed at for Europe (UNECE), organizations of regional enforcing an integrated approach to controlling economic integration, such as the European pollution arising from various activities. These include Community (EC), or with regard to particular regions combustion energy installations, mineral oil and gas (regional seas or geographically-specific areas, such as refineries, chemical installations for the production of North America). simple hydrocarbons, oxygen-containing hydrocarbons, Some areas of international environmental and sulphurous and nitrogenous hydrocarbons. The regulation that are especially relevant to the petroleum IPPC Directive establishes a mechanism of pollution sector – primarily including the marine environment, control through the system of authorizations and global atmosphere and climate change, as well as permits based on the concept of BAT. Under the conservation of biodiversity – will be discussed in 1985/1997 EIA Directives (Directives 85/337/EEC and detail in the following part of this paper. It is worth 97/11/EC on Environmental Impact Assessment) both having a brief overview of other important regulatory up and downstream operations and facilities (petroleum regimes which affect international petroleum E&P, crude oil refineries, oil and gas pipelines, large operations. thermal power plants, storage installations, and so on) The 1994 Energy Charter Treaty (ECT) is one such are subject to mandatory assessment. instrument and the first of its kind focusing entirely A wide range of the EC legislative instruments and specifically on the energy sector. Although its deal with the protection and improvement of various geographical scope is currently limited, mostly to environmental components, such as air, freshwater Eurasia (western and central Europe, former USSR, resources, marine environment, nature and Japan and Australia), this instrument, in principle, is biodiversity, ozone layer, climate change. They also open for accession of other states regardless of their address specific activities, issues or substances of geographical location. Along with provisions dealing concern, such as industrial plants, sulphur dioxide and with trade in energy products and investment nitrogen dioxide, waste disposal and hazardous promotion and protection, it pays attention to substances, etc. Suffice it to mention in this respect energy-related environmental issues by encouraging Directive 94/22/EC on the Conditions for Granting application of the precautionary principle and of the and Using Authorizations for the Prospection, ‘polluter pays’ principle. An environmental article of Exploration and Production of Hydrocarbons, or the the ECT calls for the minimization of harmful impacts Directive 84/360/EEC on the Combating of Air from all operations within the energy cycle, Pollution from Industrial Plants. environmental integration in energy policy, reflection of environmental costs in energy price, harmonization International protection of environmental standards and so forth. A special of the marine environment protocol on energy efficiency and related environmental aspects contains more detailed General remarks provisions aimed at reducing environmental impacts of There are a large number of global and regional energy systems and activities. conventions which are primarily applicable to

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pollution of the marine environment by oil – either as Since the early 1970s a variety of regional treaties a result of operational discharges or accidents and protocols covering distinct maritime areas have involving vessels and offshore platforms. International evolved to deal with various forms of marine legal regime of pollution prevention by oil and other pollution, including pollution from offshore E&P hazardous substances can be regarded as the most activities. Currently, there are some 20 conventions developed and is based on: the 1982 United Nations dealing with marine environmental protection on a Convention on the Law Of the Sea (1982 UNCLOS); regional basis. A regional approach, for example, has the 1973/1978 International Convention for the been chosen by the states bordering the north-east Prevention of Pollution from Ships (known as Atlantic, the Baltic, the Mediterranean and the Black MARPOL 73/78, MARine POLlution); and some seas, the Persian (Arabian) Gulf, the Red Sea and the framework regional conventions adopted with respect Gulf of Aden, the west and central- African region, the to specifically defined maritime areas. east-African region, the east-Asian region, the South The 1982 UNCLOS is an ‘umbrella’ instrument Pacific region, the south-east Pacific region, the whose primary objective is to create a comprehensive south-west Atlantic region and so forth. The United legal regime for the world’s seas and oceans. It aims to Nations Environment Programme (UNEP) in apportion rights and obligations among various particular, has been instrumental in fostering a categories of states, and to serve as a basis for further regional identity in combating marine pollution development of particular rules and standards in through its Regional Seas Programme. combating marine pollution, including pollution arising from navigation and seabed activities. The Operational pollution from petroleum UNCLOS grants states the sovereign right to exploit E&P operations their natural resources pursuant to their environmental The 1982 UNCLOS is the principal global policies, in accordance with their duty to protect and instrument which deals with prevention and control of preserve the marine environment. Part XII of the marine pollution, including from land-based sources UNCLOS specifically deals with the protection of the and offshore petroleum development. Articles 208 and marine environment from various sources, including 214 embrace both aspects of anti-pollution measures: exploration and production of offshore mineral regulation and implementation. Coastal states are resources. It requires states to take measures to required to adopt and enforce laws and regulations in prevent, reduce and control marine pollution from any respect of marine pollution arising from seabed source, using the best practical means at their disposal, activities. Such laws and regulations are to be no less and applying generally accepted standards, norms and effective than international rules, standards and recommended practices and procedures. recommended procedures and practices. Similarly, Many such standards are contained in the states are called upon to harmonize their policies at the MARPOL 73/78, which is aimed at combating appropriate regional level and to establish global and pollution of the marine environment by discharges of regional rules to control and prevent marine pollution harmful substances or effluents containing such from offshore installations. substances, including oil. Its primary objective is to In its Agenda 21, the 1992 UN Rio Conference on prevent and control the vessel-source marine pollution Environment and Development (UNCED) expressly but it also applies to certain environmental aspects of referred to the offshore petroleum activities as the offshore E&P operations. requiring additional measures to address degradation Alongside cooperation at global level, regional of the marine environment from discharges and approaches have proved to be a popular way of dealing emissions. with environmental problems of common concern. The MARPOL 73/78 applies to discharges from Frequently, in fact, the appropriate level for both vessels and offshore platforms, specifically to environmental action is the regional one, partly any releases – including “any escape, disposal, because this approach offers the opportunity for spilling, leaking, pumping, emitting or emptying”. custom-built regimes and more stringent legislative However, it does not apply to marine pollution directly standards – as limited membership often implies a resulting from offshore operations, for example, in higher common denominator. The importance of connection with the use of oil-based drilling muds or regional approaches, of course, is recognized in the leakage of oil during well testing. law of the sea itself. While the 1982 UNCLOS is Annex I of the MARPOL 73/78, which deals with primarily concerned with establishing a global legal pollution by oil, applies to machinery space drainage framework governing all aspects of ocean use, it from drilling rigs and other platforms. As to offshore makes express reference to regional rules, programmes processing drainage, production water discharge and and cooperation. displacement discharge, there are currently no global

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rules or standards applicable to these effluents. Such rather relatively general rules and concepts, which, discharges are partly dealt with by regional apparently, are to be further developed through the conventional regimes and partly by national decisions and recommendations of the OSPAR regulations, which often apply different standards. Commission, entrusted with development of Protection of the marine environment against programmes and measures for the elimination and pollution by garbage is governed by Annex V, which reduction of marine pollution. The regulations adopted equally applies to vessels and offshore installations. It by the OSPAR Commission cover most of the contains special provisions concerning fixed or important aspects of direct operational pollution: floating platforms engaged in the exploration, production of oily waters and drilling muds and exploitation and associated processing of seabed drilling cuttings. Much of the regulatory work of the mineral resources. OSPAR Commission, with regard to the reduction of Finally, Annex VI on air pollution sets limits on discharges of oil from offshore installations, has been sulphur oxide and nitrogen oxide emissions from ship conducted by the Offshore Industry Committee. and platform exhausts and prohibits deliberate Annex III of the 1992 OSPAR Convention emissions of ozone-depleting substances. prohibits any dumping of wastes or other matter from While practically all regional conventions establish offshore installations, which does not apply, however, general provisions concerning pollution from, or in to discharges and emissions. It is provided instead, that connection with, seabed activities, some have been the use in offshore sources, or the discharge or supplemented by protocols and subordinate emission from them, of substances – which may reach instruments which address the offshore E&P activities. and affect the maritime area – must be strictly subject Certain regional regimes, especially those in the to the authorization or regulation by the competent maritime areas with significant hydrocarbon activities, authorities of state parties. It is evident that the current or potential, establish detailed regulations. OSPAR Commission will continue to play the most These include the Baltic Sea, the north-east Atlantic, important role in developing appropriate standards and the Persian (Arabian) Gulf and the Mediterranean Sea. regulations related to offshore activities. In the 1992 Convention on the Protection of the The 1976 Kuwait Regional Convention for Marine Environment of the Baltic Sea Area (Helsinki Cooperation in the Protection of the Marine Convention), the general obligation to take all Environment (1976 Kuwait Convention) has some measures to prevent pollution of the marine general provisions on pollution resulting from environment – resulting from exploration and exploration and exploitation of the continental shelf, exploitation of the seabed and the subsoil or from any and a special protocol concerning marine pollution associated activities – is elaborated in Annex VI, resulting from exploration and exploitation of the which constitutes an integral part of the Convention. It continental shelf (1989 Protocol). The latter requires sets out relatively detailed procedures and measures to that measures against marine pollution from offshore be realized by states with respect to offshore operations should be taken on the basis of “the best petroleum operations conducted in the areas under available and economically feasible technology”. The their jurisdiction. This procedure addresses a wide Protocol contains a broad range of range of issues, including implementation of BAT and pollution-prevention measures, from the licensing BEP, EIA and monitoring, discharges in the phases of system and EIA, to specific regulations of discharges exploration and exploitation, reporting and exchange of oil and oily waters, oil-based drilling fluids, of information, as well as contingency planning and water-based drilling muds, chemical substances, abandonment. Annex VI contains a number of garbage and sewage. provisions regulating operational discharges from The 1994 Protocol for the Protection of the offshore platforms in both the exploration and Mediterranean Sea against Pollution Resulting from exploitation phases which apply primarily to Exploration and Exploitation of the Continental Shelf oil-containing discharges. Provisions of Annex IV, and the Seabed and its Subsoil is the most elaborate which deal with discharges of garbage and sewage, document of its kind. The 1994 Protocol sets out also apply to offshore platforms. detailed provisions regarding authorization of offshore The 1992 Convention for the Protection of the exploration and exploitation operations, regulation of Marine Environment of the north-east Atlantic (1992 operational pollution, safety measures and emergency OSPAR, OSlo PARis Convention) has a special Annex situations, removal of installations, specially protected III dealing with the prevention and elimination of areas, and so forth. pollution from offshore sources. However, compared To summarize, despite the importance of offshore to other similar regional instruments, it does not hydrocarbon reserves and the growing attention being provide any technical requirements and standards, but given to the environmental impacts of offshore E&P

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activities – particularly as regards waste management regime, in addition to ships and other oil-related – there is presently no global regime regulating the facilities. entire spectrum of operational pollution from offshore Under the convention, states – subject to their oil and gas E&P activities. Instead, a combination of capabilities and availability of relevant resources – are general instruments, both in the form of hard law and required to cooperate and to render assistance to soft law, as well as technical regulations and standards, parties that request such assistance in cases of supplemented by more specific regional instruments, pollution incidents. The Convention requires that represents a constantly evolving legal framework for parties establish national systems for responding to oil controlling and abating this type of marine pollution. pollution incidents, including, as a basic minimum: a national CP; designated national authorities; and Accidental pollution by oil operational contact points in charge of oil pollution Legal instruments which govern accidental response. Parties – either individually or through pollution response and cooperation do not, as a rule, cooperation with other states and, as appropriate, other distinguish between various types of potentially relevant entities, including the oil industry – are hazardous activities and emergency situations. The required to establish: term emergency is generally used to define any • A minimum level of pre-positioned oil spill situation which causes, or poses, an imminent threat of combating equipment, proportionate to the risk seriously harming the environment or other legitimate involved, and programmes for its use. interests of other states or areas beyond national • Programme of exercises for oil pollution response jurisdiction. Substantial international legal practice has organizations and training of relevant personnel. developed over the last decades to deal with accidental • Detailed plans and communication capabilities for pollution. The main objective of most of the relevant responding to oil pollution incidents. international instruments is to harmonize national oil • A mechanism or arrangement to coordinate the pollution response policies and procedures, primarily response to oil pollution incidents with, if through unification of state contingency planning and appropriate, the capabilities to mobilize the improving preparedness to emergency situations. resources. The 1982 UNCLOS addresses the accidental In addition, the Convention requires that operators pollution connected with offshore activities in a very of offshore units have oil pollution emergency plans, general manner. The states are required to take which are coordinated with the national system for measures in order to minimize – to the fullest extent preparedness and response, and approved in possible – pollution from offshore installations, with accordance with established procedures. Those in particular emphasis being accorded to measures “for charge of offshore installations are to report without preventing accidents and dealing with emergencies”. delay about any event on their unit or any event at sea In the area affected by imminent or actual damage, involving a discharge of oil or the presence of oil to they should cooperate in eliminating the effects of the coastal state to whose jurisdiction this unit is pollution and preventing, or minimizing, the damage subject. through the promotion and joint development of A special role under the OPRC Convention is Contingency Plans (CPs). This is seen as the most assigned to the IMO. The IMO provides general effective means to tackle this type of pollution. guidance for states, and oil and shipping industries, Adopted under the auspices of the International assisting them in creating an organizational framework Maritime Organization (IMO), the 1990 International and preparing CPs at the local, national and Convention on Oil pollution Preparedness, Response international levels. The most important condition for and Cooperation (OPRC), is the only global the establishment and sustainable functioning of an international instrument of this kind. Its overall effective oil pollution response system is close objective was to create a basis for international cooperation between the oil and shipping industries cooperation in responding to pollution emergencies as and governments. This interrelationship is reflected in well as to enhance existing national, regional and two planning approaches that currently co-exist in the global capabilities concerning pollution preparedness international arena: the international industry’s and response, to facilitate mutual assistance, and to concept of a tiered response; and governmental develop and maintain adequate organizational and arrangements at the local, national and international technical infrastructures. The Convention deals levels. exclusively with emergencies involving pollution by Tiered response has been accepted as an petroleum in any form, including crude oil, fuel oil, operational concept that provides a convenient sludge, oil refuse and refined products. Offshore categorization of response levels, corresponding to the petroleum platforms are covered by the conventional severity of the spill, and a practical basis for planning.

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Governmental measures regarding preparedness and exchange and reporting in cases of emergency response are grouped as well. Group 1 normally pollution as well as providing guidelines for respective encompasses the entire national response system with reports. In addition, they call for the maintenance and the national CP as the basic document that defines the promotion of national and, if necessary, regional and national response policy. Group 2 consists of bilateral sub-regional plans, providing for mutual assistance of or multilateral response plans or agreements with parties and, in certain cases, determine how and on other countries as well as with competent regional what conditions such assistance should be conducted. bodies. Such multilateral arrangements have already Finally, the protocols establish certain institutional been developed for the Baltic and North seas as well arrangements, including the creation of special as for some maritime regions covered by the UNEP regional mechanisms charged with emergency Regional Seas Programme. Finally, group 3 is the communications and collecting and disseminating network of inter-regional plans or agreements. This information, coordinating of national response includes the operation of the IMO Oil Pollution activities, and in some cases, initiating clean-up Coordination Centre and relationships, both formal operations at the regional level. and informal, among the various regional bodies Finally, two regional protocols on seabed activities worldwide. add considerably to the body of international law The importance of effective regional arrangements dealing with pollution emergency – the 1989 Kuwait and response systems with respect to accidental Protocol and the 1994 Mediterranean Protocol. Among pollution is evident, as usually more than one coastal other provisions, the Protocols contain regulations state suffers from accidental pollution. No country, specifically tailored to pollution-emergency prevention regardless of its individual capability, can sustain the and response involving offshore installations. The state level of equipment and personnel necessary in the parties are required, inter alia, to ensure that every worst-case spill. These arrangements are similar in offshore installation which is to be used within their many respects. The North Sea and north-east Atlantic jurisdiction is properly certified for safety, in order to contingency agreements, the contingency measures guarantee that it will not cause accidental damage to with respect to the Baltic Sea and the UNEP regional the marine environment. No offshore operations may seas framework conventions and supplementary begin without a CP approved by a competent national protocols are particularly instructive in this respect. authority and coordinated with existing national or The 1983 Bonn Agreement for Cooperation in local CPs. The respective roles and powers of the dealing with Pollution of the North Sea by Oil and industry and the authorities should be fully understood Other Harmful Substances – which replaced an earlier before any oil spill emergency arises and explicitly 1969 Bonn Agreement – covers accidental pollution allocated in the operator’s CP as well as in any local from offshore installations presenting a grave and and national CP. Offshore operators are required at all imminent danger to the coast or related interests. It times to have available, and in good working order, promotes an active cooperation through a “equipment and devices to minimize the risk of two-dimensional approach, which combines accidental pollution and to facilitate prompt response preparatory and organizational cooperation as well as to a pollution emergency, in accordance with good cooperation following the casualty. It was the first oilfield practice”. agreement to introduce the principle of allocation of Along with global and regional contingency zones of responsibility, which was eventually arrangements, some maritime areas are covered by incorporated into other analogous agreements. The bilateral CPs, based on agreements between the two pollution emergency preparedness and response coastal states concerned, such as between the United measures applicable to the Baltic Sea area are very States and Canada of 1974 and 1977, and between the similar to those related to the North Sea with one US and Mexico of 1980. The number of bilateral exception: they constitute an integral part of a arrangements is relatively small, and they are applied comprehensive anti-pollution instrument – the 1992 predominantly to sensitive areas, such as the Arctic, or Helsinki Convention on the Protection of the Marine to areas intensively used for international navigation or Environment. The numerous conventions adopted offshore petroleum production. Not surprisingly, such within the scope of the UNEP Regional Seas CPs are more comprehensive and detailed than their Programme are almost identical in their approach to regional analogies as it is easier to achieve an effective pollution emergencies. degree of coordination on a bilateral, rather than Supplemental protocols dealing with pollution multilateral, level. emergencies are very similar, both in terms of their Such bilateral CPs include, inter alia, NorBritPlan structure and the substantive content of their between the United Kingdom and Norway with respect provisions. They define procedures of information to the North Sea, DenGer between Denmark and

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Germany, ManchePlan between the UK and France, and This conclusion is supported by the IMO 1989 the Canada-US Contingency Plan for the Beaufort Sea. Guidelines and Standards on the Removal of Though adopted with respect to different geographical Offshore Installations and Structures on the areas, these arrangements have similar objectives and Continental Shelf and in the Exclusive Economic features. Zone (EEZ). Although the IMO guidelines and standards are not binding, their authority makes them Decommissioning of offshore petroleum more than mere recommendations. The IMO installations Guidelines reiterate the partial removal approach The question of abandonment/removal of embodied in the UNCLOS. The states are requested decommissioned offshore installations has turned into to entirely remove all disused installations and a problem of practical concern with the aging of some structures, except where non- or partial removal is early offshore petroleum production areas. How this consistent with the guidelines and standards. The problem is to be resolved will be determined in many removal operation should be performed as soon as is respects by the applicable international legal reasonably practicable after abandonment or framework, based on a number of global and regional permanent disuse, and the IMO should be notified of agreements, soft law instruments and relevant state any installations or structures not entirely removed. practice. A case-by-case approach is promoted in order to The 1958 Geneva Convention on the Continental determine such special circumstances which may Shelf was the first international instrument which allow an offshore installation or part of it to remain in addressed the issue of abandonment. It requires situ. Evaluation of the following factors is particularly generally that the exploration and exploitation of the important: continental shelf must not result in any “unjustifiable • Any potential effect on the safety of surface or interference” with other activities in the sea. Whereas sub-surface navigation, or other uses of the sea. the construction and exploitation of installations are • The rate of deterioration of the material and its subject to this general provision, the issue of present and possible future effect on the marine abandonment is specifically addressed in art. 5.5, environment. which provides that “[a]ny installations which are • The potential effect on the marine environment, abandoned or disused must be entirely1 removed”. including living resources. The 1982 UNCLOS contains substantially • The risk that the material will shift from its differing provisions on the same matter in art. 60.3. position at some future time. Under the new formula, the requirement of a complete • The costs, technical feasibility, and risks of injury removal is not absolute. In certain cases, partial to personnel associated with removal of the removal is permitted, provided that appropriate installation or structure. publicity is given to the depth, position and • The determination of a new use or other reasonable dimensions of the remains. The criteria relevant to justification for allowing the installation or determining the extent of this partial removal include structure or parts thereof to remain on the seabed. the obligation to ensure safety of navigation and due The IMO Guidelines provide for the entire removal regard to fishing, the protection of the marine of all abandoned or disused installations standing in environment, and the rights and duties of other states. less than 75 metres of water and weighing less than As to the possible conflict of legal obligations 4,000 tons in air, excluding deck and superstructure. stemming from art. 60.3 of the UNCLOS vis-à-vis the The same requirement applies to all installations and complete removal requirement of the 1958 Geneva structures placed on the seabed on or after 1 January Convention, the issue must be considered depending 1998 standing in less than 1,000 metres of water and on the ‘participating’ status of states concerned. For weighing less than 4,000 tons. those states which are party to the UNCLOS, the latter The complete removal requirement is qualified by prevails, as between states parties, over the 1958 two exception clauses, based on certain factors. The Geneva Conventions on the Law of the Sea. Given that first allows a coastal state not to remove disused the overwhelming majority of states are now party to installations when they will serve a new use if the 1982 UNCLOS, provisions of the 1958 permitted to remain wholly or partially in place on the Continental Shelf Convention should be seen as seabed. The second gives a coastal state a right to redundant. The post-Geneva development of determine whether a complete removal of a platform is international law in the field indicates a major shift in technically feasible, extremely costly or likely to the state practice, from the requirement of absolute removal towards a more flexible approach regarding abandonment. 1 Emphasis added by the Author.

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create an unacceptable risk to personnel or the marine The 1994 Protocol does not request the complete environment. In addition, existing platforms in water removal of abandoned or disused offshore installations depths of greater than 75 metres or weighing more and pipelines. While the operator is in principle than 4,000 tons can be wholly or partially left in place required to remove any installation which is abandoned where it is determined by the coastal state that they do or disused, this is qualified by the reference to the not cause unjustifiable interference with other uses of guidelines and standards adopted by the competent the sea. Importantly, the IMO Guidelines require that international organization such as IMO. Provisions no installations should be placed on the continental regarding disused pipelines are even less stringent: they shelf or in the EEZ after 1 January 1998 unless the can be left in place – abandoned or buried – under the design and construction of such an installation permits condition that they neither cause pollution, nor its entire removal. interfere with other legitimate uses of the sea. Other requirements of the IMO recommendations The 1989 Kuwait Protocol only obliges the parties include: to empower their competent national authorities with • Adequate maintenance of abandoned or disused the right to require the operator of an offshore installations or their parts, projecting above the installation (platform or other seabed apparatus and surface of the sea, in order to prevent their structures) to remove the installation in whole or in structural failure. part to ensure the safety of navigation and in the • Provision of an unobstructed water column (no less interests of fishing. In the case of pipelines, the than 55 m) sufficient to ensure safety of navigation operators may be requested to flush and remove any above any partially removed installation that does residual pollutants from the pipeline, and to bury the not project above the surface of the sea. pipeline, or remove part and bury the remaining parts. • Complete removal (without any exceptions) of any The Protocol calls for the states parties to adopt a installations located in approaches to or in straits common policy on the removal, but only when they or routes used for international navigation. have a common interest in fishing grounds in the • Indication of abandoned parts on nautical charts conventional area. It further requires states, while and their proper marking, where necessary, with determining whether or not installations should be aids to navigation. removed, to take into account any guidelines issued by Finally, states must ensure that legal title to their regional organization. installations which have not been entirely removed is unambiguous and that responsibility for maintenance Regulation of the disposal of offshore installations and the financial ability to assume liability for future as a form of dumping damages are clearly established. Parallel to the removal regimes, there is a body of From a technical point of view, the IMO international norms and standards governing disposal Guidelines constitute a well-balanced document of offshore installations as a form of dumping at sea. reflecting the best solutions of the problem of “It is to these rules rather than those on removal that abandonment currently available. From the legal point reference must be made in assessing the legality of of view, however, they do not have the status of such operations as the disposal of concrete platforms international norms creating obligations for states. by towing them to a deep-water dumping site, or the Obviously, nothing can preclude states from adopting on-site ‘felling’ of steel platforms in such a way that and implementing the IMO Guidelines in their no part of them would remain at a height above the domestic practice and legislation. However, they seabed of more than that prescribed by international cannot prevail over existing treaty obligations, unless standards” (Brown, 1992). they are transformed into law through proper legal The 1982 UNCLOS deals with the issue of procedures or accepted as a rule of general offshore disposal in a very general manner. It obliges international law by state practice. states to adopt global and regional rules, standards Parallel to these global conventional regimes, the and recommended practices and procedures as well issue of abandonment has been addressed on a as national laws and regulations to prevent, reduce regional level, particularly in oil-rich maritime and control pollution of the marine environment by regions. Among numerous conventional regimes, those dumping and to take other necessary measures in this related to the north-east Atlantic, the Mediterranean respect. Dumping is not to be carried out without the and the Persian/Arab Gulf regions are of particular permission of the competent authorities of states. The interest in this respect. Additional protocols on express prior approval of the coastal state is required, offshore E&P activities, such as the 1994 if the dumping is to be carried out within the Mediterranean Sea Protocol, along with other matters, territorial sea, EEZ, or onto the continental shelf of address the issue of abandonment. the latter. Dumping includes, among other things,

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any deliberate disposal of platforms or other incineration, does not apply to any deliberate disposal man-made structures at sea. in the maritime area of offshore installations and The 1972 London Convention on the Prevention of offshore pipelines, referring this matter to Annex III. Marine Pollution by Dumping of Wastes and Other The central provision of the latter is art. 5 which Matter (1972 LDC) is another global instrument provides inter alia: directly related to the issue of abandonment. It is • No disused offshore installation or disuse[d] applicable to all marine areas except the internal offshore pipeline shall be dumped and no disused waters of a coastal state. The 1972 LDC permits offshore installation shall be left wholly or partly in dumping to be carried out provided certain conditions place in the maritime area without a permit issued are met. The severity of these conditions varies by the competent authority of the relevant according to the danger to the environment presented contracting party on a case-by-case basis. by the materials themselves and there is a ‘black list’ • No such permit shall be issued if the disused containing materials which may not be dumped at all. offshore installation or disused offshore pipeline Although the Convention does not apply to the contains hazardous substances which may result in dumping of wastes or other matter from offshore harm to living resources and marine ecosystems, installations, the abandonment of installations at sea, damage to amenities or interference with other either total or partial, is clearly covered. Disposal of legitimate uses of the sea. the platform requires a prior special permit. This • Any contracting party which intends to take the permit may be issued only after careful consideration decision to issue a permit for the dumping of a of all relevant factors, including the characteristics of disused offshore installation or a disused offshore the dumping site, possible effects of the dumping on pipeline placed in the maritime area after 1 January amenities, marine life and other uses of the sea, and 1998 shall, through the medium of the the practical availability of alternative land-based Commission, inform other contracting parties of its methods of disposal. reasons for accepting such dumping, in order to The 1996 London Dumping Protocol, which upon make consultation possible. its entry into force (in March 2006) has replaced the Thus, the OSPAR Convention distinguishes between 1972 LDC, represents a major change of approach to the disposal in situ or elsewhere at sea the question of how to regulate the use of the sea as a – considered as dumping – and leaving the installation depository for waste materials. One of the most in place. However, notwithstanding the fact that it is important innovations is the introduction of the defined as a case of dumping, disposal at sea is precautionary approach. The 1996 Protocol is much excluded from the scope of the Dumping Annex and is more restrictive than the 1972 LDC, prohibiting in subjected to the same regime as leaving in place. This is principle all dumping. There are a few exceptions to a symptomatic departure from traditional and somewhat this which include platforms or other man-made confusing dualistic approach to abandonment structures at sea. The contracting parties are required – complete or partial removal vis-à-vis dumping – to designate an appropriate authority or authorities to towards an all-inclusive model, evidently designed to issue permits in accordance with the Protocol. The avoid the potential for conflicting regulations. Protocol recognizes the importance of implementation The OSPAR Convention adopts the same and detail compliance procedures. case-by-case approach in determining admissibility of Among several regional conventions particularly such a disposal as was introduced in the IMO relevant in this respect is the 1992 Convention for the Guidelines. Other regional dumping agreements also Protection of the Marine Environment of the north- apply to the disposal of platforms and other man-made east Atlantic (1992 OSPAR Convention) which structures at sea and their equipment, which is not replaced an earlier 1972 Oslo Dumping Convention. entirely prohibited but requires a prior authorization The 1992 OSPAR Convention does not prohibit by a special national body in charge of these matters. dumping, but obliges parties to take all possible steps Issuance of such permits is dependent upon to prevent and eliminate pollution by dumping, which consideration of relevant factors, including also applies to dumping of offshore installations and characteristics of the matter, of dumping site and offshore pipelines. However, dumping does not disposal method, as well as possible effects of disposal include the leaving in place – wholly or partly – of a on amenities, marine life and other uses of the sea. disused offshore installation or disused offshore pipeline, provided that any such operation takes place Protection of the global atmosphere in accordance with any relevant provision of the Convention and with other relevant international law. One of the negative environmental impacts of the Annex II, which deals specifically with dumping and petroleum industry is pollution of the atmosphere as a

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result of normal E&P operations and more generally Convention and some of the Protocols are quite as a consequence of the combustion of fossil fuels and important from the petroleum industry perspective. vehicle exhaust emissions. A number of international The 1999 Protocol to Abate Acidification, treaties, both global and regional, dealing with these Eutrophication and Ground-level Ozone sets emission problems are of concern to the O&G industry. The ceilings for four pollutants for 2010: sulphur, NOx, major risk to the global atmosphere comes from the VOCs and ammonia. The Protocol also sets tight limit so-called GreenHouse Gases (GHG), namely carbon values for specific emission sources, including dioxide and methane, one of the principal sources of combustion plants, and requires BAT to be used to which is burning of fossil fuels, including petroleum. keep emissions down. The 1998 Protocol on Persistent The 1992 UN Framework Convention on Climate Organic Pollutants (POPs) focuses on a list of 16 Change (FCCC) has as its primary objective to substances that have been singled out according to stabilize concentrations of GHG in the atmosphere. agreed risk criteria. The ultimate objective is to The Convention sets out a series of general principles eliminate any discharges, emissions and losses of on the protection of the Earth’s atmosphere, such as POPs by prohibiting the production and use of some the requirement of precautionary measures to be taken products outright and scheduled elimination of the to anticipate, prevent or minimize the causes of others at a later stage. The Protocol includes climate change and mitigate its adverse effects. The provisions for dealing with the wastes of products that FCCC obliges all parties to develop national will be banned. The 1994 Protocol on Further inventories of anthropogenic emissions by sources of Reduction of Sulphur Emissions uses an effects-based GHG. Similarly, parties are to implement national approach, the critical-load concept, energy savings and programmes containing measures to mitigate climate the application of BAT and economic instruments. change by addressing anthropogenic emissions by Finally, the 1991 Protocol on the Control of Emissions sources. Although the FCCC does not provide for of Volatile Organic Compounds (VOCs, i.e. specific requirements applicable to atmospheric hydrocarbons) or Their Transboundary Fluxes, aims at emissions from petroleum activities, it has prompted a reducing emissions of the second major air pollutant process of review and rule-making regarding GHG responsible for the formation of ground-level ozone. emissions, for example, from gas flaring. Some Obviously, the legal regime for climate change countries have introduced carbon taxes to curb energy established by the FCCC and its Kyoto Protocol is of use and emissions from oil and gas installations. particular relevance for the petroleum industry in the An additional 1997 Kyoto Protocol to the FCCC context of atmospheric GHG emissions, mainly as a establishes stronger and more concrete measures, result of gas flaring. It may require specific especially for developed countries, which include programmes and measures to be adopted to address quantified objectives for GHG emissions limitation this aspect of petroleum operations. But it may also and removal by sinks within a specific timescale. have much broader implications for the industry by These are intended to ensure that overall emissions increasing pressure to develop sources of energy other from industrialized nations are reduced to at least 5% than fossil fuels. below 1990 levels within the period 2008 to 2012. The 1985 Vienna Convention for the Protection of Protection of biological diversity the Ozone Layer and its 1987 Montreal Protocol is another global regime effectively addressing Similar to the climate change regime, a production and as a consequence, the releasing into comprehensive global legal framework aimed at the atmosphere of ozone-depleting substances. Its protecting biological diversity, natural habitats and ultimate objective is to significantly reduce and wildlife species may have significant impact on the eventually eliminate production and consumption of petroleum industry by limiting the availability of areas controlled substances by setting firm targets, for exploration and production. Of particular interest timetables for their phase-out and other measures, in this respect are the 1972 UNESCO Convention such as technical and financial incentives. Concerning the Protection of the World Cultural and At the regional level, protection of the atmosphere Natural Heritage, the 1971 Ramsar Convention on has been dealt with in the context of prevention and Wetlands of International Importance, and especially reduction of transboundary air pollution. The 1979 the 1992 UN Convention on Biological Diversity (CBD). UNECE Convention on Long-Range Transboundary The primary objectives of the latter are the Air Pollution and its eight Protocols have created the conservation of biological diversity, the sustainable essential framework for controlling and reducing the use of its components and the fair and equitable damage to human health and the environment caused sharing of the benefits arising out of the utilization of by emissions of a range of air pollutants. Both the genetic resources. Parties to the Convention must

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establish national conservation plans, including Producers (OGP – formerly the Oil Industry components of biological diversity important for its International E&P Forum) and the World Conservation conservation and sustainable use. Those activities Union (IUCN, International Union for the which have, or are likely to have, significant adverse Conservation of Nature and natural resources). impacts on the conservation and sustainable use of One example is the 1982 UNEP Guidelines related biological diversity, require proper monitoring. The to offshore mining and drilling – a non-binding CBD promotes in situ conservation through the instrument which sets out general directives to be establishment of protected areas, regulation or adhered to by states in their national legislation or management of biological resources important for the international arrangements. Along with some general conservation of biodiversity and rehabilitation and provisions, the Guidelines contain specific restoration of degraded ecosystems. The contracting recommendations concerning the authorization of parties are required to take measures to implement offshore operations, environmental assessment and environmental impact assessment requirements and monitoring systems, possible transfrontier thereby minimize adverse impacts. The Biodiversity environmental impact and procedures for information Convention is primarily of contextual relevance to and consultation, safety measures, contingency petroleum E&P operations. It has no operational planning and implementation measures, as well as provisions. However, it is likely to add to pressures to liability and compensation. ban or, at least, to subject E&P to more stringent The World Bank has prepared detailed EIA conditions in sensitive areas. requirements and criteria (in the form of There are also a number of regional nature Environmental Assessment Sourcebook) for conservation regimes in different parts of the world environmental protection in specific industrial sectors, likely to influence the conduct of petroleum as well as offshore E&P activities. The World Bank’s operations. In the European context, the following EC Pollution prevention and abatement handbook 1998 directives are of particular importance: Directive provides guidelines (Oil and gas development – 85/337/EEC on the assessment of the effects of certain Onshore) for onshore oil and gas operations (World public and private projects on the environment and Bank, 1998). They establish maximum levels for liquid Directive 92/43/EEC on the conservation of natural effluents, air emissions and noise levels; describe habitats and wild flora and fauna (the Habitat industry practices and processes used to reduce and Directive). control pollution; and make recommendations for monitoring and reporting. In addition to the recommendations of UNEP and 10.3.4 Soft law relevant the World Bank, the E&P industry itself provides to the petroleum industry guidance to its members. Foremost among the various oil industry groupings at international level is OGP, Alongside global regulatory instruments (hard law), the recommendations of which are particularly soft law plays an increasingly important role in influential. The organization represents the regulating the oil and gas activities. Soft law consists international O&G industry on technical and of non-binding instruments, such as international regulatory issues, and has been promoting measures to declarations, recommendations and government and improve the environmental record of the industry. As industry guidelines that may potentially evolve into part of its mandate, OGP disseminates information on binding legal standards. From this perspective, soft good practice through the development of industry law is a valuable addition to hard law, particularly as it guidelines, codes of practice, checklists and so forth. can capture emerging notions of international public Some of these have been prepared jointly with the order thus helping to extend the realm of legitimate World Conservation Union and UNEP. international concern to matters of previously To date, guidelines have been prepared on a wide exclusive national jurisdiction. range of topics such as operations in tropical The soft law type instruments include the 1992 Rio rainforests, waste management, decommissioning, Declaration on Environment and Development. Soft operations in mangrove areas and disposal of wastes law instruments of relevance to petroleum activities and produced water. OGP has published guidance on embrace a relatively numerous group of guidelines and methods for estimating atmospheric emissions from recommendations issued by competent international E&P activities and from operations in Arctic onshore organizations. These include IMO and UNEP, and offshore areas. These recommendations aim to international financial institutions such as the World establish and disseminate internationally acceptable Bank and a variety of non-governmental organizations standards, practices and procedures on environmental such as the International Association of Oil and Gas protection in petroleum E&P activities. To this end,

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they set out requirements for environmental Notwithstanding the fact that the soft law management systems and planning, and identify instruments are largely recommendations and potential impacts and environmental control measures. qualitative in nature, the various guidelines, especially For example, they call for the performance of an EIA those issued by organizations such as UNEP, the World prior to commencement of activities. Similarly, OGP Bank, OGP and IUCN, are increasingly influential. has produced a number of reports and guidelines on the While often not compulsory for individual operators, safety aspects of offshore platform decommissioning these instruments are of growing importance options. It has also issued Health, Safety and worldwide and, with time, evolve into legally binding Environmental Management Systems (HSE-MS) standards through national practice or international guidelines, which are consistent with the International standard-setting. Certain commonly used standards Standard Organization (ISO) 14000 Environmental can be acceptable to, or adopted by, parties to Management System (EMS) series. These too, have international agreements or project-specific proved popular with the international E&P industry. arrangements. Some countries, especially developing, ISO 14000 is a series of international standards on which as yet lack industry-specific standards and environmental management. It provides a framework regulations, provide for the application of relevant for the development of an environmental management international standards in their domestic legislation. system and the supporting audit programme. The main thrust for its development came as a result of the Rio Conference on the Environment Development held in 10.3.5 National legal frameworks 1992. ISO 14001 is the cornerstone standard of the ISO 14000 series. It specifies a framework of control Environmental norms and standards applicable to for an EMS against which an organization can be O&G activities are contained in a variety of national certified by a third party. The ISO 14000 series does laws. On the one hand, practically all countries have not set binding environmental standards. Rather, it is general environment protection acts which provide a designed as a tool to ensure compliance with legal broad legal foundation for more specific legislation requirements. dealing with such matters as EIA, planning, pollution, The International Association of oil Geophysical quality of air and water resources, protection of the Contractors (IAGC) has issued environmental marine environment, conservation of biodiversity, guidelines, which touch upon offshore operations. protected areas, and so forth. These legal acts are Some national oil industry organizations are also without doubt relevant to petroleum activities and active in promoting best environmental management often impose on such operations – directly or practices by adopting their own codes and guidelines. indirectly – specific conditions, requirements and These include but are not limited to, the following: constraints. On the other hand, a number of states have American Petroleum Institute (API); American enacted more specific petroleum-related legislation, National Standards Institute (ANSI); American often containing provisions addressing environmental Society of Mechanical Engineers (ASME); British matters and concerns. Although such petroleum acts Standards Institute (BSI); Catalogue of European rarely contain concrete environmental standards, they Standards (CEN); Deutsche Institut für Normung provide a basis for subordinate normative regulations. (DIN); (the British) Institute of Petroleum (IP). In terms of environmental regulation of O&G For example, the API, through its Environmental activities, three major prevailing regulatory models Stewardship Programme, developed Environmental have been identified: the statutory approach; the and Safety Mission and Guiding Principles, which are contractual approach; and the integrated legislative binding for all API members. Equally important is the approach (Gao, 1998). 1995 API Guideline for Onshore O&G Production The first, represented primarily by US and UK Practices for Protection of the Environment. legislation, is characterized by a multitude of statutes There is no one single set of internationally and other normative acts containing relevant accepted technical standards or norms applicable to environmental regulations, norms and standards. The environmental protection in the petroleum industry. US legal framework for O&G activities, where the Most of the existing standards and recommended 1990 Oil Pollution Act is perhaps the most significant practices and procedures are usually established and piece of legislation, is fragmented and does not applied at the domestic level. Although international constitute a uniform body of environmental regulatory practice in this field remains inconsistent, there is a rules. growing uniformity in terms of the content and The contractual approach is a mode of application of environmental standards by the global environmental regulation through provisions in O&G industry and individual governments. petroleum contracts, which is typical primarily for

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developing countries where there is a lack of management tools employed. These will be briefly comprehensive environmental and petroleum discussed further. legislation or where the legal infrastructure is incomplete. One example where such approach has been successfully employed is the 1994 Agreement on 10.3.6 Environmental management the Joint Development and Production Sharing tools between the state oil company of Azerbaijan and a consortium of international oil companies, which was While in the recent past the environment-related subsequently approved by the Parliament of provisions of national legislation and contractual Azerbaijan and acquired the status of national law. arrangements mainly relied on traditional concepts Environmental provisions of this Agreement are very such as good oil field practice, due diligence, or sound specific and in effect have an overriding force over technical and engineering principles, these have been relevant national legislation. They cover the entire increasingly replaced by a new generation of range of environmental aspects of E&P operations, environmental management and control mechanisms. from the requirements related to the conduct of The new management tools include standards setting operations, emergencies, monitoring, environmental and command control as well as operational damage to concrete environmental standards and procedures and practices. practices, including guidelines regarding discharges of Those applicable to the petroleum industry are effluents, air emissions, drilling cuttings and fluids, usually divided into several categories of technical and waste, etc. It can be concluded that with environmental environmental requirements. The first group generally requirement established through contractual includes standards dealing with equipment and obligations, such agreements may bear a heavier product, such as construction requirements for onshore responsibility for environmental protection than and offshore platforms, storage tanks, pipelines and national legislation. other industrial facilities. The second group deals with Another model, described as an integrated or various environmental impacts such as limits on comprehensive legislative approach (Gao, 1998), has discharges and emissions, methods of waste disposal, emerged as a result of the adoption of framework type management of chemicals used in E&P operations, legislation specifically for petroleum activities. and so forth. Finally, there are standards and Legislation of some Latin American countries provides procedures adopted to assist the petroleum operators the best illustrations of this model. In a few of them, in improving their environmental performance. These this legislation complements general environment include various environmental management protection acts and national environmental action procedures and systems, such as EIA, EMS, plans. This new generation of petroleum-specific Environmental Performance Evaluation (EPE), legislation includes, for example, Argentina’s 1992 Environmental Management Plans and programmes Resolution on the Protection of the Environment (EMP), Environmental Monitoring and Evaluation during Exploration and Exploitation of Hydrocarbons, (EM&E), environmental auditing and environmental the 1993 Regulation on Environmental Protection in reporting, some of which will be considered below. Hydrocarbons Activities of Peru, the 1995 Presidential Environmental impact assessment. This is Decree on Environmental Regulation Concerning generally described as a systematic process of detailed Hydrocarbon Activities of Ecuador, and the 1996 appraisal of the environmental consequences of the Environmental Regulation for the Hydrocarbons’ proposed activities and their alternatives to be used in Sector of Bolivia. guiding decision-making. Increasingly, the EIA The common feature of the industry-specific procedure is combined with the assessment of regulations is that they set out detailed operational socio-economic consequences of the planned activity requirements for the various phases of E&P activities. – the so-called Social Impact Assessment (SIA). The This new generation of environmental regulations principal elements of EIA usually include baseline represents the beginning of what appears to be a environmental study, impact prediction, mitigation growing trend towards the creation of an integrated, measures, Environmental Impact Statement (EIS) or industry-specific legislative framework for the oil and IEA (International Energy Agency) report, public gas E&P sector (Wagner, 1998). participation and review, decision and post-project Notwithstanding evident variations in structuring analysis. The EIA requirements are contained in petroleum-related environmental legal frameworks numerous global and regional agreements, such as the in different countries, they have many common 1991 UNECE Convention on Environmental Impact characteristics in terms of both the content of Assessment in a Transboundary Context, as well as applicable standards and regulatory and recommended by the World Bank in its Environmental

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Assessment Sourcebook and petroleum industry reference point for environmental management organizations (e.g. the OGP Principles for Impact systems, which enables companies to approach the Assessment: The Environmental and Social Dimension). subject in a systematic and efficient manner. Of Environmental management plan. This is another significant relevance in the European context is the EC important instrument, which is usually based on EIA. 1993 Eco-Management and Audit Regulation, which Among other things, it identifies the company’s established the Eco-Management and Audit Scheme environmental policy and objectives, provides detailed (EMAS). information about the operator’s capability and Environmental performance evaluation. This is experience in environmental management. EMP also another management tool, which has the aim of specifies environmental personnel, their facilitating management control of practices that may responsibilities, training and awareness, emergency have an impact on the environment. It has been used planning, procedures and equipment, incident globally to improve environmental performance, reporting and investigation, and review of provide a basis for performance benchmarking, environmental performance. demonstrate compliance to regulations and increase Environmental management system. This is operational efficiency. The ISO standard 14031 (1999) defined as a means of ensuring effective Environmental Management – Environmental implementation of an environmental management plan Performance Evaluation provides guidance in how to or procedures and compliance with environmental conduct EPE. The essential aspect of EPE is the policy objectives and targets. As a management tool, selection of meaningful indicators, which may include EMS enables an organization to identify, monitor and Operating Performance Indicator (OPI), Management control its environmental aspects. In essence, it is part Performance Indicator (MPI) and Environmental of the overall management system that includes Condition Indicator (ECI). organizational structure, planning activities, Environmental monitoring and evaluation. This is responsibilities, practices, procedures, processes and used to provide continuous observation and resources for developing, implementing, achieving, assessment of effects of development projects and reviewing and maintaining the environmental policy. activities on environmental resources and values in The model HSE-MS in the petroleum E&P sector, order to ensure effective protection from the as outlined by the OGP, consists of the following key unforeseen effects of such activities, guide changes of elements: policy or activity or to detect improvements as a result • Leadership and commitment (addressing top-down of actions taken. EM&E plays an important part in the commitment and company culture, essential to the development and implementation of pollution control success of the system). strategies, and in determining their effectiveness; and • Policy and strategic objectives (addressing corporate also in the provision of ‘baseline’ information against intentions, principles of action and aspirations with which the environmental impacts of certain activities respect to health, safety and environment). are gauged. Being applied throughout the life of the • Organization, resources and documentation project, it ensures compliance with environmental (personnel, resources and documentation for sound regulations and requirements imposed on the project HSE performance). on the basis of EIA. • Evaluation and risk management (identification Environmental auditing. This is an integral part of and evaluation of HSE risks, for activities, environmental management. It is defined as a process products and services, and development of risk of systematic, periodical evaluation of a company’s reduction measures, including EIA). environmental organization, conduct and systems • Planning (addressing planning and conduct of against predetermined standards (Wawryk, 2002). work activities, including planning for changes and While an important component of an EMS, its role is emergency response). not limited only to verifying conformity with • Implementation and monitoring (addressing management systems standards. There is a distinction performance and monitoring of activities, and how between an EMS audit and an audit of compliance corrective action is to be taken when necessary). with applicable legal regulations. The ISO 14000 • Auditing and reviewing (periodic assessment of series contain standards for environmental auditing. system performance, effectiveness and fundamental suitability). • Review (addressing senior management review of 10.3.7 Conclusions HSE-MS). The HSE-MS model is compatible with the The rapidly expanding web of environmental requirements of the ISO 14000 series, a global regulations poses a new challenge for the petroleum

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industry. The growing body of international and Glasson J. et al. (1995) Introduction to environmental impact national norms and standards has already affected the assessment. Principles and procedures, process, practice O&G activities in various ways. and prospects, London, UCL. Patin S. The industry has been under continuous and (1999) Environmental impact of the offshore oil and gas industry, East Northport (NY), EcoMonitor. growing legal pressure to address environmental Sands P. (2003) Principles of international environmental law, imperatives by improving its performance. The Cambridge, Cambridge University Press. introduction of increasingly strict environmental Skjaerseth J.B., Skodvin T. (2003) Climate change and the requirements has led to changes in investment oil industry. Common problems, varying strategies, conditions and capital and operating costs. Corporate Manchester, Manchester University Press. liability for environmental damage has a tendency to UNEP (United Nations Environmental Program)/E&P Forum evolve towards greater stringency and higher ceiling of (1997) Environmental management in oil and gas compensation. Surging environmental fines and taxes exploration and production: an overview of issues and management approaches, UNEP IE/PAC Technical Report further augment financial burden on the oil and gas 37, E&P Forum Report 2.72/254. operators. Worika I.L. (2002) Environmental law and policy of petroleum Environmental considerations affect corporate development. Strategies and mechanisms for sustainable structure and operational practices which have to management in Africa, Port Harcourt (Nigeria), Anpez adjust by introducing environmental management Centre for Environment and Development. World Bank systems, special personnel and new pollution (1998) Pollution prevention and abatement handbook, Washington (D.C.), World Bank. abatement and control procedures. Management of environmental, and associated legal risks, has become an integral part of corporate strategies. With the further anticipated expansion of O&G References operations into environmentally sensitive areas, Brown E.D. (1992) Sea-bed energy and minerals. The such as deep-water offshore zones and the Arctic international legal regime, Dordrecht-Boston (MA), Nijhoff, and Sub-Arctic regions, or to traditional territories 3v.; v.I: The continental shelf. of indigenous peoples, these risks will only Gao Z. (editor) (1998) Environmental regulation of oil and increase. gas, London-den Haag-Boston, Kluwer. Wagner J.P. (1998) Oil and gas operations and environmental law in Latin America, «Journal of Energy and Natural Resources Law», 16, 153-185. Bibliography Wawryk A.S. (2002) Adoption of international environmental Birnie P., Boyle A. standards by transnational oil companies: reducing (2002) International law and the the impact of oil operations in emerging economies, environment, Oxford, Oxford University Press. «Journal of Energy and Natural Resources Law», 20, Boesche D.F., Rabalais N.N. (edited by) (1987) Long-term 402-432. environmental effects of offshore oil and gas development, London, Elsevier. Sergei Vinogradov Churchill R.R., Lowe A.V. (1999) The law of the sea, Centre for Energy, Petroleum and Mineral Manchester, Manchester University Press. Law and Policy Gavouneli M. (1995) Pollution from offshore installations, University of Dundee London-den Haag-Boston, Kluwer. Dundee, Scotland, United Kindom

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