The Health and Safety at Work etc Act 1974 (HSWA 1974) is the principal piece of UK legislation regulating health and safety in the workplace. It applies fully to onshore activities, and many of its provisions apply to offshore activities in the UKCS. It is supplemented by a large number of subordinate regulations relating to specific risks, hazards and industries, including a number of offshore-specific regulations, mentioned below. HSWA 1974 imposes a general obligation on employers to ensure, so far as is reasonably practicable, the health, safety and welfare at work of employees and those affected by their undertaking. All employers involved in onshore and offshore work activities, such as third-party contractors, are subject to those general duties and the majority of other health and safety regulations.
The Piper Alpha disaster was seminal in the creation of the present offshore-specific regulatory regime. It is underpinned by the concept of a ‘duty holder’ (either the owner of a non-production installation or the operator of a production installation) who has overall responsibility for managing risks and hazards on an installation. The cornerstone of this regime was the Offshore Installations (Safety Case) Regulations 2005, which was replaced in 2015 by the Offshore Installations (Offshore Safety Directive) (Safety Case) Regulations 2015. Slightly confusingly, despite the revocation of the 2005 Regulations, they will continue to apply where provided for by the 2015 Regulations, that is, to oil and gas activities in internal waters. These Regulations are supplemented by a suite of offshore-specific legislation, which includes, among many other relevant regulations:
- the Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995;
- the Offshore Installations (Prevention of Fire and Explosion and Emergency Response) Regulations 1995; and
- the Offshore Installations and Wells (Design and Constructions, etc) Regulations 1996.
Amendments to (i) and (ii) were introduced in 2015 also as a result of the Offshore Safety Directive (OSD).
In terms of formal records and documents, the principal requirement on duty holders is the preparation of a safety case for each installation that must be submitted to, and accepted by, the Offshore Safety Directive Regulator (OSDR). In addition, any offshore employer (including operators, owners and contractor companies), or any person in control of work premises, must record and report certain work-related accidents in terms of the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013. A number of other formal notifications are required in respect of, for example, dangers to the integrity of installations and work on wells where there is substantial risk of unplanned escape of fluids.
The enforcing authority for offshore health and safety matters in the UK is the HSE, Energy Division. In England and Wales, the HSE can investigate and prosecute companies directly for breaches of health and safety legislation, whereas in Scotland, the HSE’s power extends to investigations but prosecutions lie in the hands of the procurator fiscal, to whom the HSE reports. In 2014, the OSDR was created to oversee industry compliance with the OSD (see below). Non-compliance with either the offshore-specific legislation or HSWA 1974 can result in criminal prosecution (punishable by unlimited fines and imprisonment for the most serious offences) or imposition of prohibition or improvement notices. Each breach of HSWA 1974 or its subordinate regulations is a separate criminal offence. There are many ‘strict liability’ offences, which means that an offence may be committed even where there is no ‘guilty mind’. Companies may also be prosecuted for corporate manslaughter in relation to fatal accidents that occur offshore. Any fatality occurring offshore will also be subject to investigation by the police under the Corporate Manslaughter and Corporate Homicide Act 2007, which may give rise to a prosecution and conviction of the organisation of corporate manslaughter. Such cases also carry an unlimited fine.
New sentencing guidelines, the ‘Health and safety offences, corporate manslaughter and food safety and hygiene offences guidelines’, have been introduced following closure of a consultation in February 2015. The guidelines are applicable to England and Wales only; however, a similar approach is expected to follow suit in Scotland, and indeed the Scottish courts have already begun to apply the English guidelines. The guidelines introduced a very significant increase of the level of fines imposed for breaches of health and safety.
On 18 July 2013, the new EU directive (OSD, see above) came into force as a consequence of the Macondo incident in the Gulf of Mexico. Initially, the European Commission published draft proposals for a regulation to harmonise the offshore health and safety regimes across all 28-member states and Norway. While in many respects the proposed regulation mirrored the UK’s world-class ‘risk-based’ regime, there was concern that it may in fact undermine the UK’s existing high standards in some areas. Oil & Gas UK opposed the proposal, and subsequently it was decided that a less prescriptive EU directive would be more appropriate. The OSD was published on 28 June 2013 and sets out minimum requirements to ensure prevention of major incidents and provisions to limit adverse environmental and social consequences where incidents have occurred. Some of the requirements of the OSD which were transposed into UK legislation in 2015 include:
- only operators with sufficient technical and financial capacities to remedy possible environmental damage will be allowed to explore and produce oil and gas in EU waters;
- an independent third party must verify the technical solutions proposed by the companies prior to and periodically after the infrastructure installation;
- companies will have to prepare a major hazard report for their installation, before the exploration or production begins;
- independent national authorities will inspect the installation, and in the event that an operator does not comply with the minimum standards, the competent authority will take enforcement action or impose penalties, or both;
- comparable information about the standards will be made available to the public;
- companies will prepare emergency response plans based on their rig or platform risk assessments and keep resources at hand to be able to act immediately;
- oil and gas companies will be fully liable for environmental damage caused to protected marine species and natural habitats;
- EU offshore authorities’ groups will work together to ensure effective sharing; and
- the EU Commission will support the promotion of the highest safety standards across the world.
The OSD applies to all offshore regions in Europe and European companies operating outside EU-regulated waters, and extends the geographical zone for environmental damage to waters (from 22km to 370km offshore). The transposition of the OSD was in stages:
- by 19 July 2015, member states had to bring into force the laws, regulations and administrative provisions necessary to comply with the Directive
- by 19 July 2016, laws, regulations and administrative provisions were to be applied to all owners and operators of planned production installations and operators planning or executing well operations; and
- by 19 July 2018, member states were to apply the laws, regulations and administrative provisions to all existing installations.
The Environmental Damage (Prevention and Remediation) (England) Regulations 2015 came into force on 19 July 2015. Similar legislation was introduced in Wales on the same date. These regulations amend the existing Environment Damage Regulations (England and Wales) 2009 and implement article 38 of the OSD, extending the scope of the regime to include marine waters. Scotland has produced similar implementing legislation in the form of the Environmental Liability (Scotland) Amendment Regulations 2015.
The environmental impact of offshore exploration and production activities is regulated by BEIS. Obligations arising from various international conventions such as the Convention for the Protection of the Marine Environment of North East Atlantic (OSPAR) have culminated in a number of domestic environmental regulations. The Offshore Chemicals (Amendment) Regulations 2011 and Offshore Petroleum Activities (Oil Pollution Prevention and Control) (Amendment) Regulations 2011 amend, respectively, the Offshore Chemicals Regulations 2002 and the Offshore Petroleum Activities (Oil Pollution Prevention and Control) Regulations 2005 for the purpose of making changes to the regulatory framework for offshore chemicals and oil pollution, prevention and control. The key changes are those contained in the Offshore Chemicals (Amendment) Regulations 2011, which ensure that enforcement action can be taken in respect of non-operational emissions of chemicals, such as accidental leaks or spills. Following the 2011 amendments cited above, enforcement action can now be taken against organisations that cause an oil or chemical release outside the terms of the permit, whether or not they are the named operator in terms of the permit. Under the Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998, an oil pollution emergency plan (OPEP) must be prepared accordingly and submitted to the HSE for approval. An OPEP must, among other things, provide evidence of financial responsibility and a description of the potential worst-case release of oil to the sea from the installation or connected infrastructure and is required for both production and non-production installations, as well as pipelines and oil handling facilities. Regulatory approvals and consents are withheld until the OPEP is approved. An oil record book must be maintained at all times.
In the event of a significant oil spill the operator, in accordance with its OPEP, would activate its emergency response centre to take appropriate actions to prevent further pollution and implement a response strategy. In the event of an oil leak from a well in UK waters, the liability for all costs lies with the owners of the well. This is an unlimited liability. As a back-up, should the operator default, the Offshore Pollution Liability Association Limited was established to help pay for any clean up and liability costs. The implications of drilling and production-related emissions have seen an increase in regulation in recent years.
There is also a framework of regulations governing offshore atmospheric emissions that relate to the flaring of gas, diesel engines, gas turbines and other ‘combustion plant’. A permit is required in order to operate an offshore combustion installation. The Offshore Combustion Installations (Pollution Prevention and Control) Regulations 2013 revoked the Offshore Combustion Installations (Prevention and Control of Pollution) Regulations 2001. As the Industrial Emissions Directive (IED) (see question 36) provisions in respect of the offshore sector mirror those of the Integrated Pollution Prevention and Control (IPPC), DECC considered that the new 2013 regulations did not place any additional administrative or compliance burdens on offshore operators and any extra obligations (eg, preparation of publicly available inspection reports) would be borne by DECC (now the OGA). The 2013 Regulations transpose the provisions of the IED. On land in England and Wales the environmental permitting regime applies to specified activities including certain oil related activities whereas in Scotland and Northern Ireland the Pollution Prevention Control regime applies.
The main enforcing authorities for environment matters in the UK are BEIS, the OSDR the Environment Agency (EA) in England, Natural Resources Wales (NRW) in Wales, the Northern Ireland Environment Agency (NIEA) and the Scottish Environmental Protection Agency (SEPA). The Maritime and Coastguard Agency (MCA) is the competent UK authority in terms of counter-pollution measures and response at sea, and the Joint Nature Conservation Committee (JNCC) and Marine Scotland provide advice on environmental sensitivities that may be affected as a result of any oil spill. Both the MCA and JNCC are consulted as part of the OPEP review and regulatory approval process.
Under the Offshore Petroleum Production and Pipelines (Assessment of Environmental Effects) Regulations 1999, prior to extraction, any operator who wishes to carry out certain upstream activities must undertake an environmental impact assessment (EIA), and present a summary of this EIA (in an environmental statement) to the OGA. Relevant activities for the purposes of the regulations includes drilling of wells, construction and installation of production facilities and pipelines in the UK territorial sea and on the UKCS.
Climate change and marine strategy and management
The Climate Change Act 2008 (CCA 2008) sets targets for the reduction of greenhouse gases (GHGs) for the UK. The provisions of CCA 2008 relating to emissions of GHGs apply to emissions from sources or other matters occurring in, above or below the UK sector of the continental shelf, as they apply to emissions from sources or matters occurring in the UK. Developments may be expected in this area.
The Marine Strategy Framework Directive, implemented in the UK by the Marine Strategy Regulations 2010, requires each member state to develop a marine strategy. This includes steps to protect and preserve the marine environment, prevent its deterioration and prevent and reduce effects in the marine environment. The UK Marine Strategy Part I was published in December 2012 and outlined an initial assessment of the UK seas and characteristics, targets and indicators of good environmental status. Part II was published in August 2014 and described the UK’s marine monitoring programmes to support the targets and indicators for good environmental status. In January 2015, the Department for Environment, Food and Rural Affairs published a consultation on proposals for a UK programme of measures to maintain or achieve good environmental status in UK waters by 2020. Part III was published in December 2015 and is the final part of the marine strategy; it outlines measures that contribute towards good environmental status.
The Marine and Coastal Access Act 2009 provides for greater protection of the marine area and process to designate marine conservation zones. It divides the UK marine areas into marine planning regions with an associated planning authority that prepares a marine plan for the area. It also establishes a Marine Management Organisation for the waters around England and the UK offshore area. The Marine (Scotland) Act 2010 establishes a similar organisation, Marine Scotland, in Scottish waters. As part of the marine strategy, different plans are in the process of being created, which will identify how oil and gas activities are to be dealt with in the appropriate area. Potential risks identified for oil and gas, both now and under future climates, is how infrastructure is sited and designed to take account of present and future climate conditions.
In December 2015 the Paris Agreement was adopted by the UK as a party to the UN Framework Convention on Climate Change; it came into force in November 2016. As part of the Agreement, the UK agreed to a legally binding target of generating 15 per cent of its energy from renewable sources by 2020, and intends to decarbonise the energy sector in the coming years to meet this target.
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