Off shore proposal Facing the Challenge of the Safety of Offshore Oil and Gas Activities

EU action after Deepwater Horizon accident - Gulf of Mexico – April 2010 Commission Communication October 2011 Policy initiative 2011 (ongoing): Public consultation (March-May 2011) Further stakeholder consultations-workshops Impact Assessment study Proposal for EU Regulation (October 2011) Commission Decision establishing EU Offshore Authorities Group (January 2012)

Offshore activities in EU/EEA

Problem definition Likelihood of EU major incident is significant and can be reduced) Reports UK & Norway; frequency analysis of incidents Full-scale consequences of an EU major incident not acceptable Provisions for financial liability/recovery are incomplete

Key aspects of proposal General measures for accident prevention Risk-based, goal-setting, health & safety and environment Irrevocable responsibility of operators Independent regulator and verification Obligations for best practices by operators and regulators EU wide Information sharing Co-ordination amongst regulators, incl. non-EU Emergency preparedness and response, incl. cross-border Technical annexes for detailed building blocks; evolution over time

State of play Member States and EP in principle supportive on substance Key issues of debate Legal form (Regulation vs Directive) Civil liability Independant regulator and verification Industry associations mostly against proposed legislative form Trade unions position evolving NGO's mostly strongly in favour The regulatory functions of the competent authority should be independent from any conflict of interest with regulatory functions relating to the economic development of the state, in particular licensing of offshore oil and gas activities, and policy for and collection of related revenues. – new draft text focuses more on independence of the functions of the competent authority and not of the organisation as such. (initial proposal provided that "the competent authority should be clearly independent of any government organisation for industry, sonsorship or for licensing or revenue collection") – however, some MS still consider that the "separation criteria" could still imply increased costs and unnecessary bureaucracy; it should be left to the MS to decide about proper arrangements to avoid conflict of interest Draft Article 7 provides that the licensee is liable for prevention and remediation of environmental damage caused by activities carried out by the licensee or any operator appointed by the licensee; some MS claim there is lack of clarity on the sharing of financial liabilities (civil environmental liability) and technical liabilities (implementation of preventive and remedial action) between licensees and operators; should be made more clear if it is the operator or the licensee who should be responsible for putting in place remedial measures and if need be paying to restore the quality of the environment. Further, should the operator take on financial liabilities directly, the proposal should specifiy that its financial capacity should be evaluated; some MS consider furthermore that the liability for damage other than environmental (tourisme, fishing) is not covered and it would be appropriate to indicate whether it is the licensee or the operator who is liable in this field (in some countries the operator is always the license holder and therefore always responsible..) ; the Commission considers that it is always the licensee who is liable for remediation of environmental damages and where the operator is not the licensee, the latter retains at all times the power to replace an operator – the Regulation does not address the matter of compensation and liability for traditional damages because the IA was inconclusive in this regard; Cion is undertaking furthr research;

Next steps EP ENVI committee vote 19/09 EP ITRE committee vote Oct Council Working Group to present new draft Directive at 27 Sept meeting EC to take a position