Environmental Liability

Key Legislation:

For more detail on the Legislation relevant to this page, please use the following links:

Guidance:

The OGA has published its procedure for enforcement decisions in relation to the Energy Act 2016, part 2, Chapter 5. The OGA is empowered to give sanction notices when compliance with one of three petroleum related requirement has failed:

  • A duty imposed under section 9c of the 1988 Act to act in accordance with the Strategy for enabling the Principal Objective to be met
  • A term or condition of an offshore licence

A requirement imposed on a person by or under the 2016 Act which is sanctionable in accordance with Chapter 5 of the 2016 Act

Consent Needed: N/A
How to Apply: N/A
Who to Apply to: N/A
When to Apply: N/A
Definition of Environmental Damage: The Regulations do not cover all types of damage to the environment. Environmental damage only refers to:

  • Adverse effects on the integrity of a Site of Special Scientific Interest (SSSI) or on the conservation status of species and habitats protected by EU legislation outside SSSIs
  • Adverse effects on surface water or groundwater consistent with a deterioration in the water’s status (Water Framework Directive)
  • Contamination of land that results in a significant risk of adverse effects on human health.

Extent of liability

The Regulations introduce two types of liability: fault-based liability in respect of environmental damage to protected species and natural habitats from all other occupational activities and strict liability in respect of environmental damage, caused by a specified range of ‘occupational activities’. There is strict liability without the need to show fault for activities listed in Schedule 2 of the Regulations, these include:

  • Activities requiring Environmental Permits
  • Discharges to water
  • Groundwater discharges
  • Water abstraction or impoundment
  • Use of pesticides, biocides or dangerous substances
  • Use and release of Genetically Modified Organisms
  • Transporting dangerous goods.

There is also liability where an operator has intended to cause damage or has been negligent but only for damage to SSSIs or EU species or habitats.

There are certain exemptions such as damage caused by acts of terrorism or natural disasters or damage falling within certain international conventions (e.g. oil pollution).

Third parties may report potential damage to the competent authorities, who are then required to investigate.

Operator roles and responsibilities

  • Take steps to prevent damage or further damage and notify the authority in the event of any damage covered by the Regulations
  • Provide information and undertake preventive and remedial measures as required by the authority
  • Submit proposal for remediation as required
  • Pay costs claimed by the authority in relation to “environmental damage”

 

Monitoring: None, although there may be requirements for monitoring post environmental damage remediation.
What to Report: Operators are required to take immediate steps to prevent damage or further damage and to notify the enforcing authority.
Who to Report to (in England and Wales): Report to the Environment Agency for:

  • Damage caused by operations regulated by the Environmental Agency under the Environmental Permitting Regulations
  • Damage to EU species and habitats in the sea caused by operations regulated by the Environment Agency
  • Damage to water caused by activities regulated by Local Authorities under the Environmental Permitting Regulations
  • Damage caused by other operations to water and species and habitats present in water but not the sea

Report to the Marine and Fisheries Agency for:

  • Damage to EU species and habitats in the sea other than where the operation is regulated by the Environment Agency

Report to the Countryside Council for Wales and Natural England for

  • Damage to EU species and habitats on land or to an SSSI, except where an operation is regulated under Environmental Permitting Regulations
  • Damage to EU species and habitats on land or to an SSSI caused by operations regulated by Local Authorities under the Environmental Permitting Regulations

Report to the Local Authorities for

  • Damage caused by operations regulated by Local Authorities under the Environmental Permitting Regulations
  • Damage to land caused by operations regulated by Local Authorities under the Environmental Permitting Regulations
  • Damage to land other than SSSIs for activities other than those regulated under the Environmental Permitting Regulations
When to Report: As soon as damage is known of.
Environmental damage: The relevant competent authority (see the Reporting Requirements tab) must establish whether damage is environmental damage as defined under the Regulations and identify a responsible operator. In the event of damage under the Regulations, the competent authority will then serve a remediation notice taking account of any remediation measures proposed by the authority. The competent authority may also, if required:

  • Take steps to prevent or remedy damage
  • Require information or action from operators
Requirements for Remediation: For damage to SSSIs or EU species and habitats and damage to water, the approach is more comprehensive than in existing legislation. It consists of:

  • Primary remediation – measures to restore the damage itself
  • Complementary remediation – measures, including at alternative sites, to compensate for where primary remediation does not fully restore the damage
  • Compensatory remediation – measures to compensate for the losses of natural resources while the damage is being restored
  • Land remediation – removal or control of contaminants so that the land no longer poses any significant risk of adversely affecting human health
Right of Appeal: Where the authority determines that there is environmental damage and notifies the operator, the operator may appeal within 28 days. Grounds for appeal include:

  • The activity did not cause the damage
  • The authority has unreasonably decided that the damage is environmental damage
  • The damage was the result of an act of a third party
  • The operator was not at fault or negligent and the emission or event was:
    • authorised and in accordance with a permit, or
    • in accordance with the state of scientific knowledge (except with respect to GMOs in Wales)

Operators may also appeal against a remediation notice on the grounds that the contents of the remediation notice are unreasonable.

Renewal: N/A
EC review of liability regime for offshore oil and gas activities: The European Commission recently published a communication on “facing the challenge of the safety of offshore oil and gas activities”. The Commission is concerned that existing licensing, operational safety and environmental protection standards often vary from one Member State to the next, preventing the establishment of a coherent European approach to managing health, safety and environmental risks. The Commission has considered how industry players can be encouraged to conduct offshore activities in a unified manner through a cohesive legal framework which would better ensure best practices are applied across the EU. The European Commission is set to review the liability regime applicable to offshore petroleum activities and will:

  • Propose amendments to the Environmental Liability Directive (2004/35/EC, as amended by Directive 2006/21/EC) so that it covers environmental damage to all marine waters (as defined in the Marine Strategy Framework Directive 2008/56/EC).
  • Re-consider introducing a mandatory requirement for operators to provide financial security in the event that a major accident occurs.
  • Consider, in a guidance document interpreting existing legislation, the applicability of the Waste Framework Directive (2008/98/EC) to oil spills.

EU Offshore Safety Directive

Following the Deepwater Horizon incident in the Gulf of Mexico in 2010 and the European Commission’s communication “Facing the challenge of the safety of offshore oil and gas activities” (published in October 2010), the EU Directive on the “Safety of Offshore Oil and Gas Operations” was published on 28 June 2013 (Directive 2013/30/EU) (PDF document), amending Directive 2004/35/EC.

Consultation on Amending the Environmental Damage (Prevention and Remediation) Regulations 2009 in England and Wales to transpose Article 38 of the Offshore Safety Directive 2013: Defra and the Welsh Government were seeking comments (by 21 September 2014) on proposals to transpose Article 38 of Directive 2013/30/EU on the safety of offshore oil and gas operations (OSD). Article 38 has extended the scope of the Environmental Liability Directive (ELD) into the marine environment in relation to offshore waters. The ELD already applies to, amongst other things, damage affecting protected habitats and species out to 200 nautical miles and damage to waters covered by the Water Framework Directive (WFD) which extend up to 1 nautical mile seaward from the baseline in England and Wales. Article 38 of the OSD amends the ELD to extend the geographical scope of the ELD to include damage to marine waters, as defined in the Marine Strategy Framework Directive (MSFD).
Consultation on the implementation of Directive 2013/30/EU on the safety of offshore oil and gas operations and amending Directive 2004/35/EC, and on the review of offshore Approved Codes of Practice and the updating of UK onshore oil and gas safety legislation to cover emerging energy technologies: Although now closed, this consultation sought views on the proposed UK approach to implement the offshore safety Directive (2013/30/EU). This will involve the introduction of new legislation and the amendment of existing legislation. The intention is to maintain as much as possible of the existing offshore safety and environmental regime. As well as these legislative changes, the consultation also presents proposals for new administrative procedures, and the establishment of an offshore competent authority. It also sought views on HSE’s proposals to update onshore oil and gas health and safety legislation to take account of emerging energy technologies and the review of two Approved Codes of Practice: Prevention of Fire and Explosion, and Emergency Response on Offshore Installations (PFEER); and Health Care and First Aid on Offshore Installations and Pipeline Works. Draft versions of the following proposed Regulations are included:

  • The Offshore Installations (Offshore Safety Directive) (Safety Case etc.) Regulations 2015
  • The Offshore Petroleum Activities (Offshore Safety Directive) (Environmental Functions) Regulations 2015
  • The Offshore Petroleum Licensing (Offshore Safety Directive) Regulations 2015;

As well as draft amendments to the following existing Regulations:

  • The Offshore Installations (Prevention of Fire and Explosion, and Emergency Response) Regulations 1995
  • The Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995
  • The Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998
Fire prevention plan guidance review The current guidance on fire prevention plans is being reviewed. The consultation ended on 4th March 2016 (link here).
MGN 507 (M+F) (Amendment 1) Oil Pollution: – bunker oil This notice informs ship-owners and masters about maintaining compulsory insurance against liability for bunker oil pollution damage (link here).
Onshore Oil and Gas sector guidance consultation This consultation was on guidance for oil and gas companies and their consultants setting out which environmental permits are needed for onshore oil and gas exploration and extraction operations in England. The consultation closed on the 3rd March 2016 (link here).