THE INTERNATIONAL LEGAL REGIME FOR OFFSHORE PIPELINES DECOMMISSIONING



Introduction
The international regulatory regime on offshore pipelines decommissioning is undoubtedly one of the most significant legal developments in the context of economic interactions between the multinational oil companies and their host countries. And it goes without saying that it has remained the benchmark for ascertaining the international code of practice for the industry and perhaps, the cornerstone for current and future policy development in the host countries[1]. Until recently, the abandonment of offshore pipelines which is the focus  of this research had never hitherto assumed the present international urgency and prominence. 

The reason is not far fetched,  because, prior to 1980s, the primordial occupation of both the offshore oil producing countries as well as the multinational oil companies were basically massive discoveries, investment in field development, capacity utilization and maximum returns for the both parties rather than  the externalities of offshore pipelines decommissioning. Additionally, it was never a crucial issue during the period under review[2].  Moreover, to most countries offshore pipelines abandonment was a long off future phenomenon[3].  Although the 1958 United nations general convention on the continental shelf constituted the international legal framework for reference and enforcement of internationally recognized standard practice, it was not until the late 1970s that abandonment of offshore pipelines became a monumental issue. A dawn reality profoundly driven by technological breakthrough of the later years which made deep sea mining possible and made manifest the environmental hazards associated with it. This undoubtedly informed significantly the increased green awareness offshore maritime hazards, the laccunna of international legal framework and general environmental nationalism[4].

Amidst the climate of uncertainties regarding standard legal requirements for removal of offshore structure and pipelines becoming a strategic concern, the United Nations summoned the first UN conference on the Law of the sea in 1958.  Although admittedly the conference was conveyed by the United Nation, it was somewhat a conference of maritime powers; Britain, Norway and others, each representing a key maritime interests.  In the light of the then existed circumstances, it was at the behest of the United Kingdom delegation at the conference, that the proposal that all disused installations should be entirely removed was adopted by the conference. Among other things to guarantee the right of Navigation which became part substance of Art.5(5) of the Geneva Convention of 1958[5]. However, in the later years the complete removal regime in the spirit of Art.5(5) has engendered a cross torrent of palpable controversies regarding its practical feasibility as well as the economic justification[6]. Infact, to some commentators of International law it begged the question where economy should be allowed to supersed legitimate environmentalism.[7]

To a large extent, it was the bid to short circuit the complex scenarios of the 1958 regime that gave rise to the 1982 Geneva Convention regime. Art. 60(3) of the Convention was anchored on the principle of “unjustifiable interference” with other uses of the sea.  The 1982 Convention removal regime was less controversial and it would be difficult to dispute that its inherent flexibility has endeared it to many more countries than the 1958 regime[8].  Perhaps, the main visionary thrust of the 1982 convention was its encompassing legal framework that managed to envisage and essentially recognised less than the entire removal regime provided for under the 1958 convention regime[9].  The requirement under the UNCLOS 1982, is that abandoned installations offshore pipelines included needed only be removed to the extent required to take account of other legitimate interests of users[10].  That is the vivid multidimensional nature of the international regulatory regime on offshore abandonment and multiduplicity of legal framework that gave rise to conflicting state practices.  It is worth point out that the controversies regarding the optional choice imbued in both 1958 and 1982 removal removal regimes had tremendous  negative impact on the development of rule of international customary law on the subject[11]. At this juncture, it would be pertinent to ask whether the present parallax belief, wishful regime of choice and emboldened propensity for diverse construction of regulatory regime would evinced a consistent future state practices regarding offshore pipelines decommissioning at the sub international country levels?  This question represents one of the underlying issues fundamentally at the core of this discourse.

The International Law Regime
Although both the 1958 and 1982 conventions constitute the international regulatory regime for offshore decommissioning, neither of the two regimes exclusively dealt with the issue of pipelines decommissioning.[12] Therefore the only available option to international practice is either reference should be made to the 1958 or 1982 convention regime in determining the proper legal regime for pipelines abandonment or alternatively it should be viewed distinctively regulated by a different legal regime. Although both Art.5(5) of the 1958 convention and Art.60(3) of the 1982 convention have specifically referred to offshore installations or structures as the case may be; what is far from certain is whether  technical expression such as offshore platforms or installations under both conventions contemplated pipelines.[13] At the moment what seems evident from the travaux preparatoires to the both conventions is that pipelines were not exclusively mentioned as the topic agenda when the conventions were being negotiated and concluded[14]. Take Art.5(1) of the 1958  convention for instance which was widely acknowledged as a rule of customary international law. It explicitly provided that legitimate exploration and exploitation of the continental shelf by the coastal state must not result in any unjustifiable interference with the legitimate rights of other users (eg navigation).  Legally speaking, in the context of the proviso, there was nothing emphatic to suggest an international obligation to decommission. However, in the event of an offshore platform decommissioned under Art.5(5) of the convention, there is a corresponding responsibility to render the pipelines in such a condition that they can not in any way interfere with other legitimate uses of the sea. As stated above, this will includes; navigation, fishing and other oceanographic or scientific research. Without specific reference to pipelines, this is the driving principle of the international regime for decommissioning offshore pipelines.[15]

On the other hand, there is a school of thought that expressed the view that pipelines should be viewed as being regulated by the international regulatory regime on offshore abandonment ie under Art.5(5) of 1958 convention and Art.60(3) of the 1982 convention.  The basis of this argument is that, offshore installations or structures as provided for under both convention meant all things necessary for the exploration and the exploitation of the resources of the continental shelf. Therefore, there is a convincing implicity that pipelines should be recognized and treated accordingly as an offshore structure[16]. In the vein the foregoing premise, whenever pipelines network becomes uneconomical to maintain, thus would arise the obligation to decommission. In the circumstances, the proper compliance with the international regulatory regime will be either the 1958 or the 1982 convention.[17]  To say the least, this argument might be plausible in view of the urgency for a legal regime but the conclusion is definitely unappealing. Take for instance, it would be an over simplification to just assume that whatever is necessary for exploitation of the resources of the continental shelf constitutes an installation simply because offshore installations have been so defined under Art.5(2) of the 1958 convention.[18] The danger will be a blurred difinational conception which provides enormous discretionary interpretations. This could be seized upon by environmental fanaticism to unleash chaos on the offshore oil industry.[19]  It therefore remained to be seen how the specific rule of removal under Art.5(5) of the convention  could be adopted through State practice as the applicable legal regime in the unique circumstance of pipeline decommissioning. In view of these uncertainties, it is obvious that state practice rather than international regulatory regime is destined to play more active role in developing and shaping a proper international legal framework for pipelines decommissioning.

Although this has been held as a viable way forward, this reseach remained very skeptical about this option. This is because every state practice devoid of enabling proper international standard is most likely to produce a legal scenario far worse than the present impasse on the 1958 regime. The lack of a difinitive legal framework to tailore individual State practice to engineered common purpose would result to a conflicting State practice engendered by national interest rather than pursuit of a common international law agenda.[20] Take for instance the United Kingdom despite her consistent opposition against complete removal regime, it has turned around to adopt same policy on pipelines decommissioning.[21]  In her house of commons Energy Committee report 1990-1991, the UK Government has insisted that pipelines which lie on the sea bed, must be entirely removed[22]. Rather than submitting the issue to the vagaries of state practice, it is the viewpoint of this research that despite the difficulties involved, the United Nation should summon a conference to address this crucial gap in the international regulatory regimes for offshore decommissioning.  In addition, it is a big surprise that despite huge divergance of international perspectives of the problem, the  1989 IMO guidelines did not address the issue of pipelines decommissioning either[23]. The only attempt made at fashioning a legal regime on the issue was the 14th consultative meeting of the contracting parties to the London Dumping convention.  The issue before the legal committee of the conference was to determine whether the definition of “offshore structures” under Art.111(1)(C)(2) should be encompassing to include pipelines.  Sadly the outcome of that effort only added impetus to the controversy on the matter. While a section of the committee felt very strongly that Art.111(1)(a)(11) of the London Convention 1972 should be given a broader interpretation to cover pipelines decommissioning, others held a contrary view. According to the this group, so long as pipelines have not been explicitly difined as offshore installations under the relevant UN conventions, there is nothing correct about treating the pipelines decommissioning within the realm of Art.111(1)(a)(11) of the London convention[24].  Although in the meantime it has been severally suggested that state practice and regional agreements should evolve a legal structure for pipelines decommissioning,  the thing to remember is that, such regional agreements are at best “soft law” principles recommended to guide policy development within member states.  Therefore, they are nonbinding rules that seldom acquire the attributes, quality or status of international law.[25]  In any event, so long as the United Nation exist, it will be a difficult thing to accept excuses why it can not act to remedy the ambiguities of both 1958 and 1982 conventions on pipelines decommissioning.  As observed earlier the solution to the problem lies with the UN rather than State practice and the sooner it act the better for all concerned.
The Current Practice
This is a very difficult thing to determine or aggregate the current practice,partly due to diversity of state practice because of absence of precise regulatory regime on the matter.[26] Every state has developed its own practice base on legal convenience.[27]  Take the United Kingdom for example, despite its preference for the 1982 convention as tyfified in its policy attitude towards the Brent Spar decommissioning, pipelines are not regarded as “offshore installation and structures” for the purposes of the IMO guidelines[28].  In view of its recent antecedents around this issue, one would expect the UK government to adopt the IMO supplement on the 1982 convention for pipelines abandonment.  That is to require for entire removal only where the pipelines lie within the water depth less than 75 meters.[29] Instead, to the utter astonishment of international law commentators, there was no clearly adopted state policy on decommissioning of offshore pipelines under the regime during the 1990s. The only suggested obligation to decommissioned under the UK regime was wholly predicated on the caveat where it constitute hazard to navigation[30]. The confirmation of this position would be seen in the House of Lords Energy Committee report of 1991 which provided that pipelines on the sea bed should be entirely removed while those buried could be left in place so long as it does not interfere with other legitimate sea uses.[31]  Although this position  makes economic sense, it is definitely a coup against sound environmental practices.[32] Perhaps this might explained the uncompromising position taken by the global environmentalist movement like the GreenPeace during the 1990s on the test case of Staffa-Ninian Pipeline Network decommissioning in the UK.[33]  Having said that, it is pertinent to observe that the greatest problem surrounding the issue of pipelines decommissioning is residual oil.[34] Studies have shown, that there is more residual oil in pipelines than in production facilities. And the effect of this on the living resources of the sea would be too great to imagine.[35] Therefore, it was not a coincidence that the emphasis had been on the environment rather then the economics of decommissioning.

The situation is not any better under the practice in the Netherlands. Although the country had adopted the complete removal regime under its continental shelf mining regulation of 1967. And that covers offshore pipelines, in practice, it is silent on whether “total removal” applies to pipelines decommissioning.[36]  The only thing suggestive of an obligation to decommission, is the provision of Art.68(1) of the 1967 regulation which provided for total removal of offshore structures used for oil and gas operations when no longer in use.[37]  The most significant aspect of dedicated state policy by way of standard requirements were deliberately ignored.

In Norway the situation is somewhat better because the defination of installation under the  Norwegian petroleum Act 1985 covered submarine pipelines. Under S30(5) of the Act, the liability for removal rest entirely with the owner of the installation at any time.[38]  However, instead of adopting the criteria set out in international law, the Act has given too much discretion to ministry for oil and energy.[39]  For instance, it is the ministry that decides on the question of decommissioning and most importantly the extent applicable base on case by case assessment.[40] On grounds of such discretion it would be somewhat difficult to precisely define the regulatory regime in Norway. Perhaps because the ministry may demand for complete or partial removal depending upon its assessment of particular circumstance of proposed Industry’s decommissioning programme.

Therefore as pointed out earlier, the Norwagian pipelines decommissioning regime also added to the uncertainties about the current international state practice. However despite the understandable internationalization of issues like residual liability, and the Brent Spar controversy which might influence future directions, it is the viewpoint of this research that the international standard practice that would eventually emerged out of the present divergent state practices will very much favour partial rather than complete decommissioning of offshore pipelines.[41]  This is because, so far there is nothing to suggest that where the residual oil if the pipelines is flushed and the pipes buried,it still poses potent threat to offshore environmental safety.[42] If this is the case, it would be over stretching the bound of reason, to build a international consensus on the matter on the paradigm of environmental paranoir. Which will be coiled around the complete removal regime.

The Conclusion

The international law on offshore pipelines decommissioning have had a very rough journey to its present state.  However, it is sad to note that it is still far away from being the ideal of the legitimate demand of its peculier circumstances. This is substancially because of the open ended controversy surrounding its legal framework. Take the instances of state obligation under Art.5(5) of the 1958 convention, the status of the convention and the relationship between the 1958 convention and the 1982 UN Law of the sea convention. The tension generated by it remained unsettled and while the law lags behind, the debate rages ahead.  Unfortunately, it is within this perpetual state of flux of the international regulatory regime that state practices evolved.  Therefore state practices were defined and shaped by the preference to either the internationally recognised practice under the 1982 convention or the 1958  convention removal regime in defiance of the far reaching consquences of their uncertainties. The divergent and often ambiguous interpretation of the two conventions have given rise to varying profoundly differential state practices. In the first category, prominent maritime countries like the United Kingdom, Norway and a handful of others have adopted partial decommissioning under their national regimes. That was their prefered state practices notwithstanding the fact that all of them were only signatories to the 1958 convention.

On the other hand, countries like the United States, France and Netherlands had national regimes that favoured complete removal requirement under Art.5(5) of the 1958  convention. The significance of the later group lies with the fact that the largest scale of offshore decommissioning had uptill today taken place in the Gulf of Mexico off the coast of the United States. Therefore the robust and huge experiences of the United State alone meant that it could single handedly define the paradigm for future legal development through its domestic state practice.[43] The consistent policy of the United States had been that disused or redundant offshore structures should be entirely removed in accordance with the existing international law.  Further more, even countries that are non signatories to the 1958 convention seemed to have better confidence and friendly disposition towards the complete removal regime. For instance, Germany and Belgium though non parties to the convention during the mid 1990s had domesticated emphasis under their national removal regimes that abandoned offshore platforms must be decommissioned in accordance with the requirement of Art.5(5) of the 1958 convention.

Further more, contrary to the widely held view that complete removal was only a norm under the 1958 regime, both the 1958 and the 1982 conventions were drafted in the same spirit. That is to say that they were meant to realise the same goals, had the same vision and had essentially operated on the same basis for future practice of offshore decommissioning. Take for instance the Imo directives which was meant to be a suppliment to the 1982 convention, it provided that no installation or structure should be placed on any countrys continental shelf or exclusive economic zone on or before 1st Jan 1998 unless the engineering design and construction is such that would allow for entire removal upon decommissioning or permanent disuse. In view of the foregoing, it could be argued that the perceived flexibilities of the 1982 regime was meant to facilitate the realization of the ultimate goal of complete removal. In any case this has further evidenced a trend towards the complete removal regime and the suggestive paradigm shift is not the prerogative of State practice alone but also for future international treaty development.[44] Looking at these scenarios very closely, it would be correct to say that although State practices in offshore abandonment have remained limited in terms of scope and dempth because it was not yet experienced in many jurisdictions, its current state is self evident of a gradual swing of the pendulum towards complete removal. Additionally, in whatever perspectives you would want to look at it, is representatively determinative of future direction in state practice.



[1] T. A. Jeremy, “New Developments in the international legal regime for the offshore oil and gas industry”, 4 OG LTR (1994), p 112.
[2] Ibid; see also Z Gao., International Petroleum Contracts: current trends and new directions (London: Graham & Trotman/matrinus Nijhoff Ltd, 1994),p.9.
[3] Z. Gao, “Current issues of international law on offshore abandonment, with special reference to the United Kingdom”, an article presented at the conference on minimising the impact of decommissioning, London, UK, 22 February 1996, p. 65.
[4] Dr. Jur. K. Kaasen, “Removal of offshore installations: some comments on the interaction between international Law”, Energy Law Journal, 1992 p. 269.
[5] Ibid.
[6] While a cross section of the international community have continue to recogmise Art.5(5) of the 1958 convention as a rule of customary international law on offshore abandonment despite its strictures,on the other hand a fraction countries from western Europe most especially  Great Britain have continue to insist that the rule no longer represents a principle of international law in view of its astronomatic cost implications owing to a fundamental change of circumstances.  The industry has even advanced technological analysis in a bid to establish the technical infeasibility of Art.5(5) under the prevailing situation.
[7] P. Cameron and M. Roggerkamp, “ Abandonment and Reclamation of Energy Sites and Facilities in the Netherlands”, Journal of Energy and Natural Resources Law, No. 1 Vol. 10 (1992), P. 29. and S.R. Dow, “Decommissioning and Abandonment of offshore Installations and Pipelines”, a paper presented at the summer seminar, Centre for petroleum mineral law and policy, university of dundee, scotland, UK (1994), P. 8.
[8] D. H. Anderson, “Some recent developments in the law relating to the continental shelf”, no 2 vol. 6 JENRL (1988), p. 99.
[9] Art.60(3) UN Law of the Sea Convention (UNCLOS) 1982.
[10]  Ibid.
[11] R. H. Beazley, “Security for Abandonment of Offshore Installations: the Legal Dimension”, 2 OGLTR (1987/88), p. 41.
[12] D.H., Anderson, “some recent developments in the Law relating to the Continental Shelf”’, Journal of Energy and Natural Resources Law, No. 2 Vol. 6 (1988), P. 99.
[13] Ibid.
[14] T.A. Jeremy, “New Developments in the international legal regime for offshore oil and gas industry’, 4 Oil and Gas Texation Law Review (1994), P.112. and Prof. R. Higgins, “ Abandonment of Energy Sites and Structures ; Relavant International Law”, Journal of Energy and Natural Resources Law, No. 6 (1993), PP. 9-11. and P.D. Cameron, “Redundant Oil Rigs: What to do when Oil Runs Out”, Petroleum Economist (1999), P. 23.
[15] Let me emphasise that, this is only an inference from Art.5(1) of the 1958 convention.  However looking at Art.5(2) of  the convention which entitled coastal states to “construct, maintain and operate on the continental shelf installations and other devices necessary for the exploration and exploitation of its natural resources......”  It could be argued that the expression “other devices necessary” had offshore pipelines in view.  The supposition therefore would be that the 1958 regulatory regime on offshore decommissioning should where applicable govern pipelines decommissioning, most especially in the signatory states.
[16] Ibid.
[17] Higgins, supra note 89.
[18] R.W. Bentham, “The Abandonment of offshore installations: the NorthSea in the International Context”, A Paper presented at the Oil and Gas Seminar, The Centre for Petroleum and Mineral Law and Policy, Unioversity of Dundee, Scotland, UK (1989), PP. 3-4
[19]  K.K/. Cuomo, “ Human Rights and Environment: The Common Ground”, Yale Journal of International Law (Yale JIL) (1993), PP. 23-34. and M. Buekes, “From Destruction to Recovery: Environmental Law, the Final Constitution and Impact of International Law”, South African Year Book of International Law (SAYIL) (1996), P. 67.
[20] K.Jr, Kaasen, “Removal of offshore installations; some comments on the interactions between International and national law”, Energy Law Journal, (1992), P. 65.
[21] Ibid.
[22] S.  R. Dow, “Decommissioning and Abandonment of Offshore Installations and Pipelines”, a paper presented at the Summer Programme, Centre for Petroleum & Mineral Law and Policy, University of Dundee, UK (1995), p 8.
[23] Ibid.
[24] R. Beazley, “Legal Aspects of the Decommissioning of submarine pipelines on the United Kingdom Continental Shelf”, 8 OGLTR (1986/87), p. 149.
[25]Gao, supra note 3, p. 71.
[26] A.S. Hussain, Law and Policy in Petroleum Development (London: Kluwer Internation 1979), P.22.
[27] A Hill, Legal Aspects of Platform Abandonment Proceedings of Conference on Platform Abandonment, London, 1 June (1984), P. 45.
[28] Dow, supra note 3, p. 71.
[29] The IMO Guidelines of 1989.
[30] Dow, supra note 95.
[31] Beazley, supra note 97.
[32] JSM Fitzpatrick, Abandonment in the 1990s is the UK Government Commited to Environmental Protection. LLM Dissertation, Centre for Petroleum and Mineral Law and Policy, University of Dundee, (1995), P. 66.
[33] Dow, supra note 101.
[34] W. John, “Decommissioning of Offshore Oil Installations in European Waters: The End of Dcades of Indecission”, The International of Marine and Coastal Law Kluwer Law International Law (1999), P.109.
[35] Ibid.
[36] P. Cameron, & M. Roggerkamp, “Abandonment and Reclamation of Energy Sites and Facilities: The Netherlands”, Vol 10 No. 1 JENRL (1992), p. 29.
[37] Ibid.
[38]  H. J. Bull, & K. Kaasen, “Abandonment and Reclamation of Energy Sites and Facilities: Norway”, Vol 10 No. 1 JENRL (1992), p. 39.
[39] S30 of Act No. 11 of March 22, 1985.
[40] Ibid.
[41] P. Mcdade, “Problems of Offshore Decommissioning Application of UK Law”, A Paper presented at the summer programme, the Centre for Petroleum and Mineral Law and Policy, University of Dundee, Scotland, UK (1989), PP. 4-5.
[42] R. Egger, Mining and Environment: International Perspectives on Public Policy, (Washington D.C., Resource for the Future 1994), P. 59.
[43] K.I.P. Khan, Petroleum Resources anmd Development Economics; Legal and Policy Issues for Developing Countries, (London: Belhaven Limited 1987), PP.12-27.
[44] Ibid.
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