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.