Fifth Standing Committee on Delegated Legislation
Monday 24 June 2002
[Sir Nicholas Winterton in the Chair]
Draft Offshore Installations (Emergency Pollution Control) Regulations 2002
The Chairman: I have great pleasure in calling the Minister.
The Minister for Energy and Construction (Mr. Brian Wilson): I beg to move,
That the Committee has considered the draft Offshore Installations (Emergency Pollution Control) Regulations 2002.
I have great pleasure in welcoming you, Sir Nicholas.
The regulations before the Committee today implement the recommendations of Lord Donaldson's review of salvage and intervention and their command and control in so far as they relate to the United Kingdom oil and gas industry. As a party to the United Nations convention on the law of the sea, the UK has an obligation to protect and preserve the marine environment, and the regulations will better enable the UK to fulfil that undertaking. They are made under section 3 of the Pollution Prevention and Control Act 1999, and provide the Secretary of State for Trade and Industry with powers to prevent or reduce actual pollution or the risk of significant pollution, following an incident involving an offshore installation.
In October 1997, Lord Donaldson of Lymington was asked to review Government involvement in salvage and intervention in pollution incidents following the grounding and subsequent salvage of the Sea Empress in 1996. The review was carried out partly as an investigation into the incident and partly to clarify the roles of all those involved in a salvage operation where there is a risk of marine pollution. Although the review was primarily concerned with accident prevention and damage limitation from shipping incidents, Lord Donaldson took the view that he needed to extend his review to include offshore installations, on the basis that they, too, could pose a threat to the marine environment. For example, where oil escapes from an installation, the task of response and recovery is identical to a situation in which oil has escaped from a ship.
The report was presented to Parliament in March 1999. It made 26 recommendations, five of which related to offshore installations; that is, any structure that is used, or connected with, petroleum exploration, development and production. Lord Donaldson specifically recommended that the Secretary of State for Trade and Industry, who is responsible for the regulatory control of offshore installations, should be given powers to intervene when there is significant pollution or the risk of significant pollution. He also said that the involvement of Ministers in operational
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decisions is not a practical option and, therefore, the Secretary of State for Trade and Industry should delegate those powers to her representative, known as the Secretary of State's representative, or SOSREP for short. Further, the Secretary of State should be given powers to pay compensation in certain circumstances, and the powers should be similar to those held by the Secretary of State for Transport, Local Government and the Regions for dealing with shipping under the Merchant Shipping Act 1995.
The regulations will give the Secretary of State for Trade and Industry the power to appoint the SOSREP, who will be empowered by the regulations to intervene in an offshore incident and give directions to the operator for the purpose of preventing or reducing pollution. He may also take further steps, such as taking control of an installation and, in extreme circumstances, more direct action may be taken. I should stress, however, that he—or, indeed, she—would not intervene unless he believed that an operator was failing, or had failed, to control an incident. Given the new powers of the SOSREP, the regulations will also provide the framework for recovering compensation from the Secretary of State, but only in circumstances in which expenses are incurred or damage suffered as a direct consequence of a direction given by the SOSREP and where the actions taken were not reasonably necessary or were disproportionate to the benefit.
The position of the SOSREP is not new. The Department for Transport, Local Government and the Regions has already adopted Lord Donaldson's recommendations and appointed a similar figure under the Merchant Shipping Act 1995. Those in the shipping industry were initially sceptical about the involvement of the SOSREP, but their fears have abated now that they have had a chance to work with him. In the past two years, he has intervened some 27 times in shipping incidents. The need for intervention in the offshore industry is expected to be very rare. Understandably, however, some operators remain cautious.
In order to ensure clear communication in what could be difficult circumstances, Lord Donaldson recommended that one person should be the SOSREP for both shipping and offshore installations. It is the intention that the Secretary of State for Trade and Industry will appoint the existing SOSREP to represent her.
A full consultation process has been undertaken on the regulations and a regulatory impact assessment has been prepared. Approximately one fifth of those consulted by my Department replied, and most of their comments related to health and safety, the application of liability, and compensation and implementation.
Industry has raised concerns about the cost of implementation of the regulations, but that will not be large. Overall costs to the industry are estimated to be approximately £500,000, spread over some 32 operators. Individual companies will have to amend existing and new oil spill contingency plans to deal with the SOSREP's new role, which will represent one-off costs of approximately £3,000 per plan, with
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each installation requiring its own plan. In addition, there will be the cost of providing on-site facilities for the SOSREP in the event of an incident, estimated at around £5,000. In all, therefore, the average financial burden on each operator is less than £16,000, dependent on the number of installations owned or operated.
Greater concern was expressed about the potential conflict between the health and safety of personnel and the protection of the environment, which is, after all, the thrust of the regulations. Health and safety will always be paramount and industry has been assured of that. The nature of incident response is such that priority is always given to human safety over pollution control. My Department has had detailed discussions with the Health and Safety Executive on the issue and a small amendment was made to the regulations to make the position absolutely clear.
Another concern has been about the claiming of compensation should the SOSREP give an inappropriate direction. Should such an event occur, it will be for the courts to decide on liability. The industry has asked for firm guidance from my Department, but it is not possible to prejudge such matters.
I take into account the industry's natural concerns, but it will ultimately benefit from the legislation. My first priority, after health and safety issues, is to safeguard the public interest in an actual or potential pollution situation by bringing Government resources to bear in such cases. Throughout, my Department has kept the offshore industry fully informed of the progress of the legislation, by means of individual discussions, an exercise involving all those who could have a role in responding to an incident, and a workshop with industry and other Government Departments.
In presenting his report, Lord Donaldson recognised the excellent record of the offshore industry in limiting the size and number of spills, and that the likelihood of a major incident on an offshore installation was low. However, he also reflected the need to balance the public and national interest against commercial pressures.
I do not believe that the regulations will be a burden on the offshore industry. Rather, in the event that they are activated, they will facilitate the setting up of a partnership for dealing with a major oil spill, which will reduce or prevent pollution.
Lord Donaldson recommended that the Secretary of State for Trade and Industry should have a power to intervene in cases of potential or actual risk of serious pollution, in order to protect the marine environment. The regulations before us seek to provide that power.
Finally, Sir Nicholas, I apologise to you and to the Committee for the lack of guidance notes to this statutory instrument, which is due to an administrative oversight in my Department. Copies are available here. I hope that the Committee will approve the regulations.
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The Chairman: I remind the Committee that we can debate the matter for one and a half hours. However, if there is a Division in the House extra time will be allowed.
Mr. Philip Hammond (Runnymede and Weybridge): I hope that it will not be necessary to debate the regulations for one and a half hours. The choice of Room might reflect the importance of the regulations, but I hope that it does not reflect a perception that they are controversial; they are not.
I am grateful to the Minister for his opening remarks and for his clarification in relation to the issue of interface with health and safety regulations.
Before I embark on my brief remarks I should draw attention to my registered interests, which are pertinent to this matter. [Interruption.] The hon. Member for Chorley (Mr. Hoyle) will find them in the Register—
The Chairman: Order. The hon. Member need not reply to any intervention where the hon. Member making it does not rise.
Mr. Lindsay Hoyle (Chorley): To put the record straight, I did not indicate any wish to know about the hon. Gentleman' interests. It must have been another hon. Member who intervened, so the hon. Member for Runnymede and Weybridge (Mr. Hammond) should withdraw the accusation.