Offshore Oil Drilling in NZ

Maritime Law Association of Australia and New ZealandNew Zealand Branch Conference

Taupo 2012 11 April 2014

DUNCAN E.J. CURRIE LL.B. (HONS) LL.M.

duncanc@globelaw.com

Maritime Zones

NZ’s International Obligations� to protect and

preserve the marine environment

� to conduct an environmental impact assessment

� to cause transboundary harm;

� to use best environmental practices;and

� to take a precautionary approach.

Art 208 laws, regulations and measures to prevent, reduce and control pollution shall be no less effective than international rules, standards and recommended practices and procedures.

Coastal State Obligations

UNCLOS art. 208

Coastal States shall adopt laws and regulations to prevent, reduce and control pollution of the marine environment arising from or in connection with seabed activities subject to their jurisdiction and from artificial islands, installations and structures under their jurisdiction, pursuant to articles 60 and 80.

2. States shall take other measures as may be necessary to prevent, reduce and control such pollution.

3. Such laws, regulations and measures shall be no less effective than international rules, standards and recommended practices and procedures.

And must enforce: arts. 214, 215.

Obligation to Protect and Preserve Marine Environment

Article 192 General obligation

States have the obligation to protect and preserve the marine environment.

Article 194 Measures to prevent, reduce and control pollution of the marine environment

1. Take…all measures consistent with this Convention that are necessary to prevent, reduce and control pollution of the marine environment from any source,.

3. These measures shall include, inter alia, those designed to minimize to the fullest possible extent:

c) pollution from installations and devices used in exploration or exploitation of the natural resources of the seabed and subsoil, in particular measures for preventing accidents and dealing with emergencies, ensuring the safety of operations at sea, and regulating the design, construction, equipment, operation and manning of such installations or devices;

5. The measures taken in accordance with this Part shall include those necessary to protect and preserve rare or fragile ecosystems as well as the habitat of depleted, threatened or endangered species and other forms of marine life.

Philippe Rouja

Obligation to Protect and Preserve Marine Environment

ITLOS Case No. 17, Seabed Advisor Opinion

Article 192 obligation a ‘general obligation’ – and that there is a general obligation of due diligence

“The link between an obligation of due diligence and the precautionary approach is implicit in the Tribunal's Order of 27 August 1999 in the Southern Bluefin Tuna Cases (New Zealand v. Japan; Australia v. Japan). This emerges from the declaration of the Tribunal that the parties "should in the circumstances act with prudence and caution to ensure that conservation measures are taken ... ..(ITLOS Reports 1999, p.274, at paragraph 77)”

The ‘due diligence’ obligation is an obligation to deploy adequate means, to exercise best possible efforts, to do the utmost, to obtain the result. It is in that sense an obligation of conduct; not result

-para 110National Geographic

Obligation to Protect and Preserve Marine Environment

ICJ in the Pulp Mills on the River Uruguay

"An obligation to adopt regulatory or administrative measures and to enforce them is an obligation of conduct. Both parties are therefore called upon, under article 36 [of the Statute of the River Uruguay], to exercise due diligence in acting through the [Uruguay River] Commission for the necessary measures to preserve the ecological balance of the river" (paragraph 187 of the Judgment).”

Obligation not to cause transboundary harm

ICJ Nuclear Weapons Advisory Opinion

The existence of the general obligation of States to ensure that activities within their jurisdiction and control respect the environment of other States or of areas beyond national control is now part of the corpus of international law relating to the environment. [29]

And UNCLOS Art 194(2) and CBD Art 3

Obligation to perform an environmental impact assessment

Article 206 Assessment of potential effects of activities

When States have reasonable grounds for believing that planned activities under their jurisdiction or control may cause substantial pollution of or significant and harmful changes to the marine environment, they shall, as far as practicable, assess the potential effects of such activities on the marine environment and shall communicate reports of the results of such assessments in the manner provided in article 205.

ITLOS Seabed Advisory Opinion

“It should be stressed that the obligation to conduct an environmental impact assessment is a direct obligation under the Convention and a general obligation under customary international law”

Pulp Mills on the River Uruguay

“Due diligence, and the duty of vigilance and prevention which it implies, would not be considered to have been exercised, if a party planning works liable to affect the régime of the river or the quality of its waters did not undertake an environmental impact assessment on the potential effects of such works.”

And Noumea Convention Art 16

Including public comment, other affected parties

Obligation to take a Precautionary Approach

Principle 15 of the Rio Declaration on Environment and Development (1992):

In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

Seabed Mining Advisory Opinion

“The precautionary approach is … an integral part of the general obligation of due diligence of sponsoring States, which is applicable even outside the scope of the [International Seabed Authority] Regulations.” “In the view of the Chamber, this has initiated a trend towards making this approach part of customary international law. (131,135)

ICJ in Gabčíkovo-Nagymaros (I.C.J., Gabčíkovo-Nagymaros Project (Hungary/Slovakia)

“The Court is mindful that, in the field of environmental protection, vigilance and prevention are required on account of the often irreversible character of damage to the environment and of the limitations inherent in the very mechanism of reparation of this type of damage.” (140)

Liability

ARTICLE 235 RESPONSIBILITY AND LIABILITY

1. States are responsible for the fulfilment of their international obligations concerning the protection and preservation of the marine environment. They shall be liable in accordance with international law.

2. States shall ensure that recourse is available in accordance with their legal systems for prompt and adequate compensation or other relief in respect of damage caused by pollution of the marine environment by natural or juridical persons under their jurisdiction.

3. With the objective of assuring prompt and adequate compensation in respect of all damage caused by pollution of the marine environment, States shall co-operate in the implementation of existing international law and the further development of international law relating to responsibility and liability for the assessment of and compensation for damage and the settlement of related disputes, as well as, where appropriate, development of criteria and procedures for payment of adequate compensation, such as compulsory insurance or compensation funds.

� Russia proposed in 2010 through G20.

“But drilling in deepwater brings new risks, not yet completely addressed by the reviews of where it is safe to drill, what could go wrong, and how to respond if something does go awry. The drilling rigs themselves bristle with potentially dangerous machinery. The deepwater environment is cold, dark, distant, and under high pressures—and the oil and gas reservoirs, when found, exist at even higher pressures, compounding the risks if a well gets out of control. The Deepwater Horizon and Macondo well vividly illustrated all of those very real risks. When a failure happens at such depths, regaining control is a formidable engineering challenge—and the costs of failure, we now know, can be catastrophically high.”- Page IX

Low probability does not mean low risk

“Even more troubling, the MMS Gulf of Mexico Regional Office approved the BP plan without additional analysis. There is little in that approval to suggest that BP and MMS gave close scrutiny to the contents of the Oil Spill Response Plan. The Regional Office's routine practice was to review and approve oil-spill response plans within 30 days of their receipt. Absent any legal requirement to do so, the office did not distribute submitted plans to other federal agencies for review or comment, nor did it seek public review or comment…. the inescapable conclusion is striking, and profoundly unsettling. None of these laws resulted in site-specific review of the drilling operations of the Macondo well.”.- Page 84

Oil Spill plan was rubber stamped

“the BP Oil Spill Response Plan described biological resources nonexistent in the Gulf—including sea lions, sea otters, and walruses.”

• dolphins still stranding at a rate three times the average rate.

• 500 dead sea turtles have been found every year for the past three years

Deepwater Drilling

� Fire, damage, injuries, pollution

� Liability to properly reflect deepwater risks

� Require bonds

� Use stronger risk assessment methodologies cost/benefit analysis

� Public oversight

� Public input

NZ response

� Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012

� Crown Minerals Amendment Act 2013

NZ: Measure up?

Greenpeace NZ v EPA and Anadarko [2013] NZHC 3482 CIV-2013-485-9572

2 core objections;

(a) The EIA did not properly address impacts on the high seas. (fish as ‘receptors’)

(b) The EIA did not include the ‘missing annexes’ - the oil spill modelling report, emergency oil spill response plan and well control contingency plan Referred to in the EIA (‘see annex B’ etc).

Section 39(1)(h): an assessment must“(h) specify the measures that the applicant intends to take to avoid, remedy, or mitigate the adverse effects identified.”

Section 39(4): “The measures that must be specified under subsection (1)(h) include any measures required by another marine management regime /…that may have the effect of avoiding, remedying, or mitigating the adverse effects of the activity on the environment or existing interests.

NZ: Measure up?

Greenpeace NZ v EPA and Anadarko [2013] NZHC 3482 CIV-2013-485-9572

Held:

[27] The issue before the Court is a much narrower one. It is whether EPA erred in law in accepting the impact assessment as complying with s 39. EPA's role under s 41, not its wider role in considering an application under the Act when it is in force, is in issue here.

“[28] EPA’s role under s 41 does not involve any assessment of the merits of the content of the impact assessment. Its role is limited to assessing whether the application contains information about the required matters. … The decision under s 41 is essentially administrative.

EPA said it was up to Anadarko to decide what information they provided to EPA, including in relation to the adverse effects of both planned discharges and potential oil spills. [36]

Also, the time for a decision under a 41 has expired. The Court does not have power to direct a decision on this issue outside the statutory timeframe.” [41]

NZ and Public Participation

Crown Minerals Act 1991 s 101(b)

(1) A person commits an offence if the person intentionally engages in conduct that results in—

(a) damage to, or interference with, any structure or ship that is in an offshore area and that is, or is to be, used in mining operations or for the processing, storing, preparing for transporting, or transporting of minerals; or

(b) damage to, or interference with, any equipment on, or attached to, such a structure or ship; or

(c) interference with any operations or activities being carried out, or any works being executed, on, by means of, or in connection with such a structure or ship.

(2) A person commits an offence if—

(a) the person is the master of a ship that, without reasonable excuse, enters a specified non-interference zone for a permitted prospecting, exploration, or mining activity; or

(b) the person leaves a ship and, without reasonable excuse, enters a specified non-interference zone for a permitted prospecting, exploration, or mining activity.

(3) In prosecuting an offence against subsection (2), it is not necessary for the prosecution to prove that the person intended to commit the offence.

which may be up to 500 metres from any point on the outer edge of the structure or ship to which the activity relates or, if there is any equipment attached to the structure or ship, 500 metres from any point on the outer edge of the equipment)

NZ and Public Participation

ARTICLE 60 ARTIFICIAL ISLANDS, INSTALLATIONS AND STRUCTURES IN THE EXCLUSIVE ECONOMIC ZONE

4. The coastal State may, where necessary, establish reasonable safety zones around such artificial islands, installations and structures in which it may take appropriate measures to ensure the safety both of navigation and of the artificial islands, installations and structures.

Article 78.2

in exercising its rights and performing its duties under this Convention in the exclusive economic zone (EEZ), New Zealand as the coastal State shall have due regard to the rights and duties of other States and shall act in a manner compatible with the provisions of the Convention. UNCLOS article 56.2.

NZ and Public Participation

SUA Convention

1. Any person commits an offence within the meaning of this Convention if that person unlawfully and intentionally:

(a) seizes or exercises control over a ship by force or threat thereof or any other form of intimidation; or

(b) performs an act of violence against a person on board a ship if that act is likely to endanger the safe navigation of that ship; or

(c) destroys a ship or causes damage to a ship or to its cargo which is likely to endanger the safe navigation of that ship; or (e) destroys or seriously damages maritime navigational facilities or seriously interferes with their operation, if any such act is likely to endanger the safe navigation of a ship;

NZ Bill of Rights s 14 (Free expression), 16 (peaceful assembly), 16 (freedom of association)

International Covenant on Civil and Political Rights

IMO “[a]ffirming the rights and obligations relating to legitimate and peaceful forms of demonstration, protest or confrontation and noting that there are international instruments that may be relevant to these rights and obligations."IMO Resolution MSC.303(87)f.

EU and Public Participation

ECHR: Women on Waves v Portugal forbidding a protest vessel to enter Portuguese territorial waters prevented the plaintiffs from conveying their information and holding meetings and manifestations – that were scheduled to take place on board – in a way they deemed most effective.

Steel v UK: physically impeding the activities constituted expressions of opinion within the meaning of Article 10. The measures taken against the applicants were, therefore, interferences with their right to freedom of expression

-proportionality, subsidiarity, safety (Shell v Greenpeace, Amsterdam, 2010)

R. v Kirkwood NSW District Court 2002: "[t]he right to protest and the right to express publicly one's political views, albeit by direct action, is one which is to be valued and protected in the context of a modern democracy."

International Law and Public Participation

Rio Declaration Principle 10 (1992)

Environmental issues are best handled with participation of all concerned citizens, at the relevant level. At the national level, each individual shall have appropriate access to information concerning the environment that is held by public authorities, including information on hazardous materials and activities in their communities, and the opportunity to participate in decision-making processes.

States shall facilitate and encourage public awareness and participation by making information widely available. Effective access to judicial and administrative proceedings, including redress and remedy, shall be provided.

The Future We Want (2012)

43. We underscore that broad public participation and access to information and judicial and administrative proceedings are essential to the promotion of sustainable development.

99. We encourage action at regional, national, sub-national, and local levels to promote access to information, public participation, and access to justice in environmental matters, as appropriate.

Remi Parmentier

Aarhus Convention and Public ParticipationConvention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters

Art 6

Each Party shall apply the provisions of this article with respect to decisions on whether to permit proposed activities listed in annex I;

(2) The public concerned shall be informed… early in an environmental decision-making procedure, and in an adequate, timely and effective manner, inter alia, of the proposed activity and the application on which a decision will be taken

(4) Each Party shall provide for early public participation, when all options are open and effective public participation can take place.

LIST OF ACTIVITIES

item 12. Extraction of petroleum and natural gas for commercial purposes where the amount extracted exceeds 500 tons/day in the case of petroleum and 500,000 cubic metres/day in the case of gas.

Article 9 Access to Justice

Each Party shall, within the framework of its national legislation, ensure that members of the public concerned…have access to a review procedure before a court of law and/or another independent and impartial body established by law, to challenge the substantive and procedural legality of any decision, act or omission subject to the provisions of article 6

NZ and Public ParticipationExclusive Economic Zone and Continental Shelf (Environmental Effects) Amendment Act 2013

Non-notified activity means a discretionary activity that—

(a) is described in regulations as non-notified; or

(b) is an activity for which regulations provide that an application for a marine consent is not to be publicly notified

S 29D (1) Regulations may describe any discretionary activity as non-notified or provide that an application for a marine consent for an activity is not to be publicly notified.

(2) Regulations must only provide that a discretionary activity is to be non-notified if, in the Minister's opinion,—

(a) the activity has a low probability of significant adverse effects on the environment or existing interests; and

(b) the activity is—

(i) routine or exploratory in nature; or

(ii) an activity of brief duration; or

(iii) a dumping activity.

Deepwater Horizon

� Exploratory Well

� Risk assessment for Mocando well found most likely large spill 4,600 barrels, and max 26,000 barrels over 40 years. Estimated “no significant impact” from spills

� Spilled 4 million barrels

� BP has paid $43 billion in cleanup, restoration costs, fines. Ongoing litigation

� NOAA led study found heart defects in fish

Exxon Valdez 25 years on

� Covered thousands of miles of pristine waters and coastal areas, killed marine mammals, fish, and seabirds, and damaged the livelihoods of the people who lived and worked in the region

� Exxon spent $2.1 billion in cleanup. Lawsuits lasted 20 years. $5 billion punitive damages reduced to $507 million. Exxon Shipping Co. v. Baker 554 U.S. 471 (2008)

� Congress enacted the Oil Pollution Act of 1990

� Local orcas heading for extinction

� Pacific herring industry never re-opened

Natalie B. Fobes/National Geographic/Getty Images

International Energy Agency“No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal, unless carbon capture and storage (CCS) technology is widely deployed.”

Oil gas and coal industry spent $674 billion last year to find and develop new potentially stranded assets

Carbon logic

Ocean Acidification

28

“We would probably have to go back at least 65 million years (the time at which the dinosaurs went extinct) to maybe find an ocean chemical change as fast as we are experiencing today” Barker/Ridgwell 2012

Turley et al 2006

A shell placed in seawater with increased acidity slowly dissolves over 45 days.Credit: NOAA PME