International Efforts to Establish Rules on Liability for Offshore Activities

Abstract

Offshore activities account for a significant and steadily growing portion of worldwide oil and gas production. According to a report by the Group of Experts on the Scientific Aspects of Marine Pollution (“GESAMP”) in 2007, it is estimated that between 25 and 30% of global oil production comes from offshore oil and gas reservoirs, with the main production areas being located in the North Sea, Gulf of Mexico, Brazil and West Africa. However, this is not without costs to the marine environment. Oil pollution is the main concern with respect to sources of marine pollution. Despite advancements in the technology for the construction and operation of offshore installations, which have made possible that pollution levels from such activities be considerably low, offshore operations still remain a source of marine pollution because of the processes and risks they involve. Sometimes these processes and risks have been the cause of major pollution incidents. Many pollution incidents from offshore operations tend to be and normally are domestic in character. “Domestic pollution” in this case implies the situation where damage is suffered within the coastal State which has jurisdiction over the offshore operations causing the incident. Because offshore activities are usually carried out in the continental shelf of a coastal State, in many cases it will be that same coastal State which is likely to be the victim of an oil pollution incident. However, oil pollution can cross boundaries of national jurisdictions. Some sea areas with active offshore oil operations in their continental shelves are more prone to sustaining damage from international pollution than some other. Considering this problem, can the domestic legal system of a coastal State still be sufficient and effective to provide compensation in cases of “international pollution”, i.e. when oil from the continental shelf of a coastal State floats over to the continental shelf or shore of another coastal State? Could the citizens of the coastal State sustaining pollution damage be able to successfully claim compensation in the courts of that coastal State, even though damage was caused by offshore installations under the jurisdiction of a foreign State? Pollution from offshore installations affects a limited area of the continental shelf and/or the shore of the coastal State under which jurisdiction the installations operate, and in the worst case areas of the continental shelf and/or the shore of one or more coastal States located in the vicinity of the first coastal State. Thus one may question what sort of international regulation would be more effective and provide the most efficient mechanisms for determining liability and compensation for pollution damage, namely should it be a global or a regional regulation? Should this international regulation aim the uniformity of rules at an international level, or are pollution problems better addressed by regional agreements that take into account the different conditions of the particular areas where offshore operations are conducted?