Legal regime of residual liability in decommissioning: The importance of role of states

Abstract

While international regulations oblige operators to entirely remove all installations, a large number of structures are not designed to be completely removed. The number of installations left in-situ or converted to artificial reefs are rapidly increasing, and special comprehensive legislation for offshore residual liability is an extreme necessity, yet a regulatory regime governing post-decommissioning has not well developed. Leaving installations behind for decades needs an ongoing monitoring programme to prevent any potential hazard, however, the uncertainty associated with the risks involved and the perpetual liability of the assets’ owners make residual liability complex and challenging. Whilst, most states such as the United Kingdom, the Netherlands and Brunei recognise operators to be liable in perpetuity, some governments established a legal framework in which maintenance, monitoring and the issue of residual liability would transfer to the state in return for an agreed financial regime: for instance, the United States or Venezuela. On the other hand, a few countries like Norway acknowledge the transference process in the role of an option. Comparing these three different legislative frameworks, towards residual liability, demonstrates that the transferring of title and subsequent liability to governments reduces the risk of uncertainty and makes them responsible for what they will benefit from. Through critical analysis of the legal requirements of the aforementioned states, it comes into conclusion that stronger environmental protection would be provided if the states born liability for the post-decommissioning process, and the risk of damages left uncompensated would have decreased at a reasonable level.