The Regulation of Continental Shelf Development : Rethinking International Standards [1 ed.] 9789004256842, 9789004256835

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The Regulation of Continental Shelf Development

Center for Oceans Law and Policy Series Editors

Myron H. Nordquist John Norton Moore

VOLUME 17

The titles published in this series are listed at brill.com/colp

The Regulation of Continental Shelf Development Rethinking International Standards Edited by

Myron H. Nordquist John Norton Moore Aldo Chircop Ronán Long

Leiden • boston 2013

Library of Congress Cataloging-in-Publication Data The regulation of continental shelf development : rethinking international standards / edited by Myron H. Nordquist, John Norton Moore, Aldo Chircop, Ronan Long.   pages cm. — (Center for oceans law and policy ; v. 17) “The Regulation of Continental Shelf Development: Rethinking International Standards, is part of a series of publications on oceans law and policy associated with the Center for oceans law and policy, university of virginia School of law. This volume is based on presentations made June 21–22, 2012, at the Center’s 36th annual Conference which was held in Halifax, Nova Scotia. The primary co-organizers of the Conference were the Virginia Center and the Marine & Environmental Law Institute, Schulich School of Law, Dalhousie University.”  ISBN 978-90-04-25683-5 (hardback : alk. paper) — ISBN 978-90-04-25684-2 (e-book) 1. Continental shelf—Law and legislation—Congresses. I. Nordquist, Myron H.,– editor of compilation. II. Moore, John Norton, 1937– III. Chircop, Aldo E., editor of compilation. IV. Long, Ronán J., editor of compilation. V. University of Virginia. Center for Oceans Law and Policy. Conference (36th : 2012 : Halifax, Nova Scotia)  KZA1664.R44 2013  341.4’48—dc23 2013025613

This publication has been typeset in the multilingual “Brill” typeface. With over 5,100 characters covering Latin, IPA, Greek, and Cyrillic, this typeface is especially suitable for use in the humanities. For more information, please see www.brill.com/brill-typeface. ISBN: 978-90-04-25683-5 (hardback) ISBN: 978-90-04-25684-2 (e-book) Copyright 2013 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Global Oriental, Hotei Publishing, IDC Publishers and Martinus Nijhoff Publishers. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper.

Halifax Papers The Regulation of Continental Shelf Development: Rethinking International Standards, is part of a series of publications on oceans law and policy associated with the Center for Oceans Law and Policy, University of Virginia School of Law. This volume is based on presentations made June 21–22, 2012, at the Center’s 36th Annual Conference which was held in Halifax, Nova Scotia. The primary co-organizers of the Conference were the Virginia Center and the Marine & Environmental Law Institute, Schulich School of Law, Dalhousie University. Associate sponsors were the Centre for International Law, National University of Singapore; School of Law, National University of Ireland, Galway; and the Korea Maritime Institute, Republic of Korea. Additional sponsorship was also provided by the Faculty of Law, University of Bergen; the law firms of McInnes Cooper; Egan, Fitzpatrick, Malsch & Lawrence PLLC; Vinson & Elkins LLP; the Halifax Marine Research Institute; Foreign Affairs and International Trade, Canada; DNV KEMA Energy and Sustainability; GARD (North America) Inc.; Ocean Science and Technology, Dalhousie University; International Cable and Protection Committee; LOICZ International Project Office; the Law Foundation, New Zealand; the International Seabed Authority; and the World Wildlife Fund.

TABLE OF CONTENTS Preface ............................................................................................................................. Acknowledgements .....................................................................................................

xi xvii

Setting the Context The Continental Shelf Regime under the UN Convention on the Law of the Sea: Reflections after Thirty Years ....................................................  S. Jayakumar

3

Part 1

Contemporary Uses of the Continental Shelf Offshore Wind Energy Development and Ecosystem-Based Marine  Management in the EU: Are the Regulatory Answers Really  Blowing in the Wind? ............................................................................................  Ronán Long

15

Submarine Cables on the Continental Shelf .......................................................  Douglas R. Burnett

53

Mining for Marine Minerals .....................................................................................  Georgy Cherkashov

71

Part 2

Emerging Challenges to the Development of the Continental Shelf Regime International Seabed Authority Mining Standards ...........................................  Michael W. Lodge The Continental Shelf beyond 200 NM: A First Look at the Bay of  Bengal (Bangladesh/Myanmar) Case ................................................................  Ted L. McDorman

79

89

viii   Contents International Standards for Offshore Drilling ..................................................... 105  J. Ashley Roach Part 3

Comparative Best Practices in Environmental Regulation of Continental Shelf Activities Renewable Energy and Marine Spatial Planning: Scientific and Legal  Implications .............................................................................................................. 153  Andreas Kannen, Hartwig Kremer, Kira Gee, and Marcus Lange The Legal Framework for the Regulation of Safety and Environmental  Issues on the Outer Continental Shelf ............................................................. 179  Joanna Mossop Offshore Safety Regimes—A Contested Terrain ................................................ 195  Preben H. Lindøe and Ole A. Engen Part 4

Probabilistic Risk Assessment for Continental Shelf Development Environmental Regulation and Probabilistic Risk Assessment ..................... 215  Martin G. Malsch Disasters and the Continental Shelf: Exploring New Frontiers  of Risk ......................................................................................................................... 225  Bruce C. Glavovic Part 5

Decommissioning of Offshore Installations and Structures Global Legal Regime on the Decommissioning of Offshore Installations  and Structures .......................................................................................................... 259  Robert Beckman Regional Regulation of Offshore Oil and Gas Industry Decommissioning  by the OSPAR Commission ................................................................................. 281  David Johnson

Contents   ix Part 6

Liability and Compensation The Regime for Liability and Compensation for Oil Pollution Damage  from Ships ................................................................................................................. 297  Alfred Popp Benefit and Risk of the Northern Sea Route to the North Pacific ................ 309  Sung-Woo Lee Developing Arctic Hydrocarbon Resources: Delineating and Delimiting  Boundaries for Field Development in the Arctic .......................................... 319  Timothy J. Tyler, James L. Loftis, Emilie E. Hawker, Hana V. Vizcarra, and  M. Imad Khan Part 7

Completing the Unfinished Business of UNCLOS III Completing the Unfinished Business of UNCLOS III ....................................... 355  Brian Flemming Comments on the Unfinished Business of UNCLOS III ................................... 359  John Norton Moore part 8

Special Presentation Beyond the Outer Limit: 60-Year Reflections for a Luncheon Address ...... 369  Edgar Gold

Preface The Thirty-Sixth Annual Conference on oceans law and policy was co-convened and co-sponsored by the Center for Oceans Law and Policy, University of Virginia School of Law and the Marine & Environmental Law Institute, Schulich School of Law, Dalhousie University in Halifax, Nova Scotia, June 20–23, 2012. Additional support for the Conference was provided by the Korea Maritime Institute, Republic of Korea; the Centre for International Law, University of Singapore; the University of Ireland, Galway; the law firm of McInnis Cooper; and the University of Bergen, as well as from other organizations recognized in the Acknowledgements of this volume. The theme selected for the Conference was “The Regulation of Continental Shelf Development” with a subtitle of “Rethinking International Standards.” Part of the rationale for holding the conference was to glean lessons learned from the 2010 blow-out of the Deepwater Horizon oil spill in the Gulf of Mexico. This book tracks the agenda of the Halifax conference starting with reflections by Professor Shunmugan Jayakumar. He is now with the National University of Singapore but formerly served as the Deputy Prime Minister and Senior Minister in the Government of Singapore. Ambassador Jayakumar also represented Singapore at the Third United Nations Conference on the Law of the Sea (UNCLOS III) from 1974 to 1979. His address in Halifax focused on developments pertaining to the continental shelf regime in the 1982 UN Convention on the Law of the Sea (1982 Convention or UNCLOS) with particular reference to the protection and preservation of the marine environment. Professor Jayakumar commented on the complexities of the UNCLOS III negotiations given their wide scope, unique processes, long duration, numerous interest groups and unprecedented role for Conference leaders. The continental shelf regime exemplified the carefully constructed compromises negotiated at UNCLOS III. While the nature of coastal State rights remained largely unchanged after protracted negotiations, Article 76 ultimately accommodated the views of both the broad and narrow margin States with respect to the outer limit of the continental shelf. Marked advances in deep water drilling technology present serious challenges to protection of the marine environment as do decommissioning of offshore rigs and competing uses such as laying and repairing submarine cables. Professor Jayakumar concluded that UNCLOS is a framework agreement which provides mechanisms for the development of more detailed rules for the regulation of continental shelf activities. Part 1 in this book deals with contemporary uses of the continental shelf. Dr. Ronán Long from the National University of Ireland, Galway, gives an overview

xii   Preface on offshore wind energy development and ecosystem-based management in the European Union (EU). He draws attention to relevant EU regulatory and policy instruments designed to resolve uncertainties between offshore wind farms and EU ecosystem-based management which is comprehensive integrated management based upon the best available scientific knowledge. Long concludes by outlining measures to achieve the EU objectives. Douglas R. Burnett, International Cable Law Advisor to the International Cable Protection Committee then describes the importance of submarine cables for telecommunications, power distribution, oil and gas production, and other uses of the oceans. He reviews the treatment of these uses under UNCLOS and offers four case studies illustrating contemporary disputes involving submarine cables on the continental shelf. Deputy Director Georgy Cherkashov of the Institute for Geology and Mineral Resources of the Ocean in St. Petersburg, Russia, concentrated on mining for marine minerals on the continental shelf. He presents a variety of data demonstrating the high potential of marine minerals while assuring that marine mining will not replace mining on land but will supplement the supply of raw materials needed by a global economy. Part 2 covers emerging challenges to the development of the continental shelf regime. The Deputy to the Secretary-General and Legal Counsel to the International Seabed Authority (ISA), Michael W. Lodge describes the standards set by the ISA for seabed mining as they relate to activities in the Area. He notes that many countries have regulatory regimes for oil and gas but that relatively few have established regimes for marine hard minerals. Hence, the ISA regulations, while not intended for national regulators, could provide a benchmark for future national regulation. Professor Ted L. McDorman, Faculty of Law, University of Victoria, British Columbia, then takes a first look at the recent International Tribunal for the Law of the Sea (ITLOS) decision in the Bay of Bengal with respect to the continental shelf beyond 200 nm. He observes that ITLOS respects the role of the Commission on the Limits of the Continental Shelf (CLCS) to deal with the scientific application of Article 76 of UNCLOS. However, when State Parties to UNCLOS agree to adjudicate disputes as in the Bangladesh/Myanmar case, ITLOS had the authority to determine the interpretation or application of the legal or scientific text in Article 76. J. Ashley Roach, former Legal Advisor to the US Department of State takes up the issue of the role of the International Maritime Organization (IMO) in establishing safety standards and standards for liability and compensation for transboundary effects of oil pollution for offshore platforms. He argues that the IMO can and should act through its Member States to deal with this problem and he provides relevant treaty provisions in this regard in two appendices. The comparative best practices in environmental regulation of continental shelf activities are examined in Part 3. Four scientists, Andreas Kannen, Hartwig Kremer, Kira Gee and Marcus Lange tackle the scientific and legal implications

Preface   xiii

of renewable energy and marine spatial planning. The authors elaborate on a disciplinary process oriented research with the ultimate goal to foster ecosystembased management. They suggest this will help move toward global sustainability in response to climate change and economic development. A Senior Law Lecturer, Victoria University of Wellington, New Zealand, Joanna Mossop, discusses the 50 full submissions and 40 partial submissions to the CLCS. The difference between continental shelf within the EEZ and beyond is that the freedom of the high seas applies beyond the EEZ. She describes conditions in coastal State continental shelf licenses on the outer continental shelf and the ability of a coastal State to set a safety zone around installations and structures based on UNCLOS Articles 60 and 80. Two University of Stavanger professors, Preben H. Lindøe and Ole A. Engen, outline offshore risk regulation on the Norwegian continental shelf. They detail Norway’s development of “a coherent, integrated legal framework for regulating health, safety and environment” for oil and gas operations. The regulations emphasize self-regulation and enforcement from non-statutory means. Part 4 is addressed to probabilistic risk assessment for continental shelf development. An experienced private lawyer, Martin G. Malsch, defines “probabilistic risk assessment” (PRA) and the problems encountered in performing a PRA, particularly in environmental regulatory programs. These include expense, acquiring the necessary expertise, assuring transparency in decision-making, accounting for uncertainty, and using PRA results in a zero risk framework. Bruce C. Glavovic of Massey University, New Zealand, approaches continental shelf disasters by a critical examination leading to the conclusion that “knowledge about ocean and coastal risk, resilience and sustainability is partial, plural, contingent and contested.” He advocates the view that ocean and coastal management needs to be “reconceptualised as a transformative practice of deliberative governance.” This will “chart new sustainability pathways and help to reduce disaster risk on coastal margins.” Part 5 is devoted to the practical problem of decommissioning offshore installations and structures on the continental shelf. Robert Beckman, Director, Centre for International Law, National University of Singapore, outlines the global regime for decommissioning offshore oil and gas installations and structures as particularly provided in Articles 60(3) and 80 of UNCLOS. He discusses the 1989 IMO Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone. He also considers “dumping” as a breach of Article 210 of UNCLOS and the 1972 London Convention. The author does not, however, conclude that conversions such as to artificial reefs are dumping violations. He observes that the absence of global rules, standards and recommended procedures is a major gap in the existing international legal regime. The immediate past Executive Secretary of the Convention for the Protection of the Marine Environment of the North-East

xiv   Preface Atlantic (OSPAR Convention), David Johnson, explains OSPAR’s role with respect to regulating the marine environmental impact of the oil and gas industry. He traces the history of OSPAR and its movement toward implementing a risk-based approach in line with an updated overarching ecosystem approach. Companies facing decommissioning seeking permission from a national regulator have to plan “for long lead in times, involving detailed environmental impact studies, complex and expensive logistical options and comprehensive engagement with stakeholders.” Liability and compensation is the topic covered in Part 6. Alfred Popp, the Administrator of the Ship-source Oil Pollution Fund (SOPF), provides background on the international regime of liability and compensation for oil pollution caused by ships. The owner of the ship is strictly liable for accidental discharges of oil causing damage up to a specified limit based on the ship’s tonnage. Uncompensated damage is available from International Oil Pollution Compensation Funds (IOPC). Two industry agreements concluded in 2006 are aimed at providing additional relief to the IOPC funds and he discusses several Canadian regimes for ship-source oil pollution. Sung-Woo LEE from KMI next examines commercial aspects of the Northern Sea Route (NSR). While decreasing shipping distance and time, he is concerned about an expensive passage toll fee imposed by Russia as well as about invisible risks inherent in an Arctic voyage. He favors further exploration of the viability of the NSR to “bring possible economic benefits to North Pacific countries by keeping up efforts for reducing the risks in the Arctic while protecting the environment.” Attorneys with the private law firm of Vinsen & Elkins (Timothy J. Tyler, James L. Loftis, Emilie E. Hawker, Hana V. Vizcarra and M. Imad Khan) argue that an effective legal framework for oil and gas exploration and exploitation must deal with delimitation of international boundaries and rules for developing fields that may be under two or more States’ boundaries. They point out that delimitation in the Arctic is probably not a major concern given that most of the resources are located under undisputed national jurisdiction. As for cross-boundary hydrocarbon-resource exploitation, they suggest that the 2010 Barents Sea Agreement between Norway and Russia represents a state-of-the-art bilateral treaty which is “expected to be preferred by the Arctic States for other boundaries.” Part 7 titled “Completing the Unfinished Business of UNCLOS III” features a discussion between Brian Flemming, QC, Canada, and John Norton Moore, Director, COLP. The first speaker identifies eight matters that have arisen over the past 30 years that merit attention: 1. The Great Arctic Melt; 2. The Increase in Deepwater Drilling Activity; 3. Overfishing Worldwide; 4. The Acidification of the Oceans/Pollution: 5. Changing Coastlines Around the World; 6. The Ongoing Failure of the US to Ratify [UNCLOS]; 7. How About an “Audit UNCLOS” Meeting?; and 8. The Growing Glut of Claims Pending Before the UN Commission [CLCS]. Director Moore chose to highlight two issues: first, the need for international and

Preface   xv

regional rules for the protection of the environment from continental shelf activities and second, the kind of rules, and how they will be enforced. Article 208 of UNCLOS provides the international framework for the international problem involved in the first issue. He is critical however, of the “command and control” approach adopted by the United States and advocates the PRA explained in Part 4. He also encourages the industry to initiate a new protocol adopting the PRA approach. Professor Moore does not believe a new UNCLOS is needed. He then elaborates why the political conditions in the United States are improving in favor of US accession. He concludes that “the bottom line is that we [the United States] got a very good deal in the overall negotiations – 200 miles, far beyond the base of the slope and even beyond that, the extended continental shelf.” Part 8 contains the insightful remarks of Professor Edgar Gold, the founding Executive Director of the Dalhousie Ocean Studies Program, upon the occasion of his being honored with a Festschrift from his Dalhousie colleagues: The Regulation of International Shipping: International and Comparative Perspectives: Essays in Honour of Edgar Gold (Martinus Nijhoff, 2012). He recounted a recent 109-day world cruise and compared what he saw on the cruise with what he saw as a sea-going Master Mariner 60 years ago. His thoughts are too sweeping and varied to be captured in a paragraph and the reader is encouraged to read for his/her self his essay on: “Beyond the Outer Limit: 60-year Reflections for a Luncheon Address.” The editors of this volume certainly join Dalhousie in celebrating Ed’s manifold contributions to the Rule of Law in the world’s oceans.

Acknowledgements The Thirty-Sixth Annual Conference on oceans law and policy was co-convened and supported by the Center for Oceans Law and Policy (COLP), University of Virginia School of Law and the Marine & Environmental Law Institute (MELAW), Schulich School of Law, Dalhousie University in Halifax, Nova Scotia, June 20–23, 2012. Additional support for the Conference was provided by the Korea Maritime Institute, Republic of Korea; the Centre for International Law, University of Singapore; the University of Ireland, Galway; the law firm of McInnis Cooper; and the University of Bergen. Additional sponsorship was provided by the law firms of Egan, Fitzpatrick, Malsch & Lawrence PLLC and Vinson & Elkins LLP; the Halifax Marine Research Institute; Foreign Affairs and International Trade, Canada; DNV KEMA Energy and Sustainability; GARD (North America) Inc.; Canada Excellence Research Chair and Ocean Science and Technology, Dalhousie University; the International Cable Protection Committee; LOICZ International Project Office; the Law Foundation, New Zealand; the International Seabed Authority; and the World Wildlife Fund. The organization was led by teams in Virginia and Halifax, respectively led by Professors Myron Nordquist (COLP) and Aldo Chircop (MELAW). The convening of the conference in Halifax was possible through the support of numerous persons. Dr. Martha Crago, Vice President (Research) and Professor Kim Brooks, Dean of the Schulich School of Law were instrumental in orchestrating financial support. The organization of the conference was led by a Steering Committee chaired by Brian Flemming, QC (MELAW and McInnis Cooper) and composed of Professors Chircop (MELAW Director) and Phillip Saunders (MELAW), Wylie Spicer, QC (McInnis Cooper) and Susan J. Rolston (Seawinds Consulting). Susan was a truly superb conference coordinator. The Steering Committee received advice and support from Dr. Douglas Wallace, Scientific Director of the Halifax Marine Research Institute and Dr. Helmuth Thomas, Department of Oceanography at Dalhousie in coordinating events with a parallel scientific meeting in Halifax. Lauri MacDougall provided patient and solid administrative support at MELAW and Christel LeBlanc was the conference webmaster. The conference team was assisted by students Hai Dang Vu, Sarah Shiels, William Russell, Ying Lu and Brittney Martin. Assistant Dean Sarah Kirby helped organize the lunch event in honour of Edgar Gold. Meredith Hand was responsible for arrangements at the Lord Nelson conference hotel. John Dalimore provided transportation services.

xviii   Acknowledgements The team from COLP – Administrator Julie Garmel, Technical Editor Judy Ellis, and Special Assistant Haryo Nugroho – rendered invaluable assistance. The main credit for editing this book goes to Judy Ellis who provided comprehensive marshaling and review of the conference proceedings.

Setting the Context

The Continental Shelf Regime under the UN Convention on the Law of the Sea: Reflections After Thirty Years S. Jayakumar1

I. Introduction The theme of the Conference, “The Regulation of Continental Shelf Development: Rethinking International Standards” could not be more appropriate or timely. The 2009 blow-out of the Montara Wellhead platform in the Timor Sea and the 2010 blow-out of the Deepwater Horizon in the Gulf of Mexico have highlighted the urgent need for comprehensive regulations to govern offshore oil and gas activities. The fact that Canada is hosting such a Conference is also particularly fitting. Canada played an instrumental role in the negotiations of the UN Convention on the Law of the Sea (UNCLOS), particularly with regards to the regime established in Part XII on the protection and preservation of the marine environment. I am a former Government official and an international lawyer who was involved in the negotiations of UNCLOS. UNCLOS was an extraordinary achievement in international treaty-making. The 320 articles, and nine annexes which have been lauded as a constitution for the oceans addressed many of the contentious issues that previous conventions had been unable to resolve. The drafters and negotiators sought to create a normative framework for the regulation of maritime spaces which, at the same time, would allow a certain degree of flexibility to accommodate emerging issues. UNCLOS still remains a sound and relevant framework for ocean activities, but its utility depends largely on its implementation and interpretation by States. This is equally true of the regime established for the continental shelf. Firstly, I shall give some reflections on the UNCLOS negotiations. Next, I will give an overview of the continental shelf regime under international law and the 1 Shunmugam Jayakumar is currently a professor in the law faculty, National University of Singapore. He is formerly the Deputy Prime Minister and Senior Minister in the Government of Singapore. As of May 2011, he retired from politics. Professor Jayakumar served as Singapore’s Permanent Representative to the United Nations and High Commissioner to Canada from 1971 to 1974, and was a member of Singapore’s delegation to the UN Law of the Sea Conference from 1974 to 1979. Professor Jayakumar has published extensively on the topics of constitutional law, international law, and legal education.

4   S. Jayakumar major compromises that were reached at UNCLOS in relation to the continental shelf. Finally, I will highlight several key challenges in the continental regime related to offshore oil and gas activities and how UNCLOS can address them.

II. Reflections on UNCLOS and the Negotiating Process I recall that the negotiations were so complex and the challenges in forging agreements so formidable that UNCLOS was one of the most difficult international Conferences of that time. Why was this so? •  First, the scope of the agenda was very wide ranging. It covered resource-based issues, navigational issues, issues of jurisdictional limits, and environmental issues; • Second, linkages were made between different issues and package deals insisted upon, and these often bogged down the talks; • Third, the negotiating process itself was complex and multilayered. We had the official sessions but there were also informal processes, some open ended and some with limited participation, and there were even some secret groups which met in embassies to broker compromises on tough issues; • Fourth, a unique feature of the process was the unprecedented role given to individuals. For instance, Chairmen of sessions were entrusted with the role of producing negotiating texts (HS Amerasinghe, Paul Bamela Engo, Andres Aguillar, Alexander Yankov, and my good friend Ambassador Tommy Koh). Next some key individuals played critical roles in their stewardship of formal sessions or special negotiating groups (Evensen Group, Castaneda Group, and the Nandan Group, for example); and • Fifth, there emerged interest groups and caucuses, such as the Territorialist Group, the Straits Group, the Archipelagic Group, the Landlocked and Geographically Disadvantaged States Group, and the Margineers or the Broad Shelf Group to name a few. These groups were helpful in crystallising the bottom lines of their special concerns, but where these positions were inflexible they impeded the brokering of compromise deals.

Little wonder then that it took so long to negotiate and settle the Convention. The negotiations took nine years but, if the work of the Sea-Bed Committee is included, the negotiations spanned a period of 14 years. The long period itself created problems in negotiations. It gave States the opportunity to reconsider national positions in light of national and international developments. Compromises in earlier sessions were reneged on in subsequent sessions which restarted the process of obtaining agreement on the text. I share these reflections because I think that an understanding of the negotiating process of UNCLOS is critical to understanding the nature of UNCLOS itself. Its content was largely the result of hard bargaining between States and groups of States. The text ultimately adopted was both a political and legal agreement

The Continental Shelf Regime under UNCLOS   5

and this blend of legal doctrine and political realities have contributed to the wide acceptance of UNCLOS as the prevailing legal order for the seas. Accordingly, my view is that it should not be tampered with lightly.

III. The Continental Shelf Regime The continental shelf regime established under UNCLOS is a very good example of the carefully constructed compromises characteristic of the provisions in UNCLOS. The historical roots of the continental shelf regime lay in the trend for States to assert rights and jurisdiction over an increasing area of seabed driven by the belief that an abundance of natural resources lay beneath. While prior to 1945, claims to the continental shelf were confined to limited rights to the resources of specific areas of the seabed, the 1945 Truman Proclamation was the first clear assertion that the resources of the continental shelf belonged to the coastal State. The rest, as they say, is history. The Truman Proclamation was not the subject of protests and indeed, was followed by similar proclamations by many other States. However, there was considerable inconsistency on the extent and nature of continental shelf claims made by coastal States. Some claimed jurisdiction and control over the resources of the continental shelf, while others claimed sovereignty. Yet other claims, particularly those of the Latin American States, covered not only the shelf but the superjacent waters. Further, these States also claimed continental shelves up to 200 nm, sometimes beyond the actual extent of their physical shelves. The need to place some limits on such extensive continental shelf claims was the subject of extensive consideration by the International Law Commission in its 1956 Draft Articles. The Draft Articles on the continental shelf were incorporated in the 1958 Convention on the Continental Shelf and ultimately formed the basis for Part VI of UNCLOS on the Continental Shelf Regime. The provisions in Part VI were essentially the result of two major compromises. The first compromise related to the nature of coastal State rights over the continental shelf and the second related to the limits of the continental shelf. Nature of Coastal States Rights over the Continental Shelf With regards to the nature of coastal State rights over the continental shelf, the regime established in the 1958 Continental Shelf Convention remained largely unchanged in UNCLOS. Discussion on the newly established regime of the Exclusive Economic Zone (EEZ) as well as on deep seabed areas dominated discussions during the negotiations and it appeared impractical to re-open debate on the 1958 Continental Shelf Convention.

6   S. Jayakumar UNCLOS accordingly adopted the formulation agreed to in the 1958 Convention of affording the coastal State “sovereign rights” for the purpose of exploring and exploiting both the non-living resources of the seabed and subsoil as well as sedentary species. The specific terminology of “sovereign rights” rather than “sovereignty” or “jurisdiction and control” was adopted to make it clear that the coastal State did not own the seabed, as advocated by some States, but had all other rights necessary for and connected with the exploration and exploitation of its natural resources. Such rights were exclusive and other States might not exploit the continental shelf without the consent of the coastal State. However, to assuage the concerns of the maritime powers, UNCLOS also preserved the legal status of the superjacent waters and the airspace above those waters. Coastal State rights over the continental shelf must not unjustifiably interfere with navigation and other rights and freedoms recognized in the EEZ or the high seas. Limits of the Continental Shelf Unlike the nature of rights over the continental shelf, the limits of the continental shelf were subject to extensive debate during the negotiations of UNCLOS. The idea expressed in the 1969 North Sea Continental Shelf Cases that the continental shelf was the “natural prolongation” of one’s territory had firmly taken root by the time negotiations began and all States wanted to ensure that they achieved the maximum extent of shelf possible. At the same time, it was clear that the limits established in the 1958 Convention of 200 metres or “to where the depth of the superjacent waters admits of the exploitation of the natural resources” was much too open-ended to be of practical use, particularly in deciding where the deep-sea bed should begin. The major issue was between the States with broad continental shelves, which wanted a limit based on the actual physical extent of their continental shelf, and those with narrow continental shelves, who wanted a limit of up to 200 nm. A compromise was finally reached after nine rounds of negotiations. Article 76 of UNCLOS ultimately accommodated the views of both the broad margin States and the narrow margin States and provided for two definitions of continental shelf. First, coastal States were able to claim a continental shelf to the outer edge of the continental margin, namely its actual geological shelf. Second, if its physical or geological shelf did not extend to that distance, it could claim a continental shelf up to 200 nm. While the broad margin States appeared to get what they wanted, they had to compromise in two respects. First, broad shelf States had to delineate the limits of their margin in accordance with complex geomorphologic and geologic criteria. Article 76 places the responsibility on claimant States to gather extensive geological and geomorphologic data to meet the technical requirements of

The Continental Shelf Regime under UNCLOS   7

extended continental shelf claims. The Commission on the Limits of the Continental Shelf (CLCS) was also established to interpret the data provided by the coastal State. Second, broad margin States had to make payments and contributions with respect to the exploitation of the continental shelf beyond 200 nm to the International Seabed Authority (ISA) in recognition of the fact that their claim to an extended continental shelf was at the expense of the common heritage of mankind.

IV. Challenges to the Continental Shelf Regime In the past thirty years, our understanding of the very structure of the landmass beneath the ocean floor, the marine biodiversity and ecosystems has greatly advanced. Further, advances in science and technology have been significant and allowed for far greater exploitation and research of the resources of the seabed. The most important of these resources are the extensive oil and gas reserves which represent approximately ninety per cent of the total value of minerals taken from the seabed. Offshore mining of other minerals such as tin, sand and gravel and polymetallic nodules remains limited due to their costs and the availability of onshore supplies. The importance of such oil and gas reserves to the world cannot be underestimated. By the mid-1990s, offshore oil and gas production accounted for a third of total world production. There are presently an estimated 7000 or more offshore platforms in the world, and this number stands to increase in light of the number of claims to outer continental shelf that have been submitted to the CLCS. It is inevitable that such developments put a strain on the carefully constructed regime in UNCLOS. One of the major questions of this Halifax Conference is whether UNCLOS provides a detailed framework within which the regulation of continental shelf activities can occur. I hope to demonstrate that the negotiators of UNCLOS intended to create an enduring framework to take into account future developments. In particular, UNCLOS adopted several mechanisms to accommodate change and progressive development of the law. These included obligations to adopt international rules, regulations and standards by the competent international organization and incorporation by reference of international rules, regulations and standards into national legislation. Equally as important are the institutions established by UNCLOS, namely the International Seabed Authority, the Commission on the Limits of the Continental Shelf and International Tribunal for the Law of the Sea, which were intended to play an instrumental role in interpreting and applying the provisions of UNCLOS, particularly when provisions were deliberately left ambiguous.

8   S. Jayakumar UNCLOS can and should be used to address issues which have emerged in relation to continental shelf activities. I will attempt to demonstrate this with a few examples, with a specific focus on offshore oil and gas activities. Protection of the Marine Environment from Offshore Oil and Gas Activities The protection of the marine environment from offshore oil and gas activities has become a pressing concern for the international community. Deliberate or operational pollution may arise from a variety of sources such as the oil contained in drilling mud, cuttings and production water and oil from drainage systems on platforms. Accidental pollution can result from a blow-out, leakage from a seabed fault caused by drilling, rupture of a pipeline, or a collision between a ship and installation, just to name a few. UNCLOS places certain obligations on State Parties in relation to offshore activities and the marine environment. First, under Article 192, States have an overarching and general obligation to take measures to prevent, reduce and control pollution of the marine environment from any source and to ensure that their activities do not result in pollution to other States. Article 194 (3) states that these measures shall include measures designed to minimize to the fullest possible extent “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.” More specifically, and complementary to this general obligation, under Article 208, coastal States have an obligation to 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. Many States, particularly the more developed States, have indeed adopted national legislation governing their offshore oil and gas activities and the protection of the marine environment from pollution resulting from these activities. However, as illustrated by the Deepwater Horizon spill, national standards and regulations may not be adequate “to prevent, reduce and control pollution of the marine environment arising from or in connection with seabed activities.” UNCLOS specifically obliges States, acting through the competent international organization or diplomatic conference, to establish global and regional rules, standards and recommended practices and procedures. Further, it requires States to ensure that national regulations are no less effective than these international rules, standards and recommended practices and procedures. This allows the incorporation by reference of the most recent internationally agreed rules, standards and practices relating to that subject matter. As previously mentioned,

The Continental Shelf Regime under UNCLOS   9

this was a significant innovation of UNCLOS and enables the marine environment protection regime to be supplemented by other treaties and instruments. However, there is presently no comprehensive international convention regulating operational or deliberate pollution from offshore platforms or installations. Similarly, the issues of liability and compensation issues connected with transboundary pollution damage from offshore activities have also become a serious concern. The 2009 Montara Wellhead blow-out and the 2010 Deepwater Horizon incident both resulted in pollution crossing national boundaries. Article 235 of UNCLOS, while not directly dealing with liability regimes relating to offshore activities, places an obligation on States to ensure that recourse is available for compensation in respect of damage caused by pollution of the marine environment by natural or juridical persons under their jurisdiction. Further, States shall cooperate 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. Again, there is presently no liability and compensation regime for pollution from offshore activities. It is therefore evident that UNCLOS does include provisions that envisage or facilitate the adoption of more detailed rights and obligations relating to offshore activities. However, the legal regime governing offshore hydrocarbon activities is a patchwork of international conventions, non-binding standards and guidelines, national legislation and industry practices. This is not due to a failure of UNCLOS but the failure of States to effectively utilize the framework provided in UNCLOS. There is a pressing need to consolidate the present international framework and adopt a comprehensive regime to govern the protection of the marine environment from offshore oil and gas activities, which is why this Conference is timely. The question is which organization is the “competent international organization” that will and should take the lead. Decommissioning of Offshore Infrastructure The decommissioning of offshore infrastructure has also become an issue of some concern, as platforms in many parts of the world come to the end of their operating lives. UNCLOS addresses this issue. Under Article 60, any installations or structures in the EEZ or on the continental shelf which are abandoned or disused must be removed to ensure the safety of navigation, taking into account any generally accepted international rules and standards established by the competent international organization. In 1989, the IMO adopted Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the EEZ. These appear to be the “generally accepted international rules and standards” referred to in Article 60 of UNCLOS.

10   S. Jayakumar However, there are also additional international conventions which may apply to decommissioning. For example, the 1972 London Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters and its 1996 Protocol address the abandonment of platforms and other structures at sea as “dumping”, if it is for the sole purpose of deliberate disposal. However, if such placement at sea is done with a permit or fulfills some other legitimate purpose, it is not “dumping” under the 1972 Convention and its 1996 Protocol It appears that rights and obligations of States with regards to the decommissioning of platforms under their jurisdiction are uncertain and inconsistent. This is another area where States should co-operate to adopt rules and regulations, either on a global or regional basis, in order to address the issues that are raised by decommissioning. Competing Uses of the Continental Shelf The last issue I wish to highlight is the issue of competing or conflicting uses on the continental shelf. There has been an intensification of uses of the seabed by coastal States since the adoption of UNCLOS in 1982, not only in offshore oil and gas activities but also in coastal State activities in relation to the production of energy from wind or waves. Increasingly, infrastructure for the utilization of wind and wave energy is being constructed on the continental shelf. Such coastal State activities have the potential to interfere with the rights and freedoms of other States recognized in the EEZ, continental shelf and high seas such as navigational freedoms and the freedom to lay and repair submarine cables and pipelines. For example, the laying and repair of submarine cables is recognized as a right of other States under both the EEZ and continental shelf regime, subject only to the right of coastal States to take reasonable measures for the exploration of the continental shelf and exploitation of its natural resources. While “reasonable measures” is ambiguous and could potentially cover a wide range of measures, there has been an increasing tendency of coastal States to regulate the laying of submarine cables in a way which is unreasonable and unrelated to coastal State’s rights over their natural resources. For example, some coastal States have imposed a tax on cables which transit their continental shelf or require permits for the laying and repair of cables on the continental shelf. Another potential for conflict of uses can be seen in offshore installations on the outer continental shelf where the superjacent waters are high seas and subject to the freedom of navigation. The overarching intention of UNCLOS was to regulate competing uses of the sea. UNCLOS accordingly provides mechanisms for resolution of this potential conflict between uses of the seabed by coastal States and other States.

The Continental Shelf Regime under UNCLOS   11

First, it places mutual obligations of “due regard” in the EEZ on both coastal States and user States, which would also apply to the seabed within 200 nm. This is a procedural obligation which compels a State to take into account the rights and obligations of the other State when exercising its rights provided for in UNCLOS. This is complemented by the obligation specifically provided for under the continental shelf regime to ensure that the exercise of coastal State rights on the continental shelf does not infringe or result in “unjustifiable interference” with navigation and other rights and freedoms of other States such as cable laying and repair. Second, Article 59 of UNCLOS provides that any conflict from rights and jurisdiction not specifically attributed to either the coastal State or other States in relation to seabed activities within the 200 nm EEZ should be resolved “on the basis of equity and in light of all the relevant circumstances, taking into account the relative importance of the interests involved to the parties as well as to the international community as a whole.” Third, UNCLOS established a complex dispute settlement machinery to resolve any conflicts relating to use of the seabed. Under Part XV on Settlement of Disputes, any dispute concerning the interpretation or application of this Convention shall be submitted at the request of any party to the dispute to compulsory procedures entailing binding decisions. UNCLOS provides a choice of dispute settlement procedures ranging from the International Court of Justice, to the International Tribunal for the Law of the Sea to arbitral tribunals. This mechanism has been seriously underused, although recent indications suggest that more and more States are seeing the merits of using binding dispute settlement mechanisms as a peaceful means of settling disputes. The dispute settlement mechanisms in UNCLOS have considerable potential as a means of clarifying and interpreting ambiguous provisions or provisions which were incapable of being subject to detailed regulation in UNCLOS.

V. Concluding Remarks To conclude, UNCLOS was never intended to and could never practically deal with all issues of ocean governance. It is a framework instrument at its very essence, intended to facilitate the development of the law of the sea in a way which took into consideration a variety of interests. It is important to emphasize that the subject matter of this Conference i.e. issues relating to the regulation of continental shelf activities, is an area where agreement or compromise was impossible to reach during the negotiations and hence is the subject of deliberate ambiguity. It was an area where it was not possible or appropriate to establish detailed or highly technical regulations. UNCLOS

12   S. Jayakumar recognized this and provided mechanisms for development of such rules and regulations. States should takes steps at global, regional and national levels to develop rules and regulations relating to continental shelf activities pursuant to and consistent with the legal framework established under UNCLOS. I have the utmost confidence that a significant step in this direction will be taken during this Conference in Halifax.

PART 1

Contemporary Uses of the Continental Shelf

OFFSHORE WIND ENERGY DEVELOPMENT AND ECOSYSTEM-BASED MARINE MANAGEMENT IN THE EU: ARE THE REGULATORY ANSWERS REALLY BLOWING IN THE WIND? Ronán Long* Abstract Within the framework of the ODEMM project (Options for Delivering Ecosystem-Based Marine Management), this paper presents an overview of the status of the offshore wind energy industry in Europe and highlights a number of factors that are influencing its rapid growth as a dynamic maritime industry. Attention is drawn to a number of EU regulatory and policy instruments, which if implemented rigorously by the Member States, ought to resolve some of the uncertainty regarding the compatibility of offshore wind farm development with ecosystem-based management of the marine environment. The latter is defined by the OSPAR and Helsinki Commissions as the comprehensive integrated management of human activities in the marine environment based upon the best available scientific knowledge about the ecosystem and its dynamics. The paper concludes by outlining a number of measures that will facilitate the application of this management concept to the offshore wind sector over the coming decades with a view to achieving the objectives of EU regulatory and policy instruments that apply to the marine environment including the Habitats and Birds Directives, the Marine Strategy Framework Directive, as well as the EU’s Integrated Maritime Policy, maritime transport policy, and energy policy.

* Marine Law and Ocean Policy Research Services Limited and Jean Monnet Chair European Union Law, National University of Ireland Galway. This research paper is undertaken as part of work package seven of the ODEMM Project, which is examining various management options and impediments for implementing the ecosystem-based approach in the European marine environment. This includes an assessment of the law and policy considerations that can help improve ecosystem-based management in a number of sectors such as the offshore wind energy sector. Supported by the European Commission’s 7th Framework Research Programme, Theme ENV.2009.2.2.1.1, Project No. 244273. Further information is available at: www.liv.ac.uk/odemm/. The author wishes to thank Erin McVeigh for proof reading the first draft, as well as Margaret Armstrong and Judy Ellis for their outstanding help as always. The author’s PowerPoint is available at .  Dr. Ronán Long is the Managing Director of Marine Law and Ocean Policy Research Services Limited, an off campus SME. He is author of Marine Resource Law (Dublin, 2007), co-author of Enforcing the Common Fisheries Policy (Oxford, 2000) and co-editor of Law, Science and Ocean Management (Boston/Leiden, 2007), and Legal Challenges in Maritime Security (Boston/Leiden, 2008). Dr. Long worked previously for the European Commission (1994–2002) and for the Naval Service in Ireland (1981­–1993). His current research interest is focused on ecosystem-based management of the marine environment and he is participating as a member of the “governance team” in the ODEMM project.

16   Ronán Long

Contents 1. Introduction 2. The 1982 Law of the Sea Convention and the production of energy from the wind 3. Status of the offshore wind energy industry in Europe 4. Factors shaping the future growth of the industry 5. Environmental footprint of offshore wind farms 6. Some practical issues and measures that facilitate ecosystem-based management 6.1 Mapping the seabed and the resource 6.2 Protecting species and habitats 6.3 Planning and managing the spatial environment 6.4 Assessing environmental impacts 6.5 Improving stakeholder participation in decision-making 6.6 Strengthening scientific monitoring programmes and information sharing 6.7 Ensuring the safety of navigation 6.8 Protecting the human environment, emergency response, and liability for environmental damage and 6.9 The “one stop shop” approach to licensing 7. Conclusions

1. Introduction Apart from marking the 36th Annual Conference of the Center for Oceans Law and Policy, this year [2012] is significant for a number of reasons from an oceans law perspective. First, it heralds a number of momentous anniversaries including: the 30th anniversary of the signing of the 1982 United Nations Convention on the Law of the Sea (hereinafter “the 1982 Convention”); the 20th anniversary of the United Nations Conference on Environment and Development held in Rio de Janeiro in 1992; and the 10th anniversary of the World Summit on Sustainable Development held in Johannesburg in 2002. Secondly, the oceans are a major focus of this year’s United Nations Conference on Sustainable Development (the RIO+20 Conference) where governments are considering new commitments to address many pressing environmental and oceans law issues.1 Thirdly, this year is designated as the United Nations International Year of Sustainable Energy 1 See outcome of the conference, entitled “The future we want” UN Doc. A/CONF.216/L.1, 19 June 2012. Available at: http://www.uncsd2012.org/.

Offshore Wind Energy Development   17

for All and this in turn is stimulating debate worldwide on how to improve the contribution of marine renewable technologies to the total supply of energy at global, regional and national levels.2 The European Union is well placed to contribute to this debate as it has set down several ambitious targets for the Member States, including: the generation of 20% of the overall share of energy from renewable sources, 20% improvement in energy efficiency, and a 20% reduction in greenhouse gas emissions, which must all be achieved by the year 2020.3 What is more, offshore wind energy is set to make a sizeable contribution to the attainment of these targets under the National Renewable Energy Plans submitted by each Member State pursuant to the EU’s Renewable Energy Directive.4 As a direct result, wind turbines are now a relatively common feature on the continental shelves of many EU Member States and stand almost as sentinels to the successful implementation of these national plans. Indeed, anyone who has flown into the beautiful city of Copenhagen or over the Thames Estuary on a clear day will have seen the receding lines of wind turbines on the seascape at sites that are relatively close to these major European cities. Further offshore, plans are afoot to cover whole swathes of maritime space in the North and Baltic Seas in a veritable tapestry of wind farms. The scale of this development may be appreciated when one considers that the industry representative body, the European Wind Energy Association (EWEA), is aiming to achieve a target of 40 GW of offshore wind power capacity by 2020.5 This is only the beginning as the European Commission’s European Energy Roadmap 2050 provides a blueprint for the reduction of carbon emissions by over 80% by 2050, and sets an extraordinary target of 55% of EU energy consumption coming from renewable sources to be achieved by the same year.6 The Roadmap foresees offshore wind energy in the North Sea, Baltic Sea, and the Atlantic delivering a substantial component of this target. If these plans are realised, then the sector will employ 314,000 people in a clean technology driven industry at a 2 See, for example, the 13th session of the United Nations Open-ended Informal Consultative Process on Oceans and the Law of the Sea which was given over to reviewing the topic of marine renewable energies, further to UNGA Resolution 65/37 A of 7 December 2010, as recalled in paragraph 234 of Resolution 66/231 of 24 December 2011. See: http://www.un.org/Depts/los/ consultative_process/consultative_process.htm. 3 Directive 2009/28/EC of 23 April 2009 on the promotion of the use of energy from renewable sources, L 140/16, 5.6.2009. 4 Member States have to submit national programmes to the European Commission on the achievement of these targets Art 4 of Directive 2009/28/EC. 5 European Wind Energy Association cited in the European Commission Report on Wind Energy Development and Natura 2000 (Luxembourg, European Commission, 2010) p. 10. Available at: http://ec.europa.eu/environment/nature/natura2000/management/docs/Wind_farms.pdf. 6 COM(2011) 885/2.

18   Ronán Long pan-European level by 2030.7 The EWEA also takes a similar upbeat view and estimates that 30% of all wind energy turbines in Europe will be located offshore by 2020 with this figure rising to 60% by 2030.8 In other words, the European wind energy sector is fast becoming a maritime industry and this in turn is opening-up a new chapter in continental shelf development that requires new thinking about how we plan and manage the use of maritime space. When considering how regulators ought to respond to this challenge, it should also be kept in mind that Europe is not acting alone and new wind turbine technology is being developed rapidly in the United States, China, Japan, South Korea, and Israel.9 Moreover, additional impetus will soon be derived from the recent decision of the United States Department of the Interior to approve the use of certain areas of the outer continental shelf for the world’s first integrated electric transmission superhighway on the east coast of the United States.10 There is also scope for considerable growth of the offshore industry in Asia to serve the insatiable energy markets in China and India.11 China has already joined the technology race as evidenced by the completion of a feasibility study examining the options for the construction of 80 offshore wind farms by 2020. Elsewhere, many coastal States have their own renewable energy plans entrain and there is growing interest in learning about the European experience in addressing the regulatory and environmental challenges posed by such developments.12 In this context, one striking feature of the European regulatory architecture is the manner in which it facilitates, and indeed encourages, the development of 7 Ibid. Also see Speech by Commissioner Damanaki to International Hydrographic Conference, Monaco, 23.04.2012. Ref: SPEECH/12/287. 8 European Wind Energy Association. 9 On progress in the United States see inter alia; M. E. Portman: “Marine Renewable Energy Policy: Some US and International Perspectives Compared”, 23(2), (2010) Oceanography 98–106; M. Higgins “Is Marine Renewable Energy A Viable Industry In The United States?”, 14 (2009) Roger Williams University Law Review 595; K. Dwyer, “UNCLOS: Securing the United States’ Future in Offshore Wind Energy” 18 (2009) Minn. J. International Law 265; C. Santora et al., “Managing offshore wind developments in the United States: Legal, environmental and social considerations using a case study in Nantucket Sound” 47 (3–4) Ocean & Coastal Management 141–164. 10 See http://atlanticwindconnection.com/about-us/. 11 See X. Dengwen, “Opportunities and challenges of the development of MRE in China” paper presented at 13th meeting of United Nation Open-ended Information Consultative Process on Oceans and Law of the Sea. Available at: http://www.un.org/Depts/los/consultative_process/ consultative_process.htm. 12 See inter alia: M. Esteban, D. Leary, “Current Developments and Future Prospects of Offshore Wind and Ocean Energy”, Journal of Applied Energy, vol. 90, (2011), p. 128; papers presented at 13th meeting of United Nation Open-ended Information Consultative Process on Oceans and Law of the Sea. Available at: http://www.un.org/Depts/los/consultative_process/consultative_process.htm.

Offshore Wind Energy Development   19

large-scale offshore wind farms, while at the same time it sets down the requirement that Member States must implement an ecosystem-based approach to the management of offshore activities in line with the scheme set down in a sophisticated array of marine environmental regulatory instruments and policies.13 The latter approach has been defined by the OSPAR and Helsinki Commissions as “the comprehensive integrated management of human activities based on the best available scientific knowledge about the ecosystem and its dynamics” and entails the application of the precautionary principle in marine environmental decision-making and law-making.14 There is general scientific acceptance that healthy ecosystems help purify the air and water, as well as regulate the climate. Therefore it comes as no surprise to see that the ecosystem approach has considerable status as both a normative principle and management concept in many international, regional and EU instruments.15 Furthermore, the EU Biodiversity Strategy to 2020 provides a blueprint and sets down specific targets for ecosystem management that have to be achieved by the Member States over the coming decade.16 The Strategy is fully consistent with the commitments made by the EU and the Member States at Nagoya in October 2010 within the wider framework of the 1992 Convention on Biological Diversity. To shed some light on these issues, this paper presents a brief overview of the status of the offshore wind energy sector in Europe and highlights a number of factors that are influencing its rapid growth as a dynamic industry.17 The paper then focuses on a number of EU regulatory and policy measures that have the potential to resolve some of the uncertainty regarding the compatibility of offshore wind farm development with ecosystem-based marine management. This whole notion of integrated management is one of the objectives of the EU’s Seventh Framework Research Project, ODEMM, which is tasked with examining the various options for improving ecosystem-based marine management at the European regional seas levels.18 The offshore wind energy sector thus provides a useful paradigm that will test the application of this management concept in practice. When considering this matter, it should also be kept in mind that the offshore industry is being rolled-out in what some commentators might 13 See R. Long, “Legal Aspects of Ecosystem-Based Marine Management in Europe” in A. Chircop, M.L. McConnell, S. Coffen-Smout (eds.), OCEAN YEARBOOK Vol. 26, (Boston/Leiden, Brill Academic Publishers, 2012) pp. 417–484. 14 Para. 5 of the “Statement on the Ecosystem Approach to the Management of Human Activities”, First Joint Ministerial Meeting of the Helsinki and OSPAR Commissions, Bremen, 25–26 June 2003. 15 Op. cit. note 13 infra. 16 COM (2011) 244 final, 3.5.2011. 17 See Commission Staff Working Document entitled “Energy policy and maritime policy: ensuring a better fit”, SEC (2007) 1283, 10.10.2007. 18 See at: www.liv.ac.uk/odemm/.

20   Ronán Long regard as a regulatory vacuum as there is no global intergovernmental or indeed EU organization dedicated to standard-setting and rule-making for wind energy development. From a regulatory perspective, this makes it similar in some respects to the offshore oil and gas industry and some analogies are drawn in this regard at appropriate points in the text below. As will be seen below, the European Union and the Member States are beset with conflicting priorities in their attempt to promote the offshore wind industry and at the same time arrest the general deterioration of biodiversity in the European marine environment. Indeed, as will be seen below, one of the preliminary findings of this aspect of the ODEMM project is that there appears to be a strong case for greater integration of existing legislative and policy measures that are applicable to wind energy development with a view to implementing the ecosystem approach at the regional level between Member States within marine eco-regions. Before discussing these matters in greater detail, the paper outlines the legal regime that applies to wind energy development under the 1982 Convention.

2. The 1982 Law of the Sea Convention and the Production of Energy from the Wind Although it is clearly beyond the scope of the paper to analyse all of the provisions in the 1982 Convention applicable to the sector, a brief summary of some key provisions is provided here. Perhaps it is best to start by pointing out that the sovereignty of a coastal State extends beyond its land territory and internal waters to the territorial sea, and this sovereignty extends to the regulation and utilisation of natural resources including sources of renewable energy.19 Further seawards, the coastal State has sovereign rights for the economic exploration and exploitation of the Exclusive Economic Zone (EEZ) and the Convention specifically mentions that this includes the right to produce energy from the water, currents and the winds.20 For this purpose, the exclusive rights of the coastal State extend to the construction, authorisation and regulation of installations and structures in the EEZ and on the continental shelf.21 As is well known, the aforementioned rights of the coastal State are not absolute. In particular, coastal States must conform with provisions in the Convention relating to the passage of vessels in the territorial sea and have due regard to the rights and duties of other States in the EEZ including the freedom of navigation.22 In the vicinity of offshore wind farms, this will often require the 19 Art 2 of 1982 LOSC. 20 Art 56(1)(a) of 1982 LOSC. 21 Art 60(1) of 1982 LOSC. 22 Arts 17–26, 56(2), 58 of 1982 LOSC.

Offshore Wind Energy Development   21

designation of sea lanes and prescription of traffic separation schemes, as well as the adoption of measures to protect the marine environment. In relation to the former, the coastal State must take into account a number of factors including: the recommendations of the International Maritime Organisation (discussed below), any channels customarily used for international navigation, the special characteristics of particular ships and channels, and the density of traffic.23 For obvious reasons pertaining to the safety of navigation, due publicity must be given to sea lanes and traffic separation schemes.24 The provisions in the Convention that provide for the establishment of safety zones in the EEZ and on the continental shelf,25 as well as for the laying of submarine cables and pipelines on the continental shelf,26 are of prime importance to both the offshore wind energy and hydrocarbon industries. There are many other provisions in the Convention that are relevant to offshore wind farm development. Most notably, the provisions on the marine environment, marine scientific research, and technology transfer.27 Furthermore, the high seas provisions on the laying of submarine cables and pipelines and the construction of artificial islands and other installations are also germane to development in areas beyond national jurisdiction.28 Again, however, these provisions are qualified by the “due regard” provision in the Convention relating to the rights and duties of other States.29 All in all, the provisions in the Convention that are applicable to wind energy development are surprisingly adequate and fit for purpose. This is noteworthy as the promotion of wind energy as a viable economic activity is very much dependent upon having a high degree of clarity and certainty in the rule of law as it applies to activities undertaken in the EEZ and on the continental shelf. State practice must of course conform to both the letter and spirit of the Convention if the delicately balanced interests codified therein are to work well in practice. We can now take a brief look at the industry in Europe.

3. Status of the Offshore Wind Energy Industry in Europe The European industry has evolved rapidly since the construction of the first wind farm in the near shore environment at Vindeby in Denmark in 1991.30 23 Art 22(3) of 1982 LOSC. 24 Art 22(4) of 1982 LOSC. 25 Arts 56, 60 and 80 of 1982 LOSC. 26 Arts 79 of 1982 LOSC. 27 Part V and XIII, 1982 LOSC. 28 Arts 87 and 112, and subject to Art 79(5), 1982 LOSC. 29 Art 87(2), 1982 LOSC. 30 See: http://www.4coffshore.com/windfarms/.

22   Ronán Long The rapid growth of the industry does not appear to have been held back by the high costs associated with the placement of turbines and substructures on the seafloor, as well as the technical difficulties associated with the completion of the offshore transmission network which entails the construction of extensive networks of subsea cables and offshore substations.31 Some delay has been encountered however due to a shortage of specialized support vessels suitable for turbine construction, installation and maintenance, as well as appropriate port infrastructure. In spite of these impediments, the wind energy industry is at a development scale similar to that experienced by the North Sea hydrocarbon industry during the 1960s and 1970s. This is borne out by the most recent statistical information on the growth of the wind energy industry, which tells its own story.32 In 2011, for example, the EWEA estimated that there were 1,371 offshore turbines located in 53 wind farms, which generated 3.8 GW of electricity in 10 Member States.33 As can be seen from the information presented in Table 1 below, the industry is up and running in 10 EU Member States and is based predominantly in the North Sea and the Baltic Sea. There is also scope for growth in the industry in the other European regional seas.34 Table 1. Status of the European offshore wind energy industry in 2011.35 Country No of farms

UK 18

No of turbines 636

DK

NL

DE

BE

SE

FI

IE

NO PT

Total

13

4

6

2

5

2

1

1

1

53

401

128

52

61

75

9

7

1

1

1,371

Capacity 2093.7 857.3 246.8 200.3 195 163.7 26.3 25.2 2.3 2 installed (MW)

3,812.6

31 IEA-OES, “Ocean Energy: Global Technology Development Status” (2009), at www.iea-oceans .org section 2. 32 European Wind Energy Association, “The European Offshore Wind Energy key 2011 trends and statistics” (Brussels, EEA, 2012). 33 Ibid. at 3. 34 See http://www.4coffshore.com/windfarms/. 35 Source: European Wind Energy Association, “The European Offshore Wind Energy key 2011 trends and statistics” (Brussels, EEA, 2012).

Offshore Wind Energy Development   23

The information on technical developments within the sector is very impressive. Turbine design is conventional with the towers made of tabular steel. Recent European trends are to locate farms farther offshore and in deeper water. This is an important consideration as distance from the shore and water depth has a major bearing on the costs of offshore renewable energy projects. In 2011, for instance, the average water depth for turbines was 23 metres and the average distance from the shore was 23 kilometres, with the latter set to increase to 33 kilometres in the near future.36 These figures suggest that the majority of the wind turbines are outside the limits of the territorial sea. Furthermore, they cannot be seen from the shore, which is an important consideration in the planning consent process in several Member States such as Germany. The construction methods for anchoring the turbines varies with the latest figures indicating that 75% of the substructures are made up of monopiles, 21% are gravity based, and the remaining 4% are comprised of both jackets and tripiles.37 The various foundation methods are shown in Table 2 below. There are many factors that influence the selection of sites that are suitable for development. Thus, for example, it is estimated that the costs associated with installing offshore fixed wind farm capacity increases from €1,800 / kW for projects in water depths between 10 and 20 meters to €2,512 / kW for projects in water depths 40 and 50 meters.38 The costs of installing offshore cables are estimated at between 500 thousand and 1 million euros per kilometre excluding transformation stations.39 The industry is very much research and development driven and the testing of new technologies is going ahead at a relatively fast pace. Most markedly, there is a new stage of development with three floating Table 2. Water depth and wind turbine structures.40 Water depth (m)

Wind turbine structures

0–10 0–30 > 20 > 50

Gravity based type Monopile type Tripod / jacket type Floating type

36 Ibid. at 14. 37 Id. at 3. 38 Ibid. p. 18. 39 Ibid. 40 Source: http://www.seai.ie/Renewables/Ocean_Energy/Strategic_Environmental_Assessment_ of_the_OREDP/Scoping_Report/SEA_Scoping_report.pdf.

24   Ronán Long turbines in operation in Norway, Portugal, and Italy.41 These turbines are large with the Hfydroa reported draft of 100 meters, a tower height of 147 meters, rotor diameter of 82 meters, with deployment of the turbines in water depths of 320 meters. The pace of development varies in the Member States with the United Kingdom leading the field, followed by Germany and Denmark (Table 1 above). Indeed, the United Kingdom is a global leader and has granted leases for more offshore projects than the rest of the world combined.42 In 2012, the United Kingdom has 1.3GW of capacity located in 15 offshore wind farms made up of 1,233 turbines.43 This will be supplemented shortly by a further seven farms which are under construction, as well an additional six farms that have received planning consent. There are some estimates that suggest that 18 GW could be installed by 2020 rising to 40 GW by 2030. Apart from the strong tradition in offshore industries, there appears to be several factors that have contributed to the success of the industry in the United Kingdom. Certainly, achieving these targets is facilitated by the relatively coherent statutory framework applicable to the industry in the United Kingdom. In particular, the 2004 United Kingdom Energy Act provides a legal basis for the establishment of the Renewable Energy Zone, which is not a full-blown EEZ but nonetheless appears to be adequate for wind energy development. The regulatory bureaucracy in the United Kingdom is further streamlined by the 2009 United Kingdom Marine and Coastal Access Act, which established a one-stop shop for licensing and planning in the form of the Marine Management Organisation. We will return to this subject at the end of the paper.44 Across the other side of the North Sea, progress in Germany is driven by a number of regulatory and policy measures.45 In particular, the implementation by Germany of a marine spatial management plan and the amendment of the Renewable Energy Sources Act provides a solid regulatory framework for the planned construction of 8,000 turbines in a relatively small area of the continental shelf in the southeast part of the North Sea. As soon as these plans are implemented, at least 15% of the entire German EEZ will be covered in wind

41 European Wind Energy Association, “The European Offshore Wind Energy key 2011 trends and statistics” (Brussels, EEA, 2012). 42 See also, K. Scott, Tilting at Offshore Windmills: Regulating Wind Farm Development Within the Renewable Energy Zone, 18 J. ENVTL. L. 89 (2006). Also see: www.decc.gov.uk/en/content/cms/ meeting_energy/renewable_ener/re_roadmap/re_roadmap.aspx. 43 State of the Industry Report, Onshore and offshore wind: a progress update, Renewable UK, October 2011, and EWEA, January 2012. 44 See paragraph 6.9 supra. 45 See paper by A. Kannen, H. Kremer, K. Gee, and M. Lange, “Renewable Energy and Marine Spatial Planning: Scientific and Legal Implications” in this volume.

Offshore Wind Energy Development   25

turbines.46 The move away from nuclear energy and towards greater reliance on sources of renewable energy was expedited in Germany in the wake of the Fukushima disaster in Japan. Next door to Germany, Denmark has pioneered the industry in Europe. At the time of writing, there are 12 offshore wind farms currently in operation in sea areas under Danish jurisdiction with a capacity of 781 MW. The steady growth of the industry has been facilitated by the Danish Energy Agency, which operates a one-stop shop for the purpose of licensing offshore renewable energy projects. Future plans are aimed at ensuring that all wind farms are located in areas 12 to 25 km from the coast under the Danish “Future Offshore Wind Farms 2025.” Moreover, a comprehensive environmental monitoring programme implemented in Denmark has concluded that the adverse environmental impacts of offshore wind farm development can be avoided or diminished if proper planning and adaptation is undertaken by the coastal State.47 Elsewhere in Europe, Belgium has granted a number of concessions for offshore wind in locations that are at least 27 km from the coast and when fully complete will generate 7% of the total national electricity requirements. Despite having one of the best ocean energy environments in the world, the offshore renewable industry lags well behind in Ireland. There are, however, a number of modest developments including the publication of the Government’s Strategy for Renewable Energy 2012–2020 and the Offshore Renewable Energy Development Plan.48 The former notes that the “offshore wind resource will only be developed as an export opportunity to the United Kingdom and North West Europe, provided this is economically beneficial to the state.” The Offshore Renewable Energy Development Plan has been subject to strategic an environmental impact assessment.49 At the operational level, two leases are granted for the development of wind farms in the Irish Sea. In addition, Ireland is participating in the North Sea Offshore Grid initiative (which extends to the North Sea, English Channel, Irish Sea, and Atlantic) with a view to exploring the options for enhancing the offshore and onshore grid. 46 See R. Long, “Offshore Wind Energy Development in Germany: Actors, Legal Instruments and Decision-Making Procedures” in H. Koch, D. Könnig, GLOBAL ENVIRONMENTAL PROBLEMS & THE GLOBALISATION OF ENVIRONMENTAL LAW (Boston/Leiden, Brill Academic Publishers), 16 pp. (forthcoming). 47 Danish Energy Authority, DONG Energy, Vattenfall and Danish Forest & Nature Agency) published an overview (until 2006) “Danish offshore wind – key environmental issues”. Available at: http://193.88.185.141/Graphics/Publikationer/Havvindmoeller/index.htm. 48 Strategy for Renewable Energy 2012–2020 (Dublin: Department of Communications, Energy and Natural Resources, 2012). Available at: http://www.dcenr.gov.ie/NR/rdonlyres/9472D68A40F4-41B8-B8FD-F5F788D4207A/0/RenewableEnergyStrategy2012_2020.pdf. 49 Available at: http://www.dcenr.gov.ie/NR/rdonlyres/DFA0FCFE-83FC-4016-9DEA-818F 65825FE5/0/OREDPSEAERVolume4Appendices.pdf.

26   Ronán Long The development of the offshore industry in Ireland has not been plain sailing and a report published by the influential Economic and Social Research Institute in 2011 concluded rather ominously that “it will not be economic in Ireland to develop offshore wind for domestic use because of its extremely high cost”.50 Furthermore, that “extensive investment in Ireland in offshore wind (or wave) is unlikely to be of value to the Irish economy”.51 Accordingly, the report called for an end to “incentives for offshore wind and wave and tidal generation on the grounds that it is “premature to incentivise substantial investment in such technologies and it could prove very expensive for the Irish economy, while bringing little or no environmental benefits. Meanwhile, limited taxpayer funds should be provided for research into these technologies as part of Ireland’s research effort”.52 Similar to Ireland, France has been slow to capitalise on what appears to be an excellent resource. Somewhat of a volte-face occurred in 2011 when France formally announced projects will cost around 10 billion euros and will entail the construction of offshore farms at a number of sites on the coast of Brittany.53 At the time of writing, there are 11 offshore grids in operation and close to a further two dozen are under consideration with the progressive establishment of a Pan-European Electricity Highways System by 2050.

4. Factors Shaping the Future Growth of the Industry Apart from the relentless rise in the price of fossil fuels and the insatiable demand for energy worldwide, there are many factors influencing the growth of the renewable energy industry in Europe. At the outset, it ought to be noted that Europe is highly energy intensive and dependent upon imports of energy from regions of the world that are prone to political instability such as the Middle East. This in itself partly explains why there is such a major political emphasis in Europe on securing and promoting home produced sources of energy in general and wind energy in particular. The economic case is often disputed as offshore wind energy is more expensive to produce than fossil fuel or indeed onshore wind energy with some estimates in the UK suggesting that fossil fuels are costing about £70 per MW, with the these costs growing to £100 per MW for onshore 50 See J. Fitzgerald, Review of Irish Energy Policy, (Dublin: Economic and Social Research Institute, 2011). Available at: http://www.esri.ie/UserFiles/publications/RS21.pdf. 51 Id. p. 35. 52 Id. p. 50. 53 See Alstom Power Media Relations (N. McConnell). Available at: http://www.alstom.com/Glo bal/Power/Resources/Documents/News%20and%20Events/Alstom_PressBackgrounder_OffshoreWind_EN.pdf.

Offshore Wind Energy Development   27

wind energy, and more significantly to £150 per MW for offshore wind.54 In view of these costs, critics of the industry are quick to point out that the European industry is highly dependent on fiscal and market support from governments in the form of feed-in tariffs, grants, subsidies, and tax credits. On the other hand, it should also be noted that there is considerable private investment in the industry and the European Commission has suggested that the sector could attract a combined investment of six trillion euros from both public and private sources by 2050.55 On the basis of these figures, supporters of the industry argue that the need for government incentives will lessen as soon as the industry achieves certain economies of scale. The frantic pace of development of the industry in Europe is receiving additional impetus from EU regulatory and policy initiatives that have the dual objectives of mitigating the effects of climate change and ring fencing Europe’s energy security needs into the future. The rolling-out of the industry in the offshore environment is driven by several factors that are unique to the marine environment including the quality of the resource and the availability of large areas of maritime space that can accommodate large-scale wind farms development to a greater extent than the terrestrial environment on the European mainland. Allied with these considerations, the R&D element has been crucial to the development of the industry in Europe and the European Commission has provided fiscal support of 78 million euros for 48 projects aimed at testing and developing ocean energy technology under the framework research programmes. In marked contrast, there appear to be few obstacles to the onward march of the industry and the principal impediments at this point in time appear to be delays in the licensing/consent process, difficulties in the supply chain regarding the availability of specialist installation and maintenance vessels, as well as in dedicated port facilities. There are also challenges to be overcome in relation to the completion of the offshore transmission grid and its integration into the terrestrial system, as well as the completion of seabed inter-connectors between Member States to allow for the export/import of electricity. The completion of the offshore grid is critical to the success of large-scale offshore wind projects and can help to reduce the cost of this form of energy significantly. Furthermore, the construction of a single European grid or the superhighway approach, similar to the one contemplated in the United States, with a limited number of landfall points will undoubtedly minimize the environmental impacts of building multiple individual radial lines to shore to service individual wind farms. 54 See: http://www.oceanenergycouncil.com/index.php/Offshore-Wind/Offshore-Wind-Energy .html. Also on the fiscal trends, see UNEP, “Global Trends in Renewable Energy Investment 2011: Analysis of Trends and Issues in the Financing of Renewable Energy” (2011). 55 See speech by Commissioner Damanaki to the IHO in 2012, available at: http://ec.europa.eu/ commission_2010-2014/damanaki/headlines/speeches/2012/04/20120423_speech_en.htm.

28   Ronán Long The agreement by Germany, Belgium, Denmark, France, Ireland, Luxembourg, Norway, Netherlands, the United Kingdom, and Sweden to develop a supernetwork high voltage cable in the North Sea by 2030 is an important step in the right direction in ensuring that there is a coordinated response to this challenge. Other impediments include inadequate storage facilities, the absence of incentives for cross-border investments, and the rules on State aid and on the functioning of internal markets, which limit public subvention of the industry. Apart from these factors, the pace of development of the offshore industry in Europe is shaped by the procedural and substantive requirements set down in a broad range of regulatory and policy instruments that are applicable to the marine environment and that are focused on protecting biodiversity and marine ecosystems. Before taking a look at how these instruments are intended to give effect to ecosystem-based management in relation to offshore wind energy development, it ought to be noted that offshore wind farms can have both positive and negative impacts on the environment and that this issue thus merits additional consideration here.

5. Environmental Footprint of Offshore Wind Farms The scientific literature on the impacts of offshore wind farms and their associated infrastructure on the marine environment is not fully mature and subject to continuous updating.56 This is borne out by the 2010 OSPAR Quality Status Report on the Marine Environment in the North-East Atlantic, which notes that: “knowledge of the wider effects of offshore wind farms on environmental quality is limited and mainly based on data from monitoring at specific sites, similar activities, government sponsored research and development, and predictions from environmental impact assessment.”57 Similarly, a report commissioned by the Danish Energy Authority points out that there is a “substantial quantity of ‘grey’ literature, of very variable quality, about the environmental impacts of wind farms; unfortunately, however, only little has been published in peer reviewed scientific journals or in books, and developers have tended to retain

56 See inter alia: G.W. Boehlert, A.B. Gill, “Environmental and Ecological Effects of Ocean Renewable Energy: A Current Synthesis”, Oceanography 23 (2001), p. 2; R. Inger, et al., “Marine renewable energy: potential benefits to biodiversity? An urgent call for research”, Journal of Applied Ecology 46 (2009), p. 1151; M.A. Shields, et al., “Marine renewable energy: The ecological implications of altering the hydrodynamics of the marine environment”, Ocean and Coastal Management 54 (2011), p. 7. 57 OSPAR Quality Status Report 2010 (London, OSPAR Commission, 2010), p. 102. Available at: www.ospar.org.

Offshore Wind Energy Development   29

data as commercially confidential material.”58 In light of these observations, considerable care is taken in this paper about drawing any definitive conclusions about this aspect of what is in essence a relatively new maritime industry. That being said, the overall environmental case supporting offshore wind farm development appears to be a solid one provided that due consideration is given to the results of environmental impact assessments and scientific monitoring programmes in the consent/licensing process. The case is predicated on the view that energy generated from renewable sources reduces overall reliance on fossil fuels and thereby mitigates the effects of climate change on marine species and ecosystems.59 Moreover, from a climate change perspective, wind energy development definitely appears to be far more environmentally friendly than some of the other types of mitigation measures such as ocean fertilisation or indeed carbon storage in the seabed as discussed by my colleague, Dr. Aarnes, on this panel.60 In addition, renewable energy ought to reduce the need to transport hydrocarbons by sea and thereby lessen the associated risk of vessel source pollution. Although there is an absence of scientific consensus on the matter, wind farms can act as artificial marine nature reserves and protect biodiversity indirectly if fishing activity is prohibited in such areas. Moving beyond these broad general assertions, the precise environmental impact is of course very much site specific and will depend upon factors such as the nature and fragility of the marine ecosystem(s) in the vicinity of the location of the proposed development. The positive aspect is noted by the European Commission which points out that it may be “possible to construct even large farms without significant impacts on local biodiversity and habitats.”61 This view is also supported by the findings of a major study in Denmark on two of the largest offshore wind farms in the world (Horns Rev and Nysted), which concluded that it is possible to construct offshore wind power facilities in an “environmentally sustainable manner” provided that there is astute use of marine spatial planning as well as the selection of appropriate sites for the turbines.62 Again this finding 58 See General viewpoints on the environmental monitoring programme from the International Advisory Panel of Experts on Marine Ecology, Danish Energy Authority, DONG Energy, Vattenfall and Danish Forest & Nature Agency, “Danish offshore wind – key environmental issues”. Available at: http://193.88.185.141/Graphics/Publikationer/Havvindmoeller/index.htm. 59 See Report of Secretary-General, Promotion of New and Renewable Sources of Energy, A/62/208, 07.08.2007, p. 4. 60 See J. Aarnes, DNV KEMA Energy and Sustainability: “Carbon Capture and Storage and the London Protocol” (PowerPoint available at http://www.virginia.edu/colp/pdf/Halifax-Aarnes.pdf). 61 Communication from Commission, Offshore Wind Energy: Action needed to deliver on the Energy Policy Objectives for 2020 COM(2008) 768 final, 13.11.2008, at 9. 62 Danish Energy Authority, DONG Energy, Vattenfall and Danish Forest & Nature Agency, “Danish offshore wind – key environmental issues”. Available at: http://193.88.185.141/Graphics/Pub likationer/Havvindmoeller/index.htm.

30   Ronán Long is supported by the European Environmental Agency, which has concluded, “in most cases proper siting can ensure that the biodiversity impacts of wind farm development are minimised to levels of no significant concern.”63 The negative impacts of offshore wind energy development are very much site specific. In the coastal zone, there is the well-documented impact of the turbines on the visual amenity and this issue frequently arises in the licensing/ permitting process. Conflicts may also arise between wind energy development and other well established uses of the marine environment such as aquaculture, recreational uses of the sea, as well as the exercise of navigation freedoms by shipping. The adverse impacts on biodiversity are well documented in the specialist literature and extend to habitat and species disturbance, acoustic pollution, changes to the benthic layer, interference with the spawning grounds and migration paths of marine mammals, birds and fish, and the introduction of nonnative species.64 There is also the displacement of fishing activity from one maritime area to another as a consequence of offshore wind energy development. Indeed, little has been published in the scientific literature on this subject. At a regional level, several international initiatives have been taken to address the adverse impacts of wind energy development and to balance the positive and negative impacts of offshore wind energy development. Thus, for example, the Conference of the Parties to both the Bonn Convention on Migratory Species and the Agreement on the Conservation of Small Cetaceans of the Baltic, NorthEast Atlantic, Irish and North Seas (ASCOBANS) have adopted a number of resolutions to address the adverse impacts of wind farms development on migratory birds and cetaceans.65 Similarly, as will be seen below, the whole process of environmental impact assessment is aimed at ensuring that the environmental implications of offshore wind farm development are taken into consideration during the planning/consent process. In summary, there appears to be a pressing need for additional research and further peer reviewed scientific publications on the environmental impact of offshore wind farms. Amongst other matters, this research should focus on the cumulative effect of large-scale wind farms (made up of several thousand 63 European Environment Agency, “Europe’s onshore and offshore wind energy potential”, Technical Report No. 6/2009 (Copenhagen: EPA, 2009) p. 60. 64 OSPAR Commission, Assessment of the Environmental Impact of Offshore Wind Farms, Publication No. 305/2008. (London, OSPAR Commission, 2008). 65 CMS Resolution 10.24 on Further Steps to Abate Underwater Noise Pollution for the Protection of Cetaceans and Other Biota (2011); ACCOBAMS Resolution 4.17 on Guidelines to address the impact of anthropogenic noise on cetaceans in the ACCOBAMS area (2010); ASCOBANS Resolution 6.2 on Adverse Effects of Underwater Noise on Marine Mammals during Offshore Construction Activities for Renewable Energy Production (2009); CMS Resolution 9.19 on Adverse Anthropogenic Marine/Ocean Noise Impacts on Cetaceans and other Biota (2008); CMS Resolution 7.5 on Wind Turbines and Migratory Species (2002).

Offshore Wind Energy Development   31

turbines) on sensitive and unique ecosystems such as the development proposed to be undertaken at the Dogger Bank in the North Sea.

6. Some Practical Issues and Measures that Facilitate Ecosystem-Based Management As noted in the introduction to this paper, one of the objectives of the ODEMM project is to identify legal constraints and opportunities at the EU level and within Member States for improving the implementation of the ecosystems approach under various Union, regional and global legislative instruments. In this regard, one of the principal challenges faced by the regulatory bodies and agencies in the Member States is how to reconcile the expansion of the offshore renewable energy sector with the implementation of an ecosystem-based approach to the management of human activities in the marine environment. This is particularly with a view to achieving the legally binding obligations set down by nature conservation instruments such as the attainment of favourable conservation status of species and habitats under the Habitats and Birds Directives, as well as good environmental status of all marine waters by 2020 under the Marine Strategy Framework Directive (MSFD).66 At first sight, it appears from the policy and legal research undertaken under the auspices of the ODEMM project that there appears to be no simple answers to these questions as the ecosystem approach implies the adoption of an integrated and interdisciplinary approach to the management and protection of the marine environment.67 As such, it entails the application of a range of normative principles in the decision-making process concerning the licensing and authorisation of maritime activities such as offshore wind farms. At the very least, it 66 Directive 2008/56/EC of 17 June 2008 establishing a framework for community action in the field of marine environmental policy (Marine Strategy Framework Directive) OJ L 164/19, 25.6.2008. See R. Long, “The EU Marine Strategy Framework Directive: A New European Approach to the Regulation of the Marine Environment, Marine Natural Resources and Marine Ecological Services”, 29 (1) (2011) Journal of Energy and Natural Resources Law 1–45. 67 See, inter alia: R. Long, “Legal Aspects of Ecosystem-Based Marine Management in Europe” in A. Chircop, M.L. McConnell, S. Coffen-Smout (eds.), Ocean Yearbook Vol. 26, (Boston/Leiden, Brill Academic Publishers, 2012) pp. 417–484; J. van Leeuwen, L. van Hoof, J. van Tatenhove, “Institutional ambiguity in implementing the European Union Marine Strategy Framework Directive”, 36 (2012) Marine Policy pp. 636–643; A. Ounanian, J. Delaney, J. Raakjaer, P. RamirezMonsalve, “On unequal footing: Stakeholder perspectives on the marine strategy framework directive as a mechanism of the ecosystem-based approach to marine management, 36(2012) Marine Policy pp. 658–666; P. Breen et al., “An environmental assessment of risk in achieving good environmental status to support regional prioritisation of management in Europe” 36 (2012) Marine Policy pp. 1033–1043.

32   Ronán Long is contended by the author of this paper that it ought to include the following elements: mapping the seabed and the resource; species and habitat protection; the adoption of a comprehensive spatial planning and management scheme; an environmental impact assessment at both strategic and project levels; the use of the best available scientific advice and the results of monitoring programmes; integrated decision-making regarding the various maritime sector activities that impinge on wind farm development; enhanced stakeholder consultation and participation in decision-making; as well as the adoption of appropriate schemes for marine environmental protection and maritime safety. Moreover, this scheme should allow for adaptive management that takes into account an evolving matrix of economic, environmental and social considerations in the consent/ licensing process.68 As will be seen next, progress in the European Union in relation to each of the elements varies considerably and in some instances leaves considerable scope for improvement. 6.1 Mapping the Seabed and the Resource The first step is a relatively fundamental one and that is to ensure that the wind energy resource and the seabed are comprehensively surveyed and mapped to provide baseline information concerning prospective development sites, seabed cabling routes, as well as to facilitate decision-making regarding the avoidance of conflicts with other uses of the marine environment. Mapping the seabed will also help scientists identify habitats and species that are protected under EU nature conservation instruments and this step should therefore be considered a prerequisite for the implementation of a scheme of ecosystem-based marine management. Progress on these issues in Europe is a mixed bag of piecemeal achievements and unrealised objectives. On the one hand, progress on mapping the offshore wind energy resource is relatively good and several Member States and industry related organisations have produced renewable energy resource atlases that show the distribution of the resource and have undertaken feasibility studies on the future deployment of renewable energy technologies such as wind, wave and tidal technologies.69 In relation to seabed mapping, on the other hand, the current practice in the European Union varies considerably. Most notably, apart from Ireland, few Member States have systematically mapped the seabed in sea areas under their 68 This is supported by findings of D. d’A. Laffoley et al., The ecosystem approach. Coherent actions for marine and coastal environments. A report to the UK Government (English Nature, Peterborough, 2004), at 7. Available at: www.vliz.be/imisdocs/publications/68220.pdf. 69 For the United Kingdom see Atlas of UK Marine Renewable Energy Resources available at: http://www.renewables-atlas.info/.

Offshore Wind Energy Development   33

national sovereignty and jurisdiction. In addition, bathymetry, hydrographic and geomorphologic data are held by a diffuse and large number of public and private bodies in the Member States. This is compounded by the use of different formats and standards for survey data and cartography. There have however been a number of important European initiatives to address these shortcomings. In 2011, for instance, the European Union launched a Seabed Mapping Initiative with a view to making a low-resolution bathometric map freely available.70 This map uses data obtained from 113 different survey bodies and the Commission has indicated its support for the publication of a new pan-European digital map showing bathymetry, sediment type, mineral deposits, as well as habitat type and disposition.71 This will be supplemented with additional information on water temperature, salinity, chemical pollution, and various forms of marine life. There are several other complementary initiatives and the European Commission has indicated that a core element of the EU research programme, Horizon 2020, will be focused on the development of new remote sensing technologies including those that facilitate the interpretation of video images of marine life and this will undoubtedly facilitate ecosystem-based marine management.72 There has also been a number of initiatives on the multilateral political landscape aimed at advancing an integrated approach to maritime affairs at a panEuropean level. One significant milestone is the signature of a Memorandum of Understanding between the European Union and the International Hydrographic Organisation (IHO) in 2012.73 The latter is the international body tasked with agreeing standards for the production of navigational charts that are fundamental for ecosystem-based management. Instructively, the memorandum mentions expressly that offshore energy and the implementation of the MSFD are areas for mutual cooperation and the sharing of information between the European Commission and the IHO. Apart from its importance to ecosystem-based management, mapping the seabed makes good sense in light of a recent socio-economic study published in the United States, which asserts that for every dollar of public money spent by National Oceanic and Atmospheric Administration on seabed mapping there is a 35 euro benefit in the form of improved information for maritime safety and marine resource management, as well as for many other maritime activities.74 70 Speech by Commissioner Damanaki to International Hydrographic Conference, Monaco, 23.04.2012. Ref: SPEECH/12/287. 71 Ibid. 72 Id. Also see COM(2011) 808 final. 73 Available at: http://www.iho.int/mtg_docs/International_Organizations/MOU/EC_IHO_MOU .pdf. 74 Available at: http://www.noaanews.noaa.gov/stories2012/032812_coastalmapping-economic value.html.

34   Ronán Long Furthermore, as pointed out by Larry Mayer, the availability of high quality seabed maps and the survey data are essential to good decision-making when public bodies and agencies are faced with the ultimate and daunting task of responding to maritime disasters such as the one that occurred with the loss of the Macondo well in the Gulf of Mexico.75 6.2 Protecting Species and Habitats There is general consensus in the scientific literature that wind farm development needs to be reconciled with the regulatory requirements setting down standards on the protection and preservation of marine biodiversity.76 This is an important consideration in the European Union as many of the most suitable sites for offshore wind farm development are located in areas that are protected under the Habitats and Birds Directives.77 These instruments are the very foundation of EU biodiversity policy and provide for the strict protection of species in their own right, as well as requiring Member States to adopt appropriate conservation measures in protected areas to ensure that habitats and species are maintained and restored at a favourable conservation status across their natural range within the European Union.78 In addition, Member States must avoid activities that have the potential to damage or disturb species, or that can lead to the deterioration of habitats.79 The entire network of protected areas is referred to as the Natura 2000 network. There are several points that can be made about wind farm development in areas that come within the scope of the Habitats and Birds Directives. First of all, the whole process of site designation and the achievement of the nature conservation objectives need to be expedited by the Member States. As it stands, the footprint of the directives is extensive with 1,848 marine sites protected under the Habitats Directive covering 159,983 km2 and a further 936 protected areas under the Birds Directive which have a marine component and cover

75 See L Mayer’s PowerPoint “Lessons Learned from Deepwater Horizon” available at http://www .virginia.edu/colp/pdf/Halifax-Mayer.pdf. 76 See discussion infra on the environmental footprint of offshore wind farms. 77 Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora OJ L 2067, 22.7.1992; Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds, O.J. L 103/1, 25.04.1979. Subsequently codified by Directive 2009/147/ EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds OJ L 20/7, 26.1.2010. Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora OJ L 206/7, 22.7.1992. Consolidated version published on 1.01.2007. There is a substantial volume of case law in the European Court of Justice on both directives. 78 Art 6(1) of Council Directive 92/43/EEC. 79 Art 6(2) of Council Directive 92/43/EEC.

Offshore Wind Energy Development   35

121,626 km2.80 The majority of protected sites are within 12 miles of the coast, which suggests that as wind farms are undertaken further seaward there will be less scope for conflict with the sites and species protected under the directives.81 Implementing ecosystem-based marine management, however, is not facilitated by the slow progress in establishing management priorities and in adopting conservation measures for specific sites in the marine environment, which are now scheduled for completion in 2012. Similarly, progress in achieving the conservation objectives is less than impressive and the European Environmental Protection Agency concluded that “only 8% and 11% of coastal habitats and species, respectively, and 10% and 2% of marine habitats and species, respectively, are in favourable conservation status.”82 The remaining habitats and species are either at an unfavourable conservation status or remain un-assessed. Secondly, it is important to keep in mind that wind farm development is not prohibited strictu sensu but must undergo “Appropriate Assessment” under Article 6 of the Habitats Directive to determine the implication of a proposed project or plan on the conservation objectives of a protected area. In practice, the assessment process is elaborate and takes into account matters such as the visual impact, collision, noise pollution, and the electro-magnetic fields generated by turbines and their associated cable networks, as well as factors such as the displacement of species due to the noise and vibration from the turbines. On completion of the assessment, the plan or project can only go ahead if it is ascertained that it will not adversely affect the integrity of the protected site.83 In exceptional circumstances when there is a negative assessment, the proposed project may still go ahead if there are no alternatives and the plan or project is considered to be of overriding public interest. In such instances, the Member State must take appropriate compensatory measures to ensure the overall coherence of the Nature 2000 network.84 Little has been published on the number of offshore wind farm projects that have been authorized for construction in the Member States despite receiving a negative assessment. There are a number of instances, however, where there is extensive wind farm development in areas that are protected under the Habitats and Birds Directives such as in the archipelago near Högsara Island in Finland. Also, it is pertinent to point out that the 80 European Commission, http://ec.europa.eu/environment/nature/natura2000/barometer/ index_en.htm. 81 For an update on the location of the sites in the Natura 2000 network, see the Natura 2000 Barometer. Available at: http://ec.europa.eu/environment/nature/natura2000/barometer/ index_en.htm. 82 European Protection Agency, “The European environment | State and outlook 2010” (Copenhagen: EEA, 2010), p. 5. Available at: Thematic_assessment_Marine and coastal_environment_new .pdf. 83 Art 6(3) of Council Directive 92/43/EEC. 84 Art 6(4) of Council Directive 92/43/EEC.

36   Ronán Long potential impact of wind farm development on the general scheme of protection afforded to species under the directives in areas outside of the Natura 2000 network must be taken into account in the licensing/permit process. The third point is that the scientific literature on the impacts of wind farm development on the wider marine environment is rapidly maturing as seen previously.85 In particular, there are important European Commission sponsored publications on the implementation of the Habitats and Birds Directives in estuaries and the coastal zone,86 as well as on the more general subject of wind energy and Natura 2000.87 The former document identifies the importance of adaptive management in cases of scientific uncertainty. The latter focuses on the procedural aspects of ensuring that wind farm development is compatible with the Natura 2000 objectives and with clarifying various aspects of the licensing or permitting process. Both publications add significantly to the scientific literature and provide a blueprint for ensuring that wind farm development is undertaken in conformity with the objectives of the Habitats and Birds Directives. 6.3 Planning and Managing the Spatial Environment Offshore wind farms require significant amounts of maritime space and demand a planning framework that is fully consistent with terrestrial planning systems. In light of these requirements, maritime spatial planning (MSP) and integrated coastal zone management (ICZM) are important processes that can be applied to the renewable energy sector.88 Both processes allow for extensive evaluation and decision-making regarding a broad range of diverse factors that have a bearing on development such as the offshore environment, bathymetry and seafloor conditions, fishing activity and navigation, offshore oil and gas infrastructure, marine biodiversity and areas designated for protection under EU nature conservation instruments, underwater cultural resources and wrecks, recreational uses of the marine environment, and maritime safety. Broadly speaking, MSP applies to offshore areas and ICZM addresses the interface of the land and the sea in the coastal zone. For those unfamiliar with the challenges posed by the tasks associated with the management of human activities in the marine environment it needs to be emphasised that MSP differs from terrestrial planning in so far as it is very much contingent upon good quality scientific data (which is not always

85 See section 5 on the environmental footprint of offshore wind farms infra. 86 EC Guidance on the implementation of the EU nature legislation in estuaries and coastal zones (Luxembourg: EU, 2011). 87 EU Guidance on wind energy development in accordance with the EU nature legislation (Luxembourg: European Commission, 2010). Available at: http://ec.europa.eu/environment/nature/ natura2000/management/docs/Wind_farms.pdf. 88 See paper by A. Kannen, et al., supra note 45.

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available) and because of public ownership of the seabed and the resources that are at stake.89 In theory, both processes should ensure that decisions concerning wind farm development are taken at the appropriate strategic level and not entirely at the level of an individual project. Moreover, best practice internationally suggests that both processes can improve decision-making regarding general and specific uses of the marine environment. As such, both processes can make an important contribution to ecosystem-based management by ensuring that the best available scientific advice is taken into consideration during the planning phase of offshore wind farm development with a view to protecting the integrity of marine ecosystems and by providing frameworks that help avoid conflicts with other uses of the marine environment. This explains why the European Commission has gone as far as recommending that the ecosystem-based approach should form the overarching principle for MSP.90 MSP and ICZM are therefore complementary to environmental impact assessment. Moreover, both MSP and ICZM can facilitate to a great extent the implementation of the MSFD and the environmental protection requirements that arise under the regional seas agreements such as the OSPAR and HELCOM Conventions. From this brief description, both processes if applied correctly ought to provide a solid planning framework for offshore wind energy development. In practice, however, the record of achievement of EU Member States in implementing MSP and ICZM is highly inconsistent and very fragmented. This is mainly because many EU Member States have little experience on the practical aspects of implementing a comprehensive system of offshore planning.91 In addition, the procedural and substantive rules that apply in the Member States to MSP and ICZM vary considerably. As a result, one cannot say with any great certainty that the current system of MSP and ICZM are either shaping or influencing the selection of locations for wind farm development, or indeed the intensity of such development, at a pan-European level. There are, however, a few notable exceptions where MSP is utilised at a national level to plan offshore activities including renewable energy development in Germany, Belgium, the Netherlands, and the United Kingdom. In many ways the United Kingdom is progressive and many of the tasks associated with MSP are undertaken at a devolved level in England, Wales, Scotland, and Northern Ireland. Vitally, the Marine and Coastal Access Act 2009 sets down a solid basis for an objective-led approach to marine planning and for the adoption of a 89 See A. Slater, ‘What is Marine Spatial Planning?’, 14(1) (2012) Environmental Law Review 1–6. 90 COM(2010) 771, 17.12.2010, p. 3. 91 See inter alia: B. Schaefer, “Maritime Spatial Planning: Opportunities and Challenges in the Framework of the EU’s Integrated Maritime Policy” (2011) 15 Journal of Coast Conservation 237–45.

38   Ronán Long “Marine Policy Statement.” In England, the Marine Management Organisation is tasked with bringing forward the first wave of marine spatial plans. Similarly, in Scotland the Marine (Scotland) Act 2010 provides a legal basis for the adoption of a National Marine Plan.92 Aside from the aforementioned examples of Member State practice, additional impetus is coming from the European institutions and the European Commission in particular has taken a number of positive initiatives to harmonise Member State best practice and to develop a common EU approach to MSP. Most notably, considerable progress was made with the publication of the “Roadmap on MSP: Achieving Common Principles in the EU” in 2008, which identified ten principles underpinning MSP in Europe.93 Since then, the Commission has also financed a number of studies including studies on the legal and economic aspects of MSP, examining the potential application in the Mediterranean Sea, as well as two test projects in the Baltic Sea and in the North-East Atlantic, including the North Sea and the Channel area. Significantly, apart from lowering administrative costs, the economic study estimated that MSP if implemented rigorously can lower transaction costs for maritime activities on the order of 400 million to 1.8 billion euros by the year 2030. The enhanced investment climate for the same year is estimated to be in the order of 155 million to 1.6 billion euros. The European Union finances additional preparatory action projects examining the implementation of MSP on a cross-border basis in the North Sea and Baltic Sea as well as in several other selected maritime areas.94 The latter projects will examine among other matters the contribution that MSP and ICZM can make to the implementation of ecosystem-based management.95 Overall, progress in implementing MSP and ICZM in the Member States appears at best to be modest. The principal weakness is that Member States, with few notable exceptions, are reluctant to apply a rigorous system of anticipatory control in accordance with the ecosystem approach with a view to balancing economic, political, social and environmental considerations in making strategic decisions regarding offshore wind farm development. In particular, the land-sea interface is not addressed adequately and there appears to be little scope for cross-boundary integration of the terrestrial and marine planning systems used by the Member States. In view of this and in light of the obligations that are set down in the MSFD, it may be contended that there appears to be a cogent case supporting the view that MSP should be undertaken in the first instance at

92 S.5 of the Marine (Scotland) Act 2010. 93 COM(2008) 791 final, 25.11.2008. 94 Regulation (EU) No 1255/2011, OJ L 321/1, 5.12.2011. 95 Art 2(b) of Regulation (EU) No 1255/2011.

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sea-basin level and not at Member State or at devolved levels therein.96 Regrettably, on this question, there is considerable reluctance on the part of the European institutions to move beyond the role of a “facilitator” and the current approach of the European Commission is limited to articulating the various options for improving cross-border cooperation on MSP and ICZM. Most noticeably, the practical implementation of both processes is being left to the Member States. There are a number of valid reasons for this hands-off approach, principally because the European Union does not have legal competence to adopt spatial management plans for sea areas under Member States sovereignty under the EU Treaties. Similarly, there are restrictions on the powers of the EU institutions to adopt measures affecting town and county planning, and land use (apart from waste management) under the Treaty on the Functioning of the European Union.97 6.4 Assessing the Environmental Impacts There are different forms of environmental assessment required under EU legislation.98 In the first instance, plans and programmes for energy development are subject to mandatory strategic environmental impact assessment (SEA) in the European Union.99 This ensures that the environmental implications of such plans and programmes are identified, assessed and taken into account by the public body vested with responsibility for their preparation and prior to their ultimate adoption. An important part of this exercise entails an assessment of alternative proposals for development, as well as the measures that can be taken to mitigate significant adverse environmental effects. Although SEA has its origins in United States law (the National Environmental Protection Act 1969), it has been up and running in the European Union for close to a decade, and a good example of how it works in practice can be seen in the strategic assessment that was undertaken in relation to the Offshore Renewable Energy Development Plan in Ireland.100 The assessment examines a number of hypotheses including

96 See R. Long, “Legal Aspects of Ecosystem-Based Marine Management in Europe” in A. Chircop, M.L. McConnell, S. Coffen-Smout (eds.), OCEAN YEARBOOK Vol. 26, (Boston/Leiden, Brill Academic Publishers, 2012) pp. 417–484. 97 Art 192(2) of the TFEU. 98 Council Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment, OJ L 197/30, 21.7.2001; codified version of Directive 2011/92/EU of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment, OJ L 26/1, 28.1.2012. 99 Directive 2001/42/EC, OJ L 197/30, 21.7.2001. 100 Available at: http://www.seai.ie/Renewables/Ocean_Energy/Strategic_Environmental_ Assessment_of_the_OREDP/.

40   Ronán Long the maximum level of production from offshore renewable energy sources that can be achieved by 2020, the maximum water depth into which devices will be installed and the maximum distance from shore devices can be installed. As procedural law, SEA thus reflects both a top-down and a bottom-up approach to marine environmental management. If implemented rigorously, SEA facilitates ecosystem-based marine management by ensuring that wind energy development is not undertaken in areas where it poses an unacceptable threat to the protection of marine biodiversity or reduces the ecological services delivered by nature. Similarly, SEA should help to avoid the cumulative impact arising from the development of a proliferation of wind farms early on in the planning process. Apart from wind energy development, SEA must also be undertaken in relation to all plans and programmes including MSP and it can therefore shape the entire strategic planning regime for offshore activities. In this manner, it also contributes to integrated and efficient planning at a strategic level and thus sits very comfortably with the EU’s Integrated Maritime Policy and ecosystem-based management as a normative principle. The second aspect of environmental assessment is undertaken at the technical planning and project decision-making stage. More specifically, environmental impact assessment (EIA) is mandatory and systematic for certain categories of projects that are set out in Annex 1 of the EIA Directive, as well as projects that are likely to have significant effects on the environment such as wind energy projects in accordance with certain selection criteria set out in Annexes II and III of the Directive.101 The assessment is conducted on the basis of the information supplied by the developer in a statement and the precise procedural requirements are set out in the EIA Directive. This will include an assessment of the impacts on marine fish and shellfish, benthic and other marine habitats, seabirds, marine mammals as well as on the overall functioning of marine ecosystems. As noted by OSPAR, in the assessment: . . . . the duration of their impacts should also be taken into account. The activities associated with the construction and decommissioning of energy source devices and installations (e.g., seismic explorations; construction noise caused by drilling, use of explosives, ramming and piling; dredging; cable laying; water turbidity; construction vessel activities) may have short or medium-term impacts. The electromagnetism and physical presence of structures could have long-term impacts.

For the majority of offshore wind farm developments in the OSPAR maritime area, EIA has been undertaken and a comprehensive scheme of national standards has been developed in the Member States.102 Moreover, by setting down 101 Annex II.3.i of Directive 2011/92/EU. 102 The OSPAR Quality Status Report 2010 cites the following examples: Standards for Environmental Impact Assessments of Offshore Wind Turbines on the Marine Environment (StUK 3). Issued by Bundesamt für Seechiffahrt und Hydrographie, February 2007 (Germany); Offshore

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essential procedural requirements, EIA is an important tool for ecosystem-based management as it provides the framework for evaluation of the direct and indirect environmental effects of the project as well as the interactions with human beings, fauna and flora, soil, water, climate and the landscape, material assets and the cultural heritage.103 In 2008, the OSPAR Commission published Guidance on Environmental Consideration for Offshore Wind Farm Development and this has proved invaluable and has had a major bearing in establishing best practice regarding EIA.104 Significantly, the OSPAR Commission reported subsequently that the existing regulatory requirements regarding EIA measures are sufficient and have been shown to work.105 The OSPAR Commission, however, expresses caution about the future and notes the following: With the expected increase in the number and scale of offshore wind farms beyond 2010, OSPAR will need to address the gaps in knowledge about the effects of wind farms on the marine ecosystem. Information from monitoring of operational wind farms should be exchanged and assessed. Impacts from wind farms need to be kept at acceptable levels in relation to reference populations of species that are affected. These could be populations that are functionally or regionally significant or populations within biogeographic regions or flyways. Where appropriate, consideration of cumulative and transboundary effects should become a more critical part of the national assessment and consenting process.106

SEA and EIA should not be viewed in isolation and attention also needs to be drawn to the MSFD as this provides a solid legal basis for Member States to consider offshore wind farms in their overall assessment of the pressure and impacts on the marine environment and whether these are likely to effect the attainment of the “good environmental status” of all marine waters by 2020 by the latest. 6.5 Strengthening Stakeholder Participation Wind farms have the potential to divide rural and coastal communities. This division is evident in the United States in relation to the development of the Cape Wind project in the vicinity of Nantucket Island.107 Instructively, a number Wind-Farms – Guidance note for Environmental Impact Assessment In respect of FEPA and CPA requirements. Version 2 – June 2004 (United Kingdom); Nature Conservation Guidance on Offshore Wind farm Development – A guidance note on the implications of the EC Wild Birds and Habitats Directives for developers undertaking offshore wind-farm developments. March 2005. Defra (United Kingdom). 103 Art 3 of Directive 2011/92/EU. 104 OSPAR Commission, Assessment of the environmental impact of offshore wind-farms (London, OSPAR Commission, 2008). Available at: http://qsr2010.ospar.org/media/assessments/ p00385_Wind-farms_assessment_final.pdf 105 OSPAR Quality Status Report 2010 (London, OSPAR Commission, 2010). 106 Ibid. 107 See The Economist 19th August 2010.

42   Ronán Long of academic studies have been completed in Denmark on public involvement in wind energy projects and one study reveals that public confidence can be improved by means of information dissemination, greater public involvement in the licensing processes, and through public partnership (or “buy-in”) in the commercial aspects of project development.108 That aside, there is a relatively robust EU legislation that sets down the minimum requirement regarding public participation in decision-making and access to information concerning the environment and this reflects the requirements set down by the Aarhus Convention.109 Furthermore, SEA (described above) entails public consultation on the draft plan or programme and this is an important opportunity for the public to participate in environmental decision-making at an early stage in the decision-making process and this requires public bodies to explain why a specific solution is taken. Ultimately, SEA ought to provide for a high level of protection for the environment by integrating environmental considerations and promoting sustainable development at an early stage in the planning process at a national/regional level. Again similar to SEA, public consultation is at the heart of the EIA process and the national authorities are obliged to let the public know the main reasons for the decision to approve or refuse any specific project, as well as a description of the main mitigation and compensatory measures.110 The Appropriate Assessment under Article 6 of the Habitats Directive described above may form part of the EIA and SEA assessment but sets down a particular environmental standard regarding the protection of the integrity of the sites. In contrast, SEA and EIA are intended to ensure that the environmental implications of the prospective wind farm or other project are taken into account in the decision-making process to grant or refuse a permission to develop. In principle, these requirements ought to facilitate the direct involvement of stakeholders in the process of identifying the most suitable sites for offshore wind farm development, as well as the most appropriate terrestrial sites for the related infrastructure. In some Member States, some marine planning bodies are aiming to engage with key stakeholders and the wider public, over and above the stipulated regulatory requirements as set down in various EU and national instruments and this approach is to be welcomed as it is very much consistent with ecosystem-based management. 108 See H. Soerensen et al., “Experience with and strategies for public involvement in offshore wind” 1(4) (2002) International Journal of Environment and Sustainable Development. 109 United Nations Economic Commission for Europe (UNECE) Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters of 25 June 1998; done at Aarhus, Denmark, 25 June 1998; entered into force on 30 October 2001; 2161 UNTS 447; 38 ILM 517 (1999). 110 Arts 6, 7 and 8 of Directive 2011/92/EU.

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Significantly, experience in Denmark suggests that the stakeholder consultation structures and procedures are working well. In particular, the EIA process is reported as allowing all interested parties to present their comments and to engage fully in the decision-making concerning the authorisation of wind farm projects.111 6.6 Scientific Monitoring Programmes and Information Sharing Scientific monitoring programmes are established in several Member States to monitor the environmental effects of wind farm development.112 As noted by the OSPAR Commission, the implementation of monitoring programmes by both public bodies and industry during the construction and operation of offshore wind farms will “provide information on effects and thereby help future developers minimise potential impacts.”113 Although it is beyond the scope of this paper to describe specific aspects of the scientific monitoring programmes, it is important nonetheless to note that there are several initiatives to improve the way marine data and information are shared at a pan-European level. More specifically, the Marine Knowledge 2020 is aimed at improving the quality and access to marine data among various user groups including the offshore wind energy sector. This is supplemented by the project to establish a European Marine Observation and Data Network (EMODnet), which is aimed at improving access to hydrographic, geological, physical, chemistry, biological and habitat data, at a pan-European level.114 Through a number of prototype websites, it assembles data from public and private databases, including data on maritime activities such as offshore wind farms. In addition, EMODnet is designed to complement WISE-Marine115 and to deliver the necessary scientific information to facilitate the assessment of the status of the marine environment and pressures on it in accordance with the requirements of the MSFD. The European Commission’s proposal for a European Maritime and

111 Danish Energy Authority, DONG Energy, Vattenfall and Danish Forest & Nature Agency) published an overview (until 2006) “Danish offshore wind – key environmental issues”. Available at: http://193.88.185.141/Graphics/Publikationer/Havvindmoeller/index.htm. 112 See, for example, the programme established in Denmark. Ibid. 113 OSPAR Commission, Assessment of the environmental impact of offshore wind-farms (London, OSPAR Commission, 2008). Available at: http://qsr2010.ospar.org/media/assessments/ p00385_Wind-farms_assessment_final.pdf. 114 See Roadmap for European Marine Observation and Data Network. 115 WISE-marine is the marine environmental component of SEIS intended to fulfil the requirements of implementation of the reporting obligations of the Marine Strategy Framework Directive 2008/56/EC and to inform the European public on implementation of marine strategies. It will be an extension of the current Water Information System for Europe (WISE) system, which covers near coastal waters, towards the marine environment.

44   Ronán Long Fisheries Fund makes provision for a continuation of EMODnet with a provisional budget of €30 million a year for the period 2014–2020.116 6.7 Ensuring the Safety of Navigation Offshore wind farm development poses a risk to the safety of navigation and increases the risk of vessel source pollution. Somewhat surprisingly, the International Maritime Organization (IMO) has yet to adopt specific guidance for governments and industry on these issues. There are, however, several IMO instruments applicable to the safety of shipping that are relevant to offshore wind farms including, inter alia: the 1974 SOLAS Convention; IMO resolutions on General Provisions on Ships’ Routeing;117 the IMO resolution on Safety Zones and Safety of Navigation around Offshore Installations and Structures of 19 October 1989;118 and the Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone of 19 October 1989.119 There is an excellent discussion of the IMO 1989 Guidelines in this volume by Professor Beckman.120 For the purpose of this paper, a few brief comments can be made about a number of IMO and EU instruments that have a bearing on the safety of navigation in the vicinity of offshore wind farms. Briefly stated, ships’ routing systems help prevent maritime accidents in areas which are congested or hazardous for shipping due to offshore wind farm development. They thus contribute indirectly to the conservation and protection of marine ecosystems. The principal international instrument, the IMO General Guidelines and Criteria on Ships’ Routing (GPSR), are aimed at “improving the safety of navigation in converging areas and in areas where the density of traffic is great or where freedom of movement of shipping is inhibited by restricted sea-room, the existence of obstructions to navigation, limited depths or unfavorable meteorological conditions.”121 The GPSR outlines the procedures and functions of the IMO, the responsibilities of Governments, as well as the recommended and compulsory practices in relation to the designation process and the adoption of appropriate routing measures. The precise objectives of any particular routing system are contingent upon several factors including the requirement to ensure the safe flow of traffic in 116 COM(2011) 804 final, 2.12.2011. 117 IMO resolution A.572(14) (General Provisions on Ships’ Routeing as since amended). 118 IMO resolution A.671(16) (Safety Zones and Safety of Navigation around Offshore Installations and Structures). 119 IMO resolution A.672(16) (Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone). 120 See R. Beckman, Global Legal Regime on the Decommissioning of Offshore Installations and Structures (paper in this volume). 121 General Provisions on Ships’ Routeing (GPSR) (Resolution A.572(14), as amended).

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areas where there is wind farm development. In practice, considerable responsibility rests with the IMO Sub-Committee on the Safety of Navigation, which considers proposals submitted by governments for a new or amended routing system. The various designations under the GPSR include the establishment of a new “Area To Be Avoided” or “Precautionary Area”. The precise designation will depend on the location and nature of a particular development and the requested designation can be changed to respond to various factors. Thus, for example, the United Kingdom submitted initially a proposal for an “Area To Be Avoided” relating to wind farm development in the vicinity of the Thornton and Bligh Banks in the English Channel. This proposal was subsequently amended to the establishment of a “Precautionary Area” to facilitate the flow of traffic during the construction phase of the wind farms and to allow the United Kingdom to make a new designation proposal at a later date after the experience gained with the initial routing measures. In general, the IMO mechanisms and designation process appear to be adequate for managing shipping traffic in the vicinity of offshore wind farms and thus capable of preserving the safety of navigation and the protection of the broader marine environment in the longer-term.122 There has been progress on a number of important safety related issues at the IMO in response to wind farm development. In February 2012, for example, the IMO Sub-Committee on Ship Design and Equipment is reported as agreeing to consider “the application of existing IMO instruments to vessels involved in the construction and servicing of offshore wind farms” and to further clarify the application of relevant requirements concerning the transport of industrial personnel by sea.123 This is a significant initiative because there is a range of new specialist vessels engaged in the construction and servicing of offshore wind farms, and concerns have been raised in Germany about their classification and the general application of appropriate safety standards to such vessels.124 There are a number of EU regulatory instruments that are also relevant to the safety of navigation. In particular, it may be recalled that following the loss of the Erika and the widespread pollution of the French coast, the then EC 122 D. Leary, M. Esteban, “Climate Change and Renewable Energy from the Ocean and Tides: Calming the Sea of Regulatory Uncertainty” 24 (2009) The International Journal of Marine and Coastal Law pp. 617–651. 123 56th session IMO’s sub-committee on Ship Design and Equipment, 13–17 February 2012. 124 See paper delivered by Gert-Jurgen Scholz, Director at the Federal Ministry of Transport, Building and Urban Development Germany, at the Forum on Offshore Wind Energy, First Hamburg International Environmental Law Conference 2011. Summary available: R. Long, “Offshore Wind Energy Development in Germany: Actors, Legal Instruments and DecisionMaking Procedures” in H. Koch, D. Könnig, GLOBAL ENVIRONMENTAL PROBLEMS & THE GLOBALISATION OF ENVIRONMENTAL LAW (Boston/Leiden, Brill Academic Publishers), 16 pp. (in press).

46   Ronán Long adopted a range of measures to combat vessel source pollution including Directive 2002/59/EC, which establishes a vessel traffic monitoring and information system.125 The overall purpose of the Directive is to enhance the safety and efficiency of maritime traffic, improve the response of authorities to incidents, accidents or potentially dangerous situations at sea, including search and rescue operations, and to contribute to the prevention and detection of pollution by ships.126 Although this instrument is not related to wind farm development per se, it nevertheless sets down a broad range of rigorous obligations that must be complied with by the masters, operators or agents of ships, as well as by shippers or owners of dangerous or polluting goods carried on board such ships, and thus provides an additional safeguard to shipping traffic in Europe. In 2011, there was an important amendment to this Directive, which enhances the powers of intervention of Member States following an incident at sea or where there is a threat to the marine environment.127 In particular, they may “give instructions to the assistance, salvage or towage companies in order to prevent a serious and imminent threat to its coastline or related interests, to the safety of other ships and their crews and passengers or of persons on shore, or to protect the marine environment.”128 Clearly, this enhances the scheme of protection that applies to maritime traffic in the vicinity of offshore wind farms and such measures ought to contribute to the attainment of good environmental status under the MSFD in due course. 6.8 Protecting the Human Environment, Emergency Response and Liability for Environmental Damage The construction and maintenance of offshore wind farms raises important questions regarding the safety of workers and the capacity of the maritime services in the Member States to respond to emergencies. This is a specialist field of law and is regulated at both EU and national levels in the Member States. Suffice it to know here that the Framework Directive for health and safety of workers applies to all sectors including the offshore wind energy sector.129 Other instruments that are applicable to the offshore oil and gas industry include: Directive

125 Directive 2002/59/EC of the European Parliament and of the Council of 27 June 2002 establishing a Community vessel traffic monitoring and information system and repealing council Directive 93/75/EEC, OJ L 208, 5.8.2002. 126 Art 1 of Directive 2002/59/EC. 127 Directive 2011/15/EU, OJ L 49, 24.02.2011. 128 Annex IV of Directive 2011/15/EU. 129 Council Directive 89/391/EEC of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers at work, OJ L 183, 29.6.1989, (as since amended).

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92/91/EEC which sets down minimum standards in the European Union concerning the safety and health of workers in the extractive industry by drilling;130 as well as Directive 94/9/EC on equipment and protective systems intended for use in potentially explosive atmospheres.131 At the time of writing, there are no specific EU legislative instruments that are applicable solely to workers in the offshore wind energy industry. Nevertheless, the Court of Justice of the European Union has taken an expansive approach to the application of EU directives that take place on the continental shelf and has held that work carried out on an offshore installation on the continental shelf is to be regarded as work carried out in the territory of that State for the purpose of applying EU law.132 This decision is important as it ensures that workers that are employed in work that is undertaken on the continental shelf are treated no differently from those working within the territory of a Member State or on board vessels flying the flag of a Member State. Somewhat surprisingly, there appears to be a dearth of regulatory instruments in the European Union setting down specific requirements on emergency response for the Member States and the industry in relation to wind energy development. The EU Civil Protection Mechanism (Council Decision 2007/779/ EC), the Monitoring and Information Centre and the European Maritime Safety Agency (EMSA) are the principal mechanisms and structures for dealing with emergency response. Steps are being taken to expand EMSA’s competence to cover also accidents of offshore installations beyond its current focus on maritime shipping. Furthermore, the OSPAR Commission has reported that all offshore wind farms in the United Kingdom and to the best of its knowledge in sea areas under the jurisdiction and sovereignty of other OSPAR Contracting Parties are subject to robust ship collision risk assessments as a component part of the licensing/consent procedure, and that site-specific marine pollution contingency plans are implemented at a local level.133 There appears to be little standardisation at a pan-European level on the issue of risk assessment, and Member States exercise considerable discretion on how to undertake this exercise in relation to 130 Directive 92/91/EEC of 3 November 1992 concerning the minimum requirements for improving the safety and health protection of workers in the mineral-extracting industries through drilling (eleventh individual Directive within the meaning of Article 16(1) of Directive 89/391/ EEC), OJ L 348/9, 28.11.1992. 131 Directive 94/9/EC of the European Parliament and the Council of 23 March 1994 on the approximation of the laws of the Member States concerning equipment and protective systems intended for use in potentially explosive atmospheres, OJ L 100, 19.4.1994. 132 Case C-347/10, para.35. The Court cited Case C-111/05 Aktiebolaget NN [2007] ECR I-2697, para. 59; Case C-37/00 Weber [2002] ECR I-2013, para. 36, and Case C‑6/04 Commission v United Kingdom [2005] ECR I-9017, para. 117. 133 OSPAR Quality Status Report 2010 (London, OSPAR Commission, 2010), p. 102. Available at: www.ospar.org.

48   Ronán Long offshore development in general. The Directorate General Waterways and Shipping in Germany, for example, is mandated with reviewing the safety aspect of offshore wind farm projects on shipping, and risk assessment is undertaken on the basis of a risk analysis ratio of 1 collision per 100 years.134 One of the major risks posed by shipping is the risk of collision with wind turbines and the consequent risk of vessel source pollution. In this context, there appears to be significant lacunae in EU instruments that are germane to the topic of liability for environmental damage. Most notably, the Environmental Liability Directive addresses liability for damages to the environment. The scope of this instrument appears to extend to offshore installations including installations which must be assumed to be associated with offshore wind farms.135 Under the scheme of the Directive, the operator of activities causing significant environmental damage to protected species, natural habitats or water is strictly liable to prevent and remedy the damage and to bear full costs. Significantly, the European Commission has suggested that the geographical scope of application of this Directive is “currently limited to the coastal strip and territorial sea in relation to water damage” and accordingly does not extend to all sea areas under the sovereignty and jurisdiction of the Member States.136 Furthermore, one fundamental weakness is the Directive does not “give private parties a right of compensation as a consequence of environmental damage or of an imminent threat of such damage” and the instrument operates without prejudice to the right of the operator to limit his liability in accordance with national legislation implementing the 1976 Convention on Limitation of Liability for Maritime Claims as since amended.137 Furthermore, the Directive does not cover oil pollution damage or damage caused by the transport of hazardous substances by sea (or indeed nuclear damage – for example, arising from the collision of a nuclear submarine with an offshore wind turbine) on the basis that such damage is covered by IMO and other international instruments.138 134 See R. Long, “Offshore Wind Energy Development in Germany: Actors, Legal Instruments and Decision-Making Procedures” in H. Koch, D. Könnig, in GLOBAL ENVIRONMENTAL PROBLEMS & THE GLOBALISATION OF ENVIRONMENTAL LAW (Boston/Leiden, Brill Academic Publishers), 16 pp. (in press). 135 Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, OJ L 143/56, 30.04.2004. 136 COM (2011) 688 final, Brussels, 27.10.2011 at 3. 137 Art 3(3) and 4(3) of Directive 2004/35/EC. 138 Arts 4(2), 4(4) and annexes IV and V of Directive 2004/35/EC. Namely, the International Convention of 27 November 1992 on Civil Liability for Oil Pollution Damage; the International Convention of 27 November 1992 on the Establishment of an International Fund for Compensation for Oil Pollution Damage; the International Convention of 23 March 2001 on Civil Liability for Bunker Oil Pollution Damage; the International Convention of 3 May 1996 on

Offshore Wind Energy Development   49

From this very brief discussion, it is evident that there is considerable scope for the adoption of additional EU regulatory measures addressing many of the important issues associated with offshore wind farm development including the protection of the human environment, emergency response and perhaps to widen the scope of existing instruments concerning liability for environmental damage. In this context, it is relevant to our discussion to note that there has been a dramatic legislative response in the European Union to the Deepwater Horizon disaster in the United States with the European Commission tabling a proposal applicable to the offshore oil and gas industry which addresses among other matters environmental assessment, risk assessment, and a notification scheme for operations. The proposal also sets down specific requirements regarding the independent verification of critical risk control elements.139 The proposed instrument in its current form is inapplicable to the offshore renewable energy industry. Similarly, the Seveso Directive 96/82/EC that sets out a framework for dealing with major hazards does not apply to the offshore sector.140 6.9 The “One Stop Shop” Approach to Licensing The final point about ecosystem-based management is a more general one and concerns the regulatory, management and administrative structures that are in place in the Member States. As a matter of practice, Member States have established their own approval process for offshore wind development and there is no uniform system governing the regulatory aspects of wind energy development in the European Union. A common theme in the specialist literature is that the licensing/consent process is incredibly cumbersome, bureaucratic and inefficient in the majority of Member States.141 Generally speaking, Member States lack suitable governance structures and procedures for integrated planning of maritime/marine activities and for coordination with the terrestrial planning systems. Europe is not unique in this regard as there are some reports which suggest that the approval of the wind farm Cape Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea; the Convention of 10 October 1989 on Civil Liability for Damage Caused during Carriage of Dangerous Goods by Road, Rail and Inland Navigation Vessels. On the shortcoming of the Directive in this regard, see L. Kramer, EU Environmental Law, 7ed, (London, Sweet and Maxwell, 2011) at 173–177. 139 Proposal for a Regulation of the European Parliament and of the Council on safety of offshore oil and gas prospection, exploration and production activities, COM (2011) 688 final, Brussels, 27.10.2011. 140 Council Directive 96/82/EC of 9 December 1996 on the control of major-accident hazards involving dangerous substances. OJ L 10/13, 14.1.1997. 141 See inter alia: D. Leary, M. Esteban, “Climate Change and Renewable Energy from the Ocean and Tides: Calming the Sea of Regulatory Uncertainty” 24 (2009) The International Journal of Marine and Coastal Law pp. 617–651.

50   Ronán Long Wind located off the coast of Massachusetts in the United States took more than ten years to complete and involved nearly two dozen state and federal bodies in the licensing and consent approval process.142 Best practice internationally suggests that many difficulties can be overcome by a “one stop regulatory shop” for the licensing and management of a range of maritime activities. Pertinent examples of best practice are the Marine Management Organisation in the United Kingdom which has a broad remit including: marine spatial planning; the licensing of offshore activities including the licensing of offshore energy installations up to 100 MW and implementing safety zones around such installations; nature conservation; fisheries management; marine pollution emergencies; and extensive powers of enforcement in relation to the aforementioned activities.143 Similarly, in the United States the mandate of the Maritime Administration extends to shipping, shipbuilding, port operations, vessel operations, national security, environment, and safety concerns.

7. Conclusions As noted in the introduction of this paper, one of the objectives of the ODEMM project is to examine the law and policy options for ecosystem-based management in a number of fields of human endeavour in the marine environment, other than the fisheries sector. The two fields selected for legal analysis and review, “marine scientific research” and offshore wind energy, were chosen on the grounds that they both demand some form of regulatory intervention by the European Union.144 Indeed, the case supporting the selection of the offshore wind energy development is self-explanatory in many respects. For a start, the largest offshore wind farms in the world are to be found in the North Sea, Baltic Sea, and other maritime areas in northern Europe. Trends worldwide suggest that the industry is fast becoming a major maritime industry that will rival the offshore oil and gas industry in terms of its scale and global footprint. As seen above, the potential growth of the industry in Europe is shaped by economic factors such as the comparative costs of fossil fuels, carbon prices, government 142 See Alstom Power Media Relations (N. McConnell), available at: http://www.alstom.com/ Global/Power/Resources/Documents/News%20and%20Events/Alstom_PressBackgrounder_ OffshoreWind_EN.pdf. 143 See, Her Majesty’s Government and Marine Management Organisation Framework Document 2012 (London, Department for Environment, Food and Rural Affairs, 2012). Available at: http:// www.marinemanagement.org.uk/about/what.htm. 144 See, R. Long, “Regulating Marine Scientific Research in the European Union: It Takes More Than Two to Tango” in M. Nordquist, J. Norton Moore, A. Soons, and H. Kim (eds.) THE LAW OF THE SEA CONVENTION: U.S. ACCESSION AND GLOBALISATION, (Leiden/Boston, Martinus Nijhoff Publishers, 2012) pp. 427–491.

Offshore Wind Energy Development   51

subvention, as well as a range of law and policy initiatives taken at EU and national levels to promote energy security and climate change mitigation measures. As a result, we can expect to see the industry grow exponentially over the coming decades with a corresponding contribution to energy security and a reduction of green house gas emissions at a pan-European level. The environmental case supporting the growth of the industry speaks for itself and bodes well for the future protection of the global environment in response to climate change. In marked contrast, this paper has sought to show, within the context of the ODEMM project, that the regulatory dimension of offshore wind energy is far more problematic and may lead to difficulty unless appropriate action is taken forthwith in harmonising the diverse range of legislative and policy instruments that now apply to the industry in a fragmented manner. The case for greater integration and harmonisation of existing measures is all the more pressing as the industry is growing at a scale that was largely unforeseen by those who participated in the treaty-making process at UNCLOS III. Furthermore, although the law of the sea aspects of offshore renewable energy development appear to be relatively well settled regarding the jurisdictional framework, the 1982 Convention is almost silent on many of the substantive issues associated with EIA, marine spatial planning, emergency response, the decommissioning of turbines, as well as the practical aspects of implementing ecosystem-based management.145 These are the issues that will shape the future of the industry and its compatibility with other long established offshore activities. What is more, the carefully crafted balance of interests codified by the Convention will be tested in the near future if the current trend of locating wind farms further offshore and in deeper water continues unabated. This will certainly test the practical aspects of ecosystem-based management in sea areas under the sovereignty and jurisdiction of the Member States. As the industry moves farther seaward, it is easy to conclude that greater regard will have to be paid by all interested parties to the “due regard” and the “unjustifiable interference” provisions of the Convention relating to uses of the EEZ and the continental shelf if conflicts with other maritime activities are to be avoided.146 International bodies such as the IMO, as well as the regional seas bodies and indeed the EU institutions, need to step up to the plate and provide guidance and leadership on how best to avoid and resolve such conflicts if they are truly committed to ecosystem-based management. Such guidance is all the more important in view of the fact that many offshore wind energy projects have a trans-national dimension and thus demand a coherent and stable regulatory framework at global and regional levels. In this context, the European Union has endeavoured to improve 145 See, however, the papers in this volume from Part 5 on the decommissioning of offshore installations. 146 Arts 58(3) and 78(2) of the 1982 Convention.

52   Ronán Long the environment for research, development and investment in offshore wind energy. At the same time, as seen above, a number of important initiatives has been taken to reconcile offshore wind energy development with the objectives of the EU’s environmental and integrated maritime policies, as well as with the broader goal of applying an ecosystem-based management approach to all maritime activities. This work is only starting and the case for further integration of existing instruments is a compelling one and entirely feasible with appropriate political support from the Member States. Accordingly, it may be appropriate to conclude this aspect of the ODEMM project by suggesting that the regulatory answers to offshore wind energy development in the European Union are not, metaphorically speaking, blowing in the wind provided that appropriate measures are taken by the relevant parties along the lines suggested in this paper. Ultimately, the absence of such measures may expose the offshore wind industry to the same pitfalls that have beset the offshore oil and gas industry as evidenced by the human tragedy and environmental disaster that occurred at the Macondo well in the Gulf of Mexico. Similarly, as seen above, much remains to be done to streamline licensing and to resolve regulatory uncertainty concerning matters such as risk assessment and the adoption of site-specific contingency plans, as well as to minimise the long-term impacts on the natural environment. Internally within the European Union, the MSFD provides Member States a valuable and much needed opportunity to consider offshore wind farms in their overall assessment of the pressure and impacts on the marine environment. The results of this assessment will be crucial to ensuring that offshore wind farm development respects the delicate balance of compromises reflected in the 1982 Convention. This of course is just a further articulation of the underlying and frequently cited premise underpinning the 1982 Convention, which is “that the problems of ocean space are closely interrelated and need to be considered as a whole.”147 Thus it is easy to conclude this facet of the ODEMM research project by recommending that that the various parties involved in offshore wind energy development are well advised to keep this cardinal maxim to the forefront their plans concerning the roll-out of this dynamic industry at a pan-European level over the coming decades.

147 3rd Indent, Preamble, 1982 LOS Convention.

SUBMARINE CABLES ON THE CONTINENTAL SHELF Douglas R. Burnett1 Abstract This paper describes the importance of submarine cables as critical international infrastructure and the uses of submarine cables for telecommunications, power distribution, oil and gas production, off-shore wind, wave, ocean current energy production, and marine scientific research. The paper then reviews how these uses are treated under the United Nations Law of the Sea Convention on the continental shelf and in the Exclusive Economic Zone. The paper then provides four case studies involving Malta, India, China, and the United Kingdom to illustrate contemporary disputes involving submarine cables on the continental shelf.

The history of submarine cables in the oceans stretches back 162 years.2 But their importance as critical infrastructure to the global economy and political systems has never been as pronounced as now.

The Importance of Submarine Cables as Critical Infrastructure Each day the Society for Worldwide Interbank Financial Telecommunications (SWIFT) transmits 15 million messages over cables to over 8,300 banking organizations, securities institutions and corporate customers in 208 countries. The Continuous Linked Settlement (CLS) Bank located in the United Kingdom is just one of the critical market infrastructures that rely on SWIFT as it provides global settlement of 17 currencies with an average daily US dollar equivalent of approximately 3.9 trillion. The US Clearing House Interbank Payment System (CHIPS) is another structure that processes over USD 1 trillion a day to over 22 countries

1 Partner, Squire Sanders (US) LLP, International Cable Law Advisor, International Cable Protection Committee (ICPC), Capt. USN (ret.), J.D. University of Denver (1980), B.S. U.S. Naval Academy (1972). Email: [email protected]. The opinions expressed in this paper are those of the author alone and do not represent the views of the ICPC or its members, currently about 124 companies and governments from about 50 nations. . The author’s PowerPoint is available at . 2 Bright, C., 1898. Submarine Telegraphs-Their History, Construction and Working. C. Lockwood, London.

54   Douglas R. Burnett for investment companies, securities and commodities exchange organizations, banks and other financial institutions.3 The common, but obsolete, belief that international communications are largely carried by satellites is false. Until the first transatlantic fiber optic cable was laid in 1988, satellites were used, but the tremendous volume of data carried on lower cost modern fiber optic submarine cables dwarfs the limited capacity of higher cost satellites. Additionally, the technical transmission delays and other quality limitations inherent in satellites make them comparatively marginal for continuous transmission of high speed voice, video, and data traffic. If the approximately 40 cables connecting the United States to the world are cut, even using every single satellite in the sky, it is estimated that only 7% of the total traffic volume could be carried by satellite.4 Referring to the submarine cable networks, the Staff Director for Management of the Federal Reserve observed “when the communication networks go down, the financial sector does not grind to a halt, it snaps to a halt.”5 The same can be said for most industries enmeshed in the global economy through the Internet including shipping companies, airlines, banks, and manufacturing industries. Other countries are no different in their reliance. With the laying of submarine cables along the east coast of Africa in 2009–2010, this last major group of nations now has access to the world’s submarine cable network. Even the Arctic Ocean is now the focus of three new proposed international submarine cables. Arctic Fibre, a planned 15,600 km system linking the United Kingdom, Canada, China, Korea, and Japan with a fiber optic cable laid through the Northwest Passage is an example of one of these proposed systems.6 Submarine cables are the physical ties that bind the world together by allowing torrents of digital data, video, and telecommunications to course throughout the world on a 24/7 continuous basis. Telecommunications is only part of the value of modern submarine cables. International submarine power cables are growing in importance. With improved technology which reduces power loss, high voltage direct current (HVDC) submarine cables, such as the 370 km Basslink interconnector linking Australia with Tasmania and the 580 km NorNed cable between Norway and the Netherlands, have been operational for years. The United Kingdom and Iceland governments 3 Malphrus, S., “Undersea Cables and International Telecommunications Resiliency,” 34th Annual Law of the Sea Conference, Center for Ocean Law and Policy, University of Virginia, 20 May 2010. The PowerPoint is available at . 4 The testimony of D. Burnett before the Senate Foreign Relations Committee on the United Nations Law of the Sea Convention, 4 October 2007. 5 Malphrus, S., Board of Governors of the Federal Reserve System, First Worldwide Cyber Security Summit, East-West Institute, Dallas, Texas, 3–5 May 2010. 6 .

Submarine Cables on the Continental Shelf   55

are presently in talks to lay the foundation for a 1500 km submarine HVDC power cable between the two countries. A 900 km HVDC cable between the United Kingdom and Norway is also under discussion.7 Many coastal States have also used submarine cables to operate off-shore wind farms, both array cables to interconnect off-shore wind turbines and export cables to channel the collected electrical power from the wind farm to shore. Denmark, Germany, and the United Kingdom have well established off-shore wind farms as a result of the utility of submarine cables. Tidal, wave, and subsea current generators are also being tried out in various locations in the Pacific Northwest of the United States and Canada.8 Coastal States have also seen off-shore energy exploitation of oil and gas improved by the efficiencies introduced when off-shore exploration platforms are linked to each other and to land by undersea fiber optic cables. Norway and the United States are examples where this cable use is operational. Norway’s Statoil uses an array of fiber optic cables to connect floating oil platforms to shore for data transfer.9 BP’s 1216 km Gulf Fiber system, operational since 2008, connects seven fixed platforms to a central shore control center with nodes available for adding additional platforms in the future.10 Finally, submarine cables are being used in growing numbers for scientific purposes. In a 2009 survey, the International Cable Protection Committee identified 193 ocean observation sites and areas worldwide, including at least 34 that planned or were using submarine cables for data transmission and power in the world’s oceans.11 The 500-mile Neptune system with multiple scientific nodes off of British Columbia is a standout operational example, and a planned US cabled observatory system is intended to link to this system.12 These submarine cable activities have broad implications for the international community. They must compete for use of the continental shelf seabed with many other uses. There is a growing awareness among nations, coastal States in particular, that submarine cables on their continental shelves are important; they are taking actions. But in several cases, these actions are not consistent with the United Nations Law of the Sea Convention (UNCLOS).13 These actions are 7 BBC News UK Politics 12 April 2012, . 8 and . 9 . 10 . 11 ICPC Ocean Observation Sites and areas-2009 . The survey results were compiled by Dr. Lionel Carter, Victoria University, Wellington, New Zealand, the ICPC International Marine Environmental Advisor (IMEA). 12 and . 13 1833 UNTS 397 (entered into force 16 November 1994).

56   Douglas R. Burnett harmful examples of coastal State encroachment on the traditional freedoms to lay and maintain submarine cables in the Exclusive Economic Zone (EEZ) and on the continental shelf that deserve scrutiny by scholars, diplomats, and ocean policy makers.

Submarine Cables on the Continental Shelf and EEZ under UNCLOS Before reviewing the most pressing of these conflicts, a review of the relevant UNCLOS provisions applicable to cables on the continental shelf is helpful. The relevant UNCLOS articles are 58, 78, and 79,14 and they are set out and discussed below. Article 78. Legal status of the superjacent waters and air-space and the rights and freedoms of other States 1. The rights of the coastal State over the continental shelf do not affect the legal status of the superjacent waters or of the airspace above those waters. 2. The legal exercise of the rights of the coastal State over the continental shelf must not infringe or result in any unjustifiable interference with navigation and other rights and freedoms of other States as provided for in this Convention. [Emphasis added.]

Paragraph 2 reiterates a consistent UNCLOS principle that coastal States must recognize the rights and freedoms of other States that are provided in the Convention. It emphasizes that, in the exercise of its rights over the continental shelf, a coastal State must not infringe or cause unjustifiable interference with navigation and other rights and freedoms of other States as provided in Convention, and [t]he categoric character of this obligation is emphasized by the use of the words “must not.”15 The reference to “other rights and freedoms of other States” includes rights regarding submarine cables.16 The rights and freedoms of submarine cables are set out in Article 79.

14 These articles evolved in most respects from the International Convention for Protection of Submarine Cables (March 14, 1884), T.S. 380. (“Cable Convention”); the Geneva Convention on the High Seas (Apr. 29, 1958), 13 U.S.T. 2312, T.I.A.S. 5200, 450 N.T.S. 82 (“High Seas Convention”), and the Geneva Convention on the Continental Shelf (Apr. 29 1958), 15 U.S.T. 473, U.N.T.S 7302 (“Continental Shelf Convention”). 15 Nordquist, M., United Nations Convention On The Law Of The Sea 1982 A Commentary, Vol. II, (1993), at 906 [78.8(c)]. 16 Id. at 907 [78.8(d)].

Submarine Cables on the Continental Shelf   57

Article 79. Submarine Cables on the Continental Shelf 1. All States are entitled to lay submarine cables and pipelines on the continental shelf, in accordance with the provisions of this article. 2. Subject to its right to take reasonable measures for the exploration of the continental shelf, the exploitation of its natural resources and the prevention, resolution and control of pollution from pipelines, the coastal State may not impede the laying or maintenance of such cables or pipelines. 3. The delineation of the course for the laying of such pipelines [but not cables] on the continental shelf is subject to the consent of the coastal State. 4. Nothing in this part affects the right of the coastal State to establish conditions for cables or pipelines entering its territory or territorial sea, or its jurisdiction over cables and pipelines constructed or used in connection with the exploration of its resources or the operations of artificial island, installations and structures under its jurisdiction. 5. When laying submarine cables or pipelines, States shall have due regard to cables or pipelines already in position. In particular, possibilities of repairing existing cables or pipelines shall not be prejudiced. [Emphasis added.]

The ordinary meaning of Article 79 is that repair permit requirements on telecommunications cables by coastal States outside of their territorial seas as described above are not authorized under UNCLOS.17 Paragraph 1 affirms, in a form appropriate for the continental shelf, the provisions of Article 87.1(c) [Freedom of the high seas]18 by which the freedom of the high seas enjoyed by all States includes the freedom to lay cables.19

17 “A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to terms of the treaty in their context and in the light of its object and purpose.” Article 31, Vienna Convention on the Law of Treaties (23 May 1969). The context of UNCLOS includes its Preamble which recognizes “the desirability of establishing through this Convention . . . a legal order for the seas and oceans which will facilitate international communication.” Perhaps no part of UNCLOS better carries out this object than its articles dealing with submarine cables. See Articles 21.1(c), 51.2, 58, 78, 79, 87.1(c), 112, 113, 114, 115, and 297.1(a) which fulfill the object and purpose of facilitating international communication. 18 Article 87.1(c) “The high seas are open to all States, whether coastal or land-locked. Freedom of the high seas is exercised under the conditions laid down by this Convention and by other rules of international law. It comprises, inter alia, both for coastal and land-locked States: (a) freedom of navigation [and] (c) freedom to lay submarine cables and pipelines, subject to Part VI [Continental Shelf] [Freedom of [n]]avigation will include . . . the movement and stationing of ships to lay and maintain submarine cables.” Dupuy-Vignes, A Handbook on the New Law of the Sea, Vol. 2 (1991), Chapter 17 at 845. (This chapter was written by Judge Tullio Treves of Italy, a former judge on the International Law of the Sea Tribunal.) 19 Nordquist, supra note 15, at 915 [79.8(a)].

58   Douglas R. Burnett Paragraph 2 further expands the freedom of States to carry out “maintenance” of existing cables.20 Paragraph 2 goes on to require that coastal States “may not impede the laying and maintenance of such cables.” The only qualification of this mandate is in connection with the coastal States taking reasonable measures for the exploration and exploitation of natural resources21 and the prevention of pollution.22 Telecommunication cables are not in any way involved with the exploration and exploitation of natural resources, and injury to a cable does not cause pollution.23 Therefore, a coastal State has no basis for its impeding the maintenance of the cable systems on the continental shelf by imposing permits, delays, fees, or guard boat requirements.24 Paragraph 3 involves two separate considerations: (1) the right of the coastal State to establish conditions for cables or pipelines entering its territory or territorial sea; and (2) the jurisdiction over cables that are constructed or used in connection with natural resources, artificial islands, installations, and structures under its jurisdiction. The second item (2) does not apply to international telecommunication cables. (As discussed below, it would apply to a fiber optic cable 20 Id. [79.8(b)] (“’laying’ refers to new cables . . . while the term ‘maintenance’ relates to both new and existing cables.” Repair is an obvious part of maintenance of a submarine cable system. 21 Article 77 defines natural resources as limited to mineral and non-living resources of the seabed and subsoil and living organisms of the sedentary species. 22 Article 79 reflects the careful compromise of the States which negotiated the text at the third Conference. China proposed that “the delineation of the course for laying cables and pipelines in the seabed of the economic zone is subject to the consent of the coastal State.” See “Report of the Committee on the Peaceful Uses of the Sea-Bed and the Ocean Floor beyond the Limits of National Jurisdiction,” Vol. V, General Assembly, Official Records, Twenty-eighth Session, Supplement No. 21, (A/9021). A subsequent proposal by Denmark was adopted, however, which limited the coastal State’s power to pipelines only, in recognition of the fact that a ruptured pipeline could result in pollution while a ruptured cable has no such result. See Nordquist, supra note 15, at 914 [79.7, n. 8]; Dupuy-Vignes, A Handbook on the New Law of the Sea, Vol. 2 (1991), Chapter 18 at 985, n. 37. (This chapter was written by L. Dolliver M. Nelson of Grenada, a former President of the International Law of the Sea Tribunal (ITLOS).) 23 Carter, L., Burnett, D., Drew, S., Marle, G., Hagadorn, L., Bartlett-McNeil, D., Irvine, N. (2009). “Submarine Cables and the Oceans-Connecting the World. UNEP_ECMC Biodiversity Series No. 31. ICPC/UNEP/UNEP-WCMC. This report compiles and analyzes the environmental experience with cables in the marine environment since submarine cables were introduced into the ocean in 1850 and underscores the benign impact a modern fiber optic cable has on the marine environment. 24 The “official” position of the United Nations on this issue, set out by its Legal Affairs of the Division for Ocean Affairs and the Law of the Sea, is instructive. It says “beyond the outer limits of the 12 nm territorial sea, the coastal State may not (and should not) impede the laying or maintenance of cables, even though the delineation of the course for the laying of pipelines [not cables] on the continental shelf is subject to its consent.” See response to Question #7, Frequently Asked Questions, at U.N. website accessed at .

Submarine Cables on the Continental Shelf   59

used to link off-shore wind farms or oil and gas platforms). With respect to the first item (1), this is a direct function of the coastal State’s sovereignty over its territory and territorial sea. Repairs beyond 12 NM are entirely outside these areas. Since paragraph 3 allows coastal States the right to delineate the route of pipelines and not cables,25 coastal States have no authority to require permits or impose conditions that infringe and cause unjustifiable interference with a cable owner’s freedom to lay or carry out maintenance (or repair) of its cables.26 Paragraph 5 underscores this point with its express provision that the “possibilities of repairing existing cables . . . shall not be prejudiced.” This provision is specifically cross-referenced in Article 112, which applies this limitation on coastal States to all cables on the high seas. Paragraphs 2 and 4 do reserve to the coastal State the power to regulate submarine cables used in connection with the exploration or exploitation of natural resources. Accordingly, the examples of cables used to connect oil and gas platforms are subject to coastal State approval. Coastal State approval in the Exclusive Economic Zone (EEZ) would apply to cables used in connection with off-shore wind, current, wave and tidal applications that generate power.27 Similarly, cables used in connection with cabled laboratories and other scientific purposes in the EEZ are subject to coastal State permission under the regime regulating marine scientific research (MSR).28 An important but deliberately vague obligation in paragraph 5 is that of “due regard.” “The coastal State cannot justify the adoption of laws and regulations that exceed its powers under Part V [EEZ] by invoking ‘other rules of international law.’”29 Due regard is an obligation present in the EEZ regime.30 Due regard arises in the context of competing uses by the coastal State and other States under UNCLOS. “The significance of this provision is that it balances the rights, jurisdiction and duties of the coastal State with the rights and duties of other States in the EEZ.31 As discussed later, coastal States have often misunderstood or ignored this obligation when considering conflicts that arise between cables used in connection with natural resources, winds, and currents and MSR, which they control, and those international cables that are used for telecommunications or shore generated power transfer between States, where coastal State powers are very limited.

25 Id. 26 Article 79.2. 27 Article 56.1(a). 28 Article 56.2(b)(i)(ii). 29 See, Nordquist, supra note 15, at 565 [58.10(e)]. 30 Articles 56.2 and 58.3. 31 See, Nordquist, supra note 15, at 543 [56.11(f)].

60   Douglas R. Burnett Article 58. Rights and duties of other States in the exclusive economic zone 1. In the exclusive economic zone all States, whether coastal or land-locked, enjoy, subject to the relevant provisions of this Convention, the freedoms referred to in article 87 of navigation and overflight and of the laying of submarine cables and pipelines, and other internationally lawful uses of the sea related to these freedoms, such as those associated with the operation of ships, aircraft and submarine cables and pipelines, and compatible with the other provisions of this Convention. 2. Articles 88 to 115 and other pertinent rules of international law apply to the exclusive economic zone in so far as they are not incompatible with this Part. 3. In exercising their rights and performing their duties under this Convention in the exclusive economic zone, States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State in accordance with the provisions of this Convention and other rules of international law in so far as they are not incompatible with this Part. [Emphasis added.]

Paragraph 1 is explicit that the freedoms listed in Article 87, including navigation, which includes the stationing and movement of cable repair ships,32 and “the laying of cables including the internationally lawful uses of the sea related to these freedoms, such as those associated with the operation of . . . submarine cables,” are recognized in the EEZ.33 Maintenance and repair by cable ships are lawful operations associated with the operation of cables.34 Paragraph 2 explicitly applies Articles 112 through 115, which deal comprehensively with cables and pipelines in the EEZ. These articles are important in that they deal with resolving conflicts among certain seabed users. Article 112 [Right to lay submarine cables and pipelines] provides for the freedom to lay submarine cables limited only by the caveat that the laying shall occur with due regard to existing submarine cables and pipelines and in particular to the possibility of their repair as provided in Article 79.5. Article 113 [Breaking or injury of a submarine cable or pipeline] deals with wilful or culpably negligent actions by mariners and fishermen that damage cables from contact with anchors, nets or other fishing gear. Article 115 [Indemnity for loss incurred in avoiding injury to a submarine cable or pipeline] complements Article 113 by providing an indemnity from the cable owner to any mariner or fishermen who, despite taking reasonably precautionary measures beforehand, sacrifices his anchor, net or fishing gear to avoid injury to a cable. These two articles reflect the very successful balancing and practical compromise of the

32 See, supra at n. 12. 33 See, Nordquist, supra note 15, at 872. 34 In contrast, the Article 87 freedoms of fishing and marine scientific research are not included. Nordquist, supra note 15, at 564 [58.10(a)].

Submarine Cables on the Continental Shelf   61

competing uses of submarine cables on the one hand and fishing and navigation on the other.35 Article 114 [Breaking or injury by owners of a submarine cable or pipeline of another submarine cable or pipeline] addresses the indemnity for repair costs paid by the cable or pipeline owner for injury to prior laid cables or pipelines damaged during the laying of a subsequent cable or pipeline. Again, this article illustrates a practical and common sense approach to the conflict that would otherwise arise with successive laying of cables and pipelines on the same seabed area.36 Paragraph 3 of Article 58 limits the ability of the coastal State to enforce laws and regulations in the EEZ to those measures that are not incompatible with Articles 58.1 and 58.2 as described above. The issue of compatibility is in essence a competition of those activities in the EEZ that are free on the high seas (i.e., cables) and those for which the coastal State enjoys sovereign rights (i.e., EEZ fishing). A reasonable interpretation is that priority should be given to the activity explicitly recognized as free, such as cables, over an activity not explicitly recognized.37 This is consistent with the objects of UNCLOS to “facilitate international communication”38 and that a coastal State may not exceed its powers in the EEZ.39 Finally, in the context of disputes over competing uses in the EEZ or upon the continental shelf, it is of special importance to recognize that the laying of submarine cables enjoys the highest level of protection under the UNCLOS dispute resolution provisions where such disputes with coastal States are subject to the mandatory requirements of these provisions.40 This fact gives diplomats special leverage when resolving cable disputes. With this background on the UNCLOS submarine cable provisions, a review of four case studies of conflicts on the continental shelf involving submarine cables 35 The compromise reflected in Articles 113 and 115 is directly derived from Articles 2 and 7 of the 1884 Cable Convention and are widely followed as the custom and practice of the cable industry. 36 The compromise reflected in Article 114 is directly derived from Article 4 of the 1884 Cable Convention. 37 See, supra at n. 9 at 872–873. In this chapter, Judge Treves recognizes two caveats to this priority interpretation. The first is the protection of human life. The second is a determination that the two activities cannot co-exist. In normal submarine cable repairs protection of human life is not involved. The two activities cannot co-exist as the ability to maintain submarine cables is significantly compromised to the point that cable owners suffer damages and its communications are impeded and placed at risk. 38 See, Nordquist, supra note 16. 39 See, Nordquist, supra note 15, at 565 [58.10(e)]. 40 Article 297.1 [Limitation of applicability of section 2].

62   Douglas R. Burnett illustrates the reality currently faced by the submarine cable industry. This list is not exhaustive.

Case Study 1-MALTA Factual Background EIG, co-owned by 18 companies, is a 15,000 km fiber optic submarine cable system landing in the United Kingdom, Gibraltar, Portugal, Monaco, France, Libya, Egypt, Saudi Arabia, Djibouti, Oman, United Arab Emirates and India. None of the 18 owners are Malta citizens or companies. EIG’s cable passes over the continental shelf claimed by Malta. It never enters Malta territory or its territorial sea. Before laying the cable, the owners provided Malta with copies of the proposed route. Malta requested and was given the full data from the cable route survey and half of any seabed samples recovered to determine cable burial suitability.41 Malta requested no changes to the final route selected based on the survey. By these actions, the EIG owners significantly exceeded any arguable due regard obligations for Malta as a coastal State. After the cable was laid and began carrying traffic in 2011, Malta sent EIG an invoice for an annual fee which Malta claimed was owed by EIG for the privilege of transiting what Malta claimed as its continental shelf. Malta insists on payment of a significant annual fee over the estimated 25 year service life of the cable as a condition of allowing the cable to merely transit its claimed continental shelf.42 Analysis Malta’s position according to its attorney is that (1) Article 79.2 requires that EIG have a license from Malta to transit its claimed continental shelf and (2) Article 79.3 requires Malta’s consent for the cable to be laid and the annual fee is a reasonable measure by Malta. Malta also bases its position on Malta’s Continental Shelf Act that states “no person shall lay or maintain any submarine cable or pipeline under the high seas in a designated area [Malta’s claimed continental shelf] without a license granted by the Prime Minster. . . .43 41 In order to avoid conflicts with anchors, dredging, and especially fishing gear, on the continental shelf, where the seabed permits, efforts are made to bury the garden hose diameter cable to about one meter depth. The process is well described in Carter, Burnett, Drew, Marle, Hagadorn, Bartlett-McNeil, and Irvine, supra note 23, at 21–25. 42 EUR 2,912,500 over 25 years. 43 Malta’s Continental Shelf Act (July 29, 1966 at article 8(1)).

Submarine Cables on the Continental Shelf   63

EIG owners take the position that under UNCLOS a coastal State may not charge fees or taxes on transiting international cables which do not land or enter into the coastal State’s territorial sea. Specifically responding to Malta’s claimed justification, the cable owners position is that Malta’s actions violate Article 78.2 because they infringe on the freedom of the cable ship to navigate and to lay and maintain cables. They violate Article 79.2 and 79.5 because the taxes and fees impede the laying and maintenance of an international cable by placing an unlawful barrier in the cable’s path or its repair. On Article 79.3 Malta is flat out wrong; it applies only to pipelines, not cables. Irrespective of Malta’s domestic laws, Malta’s actions on the high seas against non-citizens is limited by Articles 58.1, 58.2 (incorporating Article 112) and 79.5. For cable owners there are grave concerns over the terrible precedence of Malta’s actions that could turn the world’s oceans into a cacophony of unregulated unilateral tolls for international cables charged at the whim of every coastal State. Concerns also exist that Malta may, as a sanction for unpaid invoices, attempt to disrupt communications or impede a cable ship sent out on a future repair. EIG’s UK co-owners have been able to obtain diplomatic support to enforce UNCLOS rights against Malta by the effective and much appreciated diplomacy of the United Kingdom, later joined by France. It is reported that Germany, Poland and Italy have joined to support the UK-France effort against Malta within the EU’s COMAR forum. Italy reportedly has also objected on the grounds that the seabed claimed by Malta as its continental shelf is actually part of Italy’s continental shelf claim. But Malta shows no sign of backing down. Time will tell if these diplomatic efforts are successful in resolving the dispute. If Malta’s precedent is unchallenged, a stunningly negative precedent, whereby coastal States could charge transit fees, tolls and taxes on companies exercising the time honored freedom to lay and maintain international cables, would be established. Such action would likely ensue and this important freedom of the sea historically enjoyed by cable owners would unravel over time.

Case Study 2-INDIA Factual Background EIG lands in India. On June 27, 2011 the system suffered faults which required a cable repair ship to sail to repair the cable. While submarine cables are a reliable means of communications, when a cable has a fault, repairs are handled on an emergency basis. Specially built cable repair ships are stationed at strategic base ports around the world ready to sail on 24 hours’ notice to carry out repairs. Cable repair ships contractually covering the Indian Ocean for EIG are based

64   Douglas R. Burnett in Singapore and the United Arab Emirates. Time is of the essence not only to repair the damaged cable but also in recognition of the fact that each international cable is the back up for other cables should they suffer a fault from manmade or natural disasters such as a tsunami or earthquake.44 The norm in most countries, including the United States, Canada, Japan, and throughout Europe, is that repair ships sail unimpeded by the coastal State to carry out repair on an expedited basis without any permits required and without payment of any fees. India has onerous permit requirements that require a cable ship to obtain seven different permits before it can begin repairs.45 What really sets India in a class by itself is a requirement that any cable ship, before it can carry out a repair in the India EEZ, must first enter an India port for a physical security clearance inspection. This requirement was communicated to cable ship operators in an ominous directive titled “Apprehension of Vessels Violating Provisions of MZI Act 1976 and MoD Guidelines,” from no less than India’s Principal Director of Naval Operations, stating: 1. In the recent past, there have been a marked increase in offshore exploration and production activities, resulting in a number of Indian and foreign (flagged/ manned) chartered vessels operating in our EEZ. This has led to an increase in number of violations of laid down conditionalities as specified in Defense Clearance letter issued by Integrated Headquarters of MoD (Navy) from time to time, MoD Guidelines 1996 and MZI Act of 1976 and regulations in force. It has also come to light that some vessels operate without valid security clearance. 2. In order to sift the violator(s) from the rule-abiding ones, a system of periodic checks of vessels involved in “Exploration and Production” activities in the Indian Offshore region is being brought into force with effect from 15 June 06. Under this system, vessels that are found to be operating without the necessary clearance will be escorted to harbor and handed over to the Coast Guard/Police for contravening the provision of the MZI Act of India, 1976. 3. The above is for information and compliance.46 [Emphasis added.]

The failure to comply with the above missive can result in the repair ship being forced into port by Indian naval vessels. This is not a risk that cable ship opera-

44 An excellent discussion of the historical data involving disruption of international telecommunication cables by earthquakes and typhoons is found in Carter et al., supra note 23 at 38–42. The Great Tokoku Earthquake struck Honshu, Japan on 11 March 2011and knocked out six international cables; repairs were delayed by concerns of radioactive contamination of cable ships. . 45 Rapp, R., Franz-Stefan, G., Sarabjeet, S., Rauscher, K., “India’s Critical Role in the Resilience of the Global Undersea Communications Cable Infrastructure,” Strategic Analysis, Vol. 36, No. 3 May–June 2012, 375–383. 46 OP/OMD/5106/MoD/Guidelines dated 9 June 2006.

Submarine Cables on the Continental Shelf   65

tors are prepared to take. So they send the cable repair ship into an Indian port first instead of going directly to the fault location. By entering India’s port, India’s custom duties are triggered. The cable ship and the spare cable aboard it are considered “imported” into India. To again sail from the Indian port, the ship must first post security based on a percentage of the value of the vessel and spare cable. Months after the repair is completed, the security is returned to the ship owner with unexplained deductions. These deductions amount to USD 350,000–USD 500,000. The time to secure the seven permits, including the naval inspection permits can take up to 90–94 days.47 Adding the additional costs of permit fees, and repair ship daily hire costs of between USD 45,000 and USD 70,000 per day,48 these unnecessary repair costs amount to millions of dollars. Analysis The irony is that these delays and costs also increase the risk to India’s worldwide connectivity–a direct threat to the off-shore call centers and global outsourcing business that has featured so prominently in India’s recent economic growth. But, as with any international submarine cable, not only is the one country impacted but also all States connected by the cable incur the same heightened vulnerability risk during the time it is out of service. Under UNCLOS, coastal States have no right to require cable vessels to enter their ports prior to carrying out repairs to international cables in the EEZ or to impose customs duties or permit requirements that impede repairs.49 Over the last two years, the cable industry, represented by the ICPC, has been working with the East West Institute50 to meet with Indian government representatives to encourage India to comply with UNCLOS and to provide practical options (i.e., vessel pre-clearance) to India to alleviate the requirement that cable ships be forced into port before commencing emergency repairs in the EEZ. To date, the effort has not produced any changes in India’s regulations.

47 2011 ICPC Survey Results for India Government Permitting from 11 Repairs to International submarine Cables from 7/2005 to 6/2011. A repair for a fault on 1 May 2011 required 94 days. The repair for the fault on 27 June 2011 took 90 days. 48 Burnett, D., “Recovery of Cable Repair Ship Cost Damages From Third Parties That Injure Submarine Cables,” 35 Tulane Maritime L. J., Winter 2010 at 109–110. 49 UNCLOS Articles 58.1. 58.2, 78, 79.2, 79.5 and 112. 50 .

66   Douglas R. Burnett

Case Study 3-CHINA Factual Background Telecom companies are co-owners of multiple international cable systems landing in China. China has imposed permitting requirements that unnecessarily delay repairs of international cables outside of Chinese territorial seas and add significant costs to the repair because of permit fees and delays in allowing cable ships to sail to carry out repairs in international waters. For example, between January 2005 and April 2009, there were 19 cable faults caused by fishing vessels in the Chinese EEZ in the East China Sea between China, Korea, Japan, and Taiwan.51 These repairs were delayed by up to one to two weeks by Chinese government permit requirements. These delays also resulted in significant costs because of the permit fees and extra time that cable repair ships are at sea idle awaiting permits. These injuries are compounded by the fact that repairs in the Eastern Pacific region of the Chinese EEZ are far more numerous than in almost any other area of the world because of destructive bottom fishing techniques employed by Chinese fishing vessels whereby large steel structures and anchors are dropped into the seabed to hold nets to a depth of up to three meters, snapping any cable they hit. These techniques and natural disasters (earthquakes and typhoons), especially off Taiwan, are responsible for the high number of faults.52 China also requires permits for a cable route survey to take place in what China claims as its maritime boundary. Part of the lengthy permit approval includes a requirement that Chinese government officials be on board the survey vessel throughout the survey. This is a problem for at least two reasons. First, China’s maritime claims are based on the U-shape nine dash lines which include most of the South China Sea and are in extensive conflict with maritime boundary claims by Vietnam, the Philippines, Malaysia, Taiwan, and other nations.53 The coastal States may not be happy to know that Chinese government officials are aboard third party vessels in areas they claim as their EEZ or continental shelf. The survey vessel could easily find itself in the middle of a diplomatic squabble 51 CIMA/COLP/ICPC Regional Workshop on Submarine Cables, Beijing, PR China, 7–8 May 2009. 52 An excellent discussion of the historical data involving disruption of international telecommunication cables by earthquakes and typhoons and faults caused by fishing gear is found in Carter et al., supra note 23, at pp. 38–48. In the Hengchun earthquake in December 2006 eleven cables were severed and during Typhoon Murokot in August 2009 nine cables were severed, in most cases by the effects of landslides that generated turbidity currents triggered with breaking impact over hundreds of kilometers of seabed. 53 Guoqiang, L., “Claim Over Islands Legitimate,” China Daily, 22 July 2011. .

Submarine Cables on the Continental Shelf   67

through no fault of its own. Second, there is a serious question as to whether China’s permit requirements are consistent with UNCLOS. Analysis The actions of China in requiring permits with the attendant costs and delays for repairs of international cables outside of territorial seas violate the freedom to maintain and repair cables set out clearly in UNCLOS.54 Following successful regional workshops, the cable industry has tried to set up a workshop with the State Oceanic Agency, the Chinese government agency which appears most directly in charge of submarine cable repair and survey permits. The timing seemed excellent because China had suspended permit requirements during the Beijing Olympics to reduce any risk of telecommunication disruption during this important event. The idea was to work out a protocol or practical arrangement to accommodate the undefined security issues which industry is led to believe are behind the permit requirements. The protocol would then be used on a trial basis with a cable repair ship and reviewed for improvements. The workshop proposal was not accepted. It appears that the cable repair issue is hostage to the larger dispute involving the China’s U-shaped nine dash line maritime boundary. In the meantime, however, all nations using the fiber optic cables to China face increased risks from cables that are out of service awaiting Chinese permission to carry out the emergency cable repairs. The cable route survey is incident to the laying of a cable. Simply put, the cable cannot be laid without it. It consists primarily of a side scan sonar analysis of the proposed routes. Copies of all data and seabed samples taken to determine cable burial characteristics of the seabed are routinely provided to China as with any other coastal State that requests the information for a cable landing in its territory. The Submarine Cable Improvement Group defines a cable route survey as: the marine survey operation to obtain all the necessary information to design and engineer a cost effective and reliable cable system. Following receipt of the ‘cable route survey’ report the installation cable route is optimized based on data obtained on the seabed bathymetry (depth contours etc.), sub-bottom profiling together with other useful information such as side scan sonar, currents, temperatures and prevailing weather conditions. The survey will determine if cable burial is required or indeed is possible.55

As the above descriptions confirm, a cable route survey is not MSR nor is it a hydrographic survey. The purpose and use of the cable route survey incident to cable laying is distinct from those of MSR (i.e., natural resources, marine pollution) or hydrographic surveys (i.e., cartography). 54 UNCLOS Articles 58.1, 58.2, 78, 79.2, 79.5 and 112. 55 .

68   Douglas R. Burnett While the means of data collection used in a cable route survey is often the same as, or similar to, that used in MSR or a hydrographic survey, information from a cable route survey is intended for use by the cable owner. For example, under Article 40 [Research and survey activities], a survey vessel may not conduct MSR or a hydrographic survey in an international strait through territorial seas. But this provision must be construed in light of Article 39.1(c) [Duties of ships and aircraft during transit passage] which permits activities incident to the normal modes of continuous and expeditious transit such as sonic depth soundings and sonar for navigation and plotting ship position by radar, GPS, or visual means.56 In both cases, similar means may be in use, but the use determines which means for an activity can take place and which is unauthorized. With respect to Article 40, it must be emphasized that where the straits are wide so that the vessel can navigate without entering the territorial seas of bordering states, then there is no restriction on survey activities related to MSR or hydrographic surveys if the transit is performed on the high seas or on hydrographic surveys if performed in the EEZ. This is because under Article 36 [High seas routes or routes through exclusive economic zones through straits used for international navigation], the UNCLOS provisions of the high seas and the EEZ govern the strait outside of territorial seas. “As explained by the representative of the United Kingdom, in ‘broad straits’ more than 24 miles wide ‘it was unnecessary to provide a special right of transit passage since the ships and aircraft could navigate on the high seas.”57 This point is again made clear in Article 35(b) [Scope of this Part], “[n]othing in the Part affects: the legal status of the waters beyond the territorial seas of States bordering straits as EEZ or high seas.” The freedom to navigate and lay cables and the operations associated with ships exercising these freedoms are expressly provided for on the high seas, on the continental shelf, and in the EEZ. These freedoms include cable route surveys incident to a cable lay in these zones.

Case Study 4-The United Kingdom Factual Background The United Kingdom is a strategic gateway to not only that country, but also to Europe as well, because of the historic and currently large number of international submarine cables in the United Kingdom. The United Kingdom is also a coastal State that is investing heavily in renewable energy obtained from large

56 Nordquist, supra note 15, at 352 [40.9(c)]. 57 Nordquist, supra note 15, at 310 [36.2].

Submarine Cables on the Continental Shelf   69

off-shore wind farms in its territorial seas and EEZ. In both cases, the key permitting agency is the Crown Estate. The Crown Estate’s primary objective is to raise the most revenue possible from the United Kingdom’s seabed so that the proceeds will bolster the government’s revenue. In the case of a fiber optic submarine telecommunications fee, a permit requires significant payment. While this fee is more expensive than any similar fee charged by other coastal States, it is a onetime fee for the service life of the cable. In the case of an off-shore wind farm, the fee charged by the Crown Estate is a percentage of the revenue generated by the electricity sold. The offshore wind revenue is by far a more favorable revenue stream than the one time landing permit for the telecommunications cable. The problem lies in the fact that the Crown Estate has licensed wind farms over the major telecommunications cables. But in granting the more lucrative off-shore wind farm licenses, the Crown Estate has made no provision for repair of the prior laid international telecommunication cables. A cable ship will not accept the risk of damaging off-shore wind farm turbines while repairing an international telecommunications cable unless the master is comfortable with the separation between the telecommunication cable and the wind turbines and related undersea structures. An extensive private test by one cable system owner and a wind farm developer involving desk top studies, computer simulations, and an actual field test using a cable repair vessel is rumored to have determined that the prudent distance between the telecommunications and the turbines and related subsea infrastructure is probably about one nautical mile.58 The Crown Estate has so far declined to take a position on safe separation for repair or for carrying out similar public tests. Allowing a safe distance means taking off-shore wind revenue producing seabed away which may explain the Crown Estate’s reticence to intervene and settle the dispute. Analysis Legally the conflict is not just an internal United Kingdom domestic issue. While the off-shore wind farm is a domestic concern in the EEZ, the international telecommunication cables enjoy protection under UNCLOS. In particular, Articles 58.1, 79.2, and 79.5 limit a coastal State in taking actions which impede the maintenance and repair of international cables. If the international cable cannot be repaired in the United Kingdom EEZ or upon its continental shelf, then the other nations whose nationals co-own the cable, as well as the nations where the cable 58 If these reports are true, then the results are consistent with the current ICPC recommendation on this topic. ICPC Recommendation 13, Issue 1B, “Proximity of Wind Farm Developments and Submarine Cables.” This and other ICPC recommendations are free to the public upon request. .

70   Douglas R. Burnett lands outside the United Kingdom, face increased risk to their critical infrastructure by this violation of UNCLOS. Hopefully, cognizant agencies in the United Kingdom will act with due regard to the obligations of other States under UNCLOS and ensure that international cables landing in the United Kingdom can safely be maintained and repaired and that new international cables can be laid in the future. The experience of the United Kingdom is especially noteworthy because the same conundrum is currently being faced by coastal States such as Germany, the United States and others as they consider these competing cable uses on their continental shelves.

Conclusion Submarine cables are critical international infrastructure of ever increasing importance to the international community. UNCLOS, in its ten articles that expressly deal with cables, provides an excellent roadmap for coastal States and industry in resolving conflicts on the continental shelf. Coastal State encroachment is a major threat to the long term continued growth and innovation that has provided the world with international communications at levels unimaginable only a few years ago. The freedom to lay and maintain cables on the continental shelf and in the EEZ benefits all nations and should be fostered. Short sighted national regulatory policies should be eschewed in favor of the greater global benefits that submarine cables bring.

MINING FOR MARINE MINERALS Georgy Cherkashov1

Introduction Global demand for metals and minerals is going to double over the next 20 years (Showstack, 2012). World economics need new sustainable sources of resources which could be found in the ocean. Both the shallow continental margins and the deep ocean areas, which amount to 71 percent of the surface of the Earth, harbor mineral resources whose economic potential (especially those at a water depth deeper than two km) are only beginning to be appreciated. The potential for commercial minerals per unit area in the ocean appears to be similar to that of the onshore. Thus, almost ¾ of the global mineral resources are under the sea and virtually undeveloped. According to estimates available half of the global seabed minerals are now controlled by nations within the Exclusive Economic Zones (EEZs). Based on the water depth occurrence there are two types of marine minerals to be considered: shallow- and deep-sea deposits (Table 1). Table 1. Characteristics of marine minerals. Aggregates Water depth 0–100 (meters) Geological Shelf structures Economical Sand Gravel components

Shallow-Sea (EEZ) Deep-Sea (Area & EEZ) Placers Phosphorites Gas hydrates Nodules Crusts SMS 0–200

Up to 400

Shelf

Plateau

400–1000

4000–5000 1000–2000 2000–3000

Continental Deep ocean Seamounts Ridges Arc Slope Basins systems Methane Mn, Cu, Mn, Co, Ni, Cu, Au, Zn, Diamonds, P2O5 Co, Ni Cu, Pt, Mo. Pb, Ag, Te Au, Sn, Ti, REE Zr, REE Commercial Active Active Exploration Research & Exploration Exploration Exploration status Exploitation Exploitation Exploration

1 Deputy Director of the Institute for Geology and Mineral Resources of the Ocean (VNIIOkeangeologia), St. Petersburg, Russia, of the Ministry of Natural Resources.

72   Georgy Cherkashov

Shallow-Sea Deposits The most typical shallow-sea deposits are aggregates (sand and gravel) and placers (gold, diamonds, tin, titanium, zirconium, rare-earth metals etc.). Being distributed up to 100–200 meters water depth, they are completely localized within the EEZ and currently have a status of active commercial exploitation. Recovery of diamonds from the shallow seabed off the Atlantic coast of Southern Africa is a multibillion-dollar industry utilizing advanced sea technologies. Besides aggregates and placers, there is another kind of shallow-sea deposit. This is manganese nodules which occur in shallow water environments in the Baltic and Arctic seas and differ significantly from their deep-sea analogues. The nodules from the Russian part of the Baltic Sea have been actively recovered since the early 2000s. More than 100 thousand tons were mined before the 2008 crisis terminated any commercial activity at this deposit. Rock phosphate deposits (phosphorites) are situated in deeper water (up to 400–500 mbsl) and still are at the exploration stage. The main provinces of these deposits are Chatham Rise (New Zealand EEZ) and offshore Namibia. The Chatham Rock Phosphate Ltd and Royal Boskalis Westminster have current plans for production mining in 2014 (Grundlehner et al., 2012). The exploration in Namibia’s EEZ is also rather active and the start of mining in the near future can be expected. Rock phosphate is used to make most fertilizers and has good market possibilities. The last type of relatively shallow-sea deposit which also occurs mainly within the EEZ is presented by gas hydrates. The accumulations of submarine gas hydrates are localized at the continental slopes at depths of more than 400–500 m (usually – up to 1000 m) and are very common in all the oceans and deep seas (Max et al., 2012). Gas hydrates are considered as a potential source of natural gas; however to assert confidently the reality of their commercial production would be premature.

Deep-Sea Deposits The list of potential targets for deep-sea marine mining is not very long. First of all, the attention of both geologists and investors is called to the EEZ in the Western Pacific. Hydrothermal fields and seafloor massive sulfide deposits (SMS) related to Pacific island arc systems have already been discovered within the EEZs of Papua New Guinea (PNG), Tonga, Fiji, Solomon Islands, France, Japan, New Zealand and elsewhere; the discovery of new fields is widely predicted. Such companies as Nautilus Minerals Inc., Neptune Minerals Inc., Odyssey Marine Exploration as well as Korea Ocean Research and Development Institute have already got hundreds of exploration licenses from the island States in the

Mining for Marine Minerals   73

Southwest Pacific. Nautilus holds granted tenements and is under application in the territorial waters and EEZs of Papua New Guinea, Tonga, Solomon Islands, Fiji, Vanuatu and New Zealand, for a total area of approximately 522,000 km2 (http://www.nautilusminerals.com). It seems that if the plans of Nautilus Minerals Inc. become feasible, the seafloor massive sulfides at the Solwara 1 site in the PNG EEZ would be the first deepsea deposit to be mined. However, the news of delay in any commencement of production operations makes the situation not so optimistic (http://www .nautilusminerals.com). Nevertheless, favourable political, logistic, economic and geological factors including the obtaining of a mining license from PNG and agreement with Tongling Nonferous Metals Group for the sale of extracted product, close location of SMS deposits to land infrastructure, moderate water depth and high grades of metals (primarily copper and gold) give this project a pioneer status. It is also obvious that any success by Nautilus will work as a trigger for mining companies to look for the next targets for exploitation in the deep ocean. What might those be? Considering the mineral potential of the EEZ of the Pacific Island countries it should be noted that addition to SMS ferromanganese nodules, cobalt-rich crusts are widely distributed in this region as well (Table 2). Apart from the arc setting, SMS formation takes place mainly along mid-oceanic ridges (MOR). Unlike the arc systems, the majority of sulfides in the MOR occur beyond the limits of national jurisdiction (in the Area–in accordance with Law of the Sea Convention terminology) where regulation of exploration rests with the International Seabed Authority (ISA). The approval in 2010 of ‘Regulations on Prospecting and Exploration for Polymetallic Sulfides in the Area’ by the Table 2. Deep seabed mineral occurrence within the EEZ of Pacific Island Countries (Tawake, 2012). Country Kiribati Cook Islands Tuvalu Samoa Tonga PNG Solomon Islands Vanuatu Fiji Marshall Islands Federated States of Micronesia Niue

Nodules

Crusts

v v v

v v v v v v

v

v

SMS

v v v v

74   Georgy Cherkashov ISA gives impetus to the search for new potential targets for marine mining at the MOR-hosted majority of SMS in the Area. Applications for prospecting and exploration of polymetallic sulfides in the Area at the Mid-Atlantic Ridge MAR (Russia) and South West Indian Ridge (China) were approved by the ISA in 2011 and contracts for prospecting works were signed. The new applications of France (MAR) and Korea (Central Indian Ridge) were considered and approved by ISA in 2012. All of these events play an important role for future mining projects. Greatly increased interest is also seen in the development of research and geological exploration related to other deep-sea mineral resources composed not of sulfides but hydroxides: ferromanganese nodules and cobalt-rich ferromanganese crusts, which are distributed mainly in the Pacific Ocean. In addition to the contractors working in the Clarion-Clipperton zone under the legislation of the International Seabed Authority, the German Federal Institute for Geosciences and Natural Resources (BGR) as a new ‘club member’ is an example of the intensive interest in ferromanganese nodules, shown in its recent application for an exploration contract, the obtaining of a license in 2006 and the performance of systematic annual studies on the allocated site. Other applications were granted in 2011 (Tonga and Nauru) and in 2012 (United Kingdom, Belgium and Kiribati). The discovered concentration of high amounts of rare elements needed for advanced technologies in some economic sectors become a new driving force for activization of exploration of cobalt-rich ferromanganese crusts from seamounts and guyot structures. Rare earth elements (REEs) grades in crusts are similar to those of land-based deposits and might be important byproducts for the main metals (manganese, cobalt, nickel and copper). The adoption of regulations for prospecting and exploration of these types of marine minerals in the Area at the 18th Session of the International Seabed Authority in 2012 gave rise to the submission of the first applications by China and Japan immediately after approval of the above regulations. Another potential target for marine mining is the metalliferous muds of the Red Sea. This project has been frozen since the 1970s but Diamonds Fields International Ltd (Canada) and Manafa International Trade Co. of Saudi Arabia got a new mining license in 2010. A huge amount of unconsolidated mud (94 million tons in Atlantis II deep) with high-grade metals (copper, zinc, lead and precious metals) could become the target for exploitation assuming the environmental issues standing in the way of the mining project can be resolved. It should be noted that environmental issues exist for the potential mining of all marine minerals. This once more proves the necessity to find a balance between ecology and economy by elaborating uniform environmental requirements which naturally perform a protective function but would not lead to a total ban on exploration and exploitation of marine minerals.

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Conclusion The presented data imply the high potential of marine minerals. Despite this fact, marine mining will not replace mines on land but could be an additional source of raw materials needed by the global economy (Scott, 2012). In any case, the extraction of minerals from the ocean floor must be accompanied by legal regulations, the development of which is the very problem.

References Showstack R. ‘U.S. Trade Dispute With China Over Rare Earth Elements’, EOS. Vol. 93, No. 1, 2012, 134–135. Grundlehner G.J., A.Tanis, G.J.van Raalte et al. ‘Chatham Rise Phosphate – Mining Operations and System Design’. UMI 2012 Abstracts. Max M.D., A.H. Johnson & W.P. Dillon. Natural Gas Hydrate: Resource Potential in the Arctic Ocean Region and Related Issues. Hydrate Energy International. 2012. Tawake A. ‘Deep sea minerals in the Pacific Island region’. InterRidge News. V.21, 2012, 45–47. Scott S. ‘Deep ocean mining: dawning of new and reborn industries’. Sea Technology. September 2012, 7.

PART 2

Emerging Challenges to the Development of the Continental Shelf Regime

International Seabed Authority Mining Standards Michael W. Lodge1 This paper will consider the standards set by the International Seabed Authority for seabed mining as they relate to the development of the continental shelf. This is quite a complicated and sensitive topic, because the International Seabed Authority clearly has no jurisdiction over any part of the continental shelf and at first sight it may be assumed that the standards set by the Authority have nothing to do with the regulation of continental shelf development. In fact, this is not necessarily the case. Although many countries have established regulatory regimes to deal with oil and gas exploitation on the continental shelf, very few countries have established regimes for exploration for and exploitation of marine minerals. This means that, of necessity, the regulations adopted by the Authority, an international organization with 164 member States, will form a benchmark for future national regulation.

The Functions of the Authority The function of the Authority is to regulate deep seabed mining in the Area – that is, the seabed and subsoil thereof beyond the limits of national jurisdiction.2 It does this on behalf of mankind as a whole, represented by all States Parties to the United Nations Convention on the Law of the Sea.3 Effectively, therefore, the Authority is the regulatory body for the Area. Since there can be no unilateral claims to sovereignty or sovereign rights over any part of the Area, one of the important functions of the Authority is to issue licences, in the form of contracts, to qualified entities that wish to conduct seabed mining in the Area. The Authority is also responsible for establishing the terms and conditions under which seabed mining activities may be undertaken. The basic terms and conditions 1 Deputy to the Secretary-General and Legal Counsel, International Seabed Authority. The views expressed in this paper are those of the author and do not necessarily reflect the position of the International Seabed Authority. The author’s PowerPoint is available at . 2 The Area is defined in Article 1, paragraph 1(1), of the 1982 United Nations Convention on the Law of the Sea (hereafter “the Convention”). 3 See Article 157 of the Convention.

80   Michael W. Lodge are in fact set out in the Convention and the 1994 Agreement,4 but these have been further elaborated in the rules, regulations and procedures established by the Authority since it became operational in 1996.5

The Relationship between the Area and the Continental Shelf The relationship between the Area and the continental shelf is a complex one. Whereas the Convention defines the maritime zones pertaining to the national jurisdiction of coastal States by reference to objective criteria, such as baselines or, in the case of the continental shelf, by reference to criteria set out in Article 76, it defines the extent of the Area only by reference to what it is not. It is simply defined as the seabed and subsoil thereof beyond the limits of national jurisdiction. The only way we can accurately delineate the boundary of the Area is therefore by first knowing the limits of national jurisdiction. In the case of the Exclusive Economic Zone, this is relatively straightforward, at least in the case of those States Parties to the Convention that have already declared their maritime zones. In the case of the continental shelf, however, the situation is far from straightforward, especially in the case of those States having continental shelves extending beyond 200 nautical miles. Very few of these States have yet established the limits of their continental shelves. According to the latest projections from the Commission for the Limits of the Continental Shelf (CLCS), it is likely to be many years before all the current submissions can be dealt with. This is a very unsatisfactory situation. It creates uncertainty in the law of the sea, which was never the intention of the Convention. Furthermore, there is no immediately obvious way of resolving this situation. Even though the Authority clearly has an interest in knowing where the outer limit of the continental shelf lies, it has no right to be consulted by the CLCS or by a coastal State. The Authority can only rely on States to fulfil their obligation to deposit a chart or list of coordinates of the outer limits of the continental shelf once those limits

4 Agreement for the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982, annexed to General Assembly resolution A/48/263. 5 Annex III to the Convention sets out the Basic Conditions of Prospecting, Exploration and Exploitation. The application of some of the provisions of Annex III was modified by the Annex to the 1994 Agreement. The Authority has established rules, regulations and procedures governing prospecting and exploration for polymetallic nodules (2000) and polymetallic sulphides (2010). See M.W. Lodge, ‘The International Seabed Authority’s Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area’, 20(3) Journal of Energy and Natural Resources Law (2002).

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have become final and binding. At the time of writing, only two States (Ireland and Mexico) have done this.6 This can give rise to very real problems. What happens, for example, where the Authority receives an application for an exploration licence in an area that may be covered by a submission pending before the CLCS? The Convention does not provide any procedure whereby a coastal State may challenge an application for an exploration licence, and it is difficult in any case to see how a challenge could be made before the outer limits become final and binding. Conversely, the Convention provides no procedure whereby the Council of the Authority may challenge a coastal State submission. It is arguable, in certain circumstances, that such a dispute may be submitted to the Seabed Disputes Chamber under the provisions of Article 187 of the Convention,7 but this is by no means clear. Another element of the complex relationship between the regime for the Area and the regime for the continental shelf is the special status given to the continental margin beyond 200 nautical miles under Article 82 of the Convention. As a quid pro quo for a dramatic reduction in the geographical extent of the Area caused by the recognition of national jurisdiction over broad continental margins beyond 200 nautical miles, Article 82 of the Convention provides for a system of revenue-sharing between coastal States and the international community in respect of the exploitation of non-living resources of the outer continental shelf.8 Although the implementation of the provisions of Article 82 is definitely another piece of unfinished business relating to the Convention, it is best left as a subject for another day. In fact, the Authority has already held one seminar on this topic and will be holding another one in November this year [2012] in Beijing. For present purposes, it is enough to note that the Authority’s responsibilities in relation to Article 82 relate only to the revenue-sharing aspects and in no way does the Authority have any jurisdiction in relation to setting of the standards for exploration or exploitation in this area of national jurisdiction.

6 In accordance with Article 84, paragraph 2, of the Convention, Ireland deposited with the Secretary-General of the International Seabed Authority a copy of the list of coordinates of the outer limit of its continental shelf on 21 July 2010. Mexico made a similar deposit in respect of the coordinates of the outer limit of its continental shelf in the western region of the Gulf of Mexico on 6 January 2012 (ISBA/18/A/2, paragraph 8). 7 Specifically under Article 187((b)(ii), as an excess of jurisdiction by the Authority. 8 For further reading on Article 82 see Issues Associated with the Implementation of Article 82 of the United Nations Convention on the Law of the Sea, ISA Technical Study No. 6 (ISA, Kingston, Jamaica 2010).

82   Michael W. Lodge

ISA Standards for Mineral Exploration in the Area Let me turn to consider the standards set by the Authority for deep seabed mining in the Area. The basic conditions for prospecting and exploration are set out in the Convention, specifically in Annex III. The Convention itself also lays down some general principles, such as Article 145, which requires the Authority to take necessary measures to ensure effective protection of the marine environment from the harmful effects of seabed mining, and Article 146, which contains a similar provision relating to the protection of human life. Both the general principles in the Convention, as well as the largely procedural requirements of Annex III, require further elaboration through rules, regulations and procedures to be adopted by the Authority. Thus Article 17 of Annex III sets out a long list of matters over which the Authority is required to issue regulations. These include such matters as the size of areas to be licensed, progress reporting and submission of data, and mining standards and practices, including those relating to operational safety and protection of the marine environment. Since 1996, the Authority has adopted regulations governing exploration for two kinds of marine minerals. Regulations governing exploration for polymetallic nodules were adopted in 2000.9 To date, 10 exploration contracts have been issued under these regulations. Three new applications for contracts are currently pending, having been received in the past month. In 2010, the Authority adopted regulations governing exploration for polymetallic sulphides.10 One exploration contract has so far been issued. A second contract has been approved, but not yet signed, and two further applications are pending. It is important to note that the regulations issued by the Authority so far extend only as far as the exploration phase–exploration being defined in the regulations as searching for marine mineral deposits, testing of collecting systems and processing technologies and conducting environmental, technical and economic studies. There are as yet no regulations governing exploitation, which would clearly have a far greater impact on the marine environment than exploration and will require a significantly higher level of regulation.

Environmental Standards Although the Convention requires the Authority to take necessary measures to protect the marine environment from the harmful effects of seabed mining, this 9 ISBA/6/A/18, Annex. 10 ISBA/16/A/12/Rev.1, Annex.

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requirement was given added emphasis by the 1994 Agreement. This provided that one of the first issues the Authority was to concentrate on following entry into force of the Convention was the development of applicable standards for the protection and preservation of the marine environment.11 The exploration regulations require the Authority, sponsoring States and contractors to apply a precautionary approach to exploration activities. Contractors are to take necessary measures to prevent, reduce and control pollution and other hazards to the marine environment using the best available technology. Since one of the greatest impediments to effective regulation at the exploitation stage is lack of knowledge of the deep seabed environment, the regulations place a heavy emphasis on the need to gather environmental data and establish environmental baselines. Contractors are therefore required to cooperate with the Authority to carry out environmental baseline studies and to monitor and evaluate the effects of their activities on the marine environment. Data from such studies is to be collected and reported to the Authority on an annual basis. The detailed procedures for environmental monitoring are not set out in the regulations, but are contained in recommendations issued from time to time by the Legal and Technical Commission. This is a subsidiary body of the Authority’s Council, and is made up of 25 members, elected in their personal capacity. As its name suggests, the members of the Commission are legal and technical experts, including geologists, oceanographers, environmental scientists and mining engineers. The recommendations are intended to ensure that data are collected in consistent formats and use common sampling techniques. One of the major problems that have been encountered to date is the lack of common standards for taxonomy, which means that it has been difficult to fully understand the range and distribution of many of the species that will be impacted by deep seabed minerals. The environmental regulations also require contractors with the Authority to research and identify areas to be set aside as impact reference zones and preservation reference zones once the contractor proceeds to mining. Impact reference zones are areas that are representative of the environmental characteristics of the mining area and are to be used for measuring the impacts of mining. Preservation reference zones are areas in which no mining will take place. In the case of polymetallic nodule mining, most of the current claims are located in the same region of the Pacific Ocean, known as the Clarion-Clipperton Fracture Zone (CCZ). Recognizing the need to address environmental protection on a regional scale, the Legal and Technical Commission in 2011 adopted a regional environmental management plan for the whole of the CCZ that involves the designation of nine areas, each 400 square kilometers in size, in which no 11 1994 Agreement, Annex, section 1, paragraphs 5(g) and (k).

84   Michael W. Lodge mining will take place.12 The nine areas are designed to be representative of the different environmental characteristics of the CCZ as a whole. This plan is currently under consideration by the Council of the Authority. The intent of the environmental regulations is to strike a reasonable balance between the need to better understand the deep seabed environment and the need to recognize that deep seabed mining is a commercial operation in which contractors should not be burdened by unnecessary regulation. The regulations therefore specify a number of activities that are deemed to have no adverse environmental impact, including such established techniques as side-scan sonar, sediment sampling with free fall grabs and box cores, water sampling and video and photographic surveying. The list may be added to as necessary and as more data become available. The regulations also specify a procedure for dealing with environmental emergencies. The Secretary-General is required to issue a general notification to all States as soon as he becomes aware of a situation arising from seabed mining activities that has caused, or is likely to cause, serious harm to the marine environment. He is also empowered to take such temporary measures as may be necessary to prevent, contain and minimize environmental damage. Presumably, such measures would include ordering the contractor to cease operations or to begin to take remedial action, for example in the case of a spill or escape of harmful substances. The issue is then to be taken before the Council, which is empowered to make an emergency order.

Environmental Guarantees The Authority’s regulations require all applicants for exploration contracts to provide an initial environmental impact statement as well as a statement of their capacity to respond to environmental emergencies and a contingency plan explaining how they would respond to an emergency situation. The regulations fall short, however, of requiring contractors to provide any financial security or bond in the event that environmental damage is caused by their activities. During the process of negotiating the regulations, it was proposed that contractors should provide an environmental guarantee. This was not accepted at the time, although the Council did make a decision to come back to this matter in due course when regulations governing exploitation were being considered. Instead, the regulations provide that, immediately prior to the commencement of test mining, contractors should provide a guarantee of their financial and technical capacity to comply with any emergency order issued by the Council. In 12 ISBA/17/LTC/7.

ISA Mining Standards   85

the absence of such a guarantee, the sponsoring State may be requested to take the necessary measures to ensure that the contractor provides such a guarantee or shall assume liability itself to take the appropriate measures. This idea was developed further by the Seabed Disputes Chamber in its Advisory Opinion on the Responsibilities and Liabilities of States Sponsoring Activities in the Area.13 In considering the question of the liability of sponsoring States for environmental damage caused by contractors in situations where neither the contractor nor the sponsoring State were able to remedy the damage (for example, where the contractor was bankrupt and the sponsoring State was a developing State), the Chamber suggested the idea of a compensation fund. Such a fund, organized along the lines of the International Oil Pollution Compensation Funds, would be an insurer of last resort in the case of environmental damage that could not be dealt with otherwise. It is likely that this issue will need to be considered further by the Authority in the future as contractors move closer towards exploitation.

Health, Safety and Labour Standards In comparison to the environmental standards adopted by the Authority, the regulations relating to health, safety and labour standards are somewhat undeveloped. The regulations simply provide that contractors shall comply with generally accepted rules and standards established by competent international organizations or general diplomatic conferences concerning the safety of life at sea and the prevention of collisions. Each vessel used for carrying out mining activities shall possess current valid safety certificates. The Authority is empowered to make additional regulations relating to safety at sea as well as occupational health and safety, labour relations, living conditions at the work site and employment security. In so doing, the Authority is required to take into account the conventions and recommendations of the International Labour Organization and other competent international organizations. It appears that the presumption is that matters relating to safety of life at sea are already adequately dealt with by organizations such as the International Maritime Organization and thus there is no need at this time for the Authority to adopt additional regulations. It may be assumed that any vessels used for seabed mining activities, whether as drilling platforms, support vessels, transport vessels or otherwise, will be compliant with international conventions such as SOLAS, 13 Seabed Disputes Chamber of International Tribunal for the Law of the Sea. Responsibilities and Obligations of States Sponsoring Persons and Entities with respect to Activities in the Area, Advisory Opinion, (February 1, 2011), http://www.itlos.org/fileadmin/itlos/documents/cases/ case_no_17/adv_op_010211.pdf

86   Michael W. Lodge MARPOL and SCTW. Whilst this assumption may well be valid in the case of the sort of research vessels that are generally used for exploration activities, it may be that more specific regulations will be needed in due course when exploitation begins, especially if specialized technology, such as stationary mining platforms, are deployed. The regulations make provision for inspectors, who would have the authority to inspect vessels, installations, facilities and equipment to monitor compliance with contracts and with the regulations. At this stage, no inspectors have been appointed and this part of the regulations remains dormant.

Considerations for National Regulatory Regimes To return to the question I posed at the beginning, what is the relevance of the international standards established for the Area to the development of continental shelf areas? As far as conventional oil and gas exploitation is concerned, it is fair to say that the answer is probably very little. Oil and gas regimes are generally quite mature and in any case involve quite different techniques to those that will be used in seabed mining. In the case of marine minerals, however, I would suggest that the experience of the Authority might be quite valuable to coastal States. Likewise, however, the extensive experience gained in the regulation of oil and gas, particularly in terms of safety standards and emergency response, is likely to prove invaluable to the nascent deep seabed mining industry. A recent survey of national legislation by the Secretariat of the Authority, done at the request of the Council, discovered that less than 20 States actually have national legislation dealing with seabed mining. This is perhaps not surprising, given that marine mineral mining has barely begun. At the same time, however, it should be a matter of concern to those States that have potential marine mineral resources that they may wish to develop as mining technology matures. A good example of the problems that can be caused by a lack of appropriate regulation is the case of the Nautilus Minerals project in Papua New Guinea. When this project first began in the 1990s, the only regulatory system available to Papua New Guinea was its terrestrial mining legislation. This proved quite problematic in that it has been necessary to develop new regulations from scratch dealing with the particular issues relevant to marine mining. The problem has been recognized not only in Papua New Guinea, but also throughout the Pacific Islands. The regional organization, SOPAC, has commenced a four-year project, financed by the EU, to develop regional policy and model legislation for marine mining. It is suggested that the regulations developed by the Authority, which have been adopted by consensus by 164 States, forms a valuable precedent in this regard.

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Finally, I would like to consider briefly the effect of Articles 208 and 209 of the Convention. Articles 208 and 209 are found in Part XII of the Convention, dealing with the protection and preservation of the marine environment. Read together, I would suggest that the effect of these two provisions is to require that the rules, regulations and procedures to prevent pollution from seabed activities both within national jurisdiction and in the Area should be compatible. Under Article 208, coastal States are required to adopt laws and regulations to prevent, reduce and control pollution of the marine environment arising from seabed activities subject to their jurisdiction and to take such measures as may be necessary to prevent, reduce and control such pollution. It may be noted that Article 208 refers to seabed activities “subject to” national jurisdiction, and not just to activities that are carried out within national jurisdiction. This may include, for example, activities carried out beyond national jurisdiction by nationals of the coastal State or vessels flying its flag as well as seabed activities within national jurisdiction. States are further required to endeavour to harmonize their policies at the regional level and the laws, regulations and measures adopted at national level must be no less effective than international rules and standards. In accordance with paragraph 4 of Article 208, such international rules and standards are to be adopted through ‘competent international organizations’ or diplomatic conferences. Article 209 deals with pollution from activities in the Area. It requires that international rules, regulations and procedures be established in accordance with Part XI to prevent, reduce and control pollution of the marine environment from activities in the Area. This is effectively a reference back to the obligations of the Authority under Article 145 to take necessary measures to ensure effective protection for the marine environment from the harmful effects of seabed mining. More specifically, Article 145 requires the Authority to adopt rules, regulations and procedures for “the prevention, reduction and control of pollution and other hazards to the marine environment” and for “the protection and conservation of the natural resources of the Area and the prevention of damage to the flora and fauna of the marine environment”. Article 209 also requires States to adopt laws and regulations to prevent, reduce and control pollution from activities in the Area undertaken by vessels, installations, structures and other devices flying their flag or of their registry or operating under their authority, as the case may be.

THE CONTINENtAL SHELF BEYOND 200 NM: A FIRST LOOK AT THE BAY OF BENGAL (BANGLADESH/MYANMAR) CASE Ted L. McDorman* Abstract The decision in the Bay of Bengal (Bangladesh/Myanmar) Case before the International Tribunal for the Law of the Sea (ITLOS) brought forward a number of complex questions concerning the international legal regime of the continental shelf. The focus of this contribution will be on the continental shelf area beyond 200-n. miles where the challenge for the ITLOS was the relationship between delimitation of the bilateral shelf boundary and delineation of the outer limits of the continental shelf, the latter of which, pursuant to Article 76 of the 1982 U.N. Convention on the Law of Sea, engages the Commission on the Limits of the Continental Shelf (Commission). This essentially involved two questions: • Was the ITLOS precluded from establishing a boundary for the continental shelf between the two States beyond 200-n. miles, or if not precluded, should the ITLOS refrain from establishing a continental shelf boundary because of the role to be played by the Commission respecting the outer limits of the shelf beyond 200-n. miles? • Was the ITLOS precluded or, if not precluded, should the ITLOS refrain from determining whether either or both States have a legal entitlement to a continental shelf area beyond 200-n. miles since the question of whether a shelf existed beyond 200-n. miles was a question also for the Commission? The Bay of Bengal Case has not diminished or otherwise changed the role of the Commission in the process of the establishment of a coastal State of its outer limit of the continental shelf. The Commission has always been confined by Article 76 to the matter of the outer limits of the continental shelf and the ITLOS Case simply confirmed this. The Bay of Bengal Case is respectful of the role of the Commission in dealing with the scientific application of Article 76. This, of course, is the expertise of the Commission. However, it is the State Parties to the LOS Convention and where they engage dispute settlement, adjudicative dispute settlement bodies, which have the authority to determine whether or not the wording or application of wording in Article 76 is subject to legal or scientific interpretation. * This contribution was written while Professor McDorman was on secondment with the Bureau of Legal Affairs of the Canadian Department of Foreign Affairs and International Trade. The contents and views in the abstract and paper are personal and do not reflect the views or opinions of the Bureau of Legal Affairs, the Department of Foreign Affairs and International Trade, or the Government of Canada. Professor McDorman is on the Faculty of Law, University of Victoria, British Columbia, Canada. He has a cross-appointment with the Department of Geography and is an Associate of the Centre for Asia-Pacific Initiatives.

90   Ted L. McDorman

1.0 Introduction The decision in the Dispute Concerning Delimitation of the Maritime Boundary between Bangladesh and Myanmar in the Bay of Bengal (Bangladesh/Myanmar)1 before the International Tribunal for the Law of the Sea (ITLOS) came down in March 2012 and brought forward a number of complex questions concerning the international legal regime of the continental shelf. The focus of this contribution will be on the continental shelf area beyond 200-n. miles and will not deal with those aspects of the Bay of Bengal Case that involved maritime delimitation. Beyond 200-n. miles, the challenge for the ITLOS was the relationship between delimitation of the bilateral shelf boundary and delineation of the outer limits of the continental shelf, the latter of which, pursuant to Article 76 of the 1982 U.N. Convention on the Law of Sea,2 engages the Commission on the Limits of the Continental Shelf (Commission).3 This essentially involved two questions: • Was the ITLOS precluded from establishing a boundary for the continental shelf between the two States beyond 200-n. miles, or if not precluded, should the ITLOS refrain from establishing a continental shelf boundary because of the role to be played by the Commission respecting the outer limits of the shelf beyond 200-n. miles?4 The ITLOS answered that it was not precluded from establishing a shelf boundary beyond 200-n. miles and that in the case before it, it would not refrain from so doing. • Was the ITLOS precluded or, if not precluded, should the ITLOS refrain from determining whether either or both States have a legal entitlement to a continental shelf area beyond 200-n. miles since the question of whether a shelf existed beyond 200-n. miles was a question also for the Commission? In other words, did there exist overlapping claims of the two States to a continental shelf area beyond 200-n. miles in the Bay of Bengal?5 The ITLOS again answered that it was not precluded from determining whether the States were entitled to a shelf area beyond 200-n. mile. The ITLOS, however, carefully found that, based on the facts of the case and the essential point in argument between the parties, it would not refrain from answering the question as the main point of argument was a legal question within the expertise of the ITLOS. 1 Dispute Concerning Delimitation of the Maritime Boundary between Bangladesh and Myanmar in the Bay of Bengal (Bangladesh/Myanmar), Judgment, 14 March 2012, available on the website of the International Tribunal for the Law of the Sea at www.itlos.org. 2 United Nations Convention on the Law of the Sea, Montego Bay, Jamaica, 10 December 1982, entered into force 16 November 1994, 1833 U.N.T.S. 397. 3 The Commission on the Limits of the Continental Shelf is established pursuant to ibid., Annex II. See the website of the Commission at www.un.org/Depts/los/clcs_new/clcs_home.htm. 4 Bay of Bengal Case, supra note 1, at paras. 342, 360 and 363. 5 Ibid., at para. 399.

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The Commission was brought into play in the Bangladesh/Myanmar maritime boundary dispute by the December 2008 Submission by Myanmar of information on its proposed outer limits of its continental shelf.6 Bangladesh responded to the Submission with a note verbale7 which, amongst other things, indicated that pursuant to the Rules of Procedure of the Commission, there existed a dispute between the two States and that Bangladesh was invoking its right to “block” the consideration of the Submission by the Commission.8 The Bay of Bengal Case was put before the ITLOS in October 2009. In February 2011, Bangladesh submitted information on its proposed outer limits of its continental shelf to the Commission.9 Myanmar responded with a note verbale contesting aspects of the Bangladesh Submission, but did not “block” the Commission from proceeding indicating rather – “It reserves all its rights in this regard.”10

2.0 Background: The Commission11 Since the above two questions deal with the role of the Commission, a few words of background on the Commission may be helpful. During the negotiation of the 1982 LOS Convention, it was necessary that coastal States determine a definitive outer limit of the continental margin where the margin extended beyond 200-n. miles, because the “Common Heritage of  6 Myanmar, Executive Summary: Continental Shelf Submission of the Union of Myanmar, December 2008, available on the website of the Commission, supra note 3.  7 Bangladesh, Note Verbale No. PMBNY-UNCLOS/2009, 23 July 2009, available on the website of the Commission, supra note 3.  8 While the LOS Convention, supra note 2, Article 76(10) and Annex II, Article 9 is clear that the work and recommendations of the Commission are “without prejudice to the question of delimitation of the continental shelf between States with opposite or adjacent coasts,” nevertheless and quite rightly, the Rules of Procedure of the Commission provide to States the opportunity to “block” the Commission from proceeding to consider submissions where there exists a “dispute in the delimitation of the continental shelf between opposite or adjacent States or in other cases of unresolved land or maritime disputes.” See: Commission on the Limits of the Continental Shelf, Rules of Procedure, Doc. CLCS/40/Rev.1, 17 April 2008, Rule 46 and Annex I, para. 5(a), available on the website of the Commission, supra note 3.  9 Bangladesh, Executive Summary: Submission by the People’s Republic of Bangladesh, February 2011, available on the website of the Commission, supra note 3. 10 Myanmar, Note Verbale No. 146/03-20-17, 31 March 2011, available on the website of the Commission, supra note 3. 11 This section is drawn, with modification, from T.L. McDorman, ‘The Commission on the Limits of the Continental Shelf (CLCS): The Nature of its Existence and Role in the Establishment of the Outer Limits of the Continental Shelf,’ a paper prepared for the Colloquium on the Outer Limits of the Continental Shelf of the Continental Shelf and Consideration of Submissions, Kuala Lumpur, Malaysia, hosted by the Maritime Institute of Malaysia and the Ministry of Foreign Affairs Malaysia, 10–11 May 2010.

92   Ted L. McDorman Mankind” and the International Seabed Authority (ISBA) were to apply to the mineral resources of the seafloor beyond national jurisdiction, in other words, beyond the outer limits of coastal States’ continental shelves. What was being avoided was the open-ended wording of Article 1 of the 1958 Geneva Convention on the Continental Shelf, which had not established a definitive outer limit of the legal continental shelf.12 The political compromise that was agreed upon between those States which asserted that international law clearly recognized coastal State authority over the shelf beyond 200-n. miles and those States seeking to limit coastal State continental shelf authority at 200-n. miles involved several elements, two of which were: • a complex formula for determining the outer limit of a State’s continental shelf beyond 200-n. miles (the Article 76 criteria);13 and • the establishment of the Commission to assist or provide guidance to States in applying the complex formula.

12 Convention on the Continental Shelf, done at Geneva on 29 April 1958, entered into force 10 June 1964, 499 U.N.T.S. 311. Article 1 provided two criteria for the outer limit of the shelf – the seabed and subsoil within the envelope of waters of a depth of 200-metres “or, beyond that limit, to where the depth of the superjacent waters admits of the exploitation of the natural resources.” R.R. Churchill and A.V. Lowe, The Law of the Sea (3rd ed., Manchester University Press, Manchester, 1999), at 147 state: “Even at the 1958 conference it was recognized that the addition of the exploitability test rendered the seaward limit dangerously imprecise.” 13 The following is a succinct understanding of the criteria. A coastal State’s legal entitlement to a shelf area beyond 200-n. miles is based on “the natural prolongation of its territory” with Article 76(2) of the LOS Convention directing that the shelf does not extended beyond the limits established by the criteria. • Pursuant to Article 76(4), an envelope for the outer limit of the margin is first created by determining the foot of the continental slope and then constructing ° a line connecting the outermost points where “the thickness of sedimentary rocks is at least one per cent of the shortest distance from such point to the foot of the continental slope,” or ° a line connecting points “not more than 60 nautical miles from the foot of the continental slope.” • The envelope created by Article 76(4) is subject to two constraints. The lines created pursuant to 76(4) are not to extend beyond: ° 350-n. miles from a State’s baselines; or ° 100-n. miles from the 2,500 metre isobath. • For submarine ridges, the 350-n. mile constraint applies. However, for "submarine elevations that are natural components of the continental margin, such as its plateaux, rises, caps, banks and spurs," either the 350-n. mile constraint 100-n. miles or the 2,500 metre isobath constraint can be applied. • There is a general limitation that the continental margin does not include the oceanic floor with its oceanic ridges.

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Article 76(8) of the LOS Convention provides that a coastal State is to submit information supporting its proposed outer limit of its “legal” continental shelf to the Commission. Pursuant to the LOS Convention, the Commission is to consider the material submitted to it by a coastal State and make “recommendations” to the submitting State regarding the information received and the relevant Article 76 criteria. Where differences exist, the State is to resubmit further information, with the envisaged process being one of “ping-pong” – State submission, Commission recommendations, State resubmission, Commission recommendations, etc. – with the submitting State, acting in good faith, and the Commission eventually achieving accord.14 One clear point in the Article 76 and the Commission-submitting State relationship is that it is the submitting State, and not the Commission, that determines the outer limit of its continental shelf beyond 200-n. miles. This is consistent with the reality that the determination and delineation of a maritime boundary is a political act of a coastal State. This is duly acknowledged in the Bay of Bengal Case.15 The Commission is composed of 21 technical specialists elected by the State Parties to the LOS Convention.16 Commission members are to be “experts in the field of geology, geophysics or hydrography.”17 Commission members are to act in their personal capacities and, therefore, are not to be delegates or representatives of the States from which they come. The State which nominates a member of the Commission is to “defray the expenses” of that Commission member.18 Despite the financial prudence of this measure and the exhortation that Commission members “serve in their personal capacities,”19 the financial relationship is one important indicator that the Commission is not in a position equivalent to an international court and, more importantly, was never intended to approximate that status. Who, if anyone, does the Commission represent? The answer is that the Commission does not represent the international community of States in a manner similar, for example, to the way in which the United Nations or other intergovernmental organizations can be said to represent or speak for its member States. The Commission is, however, a creature of a United Nations treaty. Moreover, the 14 Piers R.R. Gardiner, ‘The Limits of the Area beyond National Jurisdiction – Some Problems with Particular References to the Role of the Commission on the Limits of the Continental Shelf, in Gerald Blake, ed., Maritime Boundaries and Ocean Resources (London: Croom Helm, 1987), at p. 69. 15 Bay of Bengal Case, supra note 1, at para. 407, “It is clear from article 76, paragraph 8, . . . that the limits of the continental shelf beyond 200 nm can be established only by the coastal State”. 16 LOS Convention, supra note 2, Annex II, Article 2(1). 17 Id. 18 Ibid., Article 2(5). 19 Ibid., Article 2(1).

94   Ted L. McDorman LOS Convention is explicit that the secretariat of the Commission is to be provided by the U.N. Secretary-General.20 Thus, the Commission is, to some extent, a U.N. body and the United Nations has, through its bureaucracy, an engagement with the Commission by the provision of secretariat services, which has included limited legal advice. Moreover, the Commission members are covered under the Convention on the Privileges and Immunities of the United Nations.21 As noted, the Commission is not, however, a voice of the United Nations, nor does it represent the United Nations. The Commission is unrelated in any way to the ISBA, although the work of the Commission can and will have significant implications for the geographic scope of the Area the minerals of which are under the management of the ISBA. The Commission does not speak or act on behalf of any or all States that are parties to the LOS Convention. While it can be argued that when a State becomes a Party to the LOS Convention that it assents to the creation and operation of the Commission, this does not mean that a State Party explicitly or implicitly endorses or consents to what the Commission does, for example, as regards the recommendations made by the Commission to a submitting State. Such a matter involves only the submitting State and the Commission and not other State Parties. The Commission is not an organ or creation of the Meeting of the State Parties to the Convention (SPLOS). The Chair of the Commission explained in 2001 that: “The Commission . . . [is] an autonomous body established by the Convention with no formal accountability to the Meeting of States Parties.”22 On the technical matter of submission dates (the 10 year situation), the SPLOS provided direction – not to the Commission per se, but to State Parties on the interpretation and application of the wording of the Convention.23 The SPLOS, however, is the body which has the responsibility under the LOS Convention to elect the 20 Ibid., Article 2(5). 21 Convention on the Privileges and Immunities of the United Nations, 13 February 1946, 1 U.N.T.S. 15. See: Letter dated 11 March 1998 from the U.N. Legal Counsel to the Commission on the Limits of the Continental Shelf, Doc. CLCS/5, 11 March 1998, available on the website of the Commission, supra note 3. 22 Report of the Eleventh Meeting of the State Parties, Doc. SPLOS/73, 14 June 2001, at paragraph 61, available on the website of the United Nations, Division for Ocean Affairs and the Law of the Sea (DOALOS), at . 23 LOS Convention, supra note 2, Annex II, Article 4 provides that a coastal State intending to establish outer limits of the continental shelf beyond 200-n. miles “shall” submit information to the Commission “within 10 years of entry into force” of the Convention for the State. The ten year mark for States that were parties to the LOS Convention when it came into effect in 1994 was adjusted at the Eleventh Meeting of the State Parties to the LOS Convention to commence as of 13 May 1999. Eleventh Meeting of the State Parties, Decision regarding the date of commencement of the ten-year period for making submissions to the Commission on the Limits of the Continental Shelf set out in article 4 of Annex II to the United Nations Convention

The Continental Shelf Beyond 200 NM   95

members of the Commission. From this explicit authority it might be suggested that the SPLOS may have some responsibility or engagement with the work of the Commission, however, it seems clear that, in the case of the Commission, the election process is divorced from an inherent powers argument that may exist for SPLOS engagement. Nevertheless, it is worth noting that the SPLOS could effectively terminate the Commission by deciding not to elect (or being unable to agree upon electing) members to the Commission. The Commission does engage with the SPLOS. The Chair of the Commission provides regular statements on the work of the Commission to the SPLOS and there are continuing discussions regarding workload. Thus, the SPLOS-Commission relationship is somewhat nuanced. In the development of the Commission’s Rules of Procedure,24 for example, the Commission put before the SPLOS certain draft provisions of the Rules for the SPLOS and the member States to consider before the Commission adopted its Rules.25 Some States have used SPLOS as an arena for commentary about the role and/or limitations that do (or should) exist on the work of the Commission and even, indirectly, on the approach undertaken by the Commission to its work.26 States have also used the annual meeting of the ISBA to voice concerns indirectly about the operation of the Commission.27 Trying to summarize “the nature of the existence” of the Commission is not easy – the words unique and autonomous are often used. Clearly, the Commission is a sui generis body.

24 25 26 27

on the Law of the Sea, Doc. SPLOS/72, 29 May 2001, available on the DOALOS website, supra note 22. In June 2008, the Eighteenth Meeting of the State Parties decided that the ten year wording could be met by a coastal State submitting “preliminary information indicative of the outer limits . . . and a description of the status of preparation and intended date for making a submission.” The preliminary information would not be acted upon by the Commission and would be without prejudice to a subsequent full submission. Eighteenth Meeting of the States Parties, Decision regarding the Workload of the Commission and the Ability of States to fulfill the Requirements of Article 4 of Annex II, Doc. SPLOS/183, 20 June 2008, paragraph 1, available on the DOALOS website. Rules of Procedure, supra note 8. For greater clarity, the Commission did not request nor did the SPLOS approve the Commission’s Rules of Procedure. See: Report of the Eighth Meeting of the States Parties, Doc. SPLOS/31, 4 June 1998, at paragraphs 41–48, available on the DOALOS website, supra note 22. See, for example: Report of the Nineteenth Meeting of the States Parties, Doc. SPLOS/203, 24 July 2009, at paragraphs 70–79 and 106–108, available on the DOALOS website, supra note 22. See, for example, ISA, Press Release, Seabed Assembly Hears 22 Speakers, Doc. SB/15/6, 28 May 2009, available on the website of ISA at www.isa.org.jm/en/home. Interestingly, Germany noted “the danger of excessive claims on extended continental shelf ” and “supported a strict and narrow interpretation of the provisions of the Convention relating to this manner,” in other words Article 76 and the Commission.

96   Ted L. McDorman

3.0 The Bay of Bengal Decision 3.1 The First Question In commencing the Bay of Bengal Case, Bangladesh sought “to secure the full and satisfactory delimitation of Bangladesh’s maritime boundaries with [. . .] Myanmar in the territorial sea, the exclusive economic zone and the continental shelf in accordance with international law.”28 As a result of this the continental shelf, including the possibility of an area of the continental shelf beyond 200-n. miles, was clearly part of the question before the Tribunal. Myanmar argued that a third-party adjudicative body could not, or in the alternative, should not establish a maritime boundary for a shelf area beyond 200-n. miles where the States involved had not sought and received the recommendations of the Commission regarding the outer limits of the shelf area beyond 200-n. miles.29 In support of this view, Myanmar cited the 1992 Canada-France Arbitral Award,30 where the Award stated “[i]t is not possible for a tribunal to reach a decision by assuming hypothetically the eventuality that such rights will in fact exist.”31 Bangladesh argued that there was no impediment on the Tribunal making a maritime boundary decision respecting the shelf area beyond 200-n. miles and pointed out that deferring to the Commission, when the Commission could be in a position not to proceed with a submission because of overlapping claims and thus deferring to a tribunal, was circular.32 As pointed out in the Case, this indeed was the situation since Bangladesh had indicated, consistent with the Rules of Procedure of the Commission, that the Commission could not proceed to deal with the Submission of Myanmar.33 The Tribunal essentially agreed with Bangladesh finding that the LOS Convention “embodies the concept of a single continental shelf . . . without any distinction being made between the shelf within 200 nm and the shelf beyond that limit.”34 The result being that, based on the question before the Tribunal, it had “jurisdiction to delimit the continental shelf in its entirety.”35 Prima facie this undermines the above noted comments from the Canada-France Arbitration.

28 Bay of Bengal Case, supra note 1, at para. 1. 29 Ibid., at paras. 345, 348 and 349. 30 Case concerning the Delimitation of Maritime Areas between Canada and France, 10 June 1992, (1992), 31 I.L.M. 1145, at para. 81. 31 Bay of Bengal Case, supra note 1, at para. 346. 32 Ibid., at para. 358. 33 See: ibid., at paras. 385–389 and regarding the action of Bangladesh, see supra note 7. 34 Ibid., at para. 361. 35 Ibid., at para. 363.

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The question then was should the jurisdiction be exercised in light of the role assigned to the Commission in the LOS Convention.36 The International Court in the 2009 Nicaragua/Honduras Case declined to exercise jurisdiction respecting the shelf area beyond 200-n. miles stating: The Court may accordingly, without specifying a precise endpoint, delimit the maritime boundary and state that it extends beyond the 82nd meridian without affecting third-States rights. It should also be noted in this regard that in no case may the line be interpreted as extending more than 200 from the baselines from which the breadth of the territorial sea is measured; any claim of continental shelf rights beyond 200 miles must be in accordance with Article 76 of UNCLOS and reviewed by the Commission on the Limits of the Continental Shelf.37

The ITLOS handled this noting only that “the determination of whether an international court or tribunal should exercise its jurisdiction depends on the procedural and substantive circumstances of each case.”38 Thus making it clear that what other courts and tribunals may have done and said respecting the role of the Commission is confined to the facts of those cases. In preparing to answer whether or not to exercise its jurisdiction, the ITLOS noted that there “is a clear distinction between the delimitation of the continental shelf . . . and the delineation of its outer limit under Article 76.”39 The Commission’s task is the making of recommendations on the outer limits of the shelf, whereas the function of settling disputes rests with the State Parties and the dispute settlement regime of the LOS Convention.40 The activities “are complementary to each other so as to ensure coherent and efficient implementation of the Convention.”41 The Tribunal commented that: “There is nothing in the Convention or in the Rules of Procedure of the Commission or in its practice to indicate that delimitation of the continental shelf constitutes an impediment to the performance by the Commission of its functions.”42 While the ITLOS did not make note of it, there have been a number of bilateral boundary agreements dealing with shelf areas beyond 200-n. miles, which indicates that States do not feel that the role of the Commission is an impediment on boundary delimitation beyond 200-n. miles.43 36 Ibid., at para. 371. 37 Case concerning the Territorial and Maritime Dispute in the Caribbean Sea (Nicaragua v. Honduras), [2007] I.C.J. Reports 659, at para. 319. 38 Bay of Bengal Case, supra note 1, at para. 384. 39 Ibid., at para. 376. 40 Ibid. 41 Ibid., at para. 373. 42 Ibid., at para. 377. 43 See, for example, Treaty between Australia and New Zealand establishing certain Exclusive Economic Zone and Continental Shelf Boundaries, done at Adelaide, 25 July 2004, entered into force 25 January 2006, reprinted in Nigel Fyfe and Greg French, ‘Australia – New Zealand,’ in

98   Ted L. McDorman As already noted, the ITLOS indicated that the Commission was precluded from dealing with the potential overlapping claims of Myanmar and Bangladesh by the action of Bangladesh44 and that if the Tribunal did not proceed, the outer limits would remain unresolved45 and that this “would not be conducive to the efficient operation of the Convention.”46 The ITLOS decided that it could and would exercise its jurisdiction in the matter before it. The facts before the ITLOS are a bit unusual in that it was Bangladesh that “blocked” the Commission from dealing with the Submission of Myanmar, but it was Myanmar that was arguing that the ITLOS should not exercise its jurisdiction to resolve the shelf maritime boundary. The circularity argument advanced by Bangladesh for the ITLOS to proceed was, in fact, created by Bangladesh’s action to block the Submission of Myanmar from being dealt with by the Commission. 3.2 The Second Question The second question was whether the ITLOS had the competence/expertise and therefore could and should determine whether the States had an entitlement to a shelf area beyond 200-n. miles or does this competence respecting assessment of an entitlement to a shelf area beyond 200-n. miles rest with the Commission?47 This can be divided into two considerations: legal entitlement and interpreting Article 76. 3.2.1 Legal Entitlement In what is perhaps the most important part of the Judgment, the ITLOS raised and resolved a fundamental conundrum about the international legal regime of the continental shelf beyond 200-n. miles – the relationship between the outer limits criteria and procedures in Article 76 and the international legal right to the shelf. The conundrum exists because of the wording of Article 77(3) of the LOS Convention, the origin of which is Article 2(3) of the 1958 Continental Shelf Convention, which indicates that a coastal State has an inherent or automatic right to its adjacent shelf area rather than a right that arises through the known approaches to territorial acquisition.48 The effect of Article 2(3) was commented David A. Colson and Robert W. Smith, eds., International Maritime Boundaries, Vol. V, (Martinus Nijhoff, Leiden, 2005), at 3768–3777. 44 Bay of Bengal Case, supra note 1, at paras. 387–389. 45 Ibid., at para. 390. 46 Ibid., at para. 391. 47 Ibid., at para. 401. 48 See generally: D.P. O’Connell, The International Law of the Sea, Vol. I (edited by I.A. Shearer) (Clarendon Press, Oxford, 1982), at pp. 472–475 and 484–484.

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upon by the International Court of Justice in the 1969 North Sea Continental Shelf Cases: “the rights of the coastal State in respect of the area of continental shelf . . . exist ipso facto and ab initio, by virtue of its sovereignty over the land. In short, there is . . . an inherent right.”49 This inherent right aspect can be contrasted with the exclusive economic zone (EEZ) regime which, while available to States, must be positively asserted by a State. The inclusion of “inherent rights” (Article 77(3)) in the LOS Convention raises directly the legal consequences of the negotiated impediments on the inherent shelf right, such as, the detailed criteria in Article 76 and the engagement of the Commission. Emphatically, the Tribunal stated that: “A coastal State’s entitlement to the continental shelf exists by the sole fact that the basis of entitlement, namely sovereignty over the land territory, is present. It does not require the establishment of outer limits.”50 In the paragraph before, the Judgment provides that entitlement to the continental shelf does not depend “on any procedural requirements.”51 The ITLOS does not clarify what it means by procedural requirements but in the context of the Case procedural requirements must include, amongst other things, submitting information to the Commission and satisfying the technical requirements in Article 76. Interestingly, in paragraph 407, the Judgment states that: “It is clear from article 76, paragraph 8, . . . that the limits of the continental shelf beyond 200 nm can be established only by the coastal State” and that it is “opposability with regard to other States” that is dependent on satisfying the requirements of Article 76, including the obligation to submit information to the Commission.52 Put a different way, a State has an inherent right to a shelf beyond 200-n. miles (where it exists) and the LOS Convention provides a procedural opportunity to establish the outer limits of that shelf that will enhance the opposability of those limits vis-à-vis other States or, as has been described elsewhere, the Commission process provides legitimacy to a coastal State’s outer limits.53

49 North Sea Continental Shelf Cases (Denmark/The Netherlands v. Germany), [1969] I.C.J. Reports 3, at para. 19. 50 Bay of Bengal Case, supra note 1, at para. 409. 51 Ibid., at para. 408. 52 Ibid., at para. 407. 53 This is not the place to revisit the discussion respecting the wording in LOS Convention, supra note 2, Article 76(8): “The limits of the shelf established by a coastal State on the base of these recommendations shall be final and binding,” especially the question of upon whom are the outer limits “final and binding.” However, the emphasis of the ITLOS on the relation of the Commission process with the “opposability” of the outer limits with other States gives considerable weight to view that “final and binding” does apply to other States. See generally: T.L. McDorman, ‘The Role of the Commission on the Limits of the Continental Shelf: A Technical

100   Ted L. McDorman The importance of this is that a coastal State has and can exercise exclusive national authority over its adjacent legal continental shelf irrespective of the submission of information to the Commission and the receipt of recommendations from the Commission. As a corollary, a State not meeting the ten year-time line for a submission of information to the Commission, set out in Article 4 of Annex II to the Convention, cannot deprive that State of its rights to a continental shelf beyond 200-n. miles. 3.2.2 Interpreting Article 76 While the above is of importance regarding understanding the continental shelf regime, the ITLOS carefully proceeded respecting its competence to determine whether or not a continental margin exists beyond 200-n. miles. The ITLOS pointed out that as Article 76 “contains elements of law and science, its proper interpretation and application requires both legal and scientific expertise.”54 The facts before the Tribunal were fortunate in that, according to the Tribunal, the two States did not differ on the scientific aspects of the seabed and subsoil of the Bay Bengal, rather what they disagreed upon was the interpretation of the facts “in particular the meaning of ‘natural prolongation’.”55 The ITLOS noted that it “would have been hesitant to proceed with the delimitation of the area beyond 200 nm had it concluded that there was significant uncertainty as to the existence of a continental margin in the area in question.”56 The obvious point being that were the issue before the Tribunal one that fell within the scientific realm that affected or impinged on the existence or non-existence of a shelf area beyond 200-n. miles, the ITLOS would not have proceeded to pronounce on entitlement or to deal with bilateral delimitation. To a large extent this answers the question raised about the potential situation of a conflict between a third party adjudicative body indicating that a coastal State has an entitlement to a shelf area beyond 200-n. miles and the Commission recommending to a State that its outer limit does not extend beyond 200-n. miles. First, if there is any significant doubt as to the physical existence of a continental margin beyond 200-n. miles of a coastal State, the ITLOS (or another adjudicative body) can be expected to yield to the Commission, thus making the potential conflict scenario only of speculative interest. Second, in almost all overlapping shelf claims beyond 200-n. miles scenarios, the States are adjacent to one another strongly indicating that what is involved is a single margin “shared” by the States. Where the existence/non-existence issue may be more likely to arise is where two States Body in a Political World’ (2002), 17 International Journal of Marine and Coastal Law 301, at 313–317. 54 Bay of Bengal Case, supra note 1, at para. 411. 55 Ibid., at para. 412. 56 Ibid., at para. 443.

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are in an opposite State scenario and the question is whether there are distinct margins as opposed to a common margin. Left unanswered, of course, is what constitutes a scientific issue within Article 76 that impinges on the existence or non-existence of a shelf area beyond 200-n. miles. The ITLOS determined that the application of the “natural prolongation” wording in Article 76(1) was a legal question. What readily comes to mind are the words in Article 76(3), and (6) – oceanic ridges, submarine ridges and submarine elevations that are natural components of the continental margin. Is the interpretation/application of these concepts within the realm of the scientific community or a matter of legal interpretation? It is of note that the terms are creatures of the LOS Convention and not of the scientific community.57 However, in its recommendations the Commission has on several occasions categorized features as being a submarine ridge, a submarine elevation and/or an oceanic ridge.58 As already noted, the divide between the Bangladesh and Myanmar both in the Case and in their submissions to the Commission concerned their differing understandings of the concept of “natural prolongation.” It was the view of Bangladesh that the wording in Article 76(1) that the “continental shelf of a coastal State comprises the seabed and subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin” meant that its ability to show geological and geomorphological continuity between the land mass and the seafloor of the Bay of Bengal (based largely on the sediment in the Bay of Bengal originating from Bangladesh) resulted in the continental shelf beyond 200-n. miles being that of Bangladesh and not that of Myanmar.59 The view of Myanmar was that what was to be applied was Article 76(4) and not “any ‘test of natural geological prolongation’,”60 with the result that Myanmar had a shelf area beyond 200-n. miles adjacent to its coast. The essence of the argument was whether natural prolongation was an independent criterion separate from the criteria set out in Article 76(4). The Tribunal commented that while natural prolongation first arose in the 1969 North Sea Continental Shelf Cases, “it has never been defined”61 and that it was utilized at the Third United Nations Conference on the Law of the Sea 57 See generally: Jianjun Gao, ‘The Seafloor High Issue in Article 76 of the LOS Convention: Some Views from the Perspective of Legal Interpretation’ (2012), 43 Ocean Development and International Law 119–145. 58 See generally: Harald Brekke and Philip Symonds, ‘Submarine Ridges and Elevations of Article 76 in Light of Published Summaries of Recommendations of the Commission on the Limits of the Continental Shelf ’ (2011), 42 Ocean Development and International Law 289–306. 59 Bay of Bengal Case, supra note 1, at paras. 415–417, 419, 424, and 426. 60 Ibid., at paras. 420, 421, 425, and 427. 61 Bay of Bengal Case, supra note 1, at para. 432.

102   Ted L. McDorman (UNCLOS III) “as a concept to lend support” to the trend of expansion of coastal State jurisdiction.62 The Tribunal accepted the view of Myanmar that what matters are the criteria of Article 76(4) and that natural prolongation does not constitute “a separate and independent criterion a coastal State must satisfy.”63 Based on the above, the ITLOS proclaimed that geographic origin of the sedimentary rocks of the continental margin was not relevant in the determination of entitlement64 and that Bangladesh’s argument that Myanmar had no shelf entitlement beyond 200-n. miles was not accepted.65

4.0 Concluding Comments The Bay of Bengal decision has not diminished or otherwise changed the role of the Commission in the process of the establishment by a coastal State of its outer limit of the continental shelf. The Commission has always been confined by Article 76 to the matter of the outer limits of the continental shelf and the ITLOS Case simply confirms this. Coastal States for whom the legal shelf clearly exists beyond 200-n. miles have the legal entitlement to exercise exclusive jurisdiction over the resources of the shelf irrespective of the engagement with the Commission. The Bay of Bengal Case is respectful of the role of the Commission in dealing with the scientific application of Article 76. This, of course, is the expertise of the Commission. However, it is the State Parties to the LOS Convention and, 62 Ibid., at para. 433. 63 Ibid., at para. 435. Judge Gao in his Separate Opinion strongly disagreed with the majority’s view of natural prolongation. Dispute Concerning Delimitation of the Maritime Boundary between Bangladesh and Myanmar in the Bay of Bengal (Bangladesh/Myanmar), Separate Opinion of Judge Gao, 14 March 2012, available on the website of the International Tribunal for the Law of the Sea at www.itlos.org. See paras. 83–91, and in particular, at para. 87: Furthermore, in paragraph 435 of the Judgment, “the Tribunal finds it difficult to accept that the ‘natural prolongation’ referred to in article 76, paragraph 1, and constitutes a separate and independent criterion a coastal State must satisfy in order to be entitled to a continental shelf beyond 200 NM.” And it goes on in paragraph 437 to conclude: “Entitlement to a continental shelf beyond 200 NM should thus be determined by reference to the outer edge of the continental margin, to be ascertained in accordance with article 76, paragraph 4. To interpret otherwise is warranted neither by the text of article 76 nor by its object and purpose.” Not only are these bold interpretations of the relevant provisions of the Convention inaccurate in my view, but they are also stated more assertively than anything other courts and tribunals have said in previous cases. 64 Ibid., at para. 447. 65 Ibid., at para. 448.

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by extension, where they engage dispute settlement, adjudicative dispute settlement bodies, which have the authority to determine whether or not the wording or application of wording in Article 76 is subject to legal or scientific interpretation. As the chair of the Commission has made clear, the Commission has a very limited role in the interpretation of the LOS Convention.66

66 Statement by the Chairman of the Commission on the Limits of the Continental Shelf on the Progress of Work in the Commission, Doc. CLCS/64, 1 October 2009, at paragraph 23, available on the website of the Commission, supra note 3.

INTERNATIONAL STANDARDS FOR OFFSHORE DRILLING J. Ashley Roach1 Abstract The Law of the Sea Convention requires States acting through the IMO to establish global and regional rules, standards and recommended practices and procedures to prevent, reduce and control pollution of the marine environment arising from or in connection with seabed activities subject to national jurisdiction. That has not happened. This paper argues the IMO can and should act through its Member States to establish safety standards and standards for liability and compensation for transboundary effect of oil pollution from offshore platforms. It demonstrates that the IMO has acted many times over the years regarding offshore seabed activities despite current arguments that the IMO lacks competence in this area. The relevant treaty provisions are collected in the two appendices.

The Law of the Sea (LOS) Convention has been described as a “far reaching environmental accord” and “the strongest comprehensive environmental treaty now in existence or likely to emerge for quite some time.”2 The LOS Convention, which has been in force since November 10, 1994, now has 164 Parties.3 The LOS Convention assigns an important role to the International Maritime Organization (IMO) as one of the “competent international organizations.” The IMO has fulfilled most of the responsibilities assigned to it by the Convention. But in two respects relevant to the topic of this conference it has not yet done so fully. This paper first addresses the role of international organizations, then the role of States in their own regard, to establish global and regional rules, standards and recommended practices and procedures to prevent, reduce and control 1 Captain, JAGC, USN (ret.), Office of the Legal Adviser, U.S. Department of State (ret.). The views expressed herein are those of the author and do not represent the views of any department or agency of the U.S. Government. This paper builds on portions of Mayer, Roach and Baker, Deepwater Horizon and the Arctic: Is There a Need for International Regulation?, in The Law of the Sea Convention: U.S. Accession and Globalization 512–525 (Myron Nordquist, John Norton Moore, Alfred H. A. Soons, and Hak-So Kim, Eds., Leiden: Martinus Nijhoff, 2012). The author’s PowerPoint is available at http://www.virginia.edu/colp/pdf/Halifax-Roach.pdf. 2 Presidential Letter of Transmittal and Secretarial Letter of Submittal of the Law of the Sea Convention, Sen. Tr. Doc. 103–39, at iii and vii, available at http://www.foreign.senate.gov/ download/?id=8AB76600-4590-4931-8BAE-2658AD093C80. 3 UN DOALOS, Table recapitulating the status of the Convention and of the related Agreements, as at 1 October 2012, available at http://www.un.org/Depts/los/reference_files/status2010.pdf.

106   J. Ashley Roach pollution of the marine environment arising from or in connection with seabed activities subject to national jurisdiction. The paper then draws conclusions and makes recommendations for further action.

I. The Role of International Organizations What the LOS Convention Requires of International Organizations Article 208(5) requires States, “acting especially through competent international organizations or diplomatic conference,” to establish global and regional rules, standards and recommended practices and procedures to prevent, reduce and control pollution of the marine environment referred to in paragraph 1 of article 208, i.e., sea-bed activities subject to their jurisdiction and from artificial islands, installations and structures under their jurisdiction, located on their continental shelf or in their EEZ. Paragraph 5 also requires that such rules, standards and recommended practices and procedures be re-examined from time to time as necessary. The Convention’s requirements regarding liability and compensation in article 235(3) are discussed below. It should be recognized that this firm requirement on States (“shall adopt”) contrasts sharply with the much looser standard of “shall endeavor” to establish rules in article 207 (pollution of the marine environment from land-based sources), in article 210 (by dumping), and in article 212 (from and through the atmosphere). The meaning of the term “competent international organization(s)” is dependent on the context in which it is used in the LOS Convention.4 The plural “competent international organizations” in article 208(5) indicates that no single international organization has exclusive competence to deal with pollution from sea-bed activities in areas under national jurisdiction, i.e., internal waters, the territorial sea, the EEZ and the continental shelf. However, in this case the competent international organizations are the IMO,5 and the International

4 See IV United Nations Convention on the Law of the Sea 1982: A Commentary, para. XII.17 (Dordrecht: Martinus Nijhoff 1991), and Walker (Gen. Ed.), Definitions for the Law of the Sea: Terms Not Defined by the 1982 Convention 137–149 (Leiden/Boston: Nijhoff 2012). 5 Oxman, Environmental Protection in Archipelagic Waters and International Straits – The Role of the International Maritime Organization, 10 Int’l J. Marine & Coastal L. 467, 469–470 (1995), and id., The Role of the International Maritime Organization, in Mochtar, Mensah and Oxman (eds.), Sustainable Development and Preservation of the Oceans: The Challenges of UNCLOS and Agenda 21, Proceedings of the Law of the Sea Institute 29th Annual Conference Bali Indonesia June 19–22, 1995, at 266, 269 (Hawaii: Law of the Sea Institute 1997).

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Civil Aviation Organization (ICAO) for aviation activities in support of offshore activities.6 Professor Oxman’s observation that the IMO meets the requirements of 211(1) equally applies to article 208(5) “both directly and as the organization that convenes and assists relevant diplomatic conferences.”7 The University of Virginia Commentary on the LOS Convention has observed that the term “diplomatic conference” implies that it must be a plenipotentiary conference of the representatives of States (and not a conference composed exclusively of the representatives of intergovernmental organizations or of independent experts), regardless of the type of instrument it adopts.8

The IMO routinely convenes diplomatic conferences to adopt new agreements intended to be legally binding when in force. It should be noted that there is a hierarchy among the actions to be taken under article 208(5): • Legally binding rules; • Internationally agreed standards, that may not be legally binding; and • Internationally agreed recommended practices and procedures that are not legally binding.9

When dealing with a new subject the IMO often starts by considering non-binding standards and/or recommended practices and procedures, often drawing on those developed by industry. The 2012 document prepared by the IMO Secretariat entitled “Implications of the United Nations Convention on the Law of the Sea for the International Maritime Organization” asserts “[w]hile pollution directly arising from exploration/ exploitation is however not the direct concern of IMO, the Organization may contribute to the establishment of international regulations.”10 I suggest this form of pollution is of direct concern to the IMO.  6  7  8  9

See infra n. 18 and accompanying text. Oxman, supra n. 5, at 473. IV University of Virginia Commentary, supra n. 4, at 133, para. 207.7(d). See IMO resolution A.911(22), Uniform wording for referencing IMO instruments, Nov. 29, 2001, IMO document A22/Res.911, Jan. 22, 2002, available at http://www.imo.org/blast/blastDataHelper.asp?data_id=24546&filename=A911%2822%29.pdf. 10 IMO Doc. LEG/Misc.7, Implications of the United Nations Convention on the Law of the Sea for the International Maritime Organization, Annex, at 18, Jan. 19, 2012, available at http://www .imo.org/ourwork/legal/documents/implications%20of%20unclos%20for%20imo.pdf (emphasis added). Version 6 from 2008, containing virtually the same statement, is reproduced in UNCLOS 1982 Commentary: Supplementary Documents 741, 866 (Leiden: Martinus Nijhoff 2012).

108   J. Ashley Roach The purposes of the IMO, as set out in article 1 of its constitutive instrument, the Convention on the International Maritime Organization, as amended, include the encouragement and facilitation of “the general adoption of the highest practicable standards in matters concerning the maritime safety . . . and prevention and control of marine pollution from ships . . .”. Article 15 sets out the functions of the Assembly, which include in paragraph ( j) “to recommend to Members for adoption regulations and guidelines concerning maritime safety, the prevention and control of marine pollution from ships and other matters concerning the effect on shipping on the marine environment assigned to the Organization by or under international instruments . . .”.11 It is hard to see any substantive difference between pollution or dumping directly from vessels into the ocean and pollution caused from the sea-bed by activities directly conducted there by vessels at sea, such as by the operation of mobile offshore drilling units (MODUs). Nevertheless, some IMO delegates have recently argued for a strict interpretation of “ships”.12 This issue is explored below after describing what the IMO has done regarding sea-bed activities. What the IMO Has Done Regarding Sea-Bed Activities The IMO has adopted a number of treaties and codes pertaining to activities on offshore platforms engaged in hydrocarbon exploration and exploitation. In December 2009, at its twenty-sixth meeting, acting on the recommendation of the Maritime Safety Committee (MSC 86), the IMO Assembly adopted a revised “Code for the Construction and Equipment of Mobile Offshore Drilling Units, 2009 (2009 MODU Code)”.13 This 146-page non-binding document provides international guidelines for mobile offshore drilling units of new construction which will facilitate the international movement and operation of these units. It is also designed to ensure a level of safety for such units and for personnel on board, equivalent to that required by the International Convention for the Safety of Life at Sea, 1974, as amended,14 and the Protocol of 1988 relating to the

11 Convention on the Intergovernmental Maritime Consultative Organization, Geneva March 6, 1948, entered into force March 17, 1958, 289 UNTS 3, available at http://treaties.un.org/doc/ publication/UNTS/Volume%20289/v289.pdf. 12 E.g., Brazil, LEG 99/14, April 24, 2012, para. 13.2. 13 IMO Assembly resolution A.1023(26), Dec. 2, 2009, IMO document A26/Res.1023, Jan. 18, 2010 (hereafter MODU Code), available at http://www.imo.org/blast/blastDataHelper.asp?data_ id=29983&filename=A1023%2826%29.pdf. 14 International Convention for the Safety of Life at Sea, London Nov. 1, 1974, entered into force May 25, 1980, 32 UST 47, TIAS 9700, 1184 UNTS 277, available at http://treaties.un.org/doc/ Publication/UNTS/Volume%201184/volume-1184-I-18961-English.pdf and http://www.austlii .edu.au/au/other/dfat/treaties/1983/22.html.

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International Convention on Load Lines, 1966,15 for conventional ships engaged on international voyages. However, this Code does not include any guidelines for the drilling of subsea wells or the procedures for their control, as such drilling operations are subject to control by the coastal State. Indeed, the Code expressly states “This Code does not include requirements for the drilling of subsea wells or the procedures for their control. Such drilling operations are subject to control by the coastal State.”16 The same text appears in the preamble to the 1989 MODU Code.17 The preamble to the 1979 MODU Code states it slightly differently: “The Code does not include requirements for the drilling of or the procedures for control of the subsea well. The drilling operations are subject to control by the coastal State.”18 While the 1979 language is perhaps understandable given that UNCLOS III was underway at that time, the text of article 208(5) had remained unchanged since the 1976 session.19 Further, the Convention was in force at the time of the 2009 revision. While “drilling operations are subject to control by the coastal State” is true, it does not preclude international standards or recommended practices for drilling operations. The quoted statement fails to acknowledge the requirement of article 208(5). The aforementioned IMO Secretariat study recounts in greater detail what the IMO has done to date in contributing to the establishment of global rules and standards for the prevention and control of pollution from seabed activities: IMO has contributed to the establishment of global rules and standards for the prevention and control of this type of pollution. Regulation 21 in Annex I of MARPOL20 contains special requirements for drilling rigs and other platforms. The Code for the

15 Protocol of 1988 relating to the International Convention on Load Lines, 1966, with annexes, London Nov. 11, 1988, entered into force Feb. 3, 2000, available at http://www.admiraltylawguide.com/conven/protoloadlines1988.html. 16 2009 MODU Code, Preamble, para. 6, supra n. 13. 17 1989 MODU Code – Annex to IMO Resolution A.649(16), Oct. 19, 1989, available at http://www .imo.org/blast/blastDataHelper.asp?data_id=22391&filename=A649%2816%29.pdf. 18 At LEG 78, October 1998, the Committee noted the submission by the Comité Maritime International on a possible international convention on offshore crafts and structures (LEG 78/10). At LEG 79 IADC opposed development of this convention insofar as it might apply to MODUs (LEG 79/10) and the Committee put off further consideration until “a later stage”. LEG 79/11, April 22, 1999, at 21, para. J(a). 19 IV Va. Commentary, supra n. 4, at 140–142. 20 International Convention for the Prevention of Pollution from Ships, 1973/1978, London Feb. 17, 1978, entered into force Oct. 2, 1983, 95th Cong., 1st Sess., Sen. Ex. E, 96th Cong., 1st Sess., Sen. Ex. C, 12 ILM 1319 (1973), 1340 UNTS 61, available at http://treaties.un.org/doc/Publication/ UNTS/Volume%201340/volume-1340-A-22484-English.pdf and http://www.austlii.edu.au/au/ other/dfat/treaties/1988/29.html. See Appendix 1 for the text of MARPOL 73 article 2 and Annex I regulation 21.

110   J. Ashley Roach Construction and Equipment of Mobile Offshore Drilling Units, 1989 (MODU Code),21 recommends design criteria, construction standards and other safety measures for mobile offshore drilling units so as to minimize not only risks to such units and to the personnel on board, but also environmental risks which could arise from a collision between vessels and offshore installations and structures. In this regard, IMO resolution A.671(16) establishes recommendations on safety of navigation around offshore installations and structures.22 Since the adoption of the MODU Code, the Organization has adopted a significant number of amendments to many of the regulations of SOLAS referenced in the Code and, in addition, the International Civil Aviation Organization (ICAO) has adopted amendments to the Convention on International Civil Aviation which impact on the provisions for helicopter facilities as contained in the Code.23 As a result, the IMO Assembly, at its twenty-sixth session, adopted the 2009 MODU Code which superseded the existing 1989 MODU Code. MARPOL applies to pollution from “fixed or floating platforms” other than pollution resulting from the “release of harmful substances directly arising from the exploration, exploitation and associated offshore processing of seabed mineral resources” (article 2). In this regard Annex I, regulation 21 lays down special oil discharge requirements for drilling rigs and other platforms. Meanwhile, the OPRC Convention provides for platforms to have oil pollution contingency plans on board,24 while both the London Convention (article IV(1)(c))[sic]25 and the 1996 Protocol (article 1.4.3)26 exclude governance of “disposal of wastes” directly arising from seabed activities. In article 1.4.3 of the 1996 Protocol, this exclusion was extended to “storage of wastes” to address the

21 The 1989 Code replaces the 1979 MODU Code – Annex to IMO Resolution A.414(XI) as amended by MSC/Circ.561, 3 July 1991. 22 IMO res. A.671(16), Safety Zones and Safety of Navigation around Offshore Installations and Structures, Oct. 19, 1989, available at http://www.imo.org/blast/blastDataHelper.asp?data_ id=22502&filename=A671.pdf. 23 See UK Civil Aviation Authority publication, CAP 437: Offshore Helicopter Landing Areas – Guidance on Standards, 6th ed. Aug. 2010, available at http://www.orga.nl/pdf/CAP437%20%206th%20edition%20-%20Offshore%20Helicopter%20Landing%20Areas%20-%20Guidance%20on%20Standards.pdf. 24 International Convention on Oil Pollution Preparedness, Response and Cooperation, 1990, London Nov. 30, 1990, entered into force May 13, 1995, 1891 UNTS 77, available at http://treaties.un.org/doc/Publication/UNTS/Volume%201891/volume-1891-I-32194-English.pdf; http:// fletcher.tufts.edu/multi/texts/BH981.txt; and http://www.admiraltylawguide.com/conven/ polpolresponse1990.html. See Appendix 1 for the text of articles 2(4) and 3(2). 25 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter, Washington, London, Mexico City, Moscow Dec. 29, 1972, entered into force Aug. 30, 1975, 26 UST 2403, TIAS 8165, 1046 UNTS 138, available at http://www.admiraltylaw guide.com/conven/ dumping1972.html; http://www5.imo.org/SharePoint/blastDataHelper.asp/data_id%3D16925/ LC1972.pdf; and http://treaties.un.org/doc/Publication/UNTS/Volume%201046/volume-1046-I15749-English.pdf. See Appendix 1 for the text of article III(1)(c). 26 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter, 1972, London Nov. 7, 1996, entered into force March 24, 2006, 36 ILM 7 (1997), UN. LOS Bull. 34, at 71, available at http://www.admiraltylawguide.com/conven/protodumping 1996.html. See Appendix 1 for the text of article 1.4.3.

International Standards for Offshore Drilling   111 storage of excess gas produced in offshore wells and the need to avoid an inadvertent prohibition of this practice.27

The 2009 MODU Code does address the following subjects: • construction, strength and materials; • subdivision, stability and freeboard; • machinery installation for all types of units; • electrical installations for all types of units; • machinery and electrical installation in hazardous areas for all types of units; • machinery and electrical installations for self-propelled units; • periodically unattended machinery spaces for all types of units; • fire safety; • life-saving appliances and equipment; • radio-communication and navigation; • lifting devices, personnel and pilot transfer; • helicopter facilities; and • operations. In addition to resolution A.671(16) mentioned above, the IMO has taken additional steps regarding installations and structures on the continental shelf. IMO Assembly resolution A.672(16) provides guidelines and standards for the removal of offshore installations and structures on the continental shelf and in the EEZ.28 Further, the IMO Sub-committee on the Safety of Navigation in 2010 issued guidelines for safety zones and the safety of navigation around offshore installations and structures.29 In 2005 the Marine Environment Protection Committee adopted guidelines for the application of the revised MARPOL Annex I requirements to floating, production, storage and offloading facilities (FPSOs) and floating storage units (FSUs).30 In 2010 the Maritime Safety and Marine 27 IMO doc. LEG/Misc.7, supra n. 10, at 69. 28 IMO resolution A.672(16), Guidelines and standards for the removal of offshore installations and structures on the continental shelf and in the exclusive economic zone, Oct. 19, 1989, available at http://www.imo.org/blast/blastDataHelper.asp?data_id=22503&filename=A672%2816%29E. pdf. This resolution was developed by the MSC in cooperation with MEPC and implements article 60(3) of the LOS Convention. 29 SN.1/Circ.295, Guidelines for safety zones and the safety of navigation around offshore installations and structures, Dec. 7, 2010, available at http://www.imo.org/blast/blastDataHelper .asp?data_id=30258&filename=295.pdf. 30 “Guidelines for the Application of the Revised MARPOL Annex I Requirements to Floating, Production, Storage and Offloading Facilities (FPSOs) and Floating Storage Units (FSUs),” resolution MEPC.139(53), July 22, 2005, annexed to MEPC 53/24/Add.2 Annex 32, available at http://www1.veristar.com/veristar/dps_info.nsf/0/cee1178f4250a326c12570d5005390a4/$FILE/ MEPC.139%2853%29.pdf. See text accompanying n. 20 supra.

112   J. Ashley Roach Environment Protection Committees issued a joint circular providing guidance for the application of safety, security and environmental protection provisions to FPSOs and FSUs.31 Further, the IMO adopted in 1988 and 2005 two protocols for the suppression of unlawful acts against the safety of fixed platforms located on the continental shelf.32 “Fixed platform” is defined as “an artificial island, installation or structure permanently attached to the sea-bed for the purpose of exploration or exploitation of resources or for other economic purposes.”33 These protocols were drafted in the Legal Committee and adopted by diplomatic conferences sponsored by the IMO.34 So it is apparent that the IMO is competent to address the prevention, reduction and control of pollution from sea-bed activities, when its Members wish to do so. Nevertheless, some IMO delegations continue to argue that the IMO has no competence in this area.35 Liability and Compensation Article 235(3) of the LOS Convention provides: With the objective of assuring prompt and adequate compensation in respect of all damage caused by pollution of the marine environment, States shall cooperate 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.

31 “Guidance for the Application of Safety, Security and Environmental Protection Provisions to FPSOs and FSUs,” MSC-MEPC.2/Circ.9, May 25, 2010, available through link at http://www.imo .org/OurWork/Circulars/Pages/IMODOCS.aspx. 32 Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms located on the Continental Shelf, Rome March 10, 1988, entered into force March 1, 1992, 27 ILM 685 (1988), UN, LOS BULL., No. 11, July 1988, at 24, 1678 UNTS 221, available at http://treaties. un.org/doc/db/Terrorism/Conv8-english.pdf; Protocol of 2005 to the Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms located on the Continental Shelf, London Oct. 14, 2005, entered into force July 28, 2010, available at https://www.unodc.org/ tldb/en/2005_Protocol2Protocol_Fixed%20Platforms.html and http://www.state.gov/t/isn/ trty/81727.htm 33 1988 SUA Protocol, article 1(3). This definition excludes MODUs which are included within the definition of “ship” in article 1 of the 1988 SUA Convention (“a vessel of any type whatsoever not permanently attached to the sea-bed, including dynamically supported craft . . .”). 34 SUA Convention 2006 Edition, IMO publication Sales No. IA462E, Foreword. 35 See the summary of the discussion at LEG 99 in the report of that session, LEG 99/14, paras. 13.2 and 13.7.

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It should be noted that the scope of article 235(3) is not directed solely to the IMO nor to particular sources of pollution damage. The International Law Commission has developed two instruments on international liability for injurious consequences arising out of acts not prohibited by international law: draft principles on the allocation of loss in the case of transboundary harm arising out of hazardous activities, 2006,36 and draft articles on prevention of transboundary harm from hazardous activities, 2001.37 Earlier an intergovernmental conference held in London in 1975 and 1976 adopted a Convention on Civil Liability for Oil Pollution Damage Resulting from Exploration for and Exploitation of Seabed Mineral Resources.38 This convention has not entered into force, reportedly because it contained higher limits than the 1976 LLMC Convention.39 Several regional conventions deal with the discharge of oil from offshore platforms. The Convention on the Protection of the Environment between Denmark, Finland, Norway and Sweden, 1974 (the Nordic Convention) provides for compensation for environmental damage resulting from the discharge of oil from offshore platforms. However, its participation is limited to those four States.40 Further, the IMO, acting through its Legal Committee, has adopted four instruments dealing with liability and compensation for, inter alia, pollution from offshore platforms.41 The major instruments include:

36 Available at http://untreaty.un.org/ilc/texts/instruments/english/draft%20articles/9_10_2006 .pdf. 37 Available at http://untreaty.un.org/ilc/texts/instruments/english/draft%20articles/9_7_2001 .pdf. See further LEG 98/13, Feb. 18, 2011 (Secretariat). 38 16 ILM 1450 (1977). See LEG 98/13, Feb. 18, 2011 (Secretariat), at 3 paras. 7–9. 39 LEG 98/14, April 18, 2011, at 31, para. 13.6 (information provided to LEG by CMI). One commentator has stated that the convention did not enter into force because of the lack of a competent international organization to host the conference and act as secretariat. Youna Lyons, Offshore oil and gas in the SCS and the protection of the marine environment – Part 2 Legal and governance framework, at 11, available at http://cil.nus.sg/wp/wp-cpontent/upoads/2010/OG_SCS_CIL-Part 206oct2011-1.pdf, quoted in LEG 99/13/1 (Brazil), infra n. 51, at 7 para. 35. 40 LEG 98/13, supra n. 37, at 3 para. 10. 41 See IMO, Liability and Compensation, http://www.imo.org/OurWork/Legal/Pages/LiabilityAndCompensation.aspx. See also De la Rue and Anderson, Shipping and the Environment: Law and Practice (London: Informa 2009).

114   J. Ashley Roach • 1971 Fund Convention;42 • 1996 HNS Convention and 2010 Protocol;43 and • 2001 Bunkers Convention.44 What Has and Has Not IMO Been Doing Since 2010? At the opening session of MEPC 60 (March 2010) Indonesia informed the Committee of the trans-border pollution damage to Indonesia caused by the August 21, 2009 well blow-out of the Montare offshore platform located in Australian waters, and the actions taken. Indonesia noted that there was no international legal instrument that addresses trans-border oil pollution damage caused by offshore oil exploration.45 Thereafter Indonesia repeated its concerns to the Legal Committee, first at LEG 97 (November 2010) with a proposal to address liability and compensation for oil pollution damage resulting from offshore oil

42 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND), London Dec. 18, 1971, entered into force Oct. 16, 1978, ceased to be in force May 28, 2002, 1110 UNTS 58, 1978 UKTS 95, available at http://treaties.un.org/doc/ Publication/UNTS/Volume%201110/volume-1110-I-17146-English.pdf and http://www.admiraltylawguide.com/conven/oilpolfund1971.html; 1992 Protocol to amend the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND 1992), London Nov. 27, 1992, entered into force May 30, 1996, 1956 UNTS 255, 1996 UKTS 87, available at http://treaties.un.org/doc/Publication/UNTS/Volume%201956/v1956.pdf and http://www.admiraltylawguide.com/conven/protooilpolfund1992.html. The text of article 1(1) of the Fund Convention appears in Appendix 2. Article 2(1) amended article 1(1) of the Fund Convention to exclude clearly offshore rigs: “Ship” means any sea-going vessel and seaborne craft of any type whatsoever constructed or adapted for the carriage of oil in bulk as cargo, provided that a ship capable of carrying oil and other cargoes shall be regarded as a ship only when it is actually carrying oil in bulk as cargo and during any voyage following such carriage unless it is proved that it has no residues of such carriage of oil in bulk aboard. 43 International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS), London May 3, 1996, not in force, available at http://www.hnsconvention.org/Documents/HNS%20Convention%201996. pdf and http://www.admiraltylawguide.com/conven/noxious1996.html; 2010 Protocol, London April 30, 2010, not in force, available at http://www.hnsconvention.org/Documents/2010%20 HNS%20Protocol.pdf. The consolidated text is available at http://www.hnsconvention.org/ Documents/2010%20HNS%20Convention%20Consolidated%20text.pdf\. The text of article 1(1), definition of “ship,” is set out in Appendix 2. The protocol did not amend the definitions contained in the 1996 Convention. 44 International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001, London March 23, 2001, entered into force Nov. 28, 2008, available at http://www.official-documents. gov.uk/document/cm66/6693/6693.pdf. The text of article 1(1), definition of “ship,” is set out in Appendix 2. 45 MEPC 60/22, April 12, 2010, at 7 para. 1.7.

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exploration and exploitation.46 Most delegations who spoke on the proposal expressed support, in principle. The Committee decided to recommend to the IMO Council and through it, the IMO Assembly, to expand the authorization in Strategic Direction 7.2 to conduct that work.47 At LEG 98 (April 2011) the issue was again discussed. The Secretariat submitted substantial information relating to the issue (LEG 98/13) and Indonesia reported on the informal consultative group discussions it had coordinated intersessionally (LEG 98/13/1). In discussing these submissions, various views were expressed in support of and in opposition to the Indonesian proposal.48 At the 106th meeting of the Council (June 2011) views were expressed on both sides of the question. A number of delegations and the IMO Secretary-General thought it was beyond the IMO mandate to undertake this work.49 Other delegations, including Indonesia, France, the Philippines and Liberia, supported the proposal for the Legal Committee to undertake this work. The Council decided to refer the matter back to LEG for reconsideration of the legal issues involved.50 Three documents were submitted to LEG 99 on this subject, one by Brazil (detailing its opposition)51 and two by Indonesia (in support).52 During the debate at LEG 99 (April 16 and 20, 2012) the Committee was divided over whether the IMO had competence to address the issue of liability and compensation connected with transboundary pollution damage from offshore oil exploration and exploitation activities. The Committee agreed to inform the Council that it wanted to analyze further the issues with the aim of possibly developing guidance to assist States interested in pursuing bilateral or regional arrangement, without receiving formal approval to proceed as previously requested, and agreed that it was premature to develop a stand-alone convention on this subject.53 The matter was discussed at the 108th session of Council, June 11–14, 2012, at which the request of the Legal Committee was approved.54 46 LEG 97/14/1, Sept. 10, 2010. 47 LEG 97/15, Dec. 1, 2010, at 27–29, paras. 14.5–14.13. 48 LEG 98/14, April 18, 2011, at 27–31, paras. 13.1–13.9 and Annex 7, Statement by Brazil (in opposition). 49 C 106/SR.7, June 30, 2011, at 11–17. The Secretary-General expressed his view that it was “clear that, under the IMO Convention, the Organization did not have competence with respect to the issue.” Id. at 16. Others question whether the IMO was competent included Germany, the United Kingdom, Jamaica, Saudi Arabia, Netherlands, the United States, India, and Panama. 50 C 106/D, July 4, 2011, at 15 para. 10.2(ii). 51 LEG 99/13/1, Feb. 10, 2012 (Brazil). For insights into Brazil’s actions over offshore oil leaks, see P.M. Barrett and P. Millard, ‘Over A Barrel,’ Bloomberg Businessweek, May 14–May 20, 2012, at 64–70. The Secretariat’s paper, LEG 99/13, Jan. 5, 2012, merely summarized the situation. 52 LEG 99/13/2, March 2, 2012 (Indonesia) (information on the international conference on this issue it hosted Sept. 21–23, 2011) and LEG 99/13/3, March 9, 2012 (commenting on the Brazilian submission). 53 LEG 99/14, paras. 13.1–13.18, and Annex 6 (statement by Cyprus supporting Indonesia). 54 C 108/WP.1, para. 8.4.

116   J. Ashley Roach In its submission to LEG 99, Brazil argued: Only an international technical structure capable of establishing safety standards uniform to all platforms in the world and also capable of certifying and inspecting these structures would provide the necessary effectiveness to this system – based upon the objective liability of the operators.55

The LEG 99 report notes that some argued “there was no compelling need to develop an international liability and compensation regime in the absence of an internationally regulated safety regime.”56 The issue of safety does not appear to have been pursued further in the debate but it highlights the truth that the IMO’s efforts on safety (MODU Codes) have not gone far enough. It also suggests that the effort to create a liability and compensation scheme, in a legally binding format, is premature. What More Should the IMO Do? It would be wise for IMO Work Programs in separate Committees progress together when dealing with the safety/pollution prevention and liability and compensation components in meeting the charge of article 235(3) with regard to sea-bed activities. Safety To carry out further the mandate of article 208 of the LOS Convention, and to act consistent with the competence of the IMO granted by its Constitution, in light of the Deepwater Horizon incident, the IMO Assembly should task the Maritime Safety Committee to revise and update the MODU Code to incorporate guidance relating to drilling operations, both generally and in the Arctic. Alternatively, in those biennial years in which the Assembly does not meet, Member States should propose that the Maritime Safety Committee task the Subcommittee on Ship Design and Equipment to undertake as an urgent work item the development of standards or recommended practices and procedures for offshore drilling operations. It has been reported that the United Kingdom and Norway oppose harmonized EU offshore safety legislation, on the basis that they “have the most robust safety regime in the world.”57 If so, that regime could be the model for the IMO to meet its UNCLOS responsibilities.

55 LEG 99/13/1, supra n. 46, at 7 para. 32. 56 LEG 99/14, para. 13.9. 57 “U.K., Norway Oppose Harmonized EU Offshore Safety Legislation,” MarineLink online, May 23, 2012, available at http://www.marinelink.com/news/legislation-harmonised344919.aspx.

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If, after time and experience with such expanded guidelines, there was a desire to make them mandatory, the guidance provided in IMO resolution A.911(22), that is uniform wording for referencing IMO instruments, should be followed.58 Liability and Compensation As noted at LEG 99, the informal consultative work led by Indonesia will continue.59 Unless and until the IMO undertakes work on the safety components of pollution prevention from sea-bed activities, it seems premature to try to advance work on this subject too far. Those considering liability and compensation issues need to have a good handle on what might be internationally agreed standards or recommended practices. A simple reference to them in a new regime would be unable to take them into consideration. It would be better to proceed with this work in tandem. Regional Efforts Some regional conventions contain provisions on this subject.60 The Convention for the Protection of Marine Environment of the North East Atlantic, 1992 (OSPAR) contains regulations for the prevention and elimination of pollution from offshore oil installations.61 The Convention for the Protection of the Mediterranean Sea against Pollution, 1976, requires Parties to minimize pollution of that Sea resulting from exploration and exploitation of the seabed (Barcelona Convention).62 Its Protocol of 1995 contains the same provision pertaining to offshore exploration and exploitation activities.63 In 1994 a lengthy protocol to the Barcelona Convention for the protection of the Mediterranean Seas against pollution resulting from 58 IMO resolution A.911(22), Uniform wording for referencing IMO instruments, supra n. 9. 59 LEG 99/14, para. 13.18. 60 LEG 98/13, at 4 paras. 13–16. 61 Article 5 and Annex III of the Convention for the Protection of Marine Environment of the North-East Atlantic, 1992 (OSPAR), Paris, Sept. 22, 1992, entered into force March 25, 1998, 2354 UNTS 67, 32 ILM 1072 (1993), available at http://treaties.un.org/doc/Publication/UNTS/ Volume%202354/v2354.pdf. The current text of which is available at http://www.ospar.org/ html_documents/ospar/html/ospar_convention_e_updated_text_2007.pdf. The relevant provisions are reproduced in Appendix 1. 62 Article 7 of the Convention for the Protection of the Mediterranean Sea against Pollution, Barcelona Feb. 16, 1976, entered into force Feb. 12, 1978, 1102 UNTS 44, 15 ILM 290 (1976), available at http://treaties.un.org/doc/Publication/UNTS/Volume%201102/volume-1102-I-16908-English .pdf and http://www.unep.ch/regionalseas/main/med/medconvi.html. Article 7 is reproduced in Appendix 1. Article 12 addresses liability and compensation; see Appendix 2 for the text. 63 Article 7 of the Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean, Barcelona June 10, 1995, entered into force July 9, 2004. Article 7 is reproduced in Appendix 1. Article 16 addresses liability and compensation; see Appendix 2

118   J. Ashley Roach exploration and exploitation of the continental shelf and the seabed and its subsoil was adopted and entered into force in 2011.64 The Kuwait Regional Convention for Co-operation on the Protection of the Marine Environment from Pollution, 1978,65 the Protocol concerning Marine Pollution resulting from Exploration and Exploitation of the Continental Shelf; Kuwait 1989,66 and the Convention on the Protection of the Marine Environment of the Baltic Sea Area, 1992,67 contain obligations on Parties to combat pollution arising from offshore operations in their respective regions. What the Arctic Council Has Done One other intergovernmental body, the Arctic Council (not an international organization), has also done some work on offshore oil and gas activities. In April 2009, the Arctic Council endorsed a revised set of “Arctic Offshore Oil and Gas Guidelines” prepared by the Protection of the Arctic Marine Environment (PAME) Working Group.68 These non-binding guidelines are “intended to be of use to the Arctic nations for offshore oil and gas activities during planning, for the text. The revised text is available at http://www.unep.ch/regionalseas/regions/med/t_ barcel.htm and http://195.97.36.231/dbases/webdocs/BCP/bc95_Eng_p.pdf. 64 Protocol for the Protection of the Mediterranean Sea against Pollution Resulting from Exploration and Exploitation of the Continental Shelf and the Seabed and its Subsoil, with annexes, Madrid Oct. 14, 1994, entered into force March 24, 2011, UN Registration no. I-48454, available at http://195.97.36.231/dbases/webdocs/BCP/ProtocolOffshore94_eng.pdf and http://eur-lex .europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0690:FIN:EN:PDF. Appendix 1 reproduces much of the text of this “Offshore Protocol.” Article 27 addresses liability and compensation; see Appendix 2 for the text. 65 Article VII of the Kuwait Regional Convention for Cooperation on the Protection of the Marine Environment from Pollution, Kuwait April 24, 1978, entered into force July 1, 1979, 1140 UNTS 155, 17 ILM 511 (1978), Int’l Env. Rep. 21:2721, available at http://treaties.un.org/doc/Publication/ UNTS/Volume%201140/v1140.pdf. Article VII is reproduced in Appendix 1. Article XIII deals with liability and compensation generally; see Appendix 2 for the text. 66 Protocol concerning Marine Pollution resulting from Exploration and Exploitation of the Continental Shelf; Kuwait March 29, 1989, entered into force Feb. 17, 1990, 2605 UNTS 91, available at http://treaties.un.org/doc/Publication/UNTS/Volume%202065/v2065.pdf and http://www .ecolex.org/server2.php/libcat/docs/TRE/Multilateral/En/TRE001128.txt. The Protocol is reproduced in Appendix 1. 67 Article 12 of the Convention on the Protection of the Marine Environment of the Baltic Sea Area, 1992, Helsinki, April 9, 1992, entered into force Jan. 17, 2000, 1507 UNTS 167, available at http://www.helcom.fi/Convention/en_GB/text/; http://www.helcom.fi/stc/files/Convention/ Conv1108.pdf. Article 12 is reproduced in Appendix 1. 68 Arctic Council Protection of the Arctic Marine Environment Working Group, Arctic Offshore Oil and Gas Guidelines, April 29, 2009, available at http://www.pame.is/images/stories/FrontPage/Arctic-Guidelines-2009-13th-Mar2009.pdf (hereafter Arctic Guidelines) and http://www .vermontlaw.edu/Documents/Arctic%20Guidelines%200B37F1B1d01.pdf.

International Standards for Offshore Drilling   119

exploration, development, production and decommissioning.”69 Chapter 6 of the Guidelines addresses operating practices and chapter 7 deals with emergencies, while chapter 10 provides a comprehensive bibliography. Chapter 5 focuses on the transition from prescriptive to performance- and risk-based regulatory systems. In February 2011 the PAME working group proposed a project for comparing “existing Arctic health, safety and environmental management systems, and best practices requirements for offshore drilling operations and possibly developing a corresponding set of expanded guidance for Arctic States beyond what is already in the Arctic Offshore Oil and Gas Guidelines, 2009.”70 The project proposal is expected to be brought to PAME I-2012 for further consideration and direction.71

II. The Role of States The preceding discussion has focused on the role of international organizations. Although they act through their Member States/Participants, the organizations provide the framework for their collective actions. However States have responsibilities individually to deal with marine pollution, including from sea-bed activities. What are the Individual National Duties of States? Article 192 provides that “States have the obligation to protect and preserve the marine environment.” With regard to sea-bed activities, article 194(3) provides in part that the measures taken by States 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.

69 Arctic Guidelines, p. 4, para. 12. 70 Arctic Council Protection of the Arctic Marine Environment Working Group, Work Plan 2011–2013, Annex 3, p. 17–20, February 2011, available at http://www.pame.is/images/stories/ PAME_Work_Plan_2011–2013.pdf. 71 Id. at 17.

120   J. Ashley Roach With regard to the duties of States in their individual national capacities, article 208(1)–(3) of the LOS Convention states: 1. 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.72

With regard to enforcement, article 214 of the LOS Convention requires States to enforce their laws and regulations adopted in accordance with article 208. It also requires them to adopt laws and regulations and to take other measures necessary to implement applicable international rules and standards established through competent international organizations or diplomatic conference 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. With regard to responsibility, liability and compensation, article 235 provides: 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 cooperate in the implementation of existing international law and the further development of international law relating to responsibility and liability for the assessment of and

72 On paragraph 3, see Oxman, The Duty to Respect Generally Accepted International Standards, 24 N.Y.U. J. Int’l L. & Pol. 109, 132–134 (1991) (while observing that the standards are not qualified as having to be “generally accepted” as appears in articles 21(4), 39(2), 41(3), 53(8), 94(2) and 94(5), he argues that these standards had to be generally accepted for States to be bound to follow them). Professor Oxman notes that the duty set forth in paragraph 3 was adopted “at a time when all or virtually all such standards remained to be established by the competent international organization.” Id. at 140 n. 100. See also Vukas, Generally Accepted Rules and Standards, The Law of the Sea: Selected Writings 25–37 (Leiden: Nijhoff 2004) (focusing on article 211) and Final Report of Committee on Coastal State Jurisdiction Relating to Marine Pollution, Conclusions Nos. 1–4, International Law Association, Report of the Sixty-Ninth Conference, Final Report of Committee on Coastal State Jurisdiction Relating to Marine Pollution 473–484 (London 2000) (addressing generally accepted international rules and standards, and applicable international rules and standards in the LOS Convention).

International Standards for Offshore Drilling   121 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.

It is beyond the scope of this paper to survey how States have met these requirements individually. They are recounted elsewhere.73

III. Conclusions and Recommendations In the absence of applicable international rules and standards, States are unable to meet fully their obligations under articles 208 and 214 to adopt and enforce “laws and regulations to prevent, reduce and control pollution of the marine environment arising from or in connection with sea-bed activities subject to their jurisdiction” which “shall be no less effective than international rules, standards and recommended practices and procedures.” Although article 208(2) requires States to “take other measures as may be necessary to prevent, reduce and control such pollution,” indeed, as we shall see from the other presentations, what States have done in this regard varies considerably. As has been seen from events before and after Deepwater Horizon in AprilJune 2010, some coastal States have experienced additional pollution from seabed activities. Such events emphasize the need for IMO Member States and the industry to agree to act through the IMO to meet the obligations under the international law of the sea “to establish global rules, standards and recommended practices” to prevent, reduce and control pollution from sea-bed activities subject to national jurisdiction. The IMO Member States must come to a definitive conclusion as to the IMO’s legal competence to undertake these activities. Then the IMO should undertake a work item, probably through the Maritime Safety Committee, to establish safety standards for the operation of offshore drilling rigs engaged in exploration and exploitation of offshore hydrocarbon resources, taking into account the work already done in the regional context set out in Appendix 1. Then the IMO Legal Committee can consider development of a regime of liability and compensation for transboundary pollution damage from offshore oil exploration and exploitation activities, taking into account the work already done set out in Appendix 2. In the meantime participation in the informal consultations hosted by Indonesia should continue.

73 See e.g., the European Council’s Explanatory Memorandum in support of the EU’s accession to the Barcelona Offshore Protocol, supra n. 62. See Appendix 2 for the provisions on liability and compensation in the regional treaties relating to offshore activities.

122   J. Ashley Roach .

Appendix 1 International Convention Provisions on Pollution Prevention from Offshore Activities Law of the Sea Convention 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. States shall take, individually or jointly as appropriate, all measures consistent with this Convention that are necessary to prevent, reduce and control pollution of the marine environment from any source, using for this purpose the best practicable means at their disposal and in accordance with their capabilities, and they shall endeavour to harmonize their policies in this connection. 2. States shall take all measures necessary to ensure that activities under their jurisdiction or control are so conducted as not to cause damage by pollution to other States and their environment, and that pollution arising from incidents or activities under their jurisdiction or control does not spread beyond the areas where they exercise sovereign rights in accordance with this Convention. 3. The measures taken pursuant to this Part shall deal with all sources of pollution of the marine environment. 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;

1.

2. 3. 4. 5.

Article 208 Pollution from seabed activities subject to national jurisdiction 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. States shall take other measures as may be necessary to prevent, reduce and control such pollution. Such laws, regulations and measures shall be no less effective than international rules, standards and recommended practices and procedures. States shall endeavour to harmonize their policies in this connection at the appropriate regional level. States, acting especially through competent international organizations or diplomatic conference, shall establish global and regional rules, standards and recommended practices and procedures to prevent, reduce and control pollution of the marine environment referred to in paragraph l. Such rules, standards and recommended practices and procedures shall be re-examined from time to time as necessary.

International Standards for Offshore Drilling   123 Article 214 Enforcement with respect to pollution from seabed activities States shall enforce their laws and regulations adopted in accordance with article 208 and shall adopt laws and regulations and take other measures necessary to implement applicable international rules and standards established through competent international organizations or diplomatic conference 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. MARPOL 73/78 MARPOL 73, article 2(4): “Ship” means a vessel of any type whatsoever operating in the marine environment and includes hydrofoil boats, air-cushion vehicles, submersibles, floating craft and fixed or floating platforms. Article 2(3)(b) provides that “discharge” does not include “[r]elease of harmful substances directly arising from the exploration, exploitation and associated off-shore processing of sea-bed mineral resources.” Annex I, Regulation 21, Special Requirements for Drilling Rigs and Other Platforms, provides: Fixed and floating drilling rigs when engaged in the exploration, exploitation and associated offshore processing of sea-bed mineral resources and other platforms shall comply with the requirements of this Annex applicable to ships of 400 tons gross tonnage and above other than oil tankers, except that: (a) They shall be equipped as far as practicable with the installations required in Regulations 16 and 17 of this Annex; (b) They shall keep a record of all operations involving oil or oily mixture discharges, in a form approved by the Administration; and (c) In any special area and subject to the provisions of Regulation 11 of this Annex, the discharge into the sea of oil or oily mixture shall be prohibited except when the oil content of the discharge without dilution does not exceed 15 parts per million.

International Convention on Oil Pollution Preparedness, Prevention, Response and Co-operation, 1990 (OPRC) Article 3(2) provides: Each Party shall require that operators of offshore units under its jurisdiction have oil pollution emergency plans, which are co-ordinated with the national system established in accordance with article 6 and approved in accordance with procedures established by the competent national authority. Article 2(4) defines “offshore unit” as “any fixed or floating offshore installation or structure engaged in gas or oil exploration, exploitation or production activities, or loading or unloading of oil.”

London Dumping Convention, 1972 Article III(1)(c) provides that The disposal of wastes or other matter directly arising from, or related to the exploration, exploitation and associated off-shore processing of sea-bed mineral resources will not be covered by the provisions of this Convention.

124   J. Ashley Roach London Convention Protocol, 1996 Article 4.1.3 provides: The disposal or storage of wastes or other matter directly arising from, or related to the exploration, exploitation and associated off-shore processing of seabed mineral resources is not covered by the provisions of this Protocol.

Regional Conventions 1. Mediterranean Sea

Convention for the Protection of the Mediterranean Sea against Pollution, Barcelona Feb. 16, 1976, Article 7, Pollution Resulting From Exploration And Exploitation Of The Continental Shelf And The Seabed And Its Subsoil: The Contracting Parties shall take all appropriate measures to prevent, abate and combat pollution of the Mediterranean Sea Area resulting from exploration and exploitation of the continental shelf and the seabed and its subsoil. Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean, Barcelona June 10, 1995, article 7, Pollution Resulting from Exploration and Exploitation of the Continental Shelf and the Seabed and its Subsoil: The Contracting Parties shall take all appropriate measures to prevent, abate, combat and to the fullest possible extent eliminate pollution of the Mediterranean Sea Area resulting from exploration and exploitation of the continental shelf and the seabed and its subsoil. Protocol for the Protection of the Mediterranean Seas against Pollution Resulting from Exploration and Exploitation of the Continental Shelf and the Seabed and its Subsoil, with annexes, Madrid Oct. 14, 1994 (Annexes I–V and VII and the Appendix are omitted): PREAMBLE The Contracting Parties to the present Protocol, Being Parties to the Convention for the Protection of the Mediterranean Sea against Pollution, adopted at Barcelona on 16 February 1976, Bearing in mind Article 7 of the said Convention, Bearing in mind the increased in the activities concerning exploration and exploitation of the Mediterranean seabed and its subsoil, Recognizing that the pollution which may result therefrom represents a serious danger to the environment and to human beings, Desirous of protecting and preserving the Mediterranean Sea from pollution resulting from exploration and exploitation activities, Taking into account the Protocols related to the Convention for the Protection of the Mediterranean Sea against Pollution and, in particular, the Protocol concerning Cooperation in Combating Pollution of the Mediterranean Sea by Oil and Other Harmful Substances in Cases of Emergency, adopted at Barcelona on 16 February 1976, and the Protocol concerning Mediterranean Specially Protected Areas, adopted at Geneva on 3 April 1982, Bearing in mind the relevant provisions of the United Nations Convention on the Law of the Sea, done at Montego Bay on 10 December 1982 and signed by many Contracting Parties,

International Standards for Offshore Drilling   125 Recognizing the differences in levels of development among the coastal States, and taking account of the economic and social imperatives of the developing countries, Have agreed as follows: SECTION I – GENERAL PROVISIONS Article 1 – DEFINITIONS For the purposes of this Protocol: (a) “Convention” means the Convention for the Protection of the Mediterranean Sea against Pollution, adopted at Barcelona on 16 February 1976; (b) “Organization” means the body referred to in Article 13 of the Convention; (c) “Resources” means all mineral resources, whether solid, liquid or gaseous; (d) “Activities concerning the exploration and/or exploitation of the resources in the Protocol Area” (hereinafter referred to as “activities”) means: (i) Activities of scientific research concerning the resources of the seabed and its subsoil; (ii) Exploration activities: – Seismological activities; surveys of the seabed and its subsoil; sample taking; – Exploration drilling; (iii) Exploitation activities: – Establishment of an installation for the purpose of recovering resources, and activities connected therewith; – Development drilling; – Recovery, treatment and storage; – Transportation to shore by pipeline and loading of ships; – Maintenance, repair and other ancillary operations; (e) “Pollution” is defined as in Article 2, paragraph (b), of the Convention; (f) “Installation” means any fixed or floating structure, and any integral part thereof, that is engaged in activities, including in particular: (i) Fixed or mobile offshore drilling units; (ii) Fixed or floating production units including dynamically-positioned units; (iii) Offshore storage facilities including ships used for this purpose; (iv) Offshore loading terminals and transport systems for the extracted products, such as submarine pipelines; (v) Apparatus attached to it and equipment for the reloading, processing, storage and disposal of substances removed from the seabed or its subsoil; (g) “Operator” means: (i) Any natural or juridical person who is authorized by the Party exercising jurisdiction over the areas where the activities are undertaken (hereinafter referred to as the “Contracting Party”) in accordance with this Protocol to carry out activities and/or who carries out such activities; or (ii) Any person who does not hold an authorization within the meaning of this Protocol but is de facto in control of such activities; (h) “Safety zone” means a zone established around installations in conformity with the provisions of general international law and technical requirements, with appropriate markings to ensure the safety of both navigation and the installations;

126   J. Ashley Roach (i) “Wastes” means substances and materials of any kind, form or description resulting from activities covered by this Protocol which are disposed of or are intended for disposal or are required to be disposed of; ( j) “Harmful or noxious substances and materials” means substances and materials of any kind, form or description, which might cause pollution, if introduced into the Protocol Area; (k) “Chemical Use Plan” means a plan drawn up by the operator of any offshore installation which shows: (i) The chemicals which the operator intends to use in the operations; (ii) The purpose or purposes for which the operator intends to use the chemicals; (iii) The maximum concentrations of the chemicals which the operator intends to use within any other substances, and maximum amounts intended to be used in any specified period; (iv) The area within which the chemical may escape into the marine environment; (l) “Oil” means petroleum in any form including crude oil, fuel oil, oily sludge, oil refuse and refined products and, without limiting the generality of the foregoing, including the substances listed in the Appendix to this Protocol; (m) “Oily mixture” means a mixture of any oil content; (n) “Sewage” means: (i) Drainage and other wastes from any form of toilets, urinals and watercloset scuppers; (ii) Drainage from medical premises (dispensary, sick bay, etc.) via wash basins, wash tubs and scuppers located in such premises; (iii) Other waste waters when mixed with the drainages defined above; (o) “Garbage” means all kinds of food, domestic and operational waste generated during the normal operation of the installation and liable to be disposed of continuously or periodically, except those substances which are defined or listed elsewhere in this Protocol; (p) “Freshwater limit” means the place in water courses where, at low rides and in a period of low freshwater flow, there is an appreciable increase in salinity due to the presence of sea water. Article 2 – GEOGRAPHICAL COVERAGE 1. The area to which this Protocol applies (referred to in this Protocol as the “Protocol Area”) shall be: (a) The Mediterranean Sea Area as defined in Article 1 of the Convention, including the continental shelf and the seabed and its subsoil; (b) Waters, including the seabed and its subsoil, on the landward side of the baselines from which the breadth of the territorial sea is measured and extending, in the case of watercourses, up to the freshwater limit. 2. Any of the contracting Parties to this Protocol (referred to in this Protocol as “the Parties”) may also include in the Protocol area wetlands or coastal areas of their territory. 3. Nothing in this Protocol, nor any act adopted on the basis of this Protocol, shall prejudice the rights of any State concerned the delimitation of the continental shelf.

International Standards for Offshore Drilling   127 Article 3 – GENERAL UNDERTAKINGS 1. The Parties shall take, individually or through bilateral or multilateral cooperation, all appropriate measures to prevent, abate, combat and control pollution in the Protocol Area resulting from activities, inter alia by ensuring that the best available techniques, environmentally effective and economically appropriate, are used for this purpose. 2. The Parties shall endure that all necessary measures are taken so that activities do not cause pollution. SECTION II – AUTHORIZATION SYSTEM Article 4 – GENERAL PRINCIPLES 1. All activities in the Protocol Area, including erection on site of installations, shall be subject to the prior written authorization for exploration or exploitation from the competent authority. Such authority, before granting the authorization, shall be satisfied that the installation has been constructed according to international standards and practice and that the operator has the technical competence and the financial capacity to carry out the activities. Such authorization shall be granted in accordance with the appropriate procedure, as defined by the competent authority. 2. Authorization shall be refused if there are indications that the proposed activities are likely to cause significant adverse effects on the environment that could not be avoided by compliance with the conditions laid down in the authorization and referred to in Article 6, paragraph 3, of this Protocol. 3. When considering approval of the siting of an installation, the Contracting Party shall ensure that no detrimental effects will be caused to existing facilities by such siting, in particular, to pipelines and cables. Article 5 – REQUIREMENTS FOR AUTHORIZATIONS 1. The Contracting Party shall prescribe that any application for authorization or for the renewal of an authorization is subject to the submission of the project by the candidate operator to the competent authority and that any such application must include, in particular, the following: (a) A survey concerning the effects of the proposed activities on the environment; the competent authority may, in the light of the nature, scope, duration and technical methods employed in the activities and of the characteristics of the area, require that an environmental impact assessment be prepared in accordance with Annex IV to this Protocol; (b) The precise definition of the geographical areas where the activity is envisaged, including safety zones; (c) Particulars of the professional and technical qualifications of the candidate operator and personnel on the installation, as well as of the composition of the crew; (d) The safety measures as specified in Article 15; (e) The operator’s contingency plan as specified in Article 16; (f) The monitoring procedures as specified in Article 19; (g) The plans for removal of installations as specified in Article 20; (h) Precautions for specially protected areas as specified in Article 21; (i) The insurance or other financial security to cover liability as prescribed in Article 27, paragraph 2(b).

128   J. Ashley Roach 2. The competent authority may decide, for scientific research and exploration activities, to limit the scope of the requirements laid down in paragraph 1 of this Article, in the light of the nature, scope, duration and technical methods employed in the activities and of the characteristics of the area. Article 6 – GRANTING OF AUTHORIZATIONS 1. The authorizations referred to in Article 4 shall be granted only after examination by the competent authority of the requirements listed in Article 5 and Annex IV. 2. Each authorization shall specify the activities and the period of validity of the authorization, establish the geographical limits of the area subject to the authorization and specify the technical requirements and the authorized installations. The necessary safety zones shall be established at a later appropriate stage. 3. The authorization may impose conditions regarding measures, techniques or methods designed to reduce to the minimum risks of and damage due to pollution resulting from the activities. 4. The Parties shall notify the Organization as soon as possible of authorizations granted or renewed. The Organization shall keep a register of all the authorized installations in the Protocol Area. Article 7 – SANCTIONS Each Party shall prescribe sanctions to be imposed for breach of obligations arising out of this Protocol, or for non-observance of the national laws or regulations implementing this Protocol, or for non-fulfilment of the specific conditions attached to the authorization. SECTION III – WASTES AND HARMFUL OR NOXIOUS SUBSTANCES AND MATERIALS Article 8 – GENERAL OBLIGATION Without prejudice to other standards or obligations referred to in this Section, the Parties shall impose a general obligation upon operators to use the best available, environmentally effective and economically appropriate techniques and to observe internationally accepted standards regarding wastes, as well as the use, storage and discharge of harmful or noxious substances and materials, with a view to minimizing the risk of pollution. Article 9 – HARMFUL OR NOXIOUS SUBSTANCES AND MATERIALS 1. The use and storage of chemicals for the activities shall be approved by the competent authority, on the basis of the Chemical Use Plan. 2. The Contracting Party may regulate, limit or prohibit the use of chemicals for the activities in accordance with guidelines to be adopted by the Contracting Parties. 3. For the purpose of protecting the environment, the Parties shall ensure that each substance and material used for activities is accompanied by a compound description provided by the entity producing such substance or material. 4. The disposal into the Protocol Area of harmful or noxious substances and materials resulting from the activities covered by this Protocol and listed in Annex I to this Protocol is prohibited.

International Standards for Offshore Drilling   129 5. The disposal into the Protocol Area of harmful or noxious substances and materials resulting from the activities covered by this Protocol and listed in Annex II to this Protocol requires, in each case, a prior special permit from the competent authority. 6. The disposal into the Protocol Area of all other harmful or noxious substances and materials resulting from the activities covered by this Protocol and which might cause pollution requires a prior general permit from the competent authority. 7. The permits referred to in paragraphs 5 and 6 above shall be issued only after careful consideration of all the factors set forth in Annex III to this Protocol. Article 10 – OIL AND OILY MIXTURES AND DRILLING FLUIDS AND CUTTINGS 1. The Parties shall formulate and adopt common standards for the disposal of oil and oily mixtures from installations into the Protocol Area: (a) Such common standards shall be formulated in accordance with the provisions of Annex V, A; (b) Such common standards shall not be less restrictive than the following, in particular: (i) For machinery space drainage, a maximum oil content of 15 mg per litre whilst undiluted; (ii) For production water, a maximum oil content of 40 mg per litre as an average in any calendar month; the content shall not at any time exceed 100 mg per litre; (c) The Parties shall determine by common agreement which method will be used to analyze the oil content. 2. The Parties shall formulate and adopt common standards for the use and disposal of drilling fluids and drill cuttings into the Protocol Area. Such common standards shall be formulated in accordance with the provisions of Annex V, B. 3. Each Party shall take appropriate measures to enforce the common standards adopted pursuant to this Article or to enforce more restrictive standards that it may have adopted. Article 11 – SEWAGE 1. The Contracting Party shall prohibit the discharge of sewage from installations permanently manned by 10 or more persons into the Protocol Area except in cases where: (a) The installation is discharging sewage after treatment as approved by the competent authority at a distance of at least four nautical miles from the nearest land or fixed fisheries installation, leaving the Contracting Party to decide on a case by case basis; or (b) The sewage is not treated, but the discharge is carried out in accordance with international rules and standards; or (c) The sewage has passed through an approved sewage treatment plant certified by the competent authority. 2. The Contracting Party shall impose stricter provisions, as appropriate, where deemed necessary, inter alia because of the regime of the currents in the area or proximity to any area referred to in Article 21. 3. The exceptions referred to in paragraph 1 shall not apply if the discharge produces visible floating solids or produces colouration, discolouration or opacity of the surrounding water.

130   J. Ashley Roach 4. If the sewage is mixed with wastes and harmful or noxious substances and materials having different disposal requirements, the more stringent requirements shall apply. Article 12 – GARBAGE 1. The Contracting Party shall prohibit the disposal into the Protocol Area of the following products and materials: (a) All plastics, including but not limited to synthetic ropes, synthetic fishing nets and plastic garbage bags; (b) All other non-biodegradable garbage, including paper products, rags, glass, metal, bottles, crockery, dunnage, lining and packing materials. 2. Disposal into the Protocol Area of food wastes shall take place as far away as possible from land, in accordance with international rules and standards. 3. If garbage is mixed with other discharges having different disposal or discharge requirements, the more stringent requirements shall apply. Article 13 – RECEPTION FACILITIES, INSTRUCTIONS AND SANCTIONS The Parties shall ensure that: (a) Operators dispose satisfactorily of all wastes and harmful or noxious substances and materials in designated onshore reception facilities, except as otherwise authorized by the Protocol; (b) Instructions are given to all personnel concerning proper means of disposal; (c) Sanctions are imposed in respect of illegal disposals. Article 14 – EXCEPTIONS 1. The provisions of this Section shall not apply in case of: (a) Force majeure and in particular for disposals: – to save human life, – to ensure the safety of installations, – in case of damage to the installation or its equipment, on condition that all reasonable precautions have been taken after the damage is discovered or after the disposal has been performed to reduce the negative effects. (b) The discharge into the sea of substances containing oil or harmful or noxious substances or materials which, subject to the prior approval of the competent authority, are being used for the purpose of combating specific pollution incidents in order to minimize the damage due to the pollution. 2. However, the provisions of this Section shall apply in any case where the operator acted with the intent to cause damage or recklessly and with knowledge that damage will probably result. 3. Disposals carried out in the circumstances referred to in paragraph 1 of this Article shall be reported immediately to the Organization and, either through the Organization or directly, to any Party or Parties likely to be affected, together with full details of the circumstances and of the nature and quantities of wastes or harmful or noxious substances or materials discharged.

International Standards for Offshore Drilling   131 SECTION IV – SAFEGUARDS Article 15 – SAFETY MEASURES 1. The Contracting Party within whose jurisdiction activities are envisaged or are being carried out shall ensure that safety measures are taken with regard to the design, construction, placement, equipment, marking, operation and maintenance of installations. 2. The Contracting Party shall ensure that at all times the operator has on the installations adequate equipment and devices, maintained in good working order, for protecting human life, preventing and combating accidental pollution and facilitating prompt response to an emergency, in accordance with the best available environmentally effective and economically appropriate techniques and the provisions of the operator’s contingency plan referred to in Article 16. 3. The competent authority shall require a certificate of safety and fitness for the purpose (hereinafter referred to as “certificate”) issued by a recognized body to be submitted in respect of production platforms, mobile offshore drilling units, offshore storage facilities, offshore loading systems and pipelines and in respect of such other installations as may be specified by the Contracting Party. 4. The Parties shall ensure through inspection that the activities are conducted by the operators in accordance with this Article. Article 16 – CONTINGENCY PLANNING 1. In cases of emergency the Contracting Parties shall implement mutatis mutandis the provisions of the Protocol concerning Cooperation in Combating Pollution of the Mediterranean Sea by Oil and Other Harmful Substances in Cases of Emergency. 2. Each Party shall require operators in charge of installations under its jurisdiction to have a contingency plan to combat accidental pollution, coordinated with the contingency plan of the Contracting Party established in accordance with the Protocol concerning Cooperation in Combating Pollution of the Mediterranean Sea by Oil and Other Harmful Substances in Cases of Emergency and approved in conformity with the procedures established by the competent authorities. 3. Each Contracting Party shall establish coordination for the development and implementation of contingency plans. Such plans shall be established in accordance with guidelines adopted by the competent international organization. They shall, in particular, be in accordance with the provisions of Annex VII to this Protocol. Article 17 – NOTIFICATION Each Party shall require operators in charge of installations under its jurisdiction to report without delay to the competent authority: (a) Any event on their installation causing or likely to cause pollution in the Protocol Area; (b) Any observed event at sea causing or likely to cause pollution in the Protocol Area. Article 18 – MUTUAL ASSISTANCE IN CASES OF EMERGENCY In cases of emergency, a Party requiring assistance in order to prevent, abate or combat pollution resulting from activities may request help from the other Parties, either directly or through the Regional Marine Pollution Emergency Response

132   J. Ashley Roach Centre for the Mediterranean Sea (REMPEC), which shall do their utmost to provide the assistance requested. For this purpose, a Party which is also a Party to the Protocol concerning Cooperation in Combating Pollution of the Mediterranean Sea by Oil and Other Harmful Substances in Cases of Emergency shall apply the pertinent provisions of the said Protocol. Article 19 – MONITORING 1. The operator shall be required to measure, or to have measured by a qualified entity, expert in the matter, the effects of the activities on the environment in the light of the nature, scope, duration and technical methods employed in the activities and of the characteristics of the area and to report on them periodically or upon request by the competent authority for the purpose of an evaluation by such competent authority according to a procedure established by the competent authority in its authorization system. 2. The competent authority shall establish, where appropriate, a national monitoring system in order to be in a position to monitor regularly the installations and the impact of the activities on the environment, so as to ensure that the conditions attached to the grant of the authorization are being fulfilled. Article 20 – REMOVAL OF INSTALLATIONS 1. The operator shall be required by the competent authority to remove any installation which is abandoned or disused, in order to ensure safety of navigation, taking into account the guidelines and standards adopted by the competent international organization. Such removal shall also have due regard to other legitimate uses of the sea, in particular fishing, the protection of the marine environment and the rights and duties of other Contracting Parties. Prior to such removal, the operator under its responsibility shall take all necessary measures to prevent spillage or leakage from the site of the activities. 2. The competent authority shall require the operator to remove abandoned or disused pipelines in accordance with paragraph 1 of this Article or to clean them inside and abandon them or to clean them inside and bury them so that they neither cause pollution, endanger navigation, hinder fishing, threaten the marine environment, nor interfere with other legitimate uses of the sea or with the rights and duties of other Contracting Parties. The competent authority shall ensure that appropriate publicity is given to the depth, position and dimensions of any buried pipeline and that such information is indicated on charts and notified to the Organization and other competent international organizations and the Parties. 3. The provisions of this Article apply also to installations disused or abandoned by any operator whose authorization may have been withdrawn or suspended in compliance with Article 7. 4. The competent authority may indicate eventual modifications to be made to the level of activities and to the measures for the protection of the marine environment which had initially been provided for. 5. The competent authority may regulate the cession or transfer of authorized activities to other persons. 6. Where the operator fails to comply with the provisions of this Article, the competent authority shall undertake, at the operator’s expense, such action or actions as may be necessary to remedy the operator’s failure to act.

International Standards for Offshore Drilling   133 Article 21 – SPECIALLY PROTECTED AREAS For the protection of the areas defined in the Protocol concerning Mediterranean Specially Protected Areas and any other area established by a Party and in furtherance of the goals stated therein, the Parties shall take special measures in conformity with international law, either individually or through multilateral or bilateral cooperation, to prevent, abate, combat and control pollution arising from activities in these areas. In addition to the measures referred to in the Protocol concerning Mediterranean Specially Protected Areas for the granting of authorization, such measures may include, inter alia: (a) Special restrictions or conditions when granting authorizations for such areas: (i) The preparation and evaluation of environmental impact assessments; (ii) The elaboration of special provisions in such areas concerning monitoring, removal of installations and prohibition of any discharge. (b) Intensified exchange of information among operators, the competent authorities, Parties and the Organization regarding matters which may affect such areas. SECTION V – COOPERATION Article 22 – STUDIES AND RESEARCH PROGRAMMES In conformity with Article 13 of the Convention, the Parties shall, where appropriate, cooperate in promoting studies and undertaking programmes of scientific and technological research for the purpose of developing new methods of: (a) Carrying out activities in a way that minimizes the risk of pollution; (b) Preventing, abating, combating and controlling pollution, especially in cases of emergency. Article 23 – INTERNATIONAL RULES, STANDARDS AND RECOMMENDED PRACTICES AND PROCEDURES 1. The Parties shall cooperate, either directly or through the Organization or other competent international organizations, in order to: (a) Establish appropriate scientific criteria for the formulation and elaboration of international rules, standards and recommended practices and procedures for achieving the aims of this Protocol; (b) Formulate and elaborate such international rules, standards and recommended practices and procedures; (c) Formulate and adopt guidelines in accordance with international practices and procedures to ensure observance of the provisions of Annex VI. 2. The Parties shall, as soon as possible, endeavour to harmonize their laws and regulations with the international rules, standards and recommended practices and procedures referred to in paragraph 1 of this Article. 3. The Parties shall endeavour, as far as possible, to exchange information relevant to their domestic policies, laws and regulations and the harmonization referred to in paragraph 2 of this Article.

134   J. Ashley Roach Article 24 – SCIENTIFIC AND TECHNICAL ASSISTANCE TO DEVELOPING COUNTRIES 1. The Parties shall, directly or with the assistance of competent regional or other international organizations, cooperate with a view to formulating and, as far as possible, implementing programmes of assistance to developing countries, particularly in the fields of science, law, education and technology, in order to prevent, abate, combat and control pollution due to activities in the Protocol Area. 2. Technical assistance shall include, in particular, the training of scientific, legal and technical personnel, as well as the acquisition, utilization and production by those countries of appropriate equipment on advantageous terms to be agreed upon among the Parties concerned. Article 25 – MUTUAL INFORMATION The Parties shall inform one another directly or through the Organization of measures taken, of results achieved and, if the case arises, of difficulties encountered in the application of this Protocol. Procedures for the collection and submission of such information shall be determined at the meetings of the Parties. Article 26 – TRANSBOUNDARY POLLUTION 1. Each Party shall take all measures necessary to ensure that activities under its jurisdiction are so conducted as not to cause pollution beyond the limits of its jurisdiction. 2. A Party within whose jurisdiction activities are being envisaged or carried out shall take into account any adverse environmental effects, without discrimination as to whether such effects are likely to occur within the limits of its jurisdiction or beyond such limits. 3. If a Party becomes aware of cases in which the marine environment is in imminent danger of being damaged, or has been damaged, by pollution, it shall immediately notify other Parties which in its opinion are likely to be affected by such damage, as well as the Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC), and provide them with timely information that would enable them, where necessary, to take appropriate measures. REMPEC shall distribute the information immediately to all relevant Parties. 4. The Parties shall endeavour, in accordance with their legal systems and, where appropriate, on the basis of an agreement, to grant equal access to and treatment in administrative proceedings to persons in other States who may be affected by pollution or other adverse effects resulting from proposed or existing operations. 5. Where pollution originates in the territory of a State which is not a Contracting Party to this Protocol, any Contracting Party affected shall endeavour to cooperate with the said State so as to make possible the application of the Protocol. Article 27 – LIABILITY AND COMPENSATION [See Appendix 2 below] SECTION VI – FINAL PROVISIONS Article 28 – APPOINTMENT OF COMPETENT AUTHORITIES Each Contracting Party shall appoint one or more competent authorities to: (a) Grant, renew and register the authorizations provided for in Section II of this Protocol;

International Standards for Offshore Drilling   135 (b) Issue and register the special and general permits referred to in Article 9 of this Protocol; (c) Issue the permits referred to in Annex V to this Protocol; (d) Approve the treatment system and certify the sewage treatment plant referred to in Article 11, paragraph 1, of this Protocol; (e) Give the prior approval for exceptional discharges referred to in Article 14, paragraph 1 (b), of this Protocol; (f) Carry out the duties regarding safety measures referred to in Article 15, paragraphs 3 and 4, of this Protocol; (g) Perform the functions relating to contingency planning described in Article 16 and Annex VII to this Protocol; (h) Establish monitoring procedures as provided in Article 19 of this Protocol; (i) Supervise the removal operations of the installations as provided in Article 20 of this Protocol. Article 29 – TRANSITIONAL MEASURES Each Party shall elaborate procedures and regulations regarding activities, whether authorized or not, initiated before the entry into force of this Protocol, to ensure their conformity, as far as practicable, with the provisions of this Protocol. Article 30 – MEETINGS 1. Ordinary meetings of the Parties shall take place in conjunction with ordinary meetings of the Contracting Parties to the Convention held pursuant to Article 18 of the Convention. The Parties may also hold extraordinary meetings in accordance with Article 18 of the Convention. 2. The functions of the meetings of the Parties to this Protocol shall be, inter alia: (a) To keep under review the implementation of this Protocol and to consider the efficacy of the measures adopted and the advisability of any other measures, in particular in the form of annexes and appendices; (b) To revise and amend any annex or appendix to this Protocol; (c) To consider the information concerning authorizations granted or renewed in accordance with Section II of this Protocol; (d) To consider the information concerning the permits issued and approvals given in accordance with Section III of this Protocol; (e) To adopt the guidelines referred to in Article 9, paragraph 2, and Article 23, paragraph 1(c), of this Protocol; (f) To consider the records of the contingency plans and means of intervention in emergencies adopted in accordance with Article 16 of this Protocol; (g) To establish criteria and formulate international rules, standards and recommended practices and procedures in accordance with Article 23, paragraph 1, of this Protocol, in whatever form the Parties may agree; (h) To facilitate the implementation of the policies and the achievement of the objectives referred to in Section V, in particular the harmonization of national and European Community legislation in accordance with Article 23, paragraph 2, of this Protocol; (i) To review progress made in the implementation of Article 27 of this Protocol; ( j) To discharge such other functions as may be appropriate for the application of this Protocol.

136   J. Ashley Roach Article 31 – RELATIONS WITH THE CONVENTION 1. The provisions of the Convention relating to any Protocol shall apply with respect to this Protocol. 2. The rules of procedure and the financial rules adopted pursuant to Article 24 of the Convention shall apply with respect to this Protocol, unless the Parties to this Protocol agree otherwise. Article 32 – FINAL CLAUSE 1. This Protocol shall be open for signature at Madrid from 14 October 1994 to 14 October 1995, by any State Party to the Convention invited to the Conference of Plenipotentiaries of the Coastal States of the Mediterranean Region on the Protocol for the Protection of the Mediterranean Sea against Pollution resulting from Exploration and Exploitation of the Seabed and its Subsoil, held at Madrid on 13 and 14 October 1994. It shall also be open until the same dates for signature by the European Community and by any similar regional economic grouping of which at least one member is a coastal State of the Protocol Area and which exercises competence in fields covered by this Protocol in conformity with Article 30 of the Convention. 2. This Protocol shall be subject to ratification, acceptance or approval. Instruments of ratification, acceptance or approval shall be deposited with the Government of Spain, which will assume the functions of Depositary. 3. As from 15 October 1995, this Protocol shall be open for accession by the States referred to in paragraph 1 above, by the European Community and by any grouping referred to in that paragraph. 4. This Protocol shall enter into force on the thirtieth day following the date of deposit of at least six instruments of ratification, acceptance or approval of, or accession to, the Protocol by the Parties referred to in paragraph 1 of this Article. IN WITNESS WHEREOF the undersigned, being duly authorized, have signed this Protocol. * * * * ANNEX VI SAFETY MEASURES The following provisions shall be prescribed by the Parties in accordance with Article 15: (a) That the installation must be safe and fit for the purpose for which it is to be used, in particular, that it must be designed and constructed so as to withstand, together with its maximum load, any natural condition, including, more specifically, maximum wind and wave conditions as established by historical weather patterns, earthquake possibilities, seabed conditions and stability, and water depth; (b) That all phases of the activities, including storage and transport of recovered resources, must be properly prepared, that the whole activity must be open to control for safety reasons and must be conducted in the safest possible way, and that the operator must apply a monitoring system for all activities; (c) That the most advanced safety systems must be used and periodically tested in order to minimize the dangers of leakages, spillages, accidental discharges, fire, explosions, blow-outs or any other threat to human safety or the environment,

International Standards for Offshore Drilling   137 that a trained specialized crew to operate and maintain these systems must be present and that this crew must undertake periodic exercises. In the case of authorized not permanently manned installations, the permanent availability of a specialized crew shall be ensured; (d) That the installation and, where necessary, the established safety zone, must be marked in accordance with international recommendations so as to give adequate warning of its presence and sufficient details for its identification; (e) That in accordance with international maritime practice, the installations must be indicated on charts and notified to those concerned; (f) That, in order to secure observance of the foregoing provisions, the person and/ or persons having the responsibility for the installation and/or the activities, including the person responsible for the blow-out preventer, must have the qualifications required by the competent authority, and that sufficient qualified staff must be permanently available. Such qualifications shall include, in particular, training, on a continuing basis, in safety and environmental matters.

2. Persian Gulf

Kuwait Regional Convention for Cooperation on the Protection of the Marine Environment from Pollution, Kuwait April 24, 1978, Article VII, Pollution Resulting From Exploration And Exploitation Of The Bed Of The Territorial Sea And Its Sub-Soil And The Continental Shelf: The Contracting States shall take all appropriate measures to prevent, abate and combat pollution in the Sea Area resulting from exploration and exploitation of the bed of the territorial sea and its sub-soil and the continental shelf, including the prevention of accidents and the combating of pollution emergencies resulting in damage to the marine environment. Protocol concerning Marine Pollution resulting from Exploration and Exploitation of the Continental Shelf; Kuwait March 29, 1989: THE CONTRACTING STATES BEING PARTIES to the Kuwait Regional Convention for Co-operation on the Protection of the Marine Environment from Pollution and to the Protocol concerning Regional Co-operation in Combating Pollution by Oil and other Harmful Substances in Cases of Emergency. BEING AWARE of the Articles 76, 197 and 208 of the United Nations Convention on the Law of the Sea (1982). RECOGNIZING the danger posed to the marine environment and to human health by pollution from exploration and exploitation of the Continental Shelf, and the serious problems resulting therefrom in the Sea Area under their national jurisdictions; CONSCIOUS of the need for further and more particular measures to prevent and control marine pollution from exploration and exploitation of the sea-bed and its subsoil; BEING MINDFUL of the their existing obligations under International Law; and PROMPTED by the desire to implement Article III, paragraph (b), Article VII, and Article XIX of the Convention; HAVE AGREED AS FOLLOWS:

138   J. Ashley Roach ARTICLE I For the purpose of this Protocol:  1. “Centre” means the Marine Emergency Mutual Aid Centre established under Article III paragraph 1 of the “Protocol concerning Regional Co-operation in Combating Pollution by Oil and other Harmful Substances in Cases of Emergency”.  2. “Certifying Authority” means any person or body of persons authorized by the Contracting State to issue a certificate of safety and fitness for purpose;  3. “Chemical Use Plan” means a plan drawn by the operator of the offshore installation which shows: a) the chemicals he intends to use in his operations; b) the purpose or purposes for which he intends to use the chemicals; c) the maximum concentrations of the chemicals he intends to use within any other substances, and maximum amounts he intends to use in any specified period; d) the area within which the chemical may escape into the marine environment; provided that where there is no known danger of a chemical escaping into the marine environment, it need not be included in the plan;  4. “Competent State Authority” means any Government department, Agency or other Authority in the Contracting State designated to exercise the power or discharge the function referred to in this Protocol, with such designation to be formally communicated to the Organization;  5. “Contracting State” means any State which has become a party to this Protocol;  6. “Convention” means the Kuwait Regional Convention for Co-operation on the Protection of Marine Environment from Pollution;  7. “Council” means the organ of the Organization comprised of the Contracting States and established in accordance with Article XVI, paragraph (b)(i) of the Convention;  8. “Garbage” means kitchen and domestic waste, refuse and solid wastes, other than any for which provision is made by any other Article of this Protocol, save for Article XII;  9. “Guidelines” means only guidelines issued by the Organization and any amendments thereto in each case approved by the Council; 10. “License” means a licence, permit including work permit, or authorization, formally issued under the authority of a Contracting State for undertaking an offshore operation; 11. “Marine Pollution” shall have the meaning given to it in Article I (a) of the Convention; 12. “Offshore Installation” means any structure, plant or vessel, whether floating or fixed to or under the seabed, placed in a location in the Protocol Area (defined in Item 16 in this Article) for the purpose of offshore operations, including any tanker for the time being moored and used for the temporary storage of oil, and including any plant for treating, storing or regaining control of the flow of crude oil; and for the purposes of certification under Article VI, an installation includes any integral part of the structure, plant, equipment or vessel, any attached lifting gear or safety mechanism, and any other part or equipment specified by the Contracting State as part of the installation; 13. “Offshore Operations” means any operation conducted in the Protocol Area for the purposes of exploring of oil or natural gas or for the purposes of exploiting

International Standards for Offshore Drilling   139 those resources, including any treatment before transport to shore and any transport of the same by pipeline to shore. It includes also any work of construction, repair, maintenance, inspection or like operation incidental to the main purpose of exploration or exploitation; 14. “Operator” means any natural or juridical person who undertakes offshore operations as defined under item (13) of Article 1 of this Protocol; 15. “Organization” shall have the meaning given to it in Article I (c) of the Con­ vention; 16. “Protocol Area” means all parts of the Continental Shelf of a Contracting State which fall within the Sea Area as defined in paragraph (a) of Article II of the Convention and all parts of its Continental Shelf contiguous therewith; 17. “Sewage” means: i) drainage and other waste from any form of toilet, urinal or water closet; ii) drainage from medical premises such as dispensary or sick bay, via washbasins, wash-tubs and drains located in such premises; iii) other wastewaters when mixed with significant quantities of the drainage defined above. 18. “Special Area” means that part of the Sea Area located north-west of the rhumb line between Ras Al Hadd (22o 30’N, 59o 48’E) and Ras Al Fasteh (25o 04’N, 61o 25 ‘E). ARTICLE II Contracting States shall require that all appropriate measures are taken to prevent, abate and control marine pollution from offshore operations in those parts of the Protocol Area within their respective jurisdictions taking into account the best available and economically feasible technology. Contracting States acting individually or jointly shall also take all appropriate steps to combat marine pollution from offshore operations within the parts of the Protocol Area under their jurisdiction. Such obligations shall be without prejudice to the more specific obligations accepted under this Protocol. ARTICLE III Each Contracting State shall ensure that in the Protocol Area under its jurisdiction any offshore operation shall be conducted under a license, which may be granted subject to such conditions for the protection of the marine environment and coastal areas as the Competent State Authority sees fit to impose. The Competent State Authority shall require the operator to comply with relevant laws and regulations issued under the authority of the State, and shall have the power to take such measures as are necessary to enforce compliance therewith. ARTICLE IV 1. Each Contracting State shall take measures to ensure the following: a) Before licensing any offshore operation which could cause significant risks of pollution in the Protocol Area or any adjacent coastal area, the Competent State Authority shall call for submission of an assessment of the potential environmental effects thereof. No such operation shall commence until a statement of those effects has been submitted, and no license shall be granted until the Competent State Authority is satisfied that the operation

140   J. Ashley Roach will entail no unacceptable risk of such damage in the Protocol Area or any adjacent coastal area. b) In deciding to call for an environmental impact statement, and in determining its scope, the Competent State Authority shall have regard to the Guidelines issued by the Organization. c) Whenever a Competent State Authority has called for and received an environmental impact statement, it shall send to the Organization a summary of the potential environmental effects referred to in that statement. The Organization shall, within four days of its receipt, dispatch copies of that summary to all the other Contracting States. The Competent State Authority before granting a licence for the proposed operation, shall allow all other Contracting States to submit representations to it through the Organization within a stated time which shall be reasonable taking into account the type of operation and urgency of the need for a decision. It shall consider any such representations before licensing the said operation. 2. Notwithstanding the obligation to send a summary to the Organization, the Contracting State shall have the right to withhold information which might prejudice its national security. Whenever a Contracting State does not call for an assessment of the environmental impact of a proposed offshore operation, it shall consider calling for a survey of the marine environment and the aquatic life therein to be made before the start of the proposed operation. The survey is to be carried out by or under the direct supervision of a body independent of the operator and approved by the Competent State Authority. 3. The Guidelines on Environmental Impact Assessment to be issued by the Organization shall contain guidance on the type of operation, and the circumstances in which it would cause significant risk of pollution in the Protocol Area or any adjacent coastal area. ARTICLE V 1. Each Contracting State shall endeavour to ensure that offshore operations within its jurisdiction shall not cause unjustifiable interference with lawful navigation, fishing or any other activity carried on under a bilateral or multilateral agreement or on the basis of international law, and that in siting an installation, due regard shall be had to existing pipelines and cables. Regard shall also be had to the need for protecting sites of special ecological and cultural interests. 2. Each Contracting State shall take steps to ensure that, within the area of its jurisdiction, operators of offshore installations survey the sea-bed in the vicinity of their installations, and remove any debris resulting from their operations which might interfere with lawful fishing: a) in the case of a pipeline, or other sub-sea apparatus immediately following completion of the work of installation; b) in the case of production platform, immediately following its removal; c) in any case when the Competent State Authority might reasonably require survey and clean-up. ARTICLE VI Each Contracting State shall take all practicable measures to ensure that every offshore installation to be used in that part of the Protocol Area within its jurisdiction

International Standards for Offshore Drilling   141 is certified by a Certifying Authority or its designee that it is safe and fit for the purpose for which it is to be used so as to ensure that it will not cause accidental damage to the marine environment. ARTICLE VII Each Contracting State shall take all practicable measures to ensure the following: 1. Operators shall at all times have available to their offshore installations, in good working order, equipment and devices to minimize the risk of accidental pollution and to facilitate prompt response to a pollution emergency, in accordance with good oilfield or other relevant industry practice. 2. Any such plant or equipment not included as part of an installation for the purposes of Article VI shall be subject to prior examination and approval by or on behalf of the Competent State Authority, and to periodic inspection, in accordance with good oilfield or other relevant industry practice. 3. Blow-out preventers and other safety equipment shall be tested periodically by the operators or on his behalf, and exercise in their operations carried out periodically, in accordance with good oilfield or other relevant industry practice. 4. Offshore installations above sea level shall carry lights and other warning instruments, in accordance with international maritime practice, maintained in good working order, and those light and instruments shall also be operated in accordance with international maritime practice. 5. All persons engaged in offshore operations shall have had or be given training in accordance with good oilfield practice. Any person employed on an offshore installation for the first time shall undergo an induction course, and shall be given a manual which includes instruction on emergency procedures. ARTICLE VIII Each Contracting State shall take all practicable measures to ensure the following: 1. No operator shall start work on any stage of his offshore operations within its jurisdiction until he has: a) prepared a Contingency Plan to deal with any event which may occur as a result of the operations, and which may cause significant pollution to the marine environment; b) had that plan approved by the Competent State Authority; c) shown to the satisfaction of that State Authority that he has available to him sufficient expertise and resources to put that plan fully into operation. 2. No Contingency Plan shall be approved unless it can be co-ordinated with any existing national or local Contingency Plans, and any Plans prepared by the Centre, and unless the operator can be required to participate in any exercise conducted in the implementation of such Contingency Plans. 3. Any person conducting offshore operations shall make and maintain arrangements to ensure that when an event occurs as a result of his operations which may cause significant pollution of the marine environment, a full report of that event is sent immediately to the State authority designated to receive such reports. 4. The respective roles and powers of the industry and the authorities shall be fully understood before an oil spill emergency, and shall be clearly defined in the operator’s Contingency Plan, and in any national and local Contingency Plans.

142   J. Ashley Roach ARTICLE IX 1. Each Contracting State shall take all practicable measures to ensure, subject to paragraph 2 below, the following: a) In that part of the Protocol Area which is a “Special Area”, no machinery space drainage from an offshore installation shall be discharged into the sea unless the oil content thereof does not exceed 15 mg. per litre whilst undiluted. Any Contract­ing state may impose a more restrictive level in any area under its jurisdiction. b) No other discharge from an offshore installation into the sea within the Protocol Area, except one derived from drilling operations, shall have an oil content, whilst undiluted, greater than that stipulated for the time being by the Organization. The oil content so stipulated shall not be greater than 40 mg. per litre as an average in any calendar month, and shall not at any time exceed 100 mg. per litre. c) Discharge points for oily wastes shall be well below the surface of the sea as appropriate. d) All necessary precautions shall be taken to minimize losses of oil into the sea from oil and gas collected or flared from well testing. 2. Measures passed in compliance with paragraph 1 of this Article may provide that there is no breach of their requirements if, when the oil content of a discharge is greater than the permitted concentrations, that excess was due to some accident or other cause beyond the control of the operator and his employees, and that they took all reasonable precautions and exercised all due diligence to avoid such excess. Alternatively, a defence of equivalent effect may be provided. 3. Each Contracting State shall ensure that the operator may be required to conduct surveys of environmental conditions in the vicinity of his offshore installation, periodically or on such occasions as the Competent State Authority may reasonably require. The State itself may conduct or have conducted such a survey. If, without apparent reason, the result of that survey show a significant difference from the results of the operator’s most recent survey, without prejudice to any other legal action, the State may charge the cost of its own survey to the operator. 4. Each Contracting State shall pass measures necessary to ensure the following: a) Oil-based drilling fluids shall not be used in drilling operations in those parts of the Protocol Area within its jurisdiction except with the express sanction of the Competent State Authority. Such sanction shall not be given unless the Authority is satisfied that the use of such fluid is justified because of exceptional circumstances. If such fluid is used, the drill cuttings shall be effectively treated to minimize their oil content before being appropriately disposed off. Any wash waters shall not be discharged at any place from which they may be carried to mix with the same drill cuttings. The discharge point for the cuttings shall, as appropriate, be well below the surface of the water. b) No oil based drilling fluid shall be discharged to any parts of the Protocol Area within its jurisdiction. c) Water-based drilling muds discharged from offshore operations must not contain persistent systemic toxins which may continue to pose an environmental threat after the initial drilling fluid discharge.

International Standards for Offshore Drilling   143 ARTICLE X 1. Each Contracting State shall take all practicable measures to ensure the following a) Disposal into the sea of the following is prohibited: i) all plastics, including but not limited to synthetic ropes, synthetic fishing nets and plastic garbage bags; ii) all other garbage, including paper products, rags, glass, metal, bottle, crockery, dunnage, lining and packing materials; b) Disposal into the sea of food wastes shall be made as far as practicable from land, but in any case not less than 12 nautical miles from the nearest land. c) When the garbage is mixed with other discharges having different disposal or discharge requirements the more severe requirements shall apply. d) Sewage shall not be discharged into the Protocol Area from an installation permanently manned by ten or more persons unless: i) it has been comminuted and disinfected using a system approved by the Competent State Authority and is discharged at a distance of more than four nautical miles from the nearest land; or ii) it is discharged at a distance of more than twelve nautical miles from the nearest land; or iii) it has passed through a treatment plant approved by the Competent State Authority; and in any case the discharge does not produce visible floating solids or discolouration of the surrounding water. 2. Each Contracting State shall provide at convenient points on its coastline, reception facilities for general garbage from manned offshore installations operating in the area of its jurisdiction. ARTICLE XI 1. Each Contracting State shall take all appropriate measures to ensure the following: a) Each operator of an offshore installation shall prepare, and submit for approval by the Competent State Authority, a “Chemical Use Plan”. Application for amendments to the Plan may be submitted subsequently and approved. If at any time he wishes to use a chemical outside the scope of his approved Plan, and that chemical may escape into the marine environment, he shall notify the Competent State Authority, except that in case of emergency to prevent the risk of injury to person or extensive damage to property, the notification need not be given prior to the use of the chemical. b) The Competent State Authority has a power to prohibit, limit or regulate the use of a chemical or product and to impose conditions on its storage and its use, for the purpose of protecting the marine environment. In exercising that power, the Authority shall have regard to any Guidelines issued by the Organization. 2. Each Contracting State shall take appropriate measures to ensure that seismic operations in the Protocol Area shall take into account the Guidelines issued by the Organization. ARTICLE XII Each Contracting State shall require that, for offshore operations in any part of the Protocol Area within its jurisdiction, the operator shall:

144   J. Ashley Roach 1. provide adequate system for collection and proper disposal of all unwanted substances or articles; 2. give proper instructions on their use; 3. endeavour to provide for penalties for improper disposal. ARTICLE XIII 1. Each Contracting State shall ensure that the Competent State Authority has the power to require the operator of an offshore installation: a) in the case of a pipeline – i) to flush and remove any residual pollutants from the pipeline, and ii) to bury the pipeline, or remove part and bury the remaining parts thereof, so as to eliminate for the foreseeable future any risk of hindrance to navigation or fishing, taking all circumstances into account. b) in the case of platforms and other sea-bed apparatus and structures, to remove the installation in whole or in part to ensure the safety of navigation and in the interests of fishing. Each Contracting State shall also take all practicable measures to ensure that the operator has sufficient resources to guarantee that any such requirements can be met. 2. Where Contracting States have a common interest in fishing grounds in the Protocol Area, they shall endeavour to adopt a common policy on the removal of installations. In determining any case whether or not installations must be removed, Contracting States shall have regard to any Guidelines issued by the Organization. Whether pipelines are removed or not, they shall be flushed to remove residual pollutants. 3. Contracting States shall pass, and take all practicable steps to enforce, measures to ensure that no offshore installation which in use has floated at or near the sea-surface, and no equipment from an offshore installation, shall be deposited on the sea-bed of the continental shelf when it is no longer needed. ARTICLE XIV 1. The provisions of the Convention relating to Protocols shall apply to this Protocol. 2. Procedures for amendments to Protocols and their Annexes adopted in accordance with Articles XX and XXI of the Convention shall apply to this Protocol. 3. The Rules of Procedure and Financial Rules adopted pursuant to Article XXII of the Convention, and amendments thereto, shall apply to this Protocol. ARTICLE XV 1. This Protocol shall be open for signature in the State of Kuwait from 29 March to 26 June 1989 by any State which is party to the Kuwait Regional Convention for Co-operation on the Protection of the Marine Environment from Pollution. 2. This Protocol shall be subject to ratification, acceptance, approval or accession by the States parties to the Convention. Instruments of ratification, acceptance, approval or accession shall be deposited with the Government of Kuwait which shall assume the functions of the Depository. 3. This Protocol shall enter into force on the ninetieth day following the date of deposit of at least five instruments of ratification, acceptance or approval of, or accession to this Protocol by the States as referred to in paragraph 2 of this Article.

International Standards for Offshore Drilling   145 In WITNESS WHEREOF the undersigned Plenipotentiaries, being duly authorized by their respective Governments, have signed this Protocol. DONE AT KUWAIT this twenty-ninth day of March, in the year one thousand nine hundred and eighty-nine in the Arabic, English and Persian languages, the texts being equally authentic.

3. North-East Atlantic

Convention for the Protection of Marine Environment of the North-East Atlantic, 1992 (OSPAR), Paris, Sept. 22, 1992: Article 5, Pollution From Offshore Sources. The Contracting Parties shall take, individually and jointly, all possible steps to prevent and eliminate pollution from offshore sources in accordance with the provisions of the Convention, in particular as provided for in Annex III. Annex III, On The Prevention And Elimination Of Pollution From Offshore Sources74 ARTICLE 1 This Annex shall not apply to any deliberate disposal in the maritime area of: (a) wastes or other matter from vessels or aircraft; (b) vessels or aircraft. ARTICLE 2 1. When adopting programmes and measures for the purpose of this Annex, the Contracting Parties shall require, either individually or jointly, the use of: (a) best available techniques (b) best environmental practice including, where appropriate, clean technology. 2. When setting priorities and in assessing the nature and extent of the programmes and measures and their time scales, the Contracting Parties shall use the criteria given in Appendix 2. ARTICLE 375 1. Any dumping of wastes or other matter from offshore installations is prohibited. 2. This prohibition does not relate to discharges or emissions from offshore sources. 3. The prohibition referred to in paragraph 1 of this Article does not apply to carbon dioxide streams 74 Text as amended on 24 July 1998, updated 9 May 2002,7 February 2005 and 18 May 2006. Amendments to Annexes II and III adopted at OSPAR 2007 the Contracting Parties. 75 Paragraphs 3 and 4 were introduced by amendment to the Annex agreed by OSPAR 2007. The amendment will enter into force for those Contracting Parties which have ratified, accepted or approved it on the thirtieth day after receipt by the Depositary Government of notification of its ratification, acceptance or approval by at least seven Contracting Parties. Thereafter the amendment will enter into force for any other Contracting Party on the thirtieth day after that Contracting Party has deposited its instrument of ratification, acceptance or approval of the amendment.

146   J. Ashley Roach from carbon dioxide capture processes for storage, provided (a) disposal is into a sub-soil geological formation; (b) the streams consist overwhelmingly of carbon dioxide. They may contain incidental associated substances derived from the source material and the capture, transport and storage processes used; (c) no wastes or other matter are added for the purpose of disposing of those wastes or other matter; (d) they are intended to be retained in these formations permanently and will not lead to significant adverse consequences for the marine environment, human health and other legitimate uses of the maritime area. 4. The Contracting Parties shall ensure that no streams referred to in paragraph 3 shall be disposed of in sub-soil geological formations without authorisation or regulation by their competent authorities. Such authorisation or regulation shall, in particular, implement the relevant applicable decisions, recommendations and all other agreements adopted under the Convention.



ARTICLE 4 1. The use on, or the discharge or emission from, offshore sources of substances which may reach and affect the maritime area shall be strictly subject to authorisation or regulation by the competent authorities of the Contracting Parties. Such authorisation or regulation shall, in particular, implement the relevant applicable decisions, recommendations and all other agreements adopted under the Convention. 2. The competent authorities of the Contracting Parties shall provide for a system of monitoring and inspection to assess compliance with authorisation or regulation as provided for in paragraph 1 of Article 4 of this Annex. ARTICLE 5 1. No disused offshore installation or disused offshore pipeline shall be dumped and no disused offshore installation shall be left wholly or partly in place in the maritime area without a permit issued by the competent authority of the relevant Contracting Party on a case-by-case basis. The Contracting Parties shall ensure that their authorities, when granting such permits, shall implement the relevant applicable decisions, recommendations and all other agreements adopted under the Convention. 2. No such permit shall be issued if the disused offshore installation or disused offshore pipeline contains substances which result or are likely to result in hazards to human health, harm to living resources and marine ecosystems, damage to amenities or interference with other legitimate uses of the sea. 3. Any Contracting Party which intends to take the decision to issue a permit for the dumping of a disused offshore installation or a disused offshore pipeline placed in the maritime area after 1st January 1998 shall, through the medium of the Commission, inform the other Contracting Parties of its reasons for accepting such dumping, in order to make consultation possible. 4. Each Contracting Party shall keep, and report to the Commission, records of the disused offshore installations and disused offshore pipelines dumped and of the disused offshore installations left in place in accordance with the provisions of this Article, and of the dates, places and methods of dumping.

International Standards for Offshore Drilling   147 ARTICLE 6 Articles 3 and 5 of this Annex shall not apply in case of force majeure, due to stress of weather or any other cause, when the safety of human life or of an offshore installation is threatened. Such dumping shall be so conducted as to minimise the likelihood of damage to human or marine life and shall immediately be reported to the Commission, together with full details of the circumstances and of the nature and quantities of the matter dumped. ARTICLE 7 The Contracting Parties shall take appropriate measures, both individually and within relevant international organisations, to prevent and eliminate pollution resulting from the abandonment of offshore installations in the maritime area caused by accidents. In the absence of relevant guidance from such international organisations, the measures taken by individual Contracting Parties should be based on such guidelines as the Commission may adopt. ARTICLE 8 No placement of a disused offshore installation or a disused offshore pipeline in the maritime area for a purpose other than that for which it was originally designed or constructed shall take place without authorisation or regulation by the competent authority of the relevant Contracting Party. Such authorization or regulation shall be in accordance with the relevant applicable criteria, guidelines and procedures adopted by the Commission in accordance with subparagraph (d) of Article 10 of this Annex. This provision shall not be taken to permit the dumping of disused offshore installations or disused offshore pipelines in contravention of the provisions of this Annex. ARTICLE 9 1. Each Contracting Party shall issue instructions to its maritime inspection vessels and aircraft and to other appropriate services to report to its authorities any incidents or conditions in the maritime area which give rise to suspicions that a contravention of the provisions of the present Annex has occurred or is about to occur. Any Contracting Party whose authorities receive such a report shall, if it considers it appropriate, accordingly inform any other Contracting Party concerned. 2. Nothing in this Annex shall abridge the sovereign immunity to which certain vessels are entitled under international law. ARTICLE 10 For the purposes of this Annex, it shall, inter alia, be the duty of the Commission: (a) to collect information about substances which are used in offshore activities and, on the basis of that information, to agree lists of substances for the purposes of paragraph 1 of Article 4 of this Annex; (b) to list substances which are toxic, persistent and liable to bioaccumulate and to draw up plans for the reduction and phasing out of their use on, or discharge from, offshore sources; (c) to draw up criteria, guidelines and procedures for the prevention of pollution from dumping of disused offshore installations and of disused offshore pipelines, and the leaving in place of offshore installations, in the maritime area;

148   J. Ashley Roach (d) to draw up criteria, guidelines and procedures relating to the placement of disused offshore installations and disused offshore pipelines referred to in Article 8 of this Annex, with a view to preventing and eliminating pollution.

4. Baltic Sea

Convention on the Protection of the Marine Environment of the Baltic Sea Area, 1992, Helsinki, April 9, 1992, Article 12, Exploration and exploitation of the seabed and its subsoil: 1. Each Contracting Party shall take all measures in order to prevent pollution of the marine environment of the Baltic Sea Area resulting from exploration or exploitation of its part of the seabed and the subsoil thereof or from any associated activities thereon as well as to ensure that adequate preparedness is maintained for immediate response actions against pollution incidents caused by such activities. 2. In order to prevent and eliminate pollution from such activities the Contracting Parties undertake to implement the procedures and measures set out in Annex VI, as far as they are applicable.

Appendix 2 Liability and Compensation Treaty Provisions re Offshore Activities Multilateral Treaties Law of the Sea Convention 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 cooperate 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.

International Standards for Offshore Drilling   149

International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, 1996 Article 1, Definitions, provides: “For the purposes of this Convention: 1 “Ship” means any seagoing vessel and seaborne craft, of any type whatsoever.”

International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 Article 1, Definitions, provides that “For the purposes of this Convention: 1. “Ship” means any seagoing vessel and seaborne craft, of any type whatsoever.” ****

Regional Conventions 1. Mediterranean Sea

Convention for the Protection of the Mediterranean Sea against Pollution, Barcelona Feb. 16, 1976: Article 12, Liability and Compensation: The Contracting Parties undertake to co-operate as soon as possible in the formulation and adoption of appropriate procedures for the determination of liability and compensation for damage resulting from the pollution of the marine environment deriving from violations of the provisions of this Convention and applicable protocols. Convention for the Protection of the Marine Environment and the Coastal Region of the Mediterranean, Barcelona June 10, 1995, Article 16, Liability and Compensation: The Contracting Parties undertake to cooperate in the formulation and adoption of appropriate rules and procedures for the determination of liability and compensation for damage resulting from pollution of the marine environment in the Mediterranean Sea Area. Protocol for the Protection of the Mediterranean Seas against Pollution Resulting from Exploration and Exploitation of the Continental Shelf and the Seabed and its Subsoil, with annexes, Madrid Oct. 14, 1994, Article 27 – Liability and Compensation: 1. The Parties undertake to cooperate as soon as possible in formulating and adopting appropriate rules and procedures for the determination of liability and compensation for damage resulting from the activities dealt with in this Protocol, in conformity with Article 16 of the Convention. 2. Pending development of such procedures, each Party: (a) Shall take all measures necessary to ensure that liability for damage caused by activities is imposed on operators, and they shall be required to pay prompt and adequate compensation; (b) Shall take all measures necessary to ensure that operators shall have and maintain insurance cover or other financial security of such type and under such terms as the Contracting Party shall specify in order to ensure compensation for damages caused by the activities covered by this Protocol.

150   J. Ashley Roach 2. Persian Gulf

Kuwait Regional Convention for Cooperation on the Protection of the Marine Environment from Pollution, Kuwait April 24, 1978, Article XIII, Liability And Compensation: The Contracting States undertake to co-operate in the formulation and adoption of appropriate rules and procedures for the determination of: (a) Civil liability and compensation for damage resulting from pollution of the marine environment, bearing in mind applicable international rules and procedures relating to those matters; and (b) Liability and compensation for damage resulting from violation of obligations under the present Convention and its protocols.

PART 3

Comparative Best Practices in Environmental Regulation of Continental Shelf Activities

Renewable Energy and Marine Spatial Planning: Scientific and Legal Implications Andreas Kannen,1 Hartwig Kremer,2 Kira Gee,3 and Marcus Lange4 Abstract Increasingly changing patterns of human sea and sea floor use originate in political, economic and societal developments often motivated by the process of transition towards a green economy. Offshore wind farming has turned into a major agent of change with a set of expected cumulative ecological impacts. Coastal and shelf seas become contested, but at the same time politically recognised areas, with emerging conflicts rooted in different perceptions, values and attitudes of coastal people. Associated with our limited understanding of environmental regimes and ecosystem impacts of cumulative shelf sea modifications are fragmented frameworks, in policy and economic sectors often opposing the balancing approach of Marine/Maritime Spatial Planning (MSP). Mid and long-term management plans are further hampered by limitations faced in predicting long-term and regional climate change impact and future socio-economic and cultural developments. Planning under these circumstances is “planning under uncertainty”. Based on a brief analysis of offshore wind farming in the context of MSP the paper illustrates the role of science by highlighting the important complementary functions of disciplinary process oriented research versus interdisciplinary and transdisciplinary approaches in assessing and modelling the expected cumulative effects of large scale offshore wind farming. In light of recent global discourse about future Earth system science, challenges and the emerging global science initiative “Future Earth” (supported by the UN, and major research and funding institutions) key research questions and the relevance of applying a co-design approach inviting all actors and researchers to the framing process are discussed. The ultimate goal is to foster ecosystem-based management. It is most evident that scientific information needs to be provided to inform one of the major and unprecedented transformations on continental shelves which is motivated by a socio-political decision to move towards

1 Dr. Andreas Kannen is a research scientist in the Department Human Dimensions in Coastal Areas at the Institute of Coastal Research of the Helmholtz-Zentrum Geesthacht, contact: [email protected]. 2 Dr. Hartwig Kremer is Chief Executive Officer of the LOICZ International Project Office located at the Helmholtz-Zentrum Geesthacht, Institute of Coastal Research, contact: hartwig.kremer@ loicz.org The authors’ PowerPoint is available at http://www.virginia.edu/colp/pdf/HalifaxKremer.pdf. 3 Kira Gee is a research scientist in the Department Human Dimensions in Coastal Areas at the Institute of Coastal Research of the Helmholtz-Zentrum Geesthacht, contact: [email protected]. 4 Marcus Lange is research assistant and congress and project manager in LOICZ International Project Office located at the Helmholtz-Zentrum Geesthacht, Institute of Coastal Research, contact: [email protected].

154   Kannen, Kremer, Gee, and Lange global sustainability in response to climate change and economic development. Designing appropriate social environmental assessment, forecasting, observations and involving the institutional and legal dimensions are central in this context.

Introduction While the oceans and continental shelves play a major role in global climate and ecosystem processes, human activities in marine areas are increasing in number and intensity. New activities arise, in particular in the sector of renewable energies. This is visible in the North Sea, where offshore wind farming has turned into a major agent of change with various resulting conflicts and cumulative impacts often still unknown.5 In all North Sea countries, plans exist for installation of sometimes large-scale offshore wind farms. The largest development is currently planned by the Forewind6 consortium in the UK territorial area of the Doggerbank with an agreed size of 9 GW until 2020, and a potential for extension up to 12 GW in water depths between 18 and 35 meters. The total European installed wind power capacity in 2011 covered 3.8 GW across 53 wind farms in ten European countries, and includes 1,371 turbines installed and grid connected.7 Scenarios of the European Wind Energy Association (EWEA) expect up to 40 GW installed capacity by 2020 (covering between 3.6% and 4.3% of the European electricity demand) and 150 GW by 2030.8 The key driver behind this development is the move towards renewable energies as a response to global climate change.9 In addition, the catastrophe at Fukushima, Japan, in March 2011 increased the recognition of renewable energies as a safe alternative to nuclear power, and amplified the societal pressure on 5 Kannen, A, 2012. ‘Challenges for marine spatial planning in the context of multiple sea uses, policy arenas and actors based on experiences from the German North Sea.’ Regional Environmental Change, DOI 10.1007/s10113-012-0349-7. 6 Forewind, 2012. Doggerbank, Overview, www.forewind.co.uk/doggerbank/overview.html, accessed 30.10.2012. 7 EWEA, (European Wind Energy Association), 2012. The European offshore wind industry – key 2011 trends and statistics, January 2012, www.ewea.org/fileadmin/files/library/publications/ statistics/EWEA_stats_offshore_2011_02.pdf, accessed 30.10.2012. 8 EWEA (European Wind Energy Association) 2009. Oceans of Opportunity – Harnessing Europe’s largest domestic energy resource, www.ewea.org/fileadmin/ewea_documents/ documents/publications/ reports/Offshore_Report_2009.pdf, accessed 13.11.2012. 9 Wiser, R., Yang, Z., Hand, M., Hohmeyer, O., Infield, D., Jensen, P.H., Nikolaev, V., O’Malley, M., Sinden, Servos, A., 2011. ‘Wind Energy’, Edenhofer, O., Pichs-Madruga, R., Sokona, Y., Seyboth, K., Matschoss, P., Kadner, S., Zwickel, T., Eickemeier, P., Hansen, G., Schlömer, S., von Stechow, C. (Eds.), Renewable Energy Sources and Climate Change Mitigation: Special Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, and New York, NY, 2011.

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politicians to move towards renewable energy production. On the other hand, debates about renewables in general, and in this context offshore wind farming, are characterised by a diverse set of frames and illustrate the complexity of this move. In this paper we discuss some of these complexities referring in particular to the example of offshore wind farming and Marine Spatial Planning (MSP) in the German North Sea and further emphasize implications for the research community by exploring the “Grand Challenges” of future Earth System science as formulated by interdisciplinary global scientific peers (ICSU etc.) and the G8 Heads of funding agencies for global change research (Belmont Forum). The paper starts with a look at the role of marine areas for global ecosystem processes. We then introduce the sea as a space for the generation of marine renewables and describe recent developments in this field. Based on this we frame marine areas as social-ecological systems and move into a discussion of MSP (focussing on Germany as a case study) as one of the main tools to steer human demands in marine areas. Framing the development of marine renewables as a societal adaptation process, we finally discuss in depth the potential of scientific research with a particular focus on transdisciplinary science and the Future Earth program to support this adaptation process.

Continental Shelves in the Global Context Coastal zones have been described as “Societies Edge”.10 In the age of the “Anthropocene”11 this is particularly evident for coastal seas (including their contributing rivers if applicable) and shelves. Covering less than five per cent of the global surface they are the major fabrics of biogeochemical processes. Climate change and expected increasing intensity of anthropogenic pressures such as oil and gas exploration and shipping are generating significant environmental and societal effects. Climate change leads to changes in the physical environment, which then lead to changes in ecosystem conditions, thus affecting resource use and ecosystem goods and services.12 One example for the feedback loops associated with rapid changes in the regional climate is the melting of snow and sea ice in the Arctic due to rising temperatures, which reduces the surface 10 Buddemeier (pers. com.). 11 Crutzen P.J. 2002. The “Anthropocene” J. Phys. IV France 12 (2002) Pr10-1, DOI: 10.1051/ jp4:20020447. 12 Forbes, D.L. (Ed) 2011. State of the Arctic Coast 2010 – Scientific Review and Outlook. International Arctic Science Committee, Land-Ocean Interactions in the Coastal Zone, Arctic Monitoring and Assessment Programme, International Permafrost Association. Helmholtz-Zentrum, Geesthacht, Germany, http://arcticcoasts.org.

156   Kannen, Kremer, Gee, and Lange reflectance (albedo) and increases solar absorption, leading to further temperature increase,13 resulting in the extension of effects from local or regional scales to the global scale. Furthermore continental shelves provide over 90% of wild catch marine resources and accommodate tremendous investments in aquaculture, industrial sites and offshore energy exploration and exploitation. In combination all ecosystem goods and services estimates of the late 1990s calculate to some 33 trillion USD deriving from coastal waters which is more than 50% of all global ecosystem goods and services.14 The footprint of socio-economic drivers in coastal systems reflecting in observed immediate and forecasted long term ecosystem change and their impact (on human welfare)15 is ever increasing. While recent estimates expect the global coastal population up to 100 km distance from the shoreline to reach around three billion people by 202516 options for sustainable societal response to pertinent and emerging pressures and change become increasingly challenging. Fishing, aquaculture, oil and gas exploration and shipping are among the globally most relevant socio-economic drivers. Global marine catch fisheries stabilize close to 80 million tons over the 1990s whereas marine and this usually means coastal aquaculture went up to 19.3 million tons in 2011.17 Taken that some 90% of the world marine wild catch fisheries come from the shelf waters the global decline here is quite obvious. Only recently regional improvements have been observed indicating a decreasing number of stocks overharvested, e.g. in the United States, and Australia. Expectations regarding aquaculture are growing however with multiple implications for the shelves. And this includes alternative sea space use combined with offshore wind farming as discussed for example in the “aquaculture forum”.18 Offshore wind farming under this perspective may actually turn into an opportunity for alternative marine food production in an otherwise almost “protected no access” area. Regarding offshore oil and gas production globally, estimates account for some 30% of the global production of oil to come from offshore drilling whereas 13 Cohen, S. & Entekhabi, D. 2001. ‘The influence of snow cover on Northern Hemisphere climate variability.’ Atmosphere-Ocean 39, 35–53; Zhang, Y., Wang, S., Barr, A.G and Black, T.A. 2008. ‘Impact of snow cover on soil temperature and its simulation in the EALCO model.’ Cold Regions Science and Technology 52, 355–370. 14 Costanza R., d’Arge R., de Groot R., Farber S., Grasso M., Hannon B., Limburg K., Naeem S., O’Neill R.V., Paruelo J., Raskin R.G., Sutton P., and M. van den Belt 1997. ‘The value of the world’s ecosystem services and natural capital.’ Nature 387: 253–260. 15 Cooper, P. 2012. The DPSWR Social-Ecological Accounting Framework: Notes on its Definition and Application. Policy Brief No. 3. EU FP7 KNOWSEAS Project. ISBN 0-9529089-5-6. 16 Yoskowitz, D. & R. Costanza 2010. ‘Bridging Environmental and Human Dimensions; Can CERF Help Find Solutions?’ CERF Newsletter Oct. 2010 p. 7 & 25. 17 FAO. 2012. The State of World Fisheries and Aquaculture 2012. Rome. 209 pp. 18 www.aquaculture-forum.com

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between 25–50% of the gas production is expected to come from the sea floor.19 The UNEP Offshore Oil and Gas Environment Forum (OEF) gives these figures: more than 6,500 offshore oil and gas installations worldwide, about 4,000 of which are in the U.S. Gulf of Mexico, 950 in Asia, 700 in the Middle East and 400 in Europe. These figures underline the importance of the shelves for global hydrocarbon exploitation.20 Shipping has since ancient times transported goods and facilitated cultural exchanges between different areas of the world. Worldwide seaborne trade irrespective of a brief decline in 2009 due to the economic crises keeps rising continuously since the last decades and more than doubled since 1990.21 2010 registered a record increase in tonnage resulting in an 8.6% growth in the global fleet (close to 1.4 billion deadweight tons). And, not surprisingly, this has an effect on traffic density on the shelves and will certainly affect sensitive areas such as the Arctic with new sea routes opening due to climate change. It is now the insurance and reinsurance business trying to calculate the emerging risks from new large scale offshore constructions, usually port facilities and it seems likely that risks arising from large scale offshore wind farming close to major shipping lanes will enter this discourse shortly.22 In a global context, society is challenged to find an informed way of balancing between protection and tradeoffs in the often conflicting and accelerating uses of continental shelves. This applies to traditional uses such as expanding oil and gas exploitation as well as future non-renewables such as methane hydrates; however it also applies to efforts aiming towards adaptation to global and climate change. Coastal shelf seas are one of society’s priority frontiers when new concepts of carbon capture and storage (CCS), land reclamation for offshore sea ports and urban expansion (for example in China) and renewable energy are evaluated and pilot activities developed. The context emerges from the global discourse on adaptation through green (and blue) economy23 development thus fostering societal transition to sustainability. While large scale offshore CCS developments, tidal, wave and osmotic energy production are still pretty much scenarios, offshore wind farm developments have entered much more concrete 19 GBI Research, 2012. Offshore Drilling Industry to 2016 – Rapidly Rising Demand for Hydrocarbons Expected to Boost Offshore Drilling in Ultra-Deepwater and Harsh-weather Environments, www.gbiresearch.com/Report.aspx?ID=Offshore-Drilling-Industry-to-2016-Rapidly-RisingDemand-for-Hydrocarbons-Expected-to-Boost-Offshore-Drilling-in-Ultra-Deepwater-andHarsh-weather-Environments&ReportType=Industry_Report&coreindustry=ALL&Title=Oil_~_ Gas&companyid=trp. 20 UNEP, no year. http//oils.gpa.unep.org/facts/extraction.htm#jointreport. 21 UNCTAD, 2012. Review of Maritime Transport 2011. Sales No.E.11.II.D.4, ISBN 978-92-1-112841-3. 22 SCOR Global P&C 09/2011. Changes in the global marine landscape and their impact on marine (re)insurance, www.scor.com/en/sgrc/pac/marine-transportation.html. 23 Fanning, A. 2012. ‘Economics, growth and energy in the Green Economy.’ Human Dimensions 1, 44–50.

158   Kannen, Kremer, Gee, and Lange levels of socio-political discourse and entrepreneurial strategy as we will show in the next section of this paper. As a consequence coastal and inland communities are becoming more closely linked with each other, also with the sea and even becoming dependent on each other when it comes to large scale electricity production from offshore wind energy, its storage and distribution. While this is a challenge on its own as a societal adaptation process, it is at the same time a large scale real time experiment in our shelf seas including today almost unknown socio-ecological consequences.

Offshore Wind Farming in the North Sea: Renewable Energy Generation on Continental Shelves Renewable energies have gained increasing prominence as a means of reducing greenhouse gas emissions (GHG) and thereby mitigating climate change. Technically and commercially, wind energy is, alongside hydropower, one of the most advanced renewable energy technologies and forms a growing industrial sector. While the capacity of wind farms installed by the end of 2009 met roughly 1.8% of global electricity demand, this contribution could grow to more than 20% by 2050 if ambitious efforts are made to reduce GHG emissions and other impediments to increased wind energy deployment are addressed.24 Within the EU – according to the European Renewable Energy Directive (2009/28/EC) – each European Member State has provided a National Renewable Energy Action Plan (NREAP) to the European Commission, which includes detailed projections for renewable energy development up to the year 2020. By that year, the cumulative consumption of renewable energy should reach an overall share of 20% across the European Union (EU). Offshore wind is of increasing interest to developers because of several advantages compared to the conditions onshore: wind speeds are higher and more predictable, larger areas are available and wind turbines can be higher as there are no settlements nearby. An installed capacity of 40 GW of offshore wind power is expected in Europe by 2020, in 2030 this can amount to 150 GW, of which about 126 GW will be located in Northern Europe.25 Plans for large scale offshore wind farms exist in several European countries with the largest amount of installations expected in the United Kingdom and Germany (figure 1) and a regional focus on the North Sea (figure 2). For Germany, offshore wind farms are

24 Supra note 9. 25 EWEA, Pure Power – Wind energy targets for 2020 and 2030, 2009 update, November 2009, cited in 3E, dena, EWEA, ForWind, IEO, NTUA, Senergy, SINTEF, 2011. Offshore Electricity Grid Infrastructure in Europe – A Techno-Economic Assessment. OffshoreGrid Final Report, www.offshoregrid .eu/images/FinalReport/offshoregrid_fullfinalreport.pdf, accessed 04 December 2012.

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expected to provide a capacity of 20 to 25 GW by 2030, meeting about 15 percent of the German electricity demand (and 30% by combining on- and offshore wind farms). This might – according to today’s technology – cover an estimated sea area of 2.000 to 4.000 square kilometres.26

Figure 1. Installed capacity of offshore wind farms in Northern Europe to 2030, OffshoreGrid scenarios.27

Figure 2. Distribution of installed capacity per specific marine area, OffshoreGrid scenarios.28 26 BMU – Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit, 2002. Strategie der Bundesregierung zur Windenergienutzung auf See. Berlin, Federal Ministry for Environment, Nature Conservation and Nuclear Safety (BMU). 27 3E, dena, EWEA, ForWind, IEO, NTUA, Senergy, SINTEF, 2011. Offshore Electricity Grid Infrastructure in Europe – A Techno-Economic Assessment. OffshoreGrid Final Report, p. 22, www.off shoregrid.eu/images/FinalReport/offshoregrid_fullfinalreport.pdf, accessed 04 December 2012. 28 Ibid.

160   Kannen, Kremer, Gee, and Lange These numbers demonstrate that a significant amount of marine space could be turned into wind farm sites in the next 20 years. However, these considerable spatial requirements of offshore wind farming meet sea areas that are already much contested. Shipping and port development, marine aggregate extraction, nature protection, and fisheries are just some examples of marine uses that also demand their share of space.29 Therefore, despite its potential for electricity generation without GHG emissions and its current growth trends, the introduction of offshore wind farming in large scales and near highly contested sea areas requires careful planning and new forms of governance.30 In particular shipping and fisheries are impacted by the construction of offshore wind farms. For fisheries in the German North Sea Berkenhagen et al.31 conclude that more than 50% of sole catches in the German North Sea come from areas for which wind farms are planned. This demonstrates the importance of looking at cumulative impacts of all planned wind farms on species-specific fishing efforts rather than impacts of individual wind farms. Furthermore, it “is also doubtful whether fishing opportunities can be substituted in remaining areas while most of the remaining area is considered MPA under the Natura 2000 protocol”.32 Similarly ecological impacts, in particular on marine mammals and birds33 of offshore wind farms are related to cumulative effects. Furthermore, ‘the North Sea has some of the busiest shipping lanes in the world and maritime transport continues to increase”.34 This implies that to keep areas free for safe shipping, it should be recognised that permanent installations such as wind farms increase the risk of collisions. Therefore, shipping and wind farms need to be spatially separated from each other.

29 Supra note 5. 30 Kannen, A. & Burkhard, B. 2009. ‘Integrated Assessment of Coastal and Marine Changes Using the Example of Offshore Wind Farms: the Coastal Futures Approach’. GAIA 18 (3): 229–238. 31 Berkenhagen J., Doring R., Fock H.O., Kloppmann M.H.F., Pedersen S.A., Schulze T. 2010. ‘Decision bias in marine spatial planning of offshore wind farms: problems of singular versus cumulative assessments of economic impacts on fisheries.’ Marine Policy 34(3):733–736. 32 Ibid., p. 736. 33 Garthe S., Mendel B. 2010. ‘Cumulative effects of anthropogenic activities on seabirds in the North Sea: methodology and first results.’ In: Lange M., Burkhard B., Garthe S., Gee K., Lenhart H., Kannen A., Windhorst W. (eds.) Analysing coastal and marine changes – offshore wind farming as a case study: Zukunft Kueste – Coastal Futures Synthesis Report. LOICZ R & S Report No. 36, pp. 86–89; Busch M., Kannen A., Garthe S., Jessopp M. 2013. ‘Consequences of a cumulative perspective on marine environmental impacts: offshore wind farming and seabirds at North Sea scale in context of the EU Marine Strategy Framework Directive.’ Ocean and Coastal Management 71 (2013), 213–224. 34 OSPAR 2010. Quality status report 2010. OSPAR Commission, London, p. 154.

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The Societal Dimension of Marine Space: Changing Perceptions of Sea Space Aside from conflicts with other demands for using sea space, the main consequence of offshore wind farming is that it creates large-scale fixed structures in an environment that has so far been largely devoid of such structures. It also creates demand for marine spatial planning, which is increasingly called upon to allocate sea uses to maximize spatial efficiency, reduce conflicts between sea uses and maintain the ecological integrity of the environment, which is discussed in the next section of this paper. One of the underexposed consequences of offshore wind farming is that it is changing the way of thinking about sea space altogether.35 Industrial uses such as offshore wind farming essentially regard the sea as an extension of the mainland, as free space that is available for development as long as the technology to do so is available and affordable. This is in line with the marine spatial planning perspective, which also regards the sea as space to be allocated and used, albeit as sustainably, efficiently and conflict-free as possible. This “industrialization of the sea”, however, marks an inescapable turning point in that the formerly ‘empty’ sea is now visibly built on. This fundamental re-casting of the sea as just another available space forces humans to re-evaluate some of the more traditional images we hold of the sea such as that of the sea as a largely natural place.36 An important question is how compatible an industrial perspective such as offshore wind is with these other views of the sea, and how compatible the rational spatial perspective is with more emotional views of the sea as a place. A recent study from Scotland has shown that fishermen’s perspective on the sea is distinctly not spatial, but place-based as they report a particular sense of belonging to the sea and responsibility for it.37 A study on the German West coast of Schleswig-Holstein has also shown that place-based perspectives play an important role in generating sense of place. Asked about their spontaneous associations with the sea, local residents name aspects as diverse as the physical environment, wildlife, nature, fishing, recreation, summer sun, sea food, land reclamation, storm surges, pollution, vastness or a sense of freedom. Aesthetic perspectives, informal recreational benefits derived from being by the sea and

35 Supra note 5. 36 Gee, K., 2010. ‘Offshore wind power development as affected by seascape values on the German North Sea coast.’ Land Use Policy 27, pp. 185–194. 37 MacKinnon, I. and Brennan, R. 2012. Belonging to the sea. Exploring the cultural roots of maritime conflict on Gaelic speaking islands in Scotland and Ireland. Scottish Crofting Federation and Scottish Association for Marine Science.

162   Kannen, Kremer, Gee, and Lange symbolic meanings associated with the sea were found to be particularly important in generating a sense of well-being.38 Social acceptance of change is a key driver of political processes. It therefore pays to take a closer look at the image of offshore wind farming held by different groups and its compatibility with place-based views of the sea. On the West coast of Schleswig-Holstein, local residents were found to have a varied image of offshore wind farming, with one group essentially in favour on account of the renewable energy argument (“clean energy”, “better than fossil or nuclear energy”) and another in opposition because of perceived threats to the marine environment and the aesthetic qualities of the sea (“destruction of the horizon”, “unknown impact on marine mammals and birds”). Group stakeholders such as local organisations and authorities were more concerned over the financial viability of the technology, the danger of ship collision (“oil on our beaches”) and the potential impacts wind farms may have on tourism, although some also argued in favour because of the potential job and revenue generation in the region (e.g. through wind turbine maintenance).39 Some arguments of local residents were highly emotional, indicating deeply held feelings about this issue and a real sense of threat (“destruction of all I hold dear”, “blight on the seascape”). Only one resident termed offshore wind farms explicitly beautiful. Those generally supportive of renewable energies tended to consider offshore wind farms a second-best, but necessary solution and were willing to trade aspects such as the open horizon against the perceived benefit of a “world worth living in for my children”.40 The attitudes revealed toward offshore wind farming are indicative of different value bases groups and individuals subscribe to. Conservation organisations calling for the protection of marine species, for example, will be motivated by different values than a developer seeking to maximize the financial return of an offshore wind farm, although the two positions are not necessarily mutually exclusive. The same applies to individuals, where different images of nature (as either resilient or ephemeral) were identified as a key driver of attitudes to offshore wind farming.41 These results, however, must take into account the fact that residents on the West coast of Schleswig-Holstein have no direct experience of 38 Gee, K., Burkhard, B. 2010. ‘Cultural ecosystem services in the context of offshore wind farming: A case study from the west coast of Schleswig-Holstein.’ Ecological Complexity 7 (3), 349–358. 39 Gee, K. & Licht-Eggert, K. 2010. ‘Stakeholder analysis in Coastal Futures.’ In: Lange, M., Burkhard, B., Garthe, S., Gee, K., Kannen, A., Lenhart, H. & Windhorst, W. (2010): Analyzing Coastal and Marine Changes: Offshore Wind Farming as a Case Study. Zukunft Küste – Coastal Futures Synthesis Report. LOICZ Research & Studies No. 36. GKSS Research Centre, Geesthacht, pp. 97–108. 40 Supra note 36. 41 Gee, K. forthcoming. The role of personal values and images of landscape in the acceptance of offshore wind farms on the North Sea coast of Schleswig-Holstein. Phd thesis. Helmhotz-Zentrum Geesthacht/University of Goettingen.

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offshore wind farming as yet, and that the actual impacts of offshore wind farming on the marine ecosystem remain controversial.42 This particularly applies to cumulative impacts of offshore wind farming and other marine uses.43 Questions of perception need to be linked to the question of whose view of the sea should count for more in decision-making processes, which is essentially an issue of ownership. In the Scottish example quoted above, the fishermen are not involved in decision-making on the future of the sea’s resources despite their strong sense of ownership of the sea. The same applies to the West coast of Schleswig-Holstein where local residents are not involved in the siting of prospective offshore wind farms despite distinct fears that these structures could threaten aspects about the sea which are particularly loved and appreciated. Given the rapid expansion of offshore wind farming, conflicts are likely to increase over different visions and priorities for the sea if place-based perspectives are not taken into account.

MSP in the Context of Fragmented Perceptions, Interests and Policies Looking at the multitude of perceptions and the many issues related to offshore wind farm development, offshore wind farming can be described as a point of convergence or meeting point of several administrative and geographical scales and policy arenas.44 Each of these is linked to particular priorities: climate change and energy policy (international and national level), regional development (regional and local level), or perception of the sea as a non-industrial environment (local level). Specific instruments such as Environmental Impact Assessments (EIA) or technical studies are readily available to deal with selected aspects of offshore wind farm development and planning. What is missing, however, is a combined policy framework capable of linking, e.g., energy policies to spatial policies for the sea45 and one that looks at the compatibility of different visions of the sea. In the earlier sections of this paper we have shown that planning and management of sea uses generally and offshore wind farming in particular is a challenging task, which needs to recognise a wide set of aspects. This allows framing offshore wind farming as embedded in a complex and dynamic social-ecological system. A social-ecological system is an ecological system that is intricately 42 Burkhard, B., Gee, K. ‘Establishing the resilience of a coastal-marine socio-ecological system to the installation of offshore wind farms.’ Ecology and Society 17/4,www.ecologyandsociety.org/ vol17/iss4/art34/ES-2012-5165.pdf. 43 Supra note 33, Busch et al. 2013. 44 Supra note 30. 45 Supra note 5.

164   Kannen, Kremer, Gee, and Lange linked with and affected by one or more social systems.46 Berkes and Folke47 use the term “social-ecological system” to emphasise the idea that humans form part of nature and that the delineation between social and ecological systems is artificial.48 In the example of offshore wind farming in Germany, main interactions between social systems and marine natural areas can be characterised as follows: Technical development and societal interest in renewable energies have created policies to support offshore wind farming for electricity generation. Economic instruments like the Renewable Energies Act (EEG 200/2004) in Germany provided a stimulus to the private sector to invest in large scale offshore wind power projects. These projects, when realised, affect the integrity of marine and coastal ecosystems, which in turn may have impacts on the production of other goods and services demanded by society.49 On the other hand, offshore wind farming has impacts on social systems through economic benefits such as employment and income generation, relating it to issues of regional development50 and at the same time through debates about visual and other non-tangible benefits.51 However, similar types of interaction exist for other sea uses, be it shipping, fishing, sand and gravel extraction, recreation or nature conservation. So – referring to Kannen and Burkhard52 – what is the challenge for offshore wind farm planning and management within this complex setting? The challenge, first and foremost, is to govern a complex maritime system linked to several policy arenas and characterised by path dependent, emergent and non-linear behaviour and high uncertainty as far as social, political and ecological impacts of offshore

46 Anderies, J.M., Janssen, M.A., Ostrom, E. 2004. ‘A framework to analyze the robustness of socialecological systems from an institutional perspective.’ Ecology and Society 9/1. www.ecologyand society.org/vol9/iss1/art18. 47 Berkes, F., Folke, C. 1998. ‘Linking social and ecological systems for resilience and sustainability.’ In: Berkes, F., Folke, C. (eds) Linking social and ecological systems: Management practices and social mechanisms for building resilience. Cambridge University Press, pp. 1–27. 48 Folke, C., Hahn, T., Olsson, P., Norberg, J. 2005. ‘Adaptive governance of social-ecological systems.’ Annual Review of Environment and Resources 30: 441–73. 49 Busch, M., Burkhard, B., Lange, M., Gee, K., Stelljes, N. 2010. ‘Impacts of Offshore Wind Farms on the Provision of Ecosystem Services and Human Well-being.’ In: Lange, M., Burkhard, B., Garthe, S., Gee, K., Lenhart, H., Kannen, A., Windhorst, W. (2010) Analysing Coastal and Marine Changes – Offshore Wind Farming as a Case Study: Zukunft Kueste – Coastal Futures Synthesis Report. LOICZ R & S Report No. 36, pp. 121–160. 50 Hohmeyer, O., Kannen, A., Lange, M., Köhn, J. 2010. ‘Analyzing potential Impacts of Offshore Wind Farms on regional Economic Development.’ In: Lange, M., Burkhard, B., Garthe, S., Gee, K., Lenhart, H., Kannen, A, Windhorst, W (2010) Analysing Coastal and Marine Changes – Offshore Wind Farming as a Case Study: Zukunft Kueste – Coastal Futures Synthesis Report. LOICZ R & S Report No. 36, pp. 109–120. 51 Gee, K. 2010. ‘Offshore wind power development as affected by seascape values on the German North Sea coast.’ Land Use Policy 27: 185–194. 52 Supra note 30.

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wind farms are concerned. Kannen53 has characterised some of the particular challenges for MSP as dealing with a) cumulative impacts arising out of specific sea use patterns, b) (spatial) conflicts among different sea uses, c) a multitude of perceptions and attitudes of stakeholders and public and d) transnational and transboundary scales. To accommodate the trend of increasing use and competition for marine space, a range of policies that focus on the sea as a particular area is evolving in Europe in recent years. Pushed in particular by the European Union, marine (or maritime) spatial planning (MSP) is currently evolving as one of the major tools for integration of different demands for marine space and resources.54 The EU defines MSP as “. . . planning and regulating all human uses of the sea, while protecting marine ecosystems. It focuses on marine waters under national jurisdiction and is concerned only with planning activities at sea. It does not cover management of coastal zones or spatial planning of sea-land interface.”55 This definition clearly separates MSP from terrestrial spatial planning, even though there are many interfaces which have to be taken into account. For example, cables and pipelines need connections from the sea to the land and ports need access from both the sea side and the land side, which requires strategic planning to consider hinterland links as well as, say, deepening waterways to allow access by large ships. However, a number of MSP activities currently exist throughout Europe, in stages ranging from early beginnings and pilot projects to wellestablished statutory systems. Germany, for example, has spatial plans in place for both its North Sea and Baltic Sea EEZs. Similar plans exist for the Netherlands56 and some sea areas in Norway.57 Other countries such as the United Kingdom have started to develop spatial plans for their sea areas. Several pilot projects exist as well.58 One of the problems MSP practitioners have to deal with is the multitude of marine policies and legislations coming from different scales and formulating 53 Supra note 5. 54 Ibid. 55 www.ec.europa.eu/maritimeaffairs/policy/maritime_spatial_planning/index_en.htm 56 Ministerie van Verkeer en Waterstaat 2009. 2009–2015 Policy Document on the North Sea. Dec. 2009. 57 Olsen, E., Kleiven, A.R., Skjoldal, H.R., and von Quillfeldt, C.H. (2010). ‘Place-based management at different spatial scales.’ Journal of Coastal Conservation. DOI: 10.1007/s11852-010-0108-1; Ottersen, G., Olsen, E., Van Der Meeren, G.I., Dommasnes, A., and Loeng, H. (2011). ‘The Norwegian plan for integrated ecosystem-based management of the marine environment in the Norwegian Sea.’ Marine Policy, 35(3), 389–398. Elsevier. doi:10.1016/j.marpol.2010.10.017. 58 Backer, H. 2011. ‘Transboundary maritime spatial planning: a Baltic Sea Perspective.’ Journal of Coastal Conservation 15, 279–289. DOI: 10.1007/s11852-011-0156-1; www.baltseaplan.eu, in particular Gee, K., Kannen, A., & Heinrichs, B. 2011. BaltSeaPlan – Towards a Common Spatial Vision: Implications of the international and national policy context for Baltic Sea space and MSP. BaltSeaPlan Report No. 8.

166   Kannen, Kremer, Gee, and Lange different, sometimes conflicting goals. For example the Integrated Maritime Policy (IMP) for the European Union59 explicitly formulates economic competitiveness and development of maritime industries as a political goal. Therefore, while the IMP frames economic use of marine space as an opportunity, several environmental policies and legislations frame human activities as a risk to the marine ecosystem.60 Also policies concerning climate change and development of renewable energies, which in particular provide targets and support for offshore wind farms, wave and tidal devices, depend on use of marine space. Therefore, together with several national and local regulations, a complicated pattern of legislation and policies has evolved (see table 1 for a brief overview). Table 1. Overview of policies and legislations for marine areas at different scales from a European and German perspective. Scale

Policies and legislations

Non-EU

UNCLOS (relevant for EEZ, translated into national law, e.g. in Germany See Anl.Verordnung) Environmental Conventions and Agreements (e.g. CBD) IMO Regulations Regional Seas Conventions (OSPAR, HELCOM, Barcelona, etc.)

EU

EU Integrated Maritime Policy (Blue Book) and related policies, e.g. MSP roadmap Common Fisheries & Agricultural Policies Maritime Strategy Framework Directive Other environmental directives (Birds and Flora-Fauna Habitat, together forming the network of Natura 2000 areas, Water Framework Directive, etc.) Sectoral strategies and policies for Climate Change, energy, environment and cohesion)

National (example Germany)

Licensing procedures for activities in EEZ (national) and territorial waters (Federal States/Laender) Spatial Planning in the sea (national for EEZ, Federal States/ Laender for terrestrial waters) Spatial Planning on land (Federal States/Laender) Nature conservation (in EEZ national, in territorial waters and on land Federal States/Laender Sectoral policies for sand/gravel extraction, ports/shipping, local fisheries, environment, regional development, renewable energies at different administrative levels

59 European Commission 2007. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. An Integrated Maritime Policy for the European Union. COM(2007) 575 final, 10 October 2007. 60 Supra note 5.

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Furthermore, while the competences for MSP are located at the level of EU Member States, the cumulative effect of all human maritime activities and all sectoral planning decisions in one or more countries in a marine basin can impact the entire basin as an ecological and economic system thereby requesting transnational co-operation in MSP to ensure that pressures and effects from human activities are adequately managed and planned, and also that opportunities are identified and realized. The BaltSeaPlan ‘Vision 2030’61 has identified four key topics for transnational co-operation in the Baltic: (1) a healthy marine environment; (2) a coherent pan-Baltic energy policy; (3) safe, clean and efficient maritime transport; and (4) sustainable fisheries and aquaculture. Looking at the different perceptions, attitudes and values as well as different policy goals and interests from a variety of actors, it becomes obvious that MSP (and other types of integrated planning) are not simple, data-based decisionmaking processes, but become social processes and actions, which may depend on different forms of communication and social interaction. This implies that priorities in a spatial plan then are the result of negotiations, influenced by power relations and discourses.62 Therefore, even the same process can lead to different outcomes and priorities in different areas and actor constellations and at different times and a stronger role of social science research is needed to support such processes.

How Science Can Contribute: Along the Five Grand Challenges of Earth System Science for Global Sustainability63 and the New FUTURE EARTH Global Research Initiative This section is elaborated along two lines of thinking. First, we look at the roles of disciplinary versus inter- and transdisciplinary perspectives and second, we look into the evolving new Earth Systems Science initiatives. Disciplinary versus Interdisciplinary Perspectives The challenge arising from the risks and opportunities in the new frontier described above is for the scientific community to provide the knowledge needed, and for society to utilize the knowledge to respond to, cope with and adapt to global environmental and societal change. Informing sustainable development 61 Gee, K., Kannen, A., Heinrichs, B., 2011. BaltSeaPlan Vision 2030 for Baltic Sea Space. Hamburg, Autumn 2011. www.baltseaplan.eu/index.php/BaltSeaPlan-Vision-2030;494/1. 62 Supra note 5. 63 Reid, W.V., Chen, D., Goldfarb, L., Hackmann, H., Lee, Y.T., Mokhele, K., Ostrom, E., Raivio, K., Rockström, J., Schellnhuber, H.J. and A. Whyte, 2010. ‘Earth System Science for Global Sustainability: Grand Challenges.’ Science 330, Policy Forum, 916–917.

168   Kannen, Kremer, Gee, and Lange and use of shelves namely for offshore wind farming is a case of “Post-Normal Science” – a concept developed by Funtowicz and Ravetz, aimed to frame research in cases where “facts are uncertain, values in dispute, stakes high and decisions urgent”.64 The concept is primarily applied in the context of long-term issues where there is less available information than is desired by stakeholders which perfectly reflects the situation of current plans for and investments in offshore wind farming. The concept calls for “extended peer” participation to bring to the table the most comprehensive collection of facts and knowledge as articulated by the various actors involved in an interactive process. In recent terminology this participatory process can be described as co-design of transdisciplinary research agendas and knowledge co-production. In terms of disciplinary vs. interdisciplinary science Kannen et al. (2011)65 point out that the strengths of conventional and disciplinary research include a detailed process of understanding and provision of quantitative assessments and models. However, they also explain the shortcomings being that single disciplinary-based knowledge cannot be readily synthesized to characterize complex system behaviour. In addition Rudd et al. (2013)66 conclude that disciplinary backgrounds of experts strongly influence the priority setting during the framing of research questions. They simply reflect different worldviews and value systems influencing their individual judgement. It is obvious that provision of actionable science to inform policy processes and decision-making must be based on a collective participatory and transdisciplinary process from the outset. In the case of the United Kingdom, Potts et al. (2012)67 see a major challenge in this process that ultimately aims to inform the transitioning to ecosystem–based management and planning. While this is already reflected in the European Marine Strategy Framework Directive and national jurisdictions of the Member States, a lot of spade work still needs to be done to achieve truly integrated approaches that build on collective efforts. Science in this process is particularly challenged to bridge the world views of the actors involved i.e. the different sectors, their activities (here sea uses, energy policies, etc.) integration across temporal and spatial including trans boundary 64 Funtowicz, S.O. and Jerome R. Ravetz. 1991. ‘A New Scientific Methodology for Global Environmental Issues.’ In: Costanza, R. (Ed) Ecological Economics: The Science and Management of Sustainability. New York: Columbia University Press: 137–152. 65 Kannen, A., Forbes, D.L., Cormier, R., Solomon, J., 2011. Integrated approaches to Coastal Change in the Arctic. In: Forbes, D.L. (Ed.): State of the Arctic Coast 2010. Scientific Review and Outlook, pp. 79–87, www.arcticcoasts.org. 66 Rudd, M. and R.N. Lawton 2013. ‘Scientist’s prioritization of global coastal research questions.’ Marine Policy 39 (2013) 101–111. 67 Potts, T., O’Higgins, T. and E. Hastings, 2012. ‘Oceans of opportunity or rough seas? What does the future hold for developments in European marine policy?’ Phil. Trans. R. Soc. A 2012 370, 5682–5700, doi: 10.1098/rsta.2012.0394.

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scales, and needs to incorporate the public and its various opinions, values and beliefs. Potts et al. see the conflicting activities in marine space such as offshore wind turbines, fisheries or MPAs as the level of a first order integration (of actors and activities) followed by second order (spatial and temporal scales integration) and third order including the full social ecological system scale. This is particularly relevant in cases such as large scale offshore wind farming (up to a few thousand wind turbines in the Southern North Sea) when existing models, e.g. for sediment dynamics, benthic biodiversity and sub-mesoscale hydrographic dynamics, are challenged to project the complexity of natural forcing and variability and the interplay with drivers, changes and feedbacks of human interaction with nature. A transformation of large areas of the shelf seas to offshore wind farms can be framed as a social-ecological system as discussed above, characterised by feedback loops between its social and natural parts and non linearities in system response. Socio-political changes such as new national or EU policies, global energy markets and economic crises may bring another dimension to the socio ecological system approach, the one of surprises, making meaningful prediction even more ambitious. As Nobel Prize laureate E. Ostrom put it “To understand sustainability in social-ecological systems (SESs) we need to build a coherent understanding of how systems are progressively linked to ever larger systems and how upward and downward causation linkages occur within SES as well as across diverse sectors and scales”.68 Therefore the bottom line is that disciplinary science is fundamental to generate precise pictures of parts and individual functions of the whole system.69 Limitations are faced in conventional approaches when dealing with missing information and uncertainty and not being inclusive in terms of actors and evaluation of their individual relevant knowledge needs and claims.70 Key research areas to be considered and ultimately integrated can be summarized as follows: • assessment of ecosystem changes needs to consider interactions between physical and biological processes, missing information on system components and feedback loops needs to be compiled; in the case of offshore wind farms the point of departure is the comprehensive characterization of the state of benthic and pelagic system functioning, the ecosystem goods and services arising from their coupled functioning and effects of current drivers such as bottom trawl fisheries, gravel mining and effects of climate change; • social issues need to be considered to assess impacts of ecosystem changes on human well being, and to develop an understanding of the scale of the socio economic services/impacts originating from the region of concern (e.g. Southern 68 Ostrom, E., 2008. ‘Frameworks and theories of environmental change.’ Global Environmental Change, 18, pp. 249–252: 249. 69 Carpenter, S.R., Folke, C., Scheffer, M. and Westley, F. 2009. ‘Resilience: accounting for the noncomputable.’ Ecology and Society, 14 (1), 13, www.ecologyandsociety.org/vol14/iss1/art13. 70 Supra notes 63 and 65.

170   Kannen, Kremer, Gee, and Lange North Sea trajectories of revenues from fisheries, energy supply, transportation services, biogeochemical functions). This also includes an underpinning of different customs, values, needs, and cultural aspects (e.g. reality and people’s perception of coastal recreational values at stake by industrialisation of coastal lands and sea); • institutional issues are central in understanding the decision-making and the criteria used by different groups including government authorities at various levels, multi-national corporations, the markets or civil society at large. In the case of offshore wind farming European and national jurisdictions need to be considered, and as well political mid- to long-term strategies towards green economies and low carbon societies, for example: º EU 2020,71 the European Union’s ten-year growth strategy, includes a large package on response to climate change aimed to accomplish three key targets set by the year 2020: 20% greenhouse gas emissions cuts; 20% minimum share of renewables in the energy mix, 20% increase in energy efficiency); º the so called “Energiewende” concept in Germany72 which is a national strategy for transition of the energy sector to prioritize renewables; and º technologically driven aspects such as transboundary agreements for power grids to enable continued supply of a discontinuously produced (wind) energy or transboundary agreements to engage other technologies for renewables integration i.e. “energy storage” such as pumped hydro storage (e.g. in Norway) or pumped thermal energy hydrogen, etc. • comprehensive multi-sectoral and socio-ecological information including likely trajectories of global and climate change to enable scenarios and to inform the development of tools for adaptation in a recognition of a certain level of uncertainty and non-linear relationships; and •  evaluation and modelling of risks of large scale offshore constructions arising from competing or nearby sea uses such as shipping as well as influences of climate change sediment and hydrodynamics

Bearing these non-exhaustive key aspects in mind, the call is for a combination of disciplinary knowledge and a complementary broader and sometimes more generalist perspective. The latter however can focus on the wider system scale, at the possible price of lower precision and higher uncertainty.73 Advanced observation enabling integrated modelling and assessment will be substantial to assess the system as a whole. This includes an appropriate concept for the social dimension and the resulting indicators (including qualitative indicators) to gauge change in the social–ecological coupling74 as well as to explore the role

71 http://ec.europa.eu/europe2020/index_en.htm 72 www.bmu.de/english/transformation_of_the_energy_system/general_information/doc/48050 .php 73 Supra note 65. 74 Glaser, M. and B. Glaeser, 2011. ‘The Social Dimension of Social-Ecological Management’ in Wolanski E., and D. McLusky Treatise on Estuarine and Coastal Science, Elsevier, Vol. 11 (Management of Estuaries and Coasts) 5–27.

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of energy embedded in economic theory.75 Deriving scientific knowledge solidly founded in the understanding of environmental and social processes would be one way of integrating institutional issues including markets, civil society and policy in order to develop collectively the appropriate means of governance. Related Research Questions of the Global Earth System Science Organizations and Initiatives On global scales the research and integration needs outlined above are reflected in both, first the so-called five Grand Challenges76 that evolved from a global peer discussion involving more than 10,000 scientists and initiated by the International Council for Science and the Social Science Council ICSU/ISSC and second, the parallel discourse conducted by leading national research funders concerned with Earth system research – the Belmont Forum.77 Resulting from these visioning processes the Rio + 20 conference in June 2012 saw the launch of the new global 10-year research initiative “Future Earth” a collective effort supported by the global Science and Technology Alliance for Global Sustainability (ICSU, ISSC, IGFA, the Belmont Forum, UNEP, UNESCO, UNU and WMO as observer).78 Future Earth is aimed at enabling the next decade of transdisciplinary research co-designed by the science and user communities in a transparent and continued process. The underlying understanding is that societal transition to sustainable green (blue) economies requires targeted action solidly founded in scientific knowledge. Research needs addressing the issues of renewable energy are embedded in three “Future Earth” Integrated Research Themes. These (still draft) themes are listed hereunder and aspects and science questions relating to energy and of significance for offshore wind farming are explicitly listed and interpreted: Future Earth Integrated Research Theme (IRT) 1: Dynamic Planet • What is happening to the human and geophysical driving forces of change such as consumption, population, technology, greenhouse gases, and evolution and how do they interact? • What are the scenarios for the future including natural variability, the risks of tipping points and catastrophic change?

Here one may argue that our current understanding of impacts from offshore wind farming relies on experiences with rather few turbines and extremely short time scales; large scale investments seeing thousands of them, e.g. in the Doggerbank area in the North Sea, turns out to be a major experiment of environmental 75 Supra note 23. 76 Supra note 63. 77 Belmont Forum White Paper, www.igfagcr.org/index.php/challenge 78 www.loicz.org/about_us/futureearth/index.html.en

172   Kannen, Kremer, Gee, and Lange engineering in adaptation to global and climate change. The cumulative impacts of many wind farms and turbines within one particular area and cumulative impacts arising from a pattern of interacting sea uses are largely unknown up to now.79 Future Earth IRT 2: Global Development • How can we ensure secure and sustainable food, water, air, energy and materials for nine billion people? • What energy options are available to provide secure and affordable energy for all with reduced environmental impacts?

These are central questions addressing the rationale behind massive renewable energy investments in marine areas. Actually offshore wind farming is currently widely seen as one of the energy options for the future. Similarly other ocean renewables such as tidal and wave energy could become additional options. Therefore marine areas might become energy generating areas in many regions of the world. Future Earth IRT 3: Transformation towards Sustainability • How can we align governance to manage global environmental change and sustainable development? • What are the options for innovative green technology and economics to promote, for example, lower carbon futures and more rewarding work? • How do information, values and policies influence individual and corporate behavior to more sustainable patterns of production, trade and consumption? • What triggers system transformations and what leverage points can be used to promote deliberate and equitable change towards sustainability?

In the case of offshore wind farming these questions need to be broken down to the regional scale and can be tailored to integrate the environmental functions/ services with research on the interplay of market sectors, policies and society at large. They form central questions asking for co-design with a variety of actors from the beginning. Researchers will be asked to put technology options in the context of public perception and preparedness to consider an active transition. This requires a collective effort of natural and social sciences, law and behavioral sciences given that in a post-normal science context a full review of societal value systems is requested with the aim to inform decision-making processes and public discourse as part of a collaborative learning process towards adaptive management. The five Grand Challenges of Earth system science for global sustainability80 are displayed in figure 3. In our reflection we only focus on three of them (challenge 1, 3 and 5) and interpret those parts of the challenges and research questions that can be closely related to offshore wind farming. 79 Supra note 5. 80 Supra note 63.

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Figure 3. Grand Challenges in Earth System Science for Global Sustainability. The concentric circles represent the disciplinary research needed in the social, natural, health and engineering sciences and the humanities that must be carried out alongside interdisciplinary and transdisciplinary research to address the challenges. The lines linking the grand challenges show that progress in addressing any challenge will require progress in addressing each of the others (adapted from figure 1, Earth System Science for Global Sustainability: The Grand Challenges).81

Challenge 1: Forecasting It is key to “improve the usefulness of forecasts of future environmental conditions and their consequences for people”.82 In a nutshell this calls for significant advances in our ability to assess the potential impact of environmental changes on human well-being (including economies, health, food security, energy security, etc.) and the potential response to such changes. Science is challenged to make an effort to quantify the uncertainties of forecasts where possible and ask how to deal with uncertainties in decision-making. Offshore wind farming is one of the responses to change and at the same time its impacts remain uncertain if we assume a large scale development. Therefore related forecasts and assessments should encompass the social, political and environmental aspects 81 ICSU (2010). Earth System Science for Global Sustainability: The Grand Challenges. International Council for Science, Paris. 82 Supra note 63.

174   Kannen, Kremer, Gee, and Lange relevant for the people potentially affected. Priority research questions mentioned for this challenge and related to offshore wind farming are: • What significant environmental changes are likely to result from human actions – in this case large scale transformation of continental shelves including competing uses of sea surface and sea floor? and • How would those changes affect human well-being, and how are people likely to respond?

This should highlight the implications for coastal communities in economic and cultural terms and an in-depth look at people’s perception of shelf transformation and related land-based infrastructure. Challenge 3: Confining The key focus is to “determine how to anticipate, recognize, avoid and manage disruptive global environmental change”.83 This challenge looks into the issue of thresholds for system change which are sometimes abrupt and driven by sociopolitical and economic surprises such as the recent global economic crises or the collapse of the Soviet Union which triggered a fundamental improvement of environmental conditions of the western Black Sea. In this light shelf sea transformation needs to be researched in consideration of an increasingly interconnected world where hardly any sector can act in isolation and teleconnected drivers affect food, health, water and security. The visioning process underscores that our current institutions (including law) to a considerable degree have not been designed to deal with these non-linear dynamics. Related priority research questions for this challenge are: • Which aspects of the coupled social-environmental system pose significant risks of feedback with harmful consequences? • How can we identify, analyze and track our proximity to thresholds and discontinuities in coupled social-environmental systems? When can thresholds not be determined? and • How can improved scientific knowledge of the risks of global change and options for response most effectively catalyze and support appropriate actions by citizens and decision-makers?

In the context of offshore wind farming our current understanding of potential consequences of large scale transformations on the shelves is restricted to rather small scale examples. The big picture remains difficult to oversee. To be able to forecast the implications research needs to identify meaningful indicators to observe the (cumulative) effects of these large scale investments. Risk assessment of large scale offshore wind farming will have to be investigated

83 Supra note 63.

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collectively in light of the environmental and socio-economic consequences.84 This includes informing about the tradeoffs and benefits potentially derived from (marine) renewable energy. Challenge 5: Innovating Questions formulated by the global Earth system science community link most closely to societal transformation at large and therefore include new energy concepts. The recent visioning of global researchers highlights the importance to “encourage innovation (coupled with sound mechanisms for evaluation) in developing technological, policy oriented, and social responses to achieve global sustainability”.85 The authors of the Belmont Forum White Paper86 point out that “considerable work is underway to explore innovative approaches such as geo-engineering and green energy technologies”. The question of “how such innovation can be responsibly intensified and how the risks associated with global environmental management can be adequately assessed” can be related directly to offshore wind farming. The underlying mid to long term objective is to find and enable informed ways to provide global energy security entirely by sources that are renewable and that have neutral impacts on other aspects of global sustainability. The related priority research question for challenge 5 is formulated as: • What incentives are needed to strengthen systems for technology, policy and institutional innovation to respond to global environmental change and what good models exist?

Again research is called upon to inform society and decision makers about tradeoffs and to base this on comprehensive and innovative assessments of risk and opportunities inherent in offshore wind farming. Scientists will be asked to provide a thorough picture of the environmental goods and services to society that the shelf system provides and put those into the context of opportunities and tradeoffs from offshore wind investments. However, science on governance is needed to look at the functioning of institutions and identify or discuss changes in institutional processes and structures and of decision criteria. Feeding into marine spatial planning (MSP) as one small part of the marine institutional setting such information may assist in developing inclusive and participative 84 See also for an example of an integrated project looking at offshore wind farms: Lange M., Burkhard B., Garthe S., Gee K., Lenhart H., Kannen A., Windhorst W. (2010) Analysing coastal and marine changes – offshore wind farming as a case study: Zukunft Kueste – Coastal Futures Synthesis Report. LOICZ R & S Report No. 36, p. 212, www.loicz.org/imperia/md/content/loicz/ print/rsreports/loiczrs36_final-300810_online.pdf. 85 Supra note 77. 86 Supra note 77.

176   Kannen, Kremer, Gee, and Lange discourse at several levels about prioritization of areas and provision of incentives for renewable energy production. Underlying this is the principle of an ecosystem–based management which considers the social and environmental coupling and contributes to societal transformation. In figure 4 we summarize some key scientific challenges addressing the cumulative effects and research needs in the context of offshore wind farming. They are mapped on the Grand Challenges of the global scientific priority discourse 2009–2010 outlined above.

Conclusions The paper illustrates that continental shelves face considerable acceleration of human resource use globally and often reflect the most rapid global environmental change on regional scale. As a major source of global ecosystem goods and services shelf seas and the sea bottom reflect multiple transition efforts of society to adapt to global change, e.g. in the area of regional and global energy policy and technology as well as mitigation of carbon emissions (CCS, renewable energy). The paper elaborates upon the example of offshore wind farm development in the North Sea and its resulting transboundary social-ecological implications cutting across a range of different spatial and jurisdictional and political scales. A key conclusion is that dealing with the cumulative effects of multi-sectoral

Figure 4. Research challenges addressing cumulative effects of offshore wind farming mapped on the Grand Challenges in Earth System Science for Global Sustainability.87

87 Supra note 81.

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activities and normative conflicts between actors in a modus of foresight and informed scenarios calls for a continuous process of co-design and collective framing in planning and management. All actors representing the pillars of governance, i.e. markets, policy, civil society and science have to work collectively to set and review the research agenda and oversee the application of relevant knowledge in decision-making. The socio-political request for transition to green economies illustrated by this example requires adaptation of economic energy and technology systems and leads to social implications as well as consequences for shelf ecosystems. It is therefore central that all societal actors engage in a collective effort to explore the tradeoffs of large scale shelf transformation and offshore wind energy investments and to base this on comprehensive and innovative assessments of risks and opportunities. As a consequence, this complex transition needs to be researched in consideration of an increasingly interconnected world where no one sector can act in isolation and teleconnected drivers affect human well-being. The roles of science and research are critical in informing the MSP process. Research is expected to support the step from simple zoning to dynamic multiand co-use concepts on the continental shelves required for planning and management processes. The underpinning assessments and process studies need to apply a social-ecological system view to account for cumulative effects, scales and feedbacks. Furthermore, if MSP is seen as one element of supporting the transition towards renewable energies and the related transformations in economy and society, social science research is needed on cooperative planning processes, underlying values and perceptions, the cultural framing of planning in different countries and regions and concepts that may support the transition of institutions. An underlying principle is that scientific disciplines from natural and social sciences involved bring in their individual knowledge bases and processes of understanding but at the same time work collectively in a transdisciplinary mode, i.e., addressing the environmental, social and legal issues of offshore wind farming with the relevant actors. The goal is to co-produce knowledge that is appropriate to: • inform a process of ecosystem-based management; • create a bridge between the different world views of stakeholders (this is a scientific and brokering function also during the co-design process); and • address these issues at the scale of a social-ecological system, i.e., how humans interact with nature including feedback loops and learning.

Such an integrated approach comprises the interactions at the system level and synthesises in a broader context to assist decision-making processes. The global dimension of large scale adaptation processes and their socio-political drivers and environmental consequences also reflects in the Earth system science visioning that was conducted between 2009 and 2011 under the leadership of

178   Kannen, Kremer, Gee, and Lange the International Council for Science (ICSU) and the International Social Science Council (ISSC). Offshore wind farming is a very typical case of “post normal science” which maps exactly on the Grand Challenges that resulted from the visioning. Therefore future Earth System Science might provide a template for future research on continental shelf transition and marine renewables. The expectations to provide advanced forecasting of the near- and mid-term implications of large scale wind farming based on interdisciplinary observation systems are an example reflected in the first challenge. Another one, which needs to be addressed by research and is discussed in the second challenge, is the need to improve thoroughly our understanding of system processes and thresholds under the influence of large scale transformation of continental shelves. Response and Innovation, the final two challenges, touch upon issues of governance and a strong science policy interface and dialogue. The emerging Future Earth Initiative addresses the integrated research themes “Dynamic Planet”, “Global Development” and “Transformation towards Sustainability”. This decadal initiative will be the upcoming frame for global Earth System and Sustainability research. We conclude that offshore wind farming and shelf uses for societal adaptation to climate change are globally relevant cases mapping onto the priorities for such an initiative. It is a key example where innovative science for action is required and relevant for society.

Acknowledgements This article draws on research from the KnowSeas project funded by the European Community’s Seventh Framework Programme [FP7/2007–2013] under grant agreement number 226675. The KnowSeas project is affiliated with LOICZ (Land-Ocean Interactions in the Coastal Zone). As well, results from other LOICZ projects and work within the LOICZ IPO contributed to this paper. LOICZ is a core project of the International Geosphere-Biosphere Programme (IGBP) and the International Human Dimensions Programme on Global Environmental Change (IHDP).

The Legal Framework for the Regulation of Safety and Environmental Issues on the Outer Continental Shelf Joanna Mossop1 Abstract To date, the Commission on the Limits of the Continental Shelf has issued 14 recommendations relating to the outer continental shelf of 15 states. As of 2010, there were in excess of 50 full submissions and 40 partial submissions that had been lodged with the Commission. If most (or all) of these submissions are upheld, then many states will have to consider how to appropriately regulate activities on the continental shelf. The main complicating factor for the OCS is that, above the shelf, the freedoms of the high seas prevail. Article 78 establishes that the rights of the coastal State over the continental shelf do not affect the legal status of the superjacent waters. In addition, “the exercise of the coastal State over the continental shelf must not infringe or result in any unjustifiable interference with navigation and other rights and freedoms of other States”. This paper considers the implications of this legal framework for safety and environmental regulation of activities taking place on and above the OCS.

I. Introduction Concerns about environmental protection and safety of operations on the continental shelf were brought into sharp relief by the Deepwater Horizon event in the Gulf of Mexico in July 2010. This event highlighted the potential impacts on human and environmental interests when things go wrong on the continental shelf. Much needed attention is being paid to how regulation could better protect such interests in the future. However, it is sometimes overlooked that regulation of the areas of the continental shelf beyond 200 nm (the “outer continental shelf ” or “OCS”) needs to take into account the different international legal framework that applies to that zone. To date, the Commission on the Limits of the Continental Shelf has issued 18 recommendations relating to the outer continental shelf of 17 states. As of 1 March 2013, there were 57 states that had lodged submissions with the Commission and a further 25 states have lodged preliminary information prior 1 Senior Lecturer, Law Faculty, Victoria University of Wellington. The author’s PowerPoint is available at http://www.virginia.edu/colp/pdf/Halifax-Mossop.pdf. The author wishes to gratefully acknowledge the support of the New Zealand Law Foundation in preparing this paper.

180   Joanna Mossop to full submissions. If most (or all) of these submissions are confirmed, then many states will have to consider how to appropriately regulate activities on the continental shelf. From the coastal State’s perspective, there is no juridical difference between the continental shelf within 200 nautical miles, and the continental shelf beyond 200 nautical miles. The rights to the living and non-living resources set out in article 77 of the United Nations Convention on the Law of the Sea (LOSC)2 are the same across the entire shelf. However, the particular circumstances that apply on the outer part of the continental shelf (OCS) mean that careful consideration needs to be given to the appropriate extent of coastal States’ regulation. The main complicating factor for the OCS is that, above the shelf, the freedoms of the high seas prevail. Article 78 establishes that the rights of the coastal State over the continental shelf do not affect the legal status of the superjacent waters. In addition, “the exercise of the coastal State over the continental shelf must not infringe or result in any unjustifiable interference with navigation and other rights and freedoms of other States”. Although in many cases the prospect of activities taking place beyond 200 nm from the coast seems to be a distant one, the reality is that increasing interest is being taken in the exploitation of resources on the outer continental shelf. If states are to realise the economic value of their resources whilst also ensuring environmental protection, they should clearly understand the limitations and possibilities of the legal framework for the OCS. This paper will explore the implications of this legal framework for safety and environmental regulation of activities taking place on and above the OCS.

II. Activities on the Outer Continental Shelf and Their Potential Environmental and Safety Consequences The perceived value of the resources of the continental shelf encouraged states to seek sovereign rights to these resources beyond 200 nm from the coast during the LOSC negotiations. The LOSC introduced significant changes to the preexisting concept of the continental shelf under the 1958 Geneva Convention.3 The juridical continental shelf was extended to 200 nm to coincide with the exclusive economic zone (EEZ) regardless of whether a physical shelf existed.4 Where the physical continental shelf extended beyond 200 nm, article 76 established a formula by which a coastal State could establish the outer limits of the

2 United Nations Convention on the Law of the Sea 1982, 1834 UNTS 397. 3 Convention on the Continental Shelf 1958, 499 UNTS 312. 4 Article 76(1), LOSC.

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shelf though the Commission on the Limits of the Continental Shelf.5 Since then, more than 76 states have made full or partial submissions on the outer limits of their continental shelves. In the future, states and businesses will consider how to exploit these resources. Although oil and gas exploitation remains the primary interest, attention is now turning to underwater mineral deposits. At the same time, scientists are increasing our knowledge about ecological systems in the deeper waters of the continental shelf.6 The early belief that the deep seabed was bereft of life has long been disproved. Rather, some areas of the continental shelf and deep seabed contain biological hotspots that are highly vulnerable to disturbances by human activities. In recent decades, scientists have identified seamounts, hydrothermal vents, cold seeps and other locations as areas where unusual, and often unique, species exist. The continental margin has been described as the most geologically diverse component of the sea floor, providing diverse habitats for living resources.7 Ultimately, both living and non-living resources may be of interest to coastal States. A. Mineral Resources Oil and gas, although normally exploited in waters close to shore, are being explored at increasing depths, up to 2000–3000 meters of water.8 As oil and gas become increasingly scarce, it is possible that exploitation could occur on a state’s outer shelf. The potential environmental impacts of such activities range

5 For example, see Frida M. Armas-Pfirter “Submissions on the Outer Limit of the Continental Shelf: Practice to Date and Some Issues of Debate” in Davor Vidas (Ed.) Law, Technology and Science for Oceans in Globalisation: IUU Fishing, Oil Pollution, Bioprospecting, Outer Continental Shelf (Martinus Nijhoff, Leiden, 2010) 477; Vladimir Jares, “The Work of the Commission on the Limits of the Continental Shelf ” in Davor Vidas (Ed.) Law, Technology and Science for Oceans in Globalisation: IUU Fishing, Oil Pollution, Bioprospecting, Outer Continental Shelf (Martinus Nijhoff, Leiden, 2010) 449; Chris Carlton “Article 76 and the UN Convention on the Law of the Sea: Implementation Problems from the Technical Perspective” (2006) 21 International Journal of Marine & Coastal Law 287; Alex G. Oude Elferink “Article 76 of the LOSC on the Definition of the Continental Shelf: Questions Concerning its Interpretation from a Legal Perspective” (2006) 21 International Journal of Marine and Coastal Law 269; Ted L. McDorman “The Role of the Commission on the Limits of the Continental Shelf: A Technical Body in a Political World” (2002) 17 Int’l Journal of Marine and Coastal Law 301; and P.J. Cook and C.M. Carleton (Eds.) Continental Shelf Limits: The Scientific and Legal Interface (Oxford University Press, Oxford, 2000). 6 See Laurence P. Madin et al., “The Unknown Ocean” in L.K. Glover and S.A. Earle (Eds.) Defying Ocean’s End: An Agenda for Action (Island Press, 2004) 213–236. 7 E. Ramirez-Llodra et al., “Deep, Diverse and Definitely Different: Unique Attributes of the World’s Largest Ecosystem” (2010) 7 Biogeosciences 2851–2899, at 2857. 8 E. Ramirez-Llodra, P. Tyler et al., “Man and the Last Great Wilderness: Human Impact on the Deep Sea” (2011) 6(7) PLoS ONE e22588. Doi:10.1371/journal.pone.0022588, at 12.

182   Joanna Mossop from day to day accidents and discharges to unusual events such as the explosion in the Deepwater Horizon well. A considerable level of interest is currently being shown in mineral deposits on the continental shelf. These minerals come in different forms. Some seamounts can form manganese crusts ranging from centimeters to meters deep which are rich in cobalt and other minerals.9 Mining these crusts would involve removing the crust for processing which would necessarily have a significant adverse impact on the immediate environment. Other potential effects include the creation of sediment clouds, waste water contamination and potentially chemical pollution.10 Another area of potential mineral exploitation is at hydrothermal vents. These vents can form chimneys and large deposits of metals such as zinc, copper, silver and gold.11 Mining these deposits may involve less overall area of destruction than harvesting manganese crusts, but the interaction between vents and the surrounding ecosystems is not well known.12 The effects of such mining on the local environment are therefore potentially damaging. A final example is methane hydrate deposits that are found on continental slopes. These deposits have high energy density and may be an alternative source of gas. However, there are risks involved with mining such deposits including sudden gas releases and triggering underwater landslides.13 B. Biological Resources A variety of deep sea ecosystems may occur on the continental shelf, although scientists admit that they are poorly understood and much more research is needed. Seamounts can host a variety of species including cold water corals, sponges and molluscs.14 Hydrothermal vents and cold seeps are environments that can host unique organisms that rely on chemosynthesis rather than photosynthesis. Bivalves, tubeworms and crustaceans may be found in these environments.15 Organisms found in these environments are suspected to have a high degree of endemism, meaning they are found nowhere else.

 9 T. Koslow The Silent Deep: The Discovery, Ecology and Conservation of the Deep Sea (UNSW Press, 2007), at 170. 10 Ramirez-Llodra, P. Tyler et al., “Man and the Last Great Wilderness”, above n. 8 at 12. 11 P. Rona “Resources of the Seafloor” (2003) 299 Science 673–674; M. Hannington et al., “The Abundance of Seafloor Massive Sulfide Deposits” (2011) 39(12) Geology 1155. 12 Koslow, above n. 9 at 172. 13 Koslow, above n. 9 at 174. 14 Ramirez-Llodra “Deep, Diverse and Definitely Different” above n. 7 at 2863; Koslow, above n. 9 at 125. 15 Madin, above n. 6 at 10; Ramirez-Llodra “Deep, Diverse and Definitely Different” above n. 7 at 2861.

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These ecological niches may be disturbed simply by the process of studying them: for example, scientists researching the mineral content of hydrothermal vent ‘black smoker’ chimneys often remove them, impacting on the surrounding organisms. Not all research will have environmental consequences, but it is not uncommon for local perturbations to result.16 One potentially disruptive activity is bottom fishing. Bottom trawling is often used to target deep sea species that live close to the sea floor, such as orange roughly. Trawl nets weighing up to 4800 kg are dragged along the sea floor. This process results in seafloor species, such as coral, being caught up in nets or crushed.17 In addition to the immediate impact on species like coral that may be centuries old, the environment does not recover quickly, if at all.18 There is also a possibility that bottom trawling may have detrimental effects on species as far as 70 km from the fishing area.19 Longlines can also impact on the seafloor when the weights on the line are dragged through coral communities.20 Bioprospecting is a further activity that may have an impact on the resources of the seafloor. Most samples collected are small, but there is the prospect that if the properties of the sample cannot be synthesized in the lab, harvesting of the species may be done in significant quantities.21

III. Environmental Obligations Regarding the Outer Continental Shelf A. The LOSC and Related Treaties The right to explore and exploit the oceans resources is accompanied by the responsibility to consider the environmental impacts of such activity. Part XII of the LOSC contains a number of provisions which require states to protect the

16 See Philomène A Verlaan “Experimental Activities that Intentionally Perturb the Marine Environment: Implications for the Marine Environmental Protection and Marine Scientific Research Provisions of the 1982 Convention on the Law of the Sea” (2007) 31 Marine Policy 210. 17 Koslow, above n. 9 at 220. 18 Malcolm Clark “Deep-sea Seamount Fisheries: A Review of Global Status and Future Prospects” (2009) 37(3) Lat. Am. J. Aquat. Res. 501–512 at 507; Koslow et al., “Seamount Benthic Microfauna off Southern Tasmania: Community Structure and Impacts of Trawling” (2001) 213 Marine Ecology Progress Series 111–125. 19 DM Bailey et al., “Long-term Changes in Deep-water Fish Populations in the Northeast Atlantic: a Deeper Reaching Effect of Fisheries?” (2009) 276 Proceedings of the Royal Society of Britain 1965–1969, at 1968. 20 Ramirez-Llodra “Deep, Diverse and Definitely Different” above n. 7 at 2883. 21 For a further discussion about the impact of bioprospecting and the legal framework on the outer continental shelf, see J. Mossop, “Protecting Marine Biodiversity on the Continental Shelf Beyond 200 Nautical Miles” (2007) 38 Ocean Development and International Law 283 at 286.

184   Joanna Mossop marine environment. This is most clearly stated in article 192 which imposes a general obligation to protect and preserve the marine environment. The remainder of part XII is largely focused on the impact of pollution. Pollution of the marine environment is defined as “the introduction by man, directly or indirectly, of substances or energy into the marine environment, including estuaries, which results or is likely to result in such deleterious effects as harm to living resources and marine life, hazards to human health, hindrance to marine activities, including fishing and other legitimate uses of the sea, impairment of quality for use of sea water and reduction of amenities”.22 Therefore, pollution would not include activities that directly impact on the environment such as fishing or mining unless it involved the introduction of substances into the environment. The LOSC requires states to prevent, reduce and control pollution of the marine environment and ensure activities under their jurisdiction do not cause pollution damage that spreads “beyond the areas where they exercise sovereign rights in accordance with” the LOSC.23 The protection must also be afforded to rare or fragile ecosystems and the habitat of depleted, threatened, or endangered species.24 States must monitor the risks or effects of pollution of the marine environment25 and, where 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 must undertake assessment of the potential effects of the marine environment. This last obligation is significant in that the obligation to conduct prior assessment is not limited to situations causing pollution but includes more general harm to the environment. In addition to the LOSC, there are many related treaties that oblige states to undertake measures to protect the environment. For example, the UN Straddling Fish Stocks Convention26 contains a number of environmental principles. Article 5 requires states to minimize pollution and other impacts on associated or dependent species, protect biodiversity in the marine environment, and assess the impacts of fishing on target stocks and species belonging to the same ecosystem or associated with the targeted species. The precautionary principle requires states to consider uncertainties relating to, and assess, the impact of fishing on

22 Article 1, LOSC. 23 Article 194, LOSC. 24 Article 194(5), LOSC. 25 Article 204, LOSC. 26 Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks (UNFSA).

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non-target and associated species27 and undertake enhanced monitoring where there is concern about the status of such species.28 Some regional fisheries management organizations (RFMOs) are beginning to take measures to protect the benthic marine environment through creating areas closed to bottom fishing,29 or ‘move on’ rules that require a vessel to move on a certain distance when by-catch indicates a vessel is fishing above a vulnerable marine ecosystem.30 There is potential for RFMOs to develop rules responding to coastal State concerns about bottom fishing above coastal States’ outer continental shelves where vulnerable ecosystems are identified. Other related treaties are directly targeted at reducing environmental harm, including MARPOL31 and the London Dumping Convention.32 Both Conventions are relevant to the OCS without containing specific provisions regarding this area. However, in theory a coastal State could, through the International Maritime Organisation, seek particular protection for the outer continental shelf, for example, through seeking the designation of a vulnerable area as a particularly sensitive sea area.33 B. International Environmental Law A range of other international instruments contains obligations to protect the environment or species which may have application to the marine environment. The Convention on Biological Diversity34 (CBD) requires states to develop national plans for the conservation and sustainable use of biological diversity,35 and take measures to protect biological diversity in situ where possible.36 The CBD contains an obligation to conduct prior environmental assessment of proposed projects that are likely to have significant adverse effects on biological diversity.37 The CBD applies to areas within national jurisdiction but also “in the case of processes and activities, regardless of where their effects occur, 27 Article 6(3)(c) and (d), UNFSA. 28 Article 6(5), UNFSA. 29 E.g. The North East Atlantic Fisheries Organization. 30 E.g. The South Pacific Regional Fisheries Management Organization. 31 International Convention for the Prevention of Pollution from Ships, as Modified by the Protocol of 1978 Thereto (MARPOL 73/78) 1340 UNTS 62. 32 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972, 1046 UNTS 138. 33 See generally, Markus J. Kachel, Particularly Sensitive Sea Areas: The IMO’s Role in Protecting Vulnerable Marine Areas (Springer, 2008); Hélène Lefebvre-Chalain, “Fifteen Years of Particularly Sensitive Sea Areas: A Concept in Development” (2007) 13 Ocean and Coastal Law Journal 47. 34 (“CBD”) 1760 UNTS 79; 31 ILM 818 (1992). 35 Article 6(1), CBD. 36 Article 8, CBD. 37 Article 14(1)(a), CBD.

186   Joanna Mossop carried out under its jurisdiction or control, within the area of its national jurisdiction or beyond the limits of national jurisdiction.”38 These principles therefore have application to the outer continental shelf. It is important to note that the CBD must be implemented in a manner consistent with the Law of the Sea Convention,39 and so could not be used to, for example, create unilateral marine protected areas on the high seas or justify interference with innocent passage.40 Species-specific treaties may impose obligations on states to take measures to protect the marine environment, although most such treaties apply to migratory species which generally do not occur on the continental shelf.41 Of particular relevance to the outer continental shelf is the emergence of customary international law principles requiring states to cause no harm to areas beyond its jurisdiction, and to exercise due diligence when approving projects or activities that have the potential to cause environmental harm to areas under another state’s jurisdiction, or to areas beyond national jurisdiction. The principle that states have an obligation not to cause harm to the environment of another is of long standing.42 It is reflected in Principle 21 of the Stockholm Declaration and Principle 2 of the Rio Declaration, which provide: “States have . . . the sovereign right to exploit their own resources pursuant to their own environmental and developmental policies, and the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction”.43 Although these declarations are non-binding in themselves, the principle is generally accepted as a rule of customary international law.44 The principle that a state must exercise due diligence is related to the principle requiring the prevention of damage to the environment, and has been confirmed as a principle of customary international law by the International Court of Justice (ICJ).45 This does not impose an obligation to avoid all harm, but a

38 Article 4, CBD. 39 Article 22, CBD. 40 Donald K. Anton, “Law for the Sea’s Biological Diversity” 36 Columbia Journal of Transnational Law 341 (1998) at 358. 41 E.g. International Convention for the Regulation of Whaling 1946, 161 UNTS 74; Bonn Convention on the Conservation of Migratory Species of Wild Animals 1982, 1519 UNTS 26342. 42 Trail Smelter Arbitration (United States v Canada) 3 RIAA 1907 (1941). 43 The words in italics appear only in Principle 2 of the Rio Declaration. 44 Legality of the Threat or Use of Nuclear Weapons [1996] ICJ Reports 266 at para. 29; Philippe Sands and Jacqueline Peel, Principles of International Environmental Law (3 ed, Cambridge University Press, 2012) 196. 45 Pulp Mills on the River Uruguay (Argentina v Uruguay) Judgment [2010] ICJ Reports 14 at para. 101.

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state must take measures within its legal system that are “reasonably appropriate” to fulfil its obligations.46 In the Pulp Mills case, the ICJ stated: It is an obligation which entails not only the adoption of appropriate rules and measures, but also a certain level of vigilance in their enforcement and the exercise of administrative control applicable to public and private operators, such as the monitoring of activities undertaken by such operators.47

There is also a customary international law obligation to conduct environmental impact assessments. This was enunciated by the ICJ in Pulp Mills in relation to risks of significant adverse transboundary harm48 and the International Tribunal for the Law of the Sea considered that the principle also applies to harm to areas beyond national jurisdiction.49 A failure to conduct an environmental impact assessment would mean that the state concerned had failed to exercise due diligence.50 The precise content of the environmental impact assessment is a matter for domestic law, although states are expected to have regard to international guidelines. The assessment must be conducted prior to the implementation of a project and there should be continuous monitoring of the project’s effect on the environment.51 In light of the treaty and customary law obligations, it is now arguable that a state must conduct an environmental impact assessment when there is a risk of significant adverse impact on the environment beyond its national jurisdiction from a project focusing on the resources of the outer continental shelf. The harm could include substantial pollution or significant and harmful changes to the marine environment.52 This could be triggered by potential harm to another state’s jurisdiction, the high seas environment or the deep seabed (“the Area”). It is also important to remember that ecosystems on the continental shelf are likely to be governed by two areas of jurisdiction: the high seas in the case of non-sedentary species and the continental shelf in the case of sedentary species. This makes the need for such assessment more acute. In addition, states must exercise due diligence to avoid or mitigate harm to the marine environment which will involve implementing effective decision making processes. Therefore, states will be obliged to have regulatory mechanisms for evaluating the environmental impact of activities on the outer continental shelf.

46 Responsibilities and Obligations of States Sponsoring Persons and Entities with Respect to Activities in the Area (Advisory Opinion) (ITLOS Case No 17, 1 February 2011) at para. 120. 47 Pulp Mills at para. 197. 48 Pulp Mills at para. 204. 49 Advisory Opinion on the Responsibility of States at para. 148. 50 Pulp Mills, at para. 204. 51 Pulp Mills, at paras. 120, 205. 52 Article 206, LOSC.

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IV. Issues for the Environmental and Safety Regulation of the Outer Continental Shelf In relation to each of the activities that might take place on the outer continental shelf, there is a range of environmental measures that a state may wish to impose to prevent harm to the marine environment. This section will discuss a selection of these options in light of ambiguities in the LOSC. A. Marine Scientific Research 1. The Legal Framework for Marine Scientific Research Marine scientific research is a freedom under the Law of the Sea Convention,53 although it must be conducted in conformity with the LOSC including regulations for the protection and preservation of the marine environment.54 Limitations on the freedom of MSR are imposed when the research takes place in an area under a coastal State’s jurisdiction. In relation to a state’s EEZ and the continental shelf, coastal States have the right to “regulate, authorize and conduct” MSR and research is “to be conducted with the consent” of the coastal State.55 If the MSR is of direct significance for the exploration and exploitation of living or non-living resources, or the MSR involves drilling, the use of explosives or introduction of harmful substances into the environment, then a coastal State may refuse consent at its discretion.56 It is also arguable that if the application indicates that the research project does not comply with the provisions of the LOSC coastal States may refuse consent.57 However, if these circumstances do not apply, the coastal State, “shall, in normal circumstances, grant their consent for marine scientific research projects . . . to be carried out . . . exclusively for peaceful purposes and in order to increase scientific knowledge of the marine environment for the benefit of all mankind”.58 This balance between the preservation of a modified freedom of MSR and the protection of coastal State interests allows a state to assess each application in terms of its impact on the coastal State’s sovereign rights in the EEZ and 53 Article 87 and 238, LOSC. 54 Article 240(d), LOSC. 55 Article 246(1) and (2), LOSC. 56 Article 246(5), LOSC. Other reasons for refusing consent include: if the MSR involves the construction or use of artificial islands, installations or structures; if the project information contains inaccurate information; or the research state or organization has outstanding obligations from a prior research project. 57 Marine Scientific Research: A Guide to the Implementation of the Relevant Provisions of the United Nations Convention on the Law of the Sea (Office for Ocean Affairs and Law of the Sea, New York, 1991) at 11. 58 Article 246(3), LOSC.

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continental shelf. MSR related to the exploitation of resources is reliant on coastal State consent. Despite this general approach, the LOSC further limits a coastal State’s rights to refuse consent for MSR taking place on the outer continental shelf. Because the right to extend the continental shelf beyond 200 nm was contentious, the provisions on MSR reflect a compromise in respect of control over MSR on the outer shelf. Article 246(6) provides: Notwithstanding the provisions of paragraph 5, coastal States may not exercise their discretion to withhold consent under subparagraph (a) of that paragraph [being MSR relating to the exploration and exploitation of resources ]in respect of marine scientific research projects to be undertaken . . . on the continental shelf, beyond 200 nautical miles . . . outside those specific areas which coastal States may at any time publicly designate as areas in which exploitation or detailed exploratory operations focused on those areas are occurring or will occur within a reasonable period of time.

Article 7 states that the provisions of paragraph 6 are without prejudice to the rights of coastal States over the continental shelf. 2. Refusal of Consent for MSR The requirement for a state to designate an area on the outer shelf before it can refuse MSR directed at resources raises a number of questions. For example, it seems that if a foreign researcher wished to evaluate the mineral content of hydrothermal vent chimneys on a state’s outer shelf without introducing harmful substances to the water, the state would be unable to refuse consent on the basis that it had implications for resources unless it had previously designated the area under article 246(6). But what if the state was concerned about the impact on the living resources in the vicinity by the removal of one or more vent chimneys for analysis? Article 246(5) allows refusal of the consent only in limited circumstances – such as when the research uses explosives or introduces a harmful substance into the marine environment. The first thing to note is that the scope of the coastal State’s interests in living resources is in the sedentary species only. However, this does not prevent the coastal State considering the impact of the MSR on the rest of the benthic environment. As discussed above, a state has an obligation under customary international law to undertake due diligence to assess and minimise significant adverse harm to the environment outside the state’s jurisdiction from activities within their jurisdiction. Therefore, in considering the impact on the marine environment a state can consider the total impact on the marine environment. In considering whether a coastal State is entitled to refuse consent for MSR on the basis of potential harm to the marine environment, the first point is that this is not one of the reasons given for refusing consent in article 246(5). The provision was a careful balancing between protection of a coastal State’s interests and

190   Joanna Mossop the freedom of MSR in light of the extension of coastal State jurisdiction into the EEZ and continental shelf. The right to conduct MSR is stated as “subject to the rights and duties of other States as provided for in” the LOSC. Therefore, it is possible to argue that only the reasons listed in article 246(5) may be relied on to refuse consent for an MSR project.59 However, as already discussed, the LOSC does contain obligations on states to protect and preserve the marine environment. While this is usually described in relation to pollution, articles 192 and 206 suggest that the obligation relates to all activities that could cause harm to the marine environment. In addition, it is clear that the intention of article 246(5) is that a state is entitled to refuse consent where the research will have a negative impact on the living resources of the shelf. In particular, the ability to refuse where the research involves the use of explosives, drilling, or the introduction of a harmful substance to the environment indicates the negotiators were intending to give the coastal State discretion to avoid harm. It is therefore arguable that such a refusal of consent for research on the OCS would not be a violation of international law. Article 240(d) adds substance to this approach. A coastal State that refuses consent to MSR on the outer shelf due to concerns about the environment can be reassured that this decision is not subject to compulsory dispute settlement under Part XV of the LOSC. A state’s exercise of a right or discretion under article 246 is not required to be settled under Section 2 of Part XV. The dispute may be submitted to a conciliation commission “provided that the conciliation commission shall not call in question the exercise by the coastal State of its discretion to designate specific areas as referred to in article 246, paragraph 6, or of its discretion to withhold consent in accordance with article 246, paragraph 5.”60 Therefore the exercise of a state’s discretion may result in a political rather than legal dispute. 3. Marine Protected Areas on the Outer Continental Shelf A state that wishes to have the option to refuse consent to MSR on the outer shelf could declare an area of the outer continental shelf a marine protected area61 and argue that this amounts to a designation for the purposes of article 246(6). This would allow the state to refuse research applications that target resources. The purpose of article 246(6) was to allow access to the resources of the shelf to foreign researchers unless the resources are being actively explored or exploited. This compromise gives more freedom to researchers although of 59 This interpretation is preferred in Myron H. Nordquist (Ed.) United Nations Convention on the Law of the Sea 1982: A Commentary (Volume IV, Martinus Nijhoff, Dordrecht, 1991) at 518. 60 Article 297(2)(b), LOSC. 61 For an example of a marine protected area on an area of outer continental shelf, see Marta Chantal Ribeiro “The ‘Rainbow’: The First National Marine Protected Area Proposed Under the High Seas” (2010) 25 International Journal of Marine and Coastal Law 183.

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course the coastal State retains the exclusive right to exploration and exploitation. The wording of article 246(6) is based on the idea that the main value a coastal State has in its shelf is in minerals. However, the international community today is more aware of the unique qualities of many vulnerable marine ecosystems. It seems arguable that, to protect the living resources of the shelf, a coastal State may declare a marine protected area in which consent is needed for MSR projects. Article 246(7), which reinforces the sovereign rights of the coastal State, supports this argument.62 Undoubtedly the protected area should be based on science and reflect knowledge about vulnerable ecosystems. A state would not be able to declare the entire outer shelf area a marine protected area, as this would be defeating the purpose of article 246(6). 4. Conditions on Consent for MSR The next question is whether the coastal State can impose conditions on the consent for MSR to protect the environment. Article 249 sets out the obligation of researching states to comply with particular conditions. These include allowing the coastal State to participate in the project, providing the coastal State with results of the research, giving access to the data, samples and research results, ensuring the research results are made internationally available and informing the coastal State of major changes to the research program.63 None of these conditions directly relate to protection of the environment. However, article 249(2) is clear that the previous obligations are without prejudice to conditions established by the laws of the coastal State for the exercise of its discretion to grant or withhold consent according to article 246(5). Soons distinguishes between research to which the coastal State is obliged to give consent and research projects to which the coastal State has discretion to refuse consent.64 In the first case, the state is not able to impose conditions because it is required to grant consent in normal circumstances. In the second case, Soons argues that the coastal State is able to impose any conditions it likes “since the discretionary power to withhold consent must be deemed also to include the power to grant consent under conditions to be established unilaterally by the coastal state”.65 State practice confirms that many states have imposed environmental conditions on foreign MSR projects that go beyond the content of article 249(1).66 Hubert cites the example of the Canadian Endeavour Hydrothermal Vents Marine Protected Area Regulations, which require all researchers, including 62 For a more detailed discussion of this issue, see Mossop above n. 21 at 295. 63 Article 249, LOSC. 64 Alfred H.A. Soons, Marine Scientific Research and the Law of the Sea (Kluwer, The Hague, 1982) at 188. 65 Ibid. 66 Montserrat Gorina-Ysern An International Regime for Marine Scientific Research (Transnational Publishers, Ardsley 2003) at 18.

192   Joanna Mossop foreign researchers, to comply with the environmental protection measures set out.67 Particular parts of the marine protected area are set aside for research with different levels of impact on the marine environment. B. Mineral Exploration The LOSC’s primary environmental and safety protection for mining operations on the continental shelf is the ability for a coastal State to declare safety zones around installations and structures, such as oil and gas platforms.68 Such installations must be “reasonably related” to the nature and function of the structure, and other states must ensure their vessels respect the safety zones. These obligations are contained in article 60, which is applied to the continental shelf “mutadis mutandis”.69 It is not entirely clear what the necessary changes might be as it can be assumed that the safety zones, when properly applied, are not a breach of the freedom of navigation of the high seas. There is no distinction made in the LOSC between the continental shelf within 200 nm or beyond it. Therefore, coastal States could impose safety zones around structures on the outer continental shelf. More difficult in the future may be new technologies that are developed to mine the resources of the shelf. It is not impossible that, in the future, autonomous vehicles that are unconnected to a vessel on the surface, may ply the ocean floor searching for minerals or extracting resources. In that situation the concern may not be about the safety of navigation on the surface but interference with the autonomous vehicle by other users of the sea, including fishing vessels. Could a coastal State in that situation declare, for example, a ban on fishing near the sea floor in a broad area above the outer shelf where the vehicle is operating? This issue relates to the requirement in article 78 that coastal States, in exercising their rights, must not infringe or result in any unjustifiable interference with the navigation and other rights and freedoms of other states. Although this provision does contemplate some interference with the high seas rights and freedoms, states will need to be very careful to ensure that the interference is reasonable and as minimal as possible.70 67 Anna-Maria Hubert “The New Paradox in Marine Scientific Research: Regulating the Potential Environmental Impacts of Conducting Ocean Science” (2011) 42 Ocean Development and International Law 329 at 343. 68 Article 60(4), LOSC. 69 I.e. “with the necessary changes” Article 80, LOSC. 70 For a further discussion about the appropriate extent of coastal State interference with high seas freedoms, see Joanna Mossop “Regulating Uses of Marine Biodiversity on the Outer Continental Shelf ” in Davor Vidas (Ed.) Law, Technology and Science for Oceans in Globalisation: IUU Fishing, Oil Pollution, Bioprospecting, Outer Continental Shelf (Martinus Nijhoff, Leiden, 2010) 319–338.

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IV. Conclusion As technology increasingly allows the exploitation of living and non-living resources beyond 200 nm from the coast, states need to turn their minds to the form that regulation of these activities may take. The particular legal framework that exists on the outer continental shelf means that one size does not fit all: regulations that are legitimate up to 200 nm may not be on the outer shelf. Almost all activities on the outer continental shelf may be affected by the differences in the legal framework. As I have explained, states have a number of obligations to protect and preserve the marine environment in the LOSC itself and in other conventions. Even more importantly, states considering activities on the outer shelf need to keep in mind the obligations developing in international customary law to not allow activities under their jurisdiction to harm the marine environment in areas beyond their jurisdiction. This may be particularly important when activities impact on benthic communities that are a mix of sedentary and non-sedentary species. The first are governed by the freedom of the high seas, the latter are under the jurisdiction of the coastal State, making the probability of harm to species in another jurisdiction very high. Coastal States may be limited in their ability to refuse consent to MSR projects on the outer continental shelf that are of relevance to the exploitation of living or non-living resources where there is no designated area according to article 246(6). These states have some options. First, they could declare a marine protected area on the outer continental shelf in which MSR projects are prohibited or restricted. Second, they could seek to decline consent to the projects on the basis that they are harmful to the environment. In both cases there is no explicit authorisation for these measures in Part VI or Part XIII of the LOSC, but they are arguably consistent with the LOSC and general international law. Technology is continually improving to allow access to resources in the deep ocean. As this technology develops, it is possible that Part VI of the LOSC will no longer provide sufficiently explicit rules to allow for environmental and safety protection, for example with autonomous vehicles. In these situations, coastal States should develop regulations that are consistent with the need to avoid unjustifiably interfering with the freedoms of the adjacent areas. This chapter has focused on environmental and safety regulation of two activities that may take place on states’ outer continental shelves in the future. There will be other activities, such as fishing and bioprospecting, for which states will wish to impose environmental and safety measures. In all cases, the requirements of article 78 of the LOSC must remain paramount in the minds of regulators.

Offshore Safety Regimes—A Contested Terrain Preben H. Lindøe1 and Ole A. Engen2 Abstract This paper is derived from a research project addressing the robustness of offshore risk regulation on the Norwegian continental shelf (NCS). The scope has been three fold: (1) developing a theoretical framework for “robust risk regulation”, (2) comparing the theoretical framework with three relevant regimes and (3) assessing the interface between the regulatory regimes and risk management systems in industry. In this paper we will particularly discuss the Norwegian development paths i.e. the close connection between Nordic traditions for organising the working life and the risk regulatory regime on the Norwegian shelf. Major and fatal accidents on the NCS, especially the 1977 blow-out at Ekofisk Bravo (1977) and the 1980 capsizing of the Alexander Kielland gave momentum to rethinking and redesign of regulatory principles. Those events initiated political processes and pressure for developing new regulations in which the newly established Norwegian Petroleum Directorate (NPD) played a major role. In the 1970s, Norway developed very stringent labour legislation, which materialized in the Work Environment Act of 1977. A unionized industry with complete collective bargaining rights and a comprehensive network of safety representatives recruited from the unions became mandatory for the offshore industry (Karlsen and Lindøe 2006). Since the 1980s Norway has been working at developing a coherent, integrated legal framework for regulating health, safety and environment in the conduct of NCS oil and gas operations. Risk regulation has been developed step by step in the direction of increased use of functional requirements expressed in legislation as legal standards (Braut and Lindøe 2010). The regulations focus on promoting self-regulation by operators by directly requiring each operator to develop and apply an “internal control” system for reducing risks and preventing and responding to accidents, a system which reflects “a sound health, environment and safety culture” (Kringen 2009). However, use of common law concepts does not mean that detailed proceduralization is absent from the Norwegian system. The tripartite cooperation of authorities, operators and labour unions in problem-solving has created a Petroleum Safety Authority (PSA) managed, nonadversarial approach to building safety systems within each company. The regulatory means of enforcement by the PSA give priority to soft regulation (Baldwin and Cave 2012), from non-statutory means as “identical letters of interpretations” to “orders”.

1 Professor, University of Stavanger. 2 Professor, University of Stavanger. The author’s PowerPoint may be viewed at .

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1. Introduction After the Macondo disaster in the Gulf of Mexico in 2010, members of the European Union Parliament raised the question of how robust the existing risk regulatory approaches for offshore health and safety regulation was among the member States. The issue was followed by the EU Commission, and in October 2011 they presented a proposal for safety of offshore oil and gas activities.3 In the European Union and Norway, over 90% of oil and gas produced is coming from offshore operations, mostly in the North Sea and the Norwegian Sea. With this background it was predictable that the authorities as well as industrial stakeholders in the United Kingdom and Norway opposed the proposal. Based on the development of the offshore risk regime in the North Sea, the purpose of this paper is to assess the conflict of interest among stakeholders. Even if the context of the study is the “North Sea regimes” Norway will be the focal point. After major accidents in the first decades of development (Sea Gem, 1963; Bravo, 1977; Alexander Kielland; 1980 and Piper Alpha 1988) the United Kingdom and Norway developed a “North Sea” safety approach that has been regarded as both innovative and future-oriented. (Lindøe, Baram et al. 2012). That has recently been confirmed in the debate and follow-up after the Deepwater Horizon accident in the United States.4 In Norway the regime is based on the Nordic model of Occupational Health and safety (Karlsen and Lindøe 2006) with labour contract negotiations and a tripartite system involving employer, employees and government, an element that is not part of the new EU approach, and the consequence may be a fragmentation of regulations as has been the case in the United States. From 2007 to 2012 a project, “Robust Regulation in the Petroleum Industry” has been carried out by a group of researchers from Norway, the United Kingdom and the United States where a portfolio of research projects on technological change, risk regulation and safety management systems within the offshore oil and gas industry have been used.5 The development of the Norwegian continental shelf (NCS) under a tripartite system of regulators, industry and unions and with strong involvement of the scientific community has contributed to this portfolio.6 A smaller body of knowledge regarding UK and US regulators and companies working under their jurisdiction has been used. In addition rapidly expanding sources of information have been developed after the Macondo

3 Proposal for a “Regulation of the European Parliament and of the Council on safety of offshore oil and gas prospection, exploration and production activities” 2011/0309 (COD). 4 Infra, note 7. 5 See the website for the project: . 6 Ibid.

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disaster.7 Relevant documents from the three countries, including the text of laws, regulations, regulatory guidelines and industrial norms and standards have been assessed.8 The paper is divided into four sections. First we introduce a framework for analysis and assess the variance in risk regulating regimes, secondly important phases in development of the offshore regimes are presented, then follows a discussion of the main conflicting issues and finally we draw some preliminary conclusions.

2. Framing Risk Regulatory Regimes The legitimate base for risk regulations is grounded in common values stating that citizens should be protected against accident risks, implying that no use of technology should damage individual or public interests (Baldwin and Cave 2012) There is an ongoing debate of who is most capable of leading the effort of managing risk in society (Power 2004, Power 2007) and the balance between “command and control” with hard laws and performance and risk based regulation with “soft” laws. As a result new concepts are introduced and coined as “self-regulation” (Sinclair 1997, Short and Toffel 2010) “meta-regulation” (Gilad 2010) and the pros and cons of rule-compliance vs. risk management are continuously debated (Hopkins 2011). The discussion has been running for years if the distinction between “hard” regulation with prescriptive rules and “soft” performance based regulation with functional requirements is a false dichotomy (Darran, 1997; Hopkins 2007). The state as legislator and controller based on legal-binding norms and the industrial actors with safety management systems based on “internal control” and industrial standards and “best practice” can be presented as in figure 1. The left hand of the figure presents a values and policy driven process of legislation and public administration aiming at good governance based on values ​​and preferences in society. The legislative process is mandated by political decisions (supported or opposed) from civil society, public opinion and with 7 The most relevant reports used from Deepwater Horizon accidents are (1) Progress report 3. The Macondo Blowout. Deepwater Horizon Study Group (ccrm.berkeley.edu/deepwaterhorizonstudygroup/), (2) National Commision on the Deepwater Horizon Oil Spill and Offshore Drilling Deepwater. The Gulf Oil Disaster and Future of Offshore Drilling. Report to the President (www.oilspillcommission.gov/) and (3) Det Norske Veritas: OLF/NOFO – Summary of differences between offshore drilling regulations in Norway and U.S. Gulf of Mexico (http://www .norskoljeoggass.no/en/Publica/Environmental-reports/Drilling-regulations-NorwayUS-Gulf-ofMexico/). 8 See Lindøe, P. Baram, M. and Renn, O. (2013) Risk Governance of Offshore Oil and Gas Operations. In Search of Robustness. Cambridge University Press, Cambridge.

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Figure 1. State control vs. industrial internal control.

third party interests. According to the legality principle the state is a protector of law and order where the primary task is, by the use of legitimate authority, to force citizens as well as economic actors in fulfilling their obligation within legal binding norms. Anyone violating laws and orders can be sanctioned and punished according to this legal principle. Due to the power of sanctioning and punishment the role of the state and regulating agencies implies an asymmetrical relationship towards the regulated. According to this principle safety regulation tends to follow “command and control” with detailed and prescriptive laws and regulations. The right hand side of the figure presents the economic, industrial activities within a value chain with input and support from many different sources; knowledge creation within the scientific communities, innovative entrepreneurs, suppliers, etc. Part of this value creation is an accumulation of knowledge and experience codified as “best practice” and technical standards embedded within the enterprises and industries (Sennett 2008). The process of standardization within national and international organizations and institutions became new principles of organizing (Brunsson and Jacobsson 2000). In their own interests, these stakeholders (industries, research institutions, laboratories, universities, etc.) made efforts to safeguard processes and products to reduce the accompanied risk. Within the modern industrial societies, as demonstrated in the “welfare state”,

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the state plays an important role in developing and funding programs for industrial development and innovation. In that capacity there is symmetry in the interplay of the state and the industrial actors. The state as controller and a safeguard of industrial activity and the industry as value creator with “internal control” follow different paths and principles in developing and setting their norms and standards regarding safety. The readjustment towards goal-oriented and performance based regulation has changed how legal-binding norms and industrial standards are developed, formulated and used in practice. When functional responsibilities regarding the safe conduct of activities is transferred from regulators to companies, the system provides for cooperative approaches by different stakeholders in dealing with implementation (Baram 2006, Olsen and Lindøe 2009). Emphasis upon the detailed written legislative texts is replaced with legal, industrial and professional standards when companies largely replace regulators. The use of legal standards makes a connection between the regulatory framework and the regulated activities obvious by involving the companies and their employees and engaging professionals in the formulation of statements of what should be regarded as safe practice, not only leading them to just comply with legislation. In addition, they open up for more updated regulatory practices than is possible when relying solely upon written statutes with detailed content. Detailed and prescriptive rules provide no incentives for enterprises to innovate and bind them to the established technology and organizational solutions. The more rules and technical regulations from government, the greater the “burden of proof ” is imposed externally. Conversely, if the rules are based on “enforced self-regulation”, risk and performance based voluntary technical standards, the burden of compliance with a requirement of legal standards lays on the enterprises. In the interplay of between the state (as regulator) and industrial actors (as the regulated) the balance between legal-binding and non-legal norms and the use of legal standards is crucial. Legal Standards9 Most of the safety norms contained in the Norwegian offshore regulations are function requirements, leaving it to the party responsible to decide how the described results are to be achieved. However, the freedom of choice is in practice limited because the official comments to the regulations recommend certain standards to be applied. The Facilities Regulations alone make reference to and 9 The text draws on Kaasen: Safety Regulation on the Norwegian Continental Shelf ” in Lindøe, P., Baram, M. and Renn, O. (2013) Risk Governance of Offshore Oil and Gas Operations. In Search of Robustness. Cambridge University Press, Cambridge.

200   Lindøe and Engen recommend the use of a total of some 100 standards issued by some 12 different institutions in Norway and world-wide. Each of the standards offer comprehensive and detailed guidelines and recommendations within their specific scope, usually describing methods to be used to achieve the results prescribed by the function standards rather than just detailing the results. There is no lack of detailed norms, not even in the form of detailed methods to be applied. Even if they are all non-binding, the party responsible carries the burden of proof that his method is as good as the recommended one if he elects to deviate from it. The use of norms in legal text as presented above is denoted as “legal standards”. The purpose is to achieve an appropriate regulation of complex fields is in constant development. It can also be seen as an expression of respect for the importance of expert knowledge to ensure the safety and quality in key areas of society. Legal standards probably often safeguard the government goal of safety and quality better than if they had been fully formulated in the regulations. The underlying measure of the legal standards based on the understanding of the issues, terminology and solutions in ways that are understood in the scientific community and, through their academic involvement in the process of developing norms enjoy greater legitimacy than rules based on legal terminology and logic. In the Norwegian Petroleum Act § 9–1 the legal standard is articulated as follows: “The petroleum activities shall be conducted so that a high level of security can be maintained and developed in line with technological development”. A consistent application of function-based regulations require a comprehensive and systematic review/guide on how the various provisions are to be understood and the appropriate standards that can or should be used to meet the requirements. One must, in other words, fill the legal standard of content. The procedures must provide information about the relationship between regulations and professional standards and thus provide an opportunity for businesses to comply in accordance with the laws and predictability in relation to supervisors’ evaluations. For the authorities, this can be a demanding and comprehensive system to keep up to date, and it requires that the standards keep pace with developments and new knowledge. A comprehensive guide can also be an excuse for companies so that they do not take personal responsibility to monitor and implement new recognized expertise on proper business. Linking Norms to Operational Standards Norms can be divided in two groups; legal-binding and non-binding norms where legal standards became a “linking pin” between the two. Applied to the variety of safety issues the hierarchy of norms can be enforced as laws, regulations and regulatory guidelines as well as mandatory or voluntary technical standards. The possible links between the hierarchies of norms and how they are applied within different safety issues is presented in figure 2.

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Figure 2. Linking norms and standards to safety issues.

Within a command and control regime, prescriptive rules will be legally binding to all safety elements. The purpose of the safety management system in the enterprises is to make sure that the rules are followed. By contrast, in a purpose and performance regime, the use of legal-binding norms are minimized but connected by legal standards to relevant and applicable technical standards. In practice the challenges will be to find the balance between the two extremes. Defining the balance is a complicated issue and it depends on a multitude of factors. Defining how the roles in safety management should be distributed between the state and the industry is one of the most complex questions regarding safety regulation (Kaasen 2012). Influential factors include how the actual risk is perceived and interpreted among the stakeholders, the capability of the regulator and regulated, the power relations among stakeholder and interest groups, regulatory and legislative culture, etc. (Hood, Rothstein et al. 2001, Renn 2008).

3. Development of the North Sea Offshore Regime The North Sea risk offshore regime has been developed through different phases over a period of 50 years. These phases reveal a pattern of reflexive regulation practice within the Nordic countries in interaction with UK regulations (Karlsen and Lindøe 2006, Lindøe, Baram et al. 2012). Assessing mechanisms and factors that have contributed to this development can give a useful perspective in addressing the controversy between the United Kingdom/Norway and the EU parliament.

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Figure 3. Phases in the development of UK and Norwegian offshore regulation.

Figure 3 illustrates a time-line that represents four phases of change in Nordic OHS regulation practice from the early 1970s towards the EU intervention. Phase I: In 1972 in the United Kingdom the Robens Report triggered the Health and Safety at Work Act (1974). Concurrently, new Working Environment Acts were implemented in the Nordic countries. With the tripartite system Norway adopted possibly the world’s most stringent labour legislation, the Norwegian Work Environment Act of 1977, a densely unionised offshore industry with extensive collective bargaining rights and a comprehensive network of safety representatives. The theoretical and normative base for the new regulation of the workplace in the Nordic countries was the socio-technical theory and Kurt Levin’s ideas about action research with involvement of the workforce. The Industrial Democracy Project that took place in the 1960s became a linking pin between the theoretical bases and practical industrial development of regulation of labour laws. “A chief characteristic of the work environment reform is the merger between ideas about work environment and ideas about industrial democracy” (Gustavsen and Hunnius 1981). Consequently, it influenced both traditional management concepts and OHS regulation concepts and thereby laid the ideological foundation for a merge of productivity and quality of working life. In a comparative analysis of the Nordic and European countries, Vogel (1998) stated: The changes which set in from the late Sixties make it possible to define a Nordic occupational health model in terms of its interconnections with industrial relations, the debates on blueprints for society, and the features of the prevention policies put in place. This model is genuinely different from those found elsewhere in Europe, although obviously not uniform.

Later on, other countries used the Nordic as a model in their redesign of industrial OHS-regulations (Karasek and Theorell 1990).

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Phase II: While the sinking of the Sea Gem I in 1965 awoke public and political attention in the United Kingdom, two major accidents on the NCS gave momentum to regulatory reform in Norway. The blow-out on the Bravo platform in 1977 was a wakeup regarding the environmental risk and the capsizing of the Alexander Kielland platform with 123 lives lost became a shocking reminder of the human risk. The newly established Norwegian Petroleum Directorate (NPD) started a process of developing new regulations, and in 1981 new rules concerning Licences’ internal control were established, followed in 1985 by the Regulation of Internal Control. In the same period a number of serious industrial accidents fed a public debate about how society should control risk (See the box). The same year as the Chernobyl accident Beck released his book on “Risk Society” (Beck 1986). Seveso (Italy) 1976. Uncontrolled emissions from a chemical plant led to an area of approx. 1,800 acres contaminated with extremely hazardous substances. The accident led to a focus on hazards in the chemical industry, and in 1982 it was called Sevesodirektivet – for prevention of such accidents ratified by EU Member States. The directive has since been modified several times and the process for a new Directive is implemented (Seveso II). Three Mile Island (USA) 1979. The Middletown, Pennsylvania, accident is to date the most serious nuclear accident in the United States. The pumps for cooling water failed. The reactor stopped automatically, but part of the chain reaction continued to run after the reactor was stopped. The reactor was completely destroyed, and a partial melting of fuel rods was confirmed. Cleanup efforts took ten years and cost nearly a billion dollars. Bhopal (India) 1984. One of history’s worst industrial disasters, toxic gas (metylisocyanat) leaked from the Union Carbide factory for pesticides. A poisonous cloud settled over the city, and within a few days, 8,000 people were killed, mostly the poor from the city adjacent to the factory site. In total, between 16,000 and 30,000 were killed and an estimated 500,000 received serious, permanent injury. 20 years after the accident Union Carbide was still not made legally responsible for the tragedy. Chernobyl (Ukraine) 1986. While working with various experiments the usual safety procedures were not followed, and the reactor went out of control. There was a steam explosion, the roof of the reactor was blown away, the graphite thus had access to air, and there was an explosive fire, and radioactive substances were thrown out, which led to radioactive fallout in many countries. The accident generated a debate on radiation emergency response and other measures to better prepare for such accidents in the future.

204   Lindøe and Engen In the 1980s a flow of new regulations and directives emerged in Europe and the European Commission in 1982 passed a Directive on Major Accident Hazards, called the Seveso Directive. A couple of years later, in 1984, the Health and Safety Executive (HSE) in the United Kingdom passed the Control of Industrial Major Hazards Regulations covering all onshore hazard installations, which implied that the operator should provide the HSE with a written report on the safety of the installation, commonly known as the “Safety Case” (Reason 1997). Phase III: The EU Framework Directive 89/391 regarding safety and health of workers was based on the new regulative principles developed in the United Kingdom (c.f. Robens Report) and the recent development in the Norwegian offshore sector.10 The directive imposed new means of onshore regulation in all sectors. In Norway the directive was implemented in practice by the Working Environment Act of 1977 and regulations relating to internal control regulation on Health, Environment and Safety, which came into force on 1 January 1992. In the Norwegian context the onshore reform was inspired by the positive experience from the North Sea (Lindøe 1992). However, the aluminium industry was also a forerunner in implementing internal control (Lindøe and Hansen 2000). In both cases, a major concern for the enterprises as well as the authorities was to prevent pollution of the sea and air. When the principles of internal control subsequently were extended to other industrial sectors, the authorities kept the emphasis on the external environment in the regulation. The experience was that the principles did not match small-scale industry well. Phase IV: The second volume of the Cullen Report (1990) on the Piper Alpha disaster of 1988 played a major role, both by its recommendation of a specific HSE regime and by spreading Formal Safety Assessment (FSA) presented as “Safety Cases” to other industries. The HSE requires that all operations are covered by detailed safety cases in which potential hazards, their consequences, and the methods of controlling any risks are described and explained. The overall responsibility for safety on an installation falls to the Safety Case Duty Holder who appoints an Offshore Installations Manager (OIM) to discharge this responsibility. In the case of mobile drilling rigs, the duty holder is the drilling contractor. Phase V: The final stage led to the Deepwater Horizon accident in the Gulf of Mexico in April 2010 followed by the EU-intervention with the new proposal. However, in the same period some near accidents on the NCS were part of the argument used by the European Union in promoting its proposal. 10 Walters D. European Union Overview. In Report no. 10, Workplace Safety. Vol. II. pp.

4–6. Sidney: Parliament of New South Wales 1998:0-4-6.

Offshore Safety Regimes   205 Safety Case Before operators bring a drilling rig into the United Kingdom or operates a fixed platform, they have to prepare a safety case for the Health and Safety Executive to approve. The Operator, or License Holder is subject to separate and additional verification requirements under the Design and Construction Regulations in the form of well examinations carried out by an independent and competent person. All parties involved have legal duties to cooperate with both the OIM and the well Operator when the well is under construction. The Safety Case Duty Holder and the well Operator must demonstrate how their safety management systems will operate together, who has primacy in an emergency, and who has overall responsibility. (Lindøe, Baram et al. 2012)

Near Accidents on NCS11 Between December 2009 and May 2010, the Gullfaks C field, operated by Statoil was subjected to several critical incidents with leakages of hydrocarbons from wells. The initial well trajectory was plugged during the fall 2009, and drilling in a sidetrack well started in December 2009. During the next couple of months, Statoil experienced three serious well-control incidents in the well, the most critical one resulting in a complete loss of well control on May 19, 2010. Statoil decided to shut down production and evacuate 89 people from the platform, only leaving behind a crew to deal with the well. All activities on board were for the next two months concentrated on plugging the well systematically from the bottom and up. Although the incident did not result in any injuries or environmental damage PSA stated that only chance prevented the incident from becoming a full-scale disaster. PSA’s report aimed to clarify to what extent Statoil had met the regulatory safety requirements related to the planning and preparation process for the well. The investigation pointed to deficiencies in connection with risk management and compliance with internal requirements for drill operation planning and execution. In sum, it was identified that Statoil had specific challenges related to quality of the planning process, quality and precision within execution processes, risk comprehension, compliance and management. Based on the PSA report Statoil was requested to further clarify why such an incident actually happened and identify and carry out improvements concerning quality and resilience in the organization as a whole. Statoil interpreted this request as an instruction to accomplish an independent study and after procurement procedures. The assessment was made by an independent research

11 The presentation is based on the report: Læring av hendelser I Statoil. En studie av bakenforliggende årsaker til hendelsen på Gullfaks C og Statoils læringsevne. Rapport IRIS 2011/156.

206   Lindøe and Engen institute.12 The report was critical towards Statoil and created a public debate after being published including question time in the Parliament. To one of the strong environmental groups, Bellona, the report was an indication that Norway – the sooner the better – should adapt EU regulations to avoid such incidents in the future. EU Intervention After the Macondo disaster, members of the EU Parliament raised questions about how robust the existing risk regulatory approaches for offshore health and safety regulation was among the member States. Following the disaster, there were efforts on the part of the UK authorities to reassure the public and the European Union that there were no problems with offshore safety regulation. The Secretary of State for Energy and Climate Change rapidly said that the current regime was “fit for purpose”.13 In Norway the CEO of the PSA admitted that the same could have happened on the NCS. The authorities and industry in Norway and the United Kingdom formed groups with the purpose of reviewing and assessing lessons learnt to make necessary recommendations with regard to well control and safe offshore operations. In the United Kingdom some rapidly declared that offshore regulatory standards, as exemplified by the “Safety Case Regime” was superior to that what was found in the Gulf of Mexico at the time of the Deepwater Horizon disaster.14 However, the uncontrolled gas leak at the Elgin field in 2011 became more problematical for the UK regulatory approach where the suggestion from the operator, Total, was that forming relief wells could take six months to complete. In October 2010 both the Parliament15 and the Commission16 indicated that legislative action was necessary at the European level. Initially the suggestion was that intervention towards member states should be restricted to an amendment of the Extractive Industries Directive,17 while the proposal from the Commission is a new Regulation.18 This approach has caused a strong reaction in both the United Kingdom and Norway. Even not being a member state of the 12 International Research Institute of Stavanger (IRIS). 13 DECC Press Release: PN10/067, the United Kingdom increases North Sea rig inspections, 8 June 2010. 14 Energy and Climate Change Select Committee Report, p. 41, para. 3. 15 European Parliament resolution of 7 October 2010 on EU action on oil exploration and extraction in Europe (hereafter “Parliament Resolution”). 16 European Commission, Communication from the Commission to the European Parliament and the Council: Facing the challenge of the safety of offshore oil and gas activities, SEC (2010) 1193 final (hereafter “Commission Communication”). 17 Directive 92/91/EEC. 18 Details of direction.

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European Union, Norway would be affected by a new Regulation through its membership of the European Economic Area. On February 21 2013, the European Parliament reached a political agreement on the commission legislative proposal on the safety of oil and gas in EU. From the employers and employee organisations and even Norwegian authorities the resistance towards the EU directive still remains – simply because they mean that the Norwegian regulations already surpass the EU regulations when it comes to legal quality and public participation. As this book goes to press the process is still on-going, and the outcome is uncertain concerning how Norwegian environmental regulations and safety regulations may be enrolled in the complex hierarchy of norms that EU regulations represent.

4. Analysis and Discussion In our analysis we will relate the controversy over the new EU proposal to two main issues: firstly the increased complexity of enforcing a new layer of legal binding norms “on the top of ” well established and integrated regimes and secondly the lack of a participatory approach with the work force as a legitimate actor within the regulation. Increased Complexity The proposed EU regulation of offshore safety is a decree to be taken word for word. An EU regulation in the form of a binding legal text can be a good strategy for countries without a developed legal framework. If the member of the European Union has a well-functioning legal framework a decree may require national regulations undergo major changes and become more complicated and unmanageable than before. In recent years a debate has persisted on whether the regulation of international security will be based on risk, purpose and functionbased requirements or rather become prescriptive and detail oriented. In Norway the critics address a lack of consistency in the regulatory principles. Despite the support for risk-based regulation by the Commission, the proposed approach is rather prescriptive, and deviates from the approach adopted in Norway (and indeed in the UK) where the ultimate responsibility of assessing and handling the risk is placed on the operator rather than the regulator.19 Paterson (2012) points at the UK industry which criticised the proposed regulation on the grounds that while the Commission acknowledged the quality of 19 For details, see Norway: Comments to the European Commission proposal for a Regulation of the European Parliament and of the Council on safety for offshore oil and gas prospection, exploration and production activities, December 2011.

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Figure 4. Increased complexity of linking norms and standards to safety issues.

the UK system and indeed “cherry-picked” elements of it, this was done so in a clumsy way that will pose significant problems of bureaucracy, delay and cost on the UK industry and regulator.20 An independent report exposed flaws in the justification for the proposed regulation including the assumptions the Commission made about the polluting potential of North Sea wells and about the likely reduction in incidents and costs achievable with the new regulation.21 An indication of the increased complexity is illustrated in figure 4. This illustrates the dilemma with the proposed regulation. The driving force from the European Union seems to be better protection against pollution of water and seabed, a safety issue with international and global focus. Legislation in order to protect the interests of the environment has been developed in the global arena. An example of the many conflicts that arose between the oil industry and the environmental movement was as we have seen when Shell in 1995 wanted to dump the Brent Spar platform. Interest conflicts around the external environment affect primarily the industrial and social interests where citizens are third party. It does not affect the offshore workers as such, and their interests are not enshrined in law and regulations. Based on the norm of “protecting the environment” a stronger and better regime on “environmental safety” could be put in place with the necessary laws and regulation. The challenge will mostly be the coordination issue. However, moving to the many issues regarding occupational health and safety for the

20 For details, see http://www.oilandgasuk.co.uk/ProposedEURegulation.cfm. 21 For details see http://www.oilandgasuk.co.uk/feature1-wireline-feb2012.cfm.

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workers the numbers of safety issues increase, and both horizontal and vertical coordination became much more complex. The Norwegian response concludes by accepting the Commission’s intention by proposing a regulation to obtain the same level of safety in all Member States with offshore petroleum activities admitting that the proposed regulation would possibly achieve this in Member States where the regulatory framework is not well developed. However, being implemented for offshore activities in geographical areas where robust safety principles and legal frameworks have been carefully developed over a long period of time (as the North Sea), it represents a step backwards. Since the regulation leaves little room for adaptation to existing legal frameworks, any new EU measures will be in the form of new or amended directive(s) where adjusting the existing regulation would create a massive administrative burden and most probably raise complicated legal questions. In sum, the conclusion is that the proposed EU-regulation could lead to a less effective safety system. The Work Force as a Legitimate Actor As pointed at in the last section (phase I) the new working environment laws developed in the 1970s entailed mechanisms empowering workers to have more influence on standards and processes in the work place. Performance standards with their notions of systems, work organization and management responsibility entitled unions to negotiate OHS issues in areas where narrow specification standards had left conspicuous gaps (e.g. shift arrangements, the use of contractors, workloads etc.). The history of onshore industrial development, societal and cultural values influenced governmental authorities, industrial actors and the workforce (unions) influenced the risk regimes developed in the “North Sea”. The Norwegian offshore regime goes even further than in the United Kingdom in developing a tripartite system based on egalitarian values and mutual trust among involved actors (Tharaldsen). In its welfare state model, Norway, promotes a symmetrical partnership between public agencies and industrial actors, which involves labor unions in parallel with the asymmetric role of sanctioning industry for violations of law. This differs from a command and control regime with regulators requiring that industry must comply with the regulator’s rules or be punished. In the process of redesigning the regime after 2010, the US regulators considered the UK and Norway regimes even if there are voices questioning why UK “Safety Cases” and Norway’s trust-based soft path to industrial compliance should come to America (Steinzor 2011; Baram 2011). It is relevant to draw a parallel to the issue of workers’ interests in EU legislation in the late 1980s and the new EU-proposal in 2011. When the European Union installed the framework to ensure safety and health of workers (89/391/EC), the

210   Lindøe and Engen directive was inspired by the principles developed through the new laws on workers protection and a safety regime in the North Sea. In the directive from 1989, consultation and participation of workers met through a series of articles. The role of the unions in the Norwegian tripartite-system is multiple. It is part of a process to resolve conflicts by mediation or appeal to higher administrative authority instead of recourse to the courts and represents the workforce in multiple arenas of tripartite cooperation: Regulatory Forum (RF), Safety Forum (SF), a portfolio of improvement projects (Working Together for Safety), a program of monitoring safety indicators (RNNP) and an extensive training program (Regulatory Competence project) in which about 10,000 employees have courses on the new regulations of 2001. The role of the workforce is implemented by several collaborative structures within companies: a working environment committee for managers and employees to discuss safety and related issues, election by workers of a safety representative at each worksite, and having occupational safety and health experts on call as consultants to help resolve disputes and provide services to the internal control system. However, there is continuing concern expressed by labor unions and safety advocates that the Nordic OSH model will be undermined by several developments: Standardization processes regarding safety without a participatory approach, an increase in operators from countries that show less regard for workers and unions, market forces which lead operators to increase hiring of temporary workers, and management application of behavior-based approaches to the workforce, etc.

5. Conclusion A comparative study of the offshore safety regime between Norway, England and the United States shows the complexity of the regulatory regimens and how important it is to develop regulations that have legitimacy and can be handled by all involved parties.22 It is thus reasonable to argue that the European Union’s laudable aim of contributing to a safer oil and gas industry could best be achieved by binding the members of an EU directive with the objectives of the result to be achieved, based on best international industry practices. A detail-focused regulation will provide a more complicated set of rules for the Norwegian and UK shelf and create unclear roles and relationships between national authorities, parties and trade unions. The assessment of the Gullfaks C incidents can be used as an indicator of vulnerability as well as an evidence of the robustness of the “Norwegian model” 22 For documentation, supra note 5.

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which is a regime that induces learning and improvement within the industry. For Statoil it would have been easier “to pay a fine” instead of following up the questioning from PSA by making an external investigation – thereby giving insight into the difficult internal processes and weakness. The assessment report and the many reports after the Deepwater Horizon accident confirm how difficult it is to develop and maintain integrated and effective safety management systems in large and complex organizations. It is difficult to see how safety critical issues related to management, organization and technology cannot be improved by using additional or more detailed rules by the authorities. The more prescriptive rules and technical standards the regulator takes into its regulations as legal-binding, the more responsibility it takes upon itself. Safety regulations for workers (the internal environment) and safety of the environment have different ideological, institutional and legal foundations. In the Norwegian context, workers’ participation in terms of safety is rooted in the working environment legislation and strengthened through a well-developed tripartite cooperation between workers, employers and governments. These principles have further been incorporated into the regulations applicable to the offshore business where one has managed to combine two good purposes, namely to improve technology, processes and products at the same time as holding a high level of security.

References Baldwin, R. and M. Cave (2012). Understanding Regulation. Oxford, Oxford University Press. Baram, M. (2006). Alternatives to Prescriptive Regulation of Workplace Health and Safety. 3d International Conference Working on Safety, Amsterdam, Working on Safety. Beck, U. (1986). Risikogesellschaft: auf dem Weg in eine andere Moderne. Frankfurt am Main, Suhrkamp. Braut, G.S. and P.H. Lindøe (2010). “Risk Regulation in the North Sea: A Common Law Perspecitve on Norwegian Legislation.” Safety Science Monitor 14 (1, Article 2). Brunsson, N. and B. Jacobsson (2000). A World of Standards. Oxford, Oxford University Press. Gilad, S. (2010). “It runs in the family: Meta-regulation and its siblings.” Regulation & Governance (4): 485–506. Gustavsen, B. and G. Hunnius (1981). New patterns of work reform: the case of Norway. Oslo, Universitetsforl. Haugland, A. (2012). Bruk av funksjonsbaserte regelverk og rettslige standarder. Risiko og tilsyn. Risikostyring og rettslig regulering. P. Lindøe, J. Kringen and G.S. Braut. Oslo, Universitetsforlaget: 170–188. Hood, C., et al. (2001). The Government of Risk. Oxford, Oxford University Press. Hopkins, A. (2011). “Risk-management and rule complience: Decision-making in hazardous industries.” Safety Science 49: 110–120. Karasek, R. and T. Theorell (1990). Healthy work: stress, productivity, and the reconstruction of working life. [New York], Basic Books.

212   Lindøe and Engen Karlsen, J.E. and P.H. Lindøe (2006). “The Nordic OHS Model at a Turning Point?” Policy and Practice in Health and Safety 4(1): 17–30. Kringen, J. (2009). Culture and control. Regulation of risk in the Norwegian Petroleum Industry. University of Oslo: 457. Lindøe, P. Baram, M. and Renn O. (2013) Risk Governance of Offshore Oil and Gas Operations. In Search of Robustness. Cambridge University Press, Cambridge. Lindøe, P., et al. (2012). Robust Offshore Risk Regulation – an assessment of US, UK and Norwegian approaches. ESREL2012, Helsinki. Lindøe, P.H. (1992). Internkontroll: krysspress mellom byråkratisk kontroll og aktiv medvirkning. Institutt for organisasjons- og arbeidslivsfag. Trondheim, NTNU. Doktor ingeniøravhandling: vi, 208, 221 s. Lindøe, P.H. and K. Hansen (2000). “Integrating Internal Control into Management Systems. A discussion based on Norwegian case studies.” Systematic Occupational Health and Safety Management. K. Frick, P.L. Jensen, M. Quinland and T. Wilthagen. Amsterdam, Pergamon, Elsevier. Olsen, O.E. and P.H. Lindøe (2009). “Risk on the ramble: The international transfer of risk and vulnerability.” Safety Science 47: 743–755. Power, M. (2004). The Risk Management of Everything Rethinking the politics of uncertainty. London, Demos. ——. (2007). Organized Uncertainty. Designing a World of Risk Management. Oxford, Oxford University Press. Reason, J. (1997). Managing the risks of organizational accidents. Aldershot, Ashgate. Renn, O. (2008). Risk Governance. Coping with Uncertainty in a Complex World. London, Earthscan. Sennett, R. (2008). The Craftsman. London, Allen Lane. Short, J.L. and M.W. Toffel (2010). “Making Self-Regulation More Than Merely Symbolic: The Critical Role of the Legal Environment.” Administrative Science Quaterly 55: 361–396. Sinclair, D. (1997). “Self-Regulation Versus Command and Control? Beyond False Dichotomies.” Law & Policy 19(4): 529–559. Vogel, L. (1998). Prevention at the Workplace. Brussels, European Trade Union Technical Bureau for Health and Safety.

part 4

Probabilistic Risk Assessment for Continental Shelf Development

ENVIRONMENTAL REGULATION AND PROBABILISTIC RISK ASSESSMENT Martin G. Malsch1 Abstract Four related questions are addressed: what is a probabilistic risk assessment (PRA); what problems are encountered in performing one; how is one to be used, in general; and what problems are encountered when one is used in environmental regulatory programs? Essentially, a PRA provides (or attempts to provide) answers to three important questions applicable to complex technological or natural systems: what can go wrong; how likely is it; and what are the consequences (called the risk “triplet”). Problems encountered in performing a PRA include incomplete selection of initiating events, misleading “worst case” analyses, improperly truncated analyses, and improper treatment of uncertainties including model and data (parameter) uncertainties. A PRA may be used to inform decision-makers of the total health, safety and environmental risk posed by a technological or natural system, but great caution should be exercised in using such “bottom line” PRA results because of the many uncertainties that are often inherent in the assessment. A PRA may be more useful in identifying the major contributors to risk so that decision-making is “risk informed,” that is, includes consideration of PRA results along with engineering judgment and other factors. In general a PRA may be used in legal frameworks that require the reduction or elimination of an environmental, safety or health hazard because (1) the hazard is deemed intrinsically unacceptable (“pure risk” frameworks, which include a framework demanding zero risk) or (2) measures to reduce or eliminate the hazard are available at a cost that is justified given the value of the risk reduction or elimination that will result if the measures are adopted (“utility-based” frameworks, which include cost-benefit analyses). The problems with using a PRA in an environmental regulatory program include the expense, acquiring the necessary expertise, assuring transparency in decision-making, accounting for uncertainty, and using PRA results in a zero risk framework when (as is usually the case) accomplishing zero risk is impossible. In all cases careful PRA planning and execution are essential.

Introduction This paper addresses four related questions: what is a probabilistic risk assessment (PRA); what kinds of problems does one encounter in performing one; how might one be used in general (including by developers and operators of 1 Egan, Fitzpatrick, Malsch & Lawrence, PLLC, 1750 K Street N.W., Suite 350, Washington, DC, 20815. The author’s PowerPoint is available at .

216   Martin G. Malsch complex technological facilities); and what particular problems are encountered and what advantages may be obtained when one is used in environmental protection and regulatory programs? The presentation is general. It will not address any particular kind of facility or hazard. The objective is to provide the reader with information about basic PRA concepts so that he or she can consider whether one would be useful and be generally knowledgeable about what goes into a good or bad one.

What Is a Pra? A probabilistic risk assessment or PRA is a comprehensive, structured and logical analysis aimed at identifying, assessing and ultimately quantifying the risks in complex technological or natural systems. It is sometimes called a “probabilistic safety assessment or “PSA” and, when geologic waste disposal systems are evaluated, the term used is “total systems performance assessment,” but the basic principles are similar. Risk, as used here, is a measure of a hazard that combines a measure of the likelihood of occurrence of an undesirable event and a measure of its consequences. Often the PRA concept is described as a “triplet” comprising three fundamental questions. What can go wrong? How likely is it? What are the consequences? Often we say that the probability of something bad happening is “low” or “essentially impossible” and that the consequences are “small” or maybe “large.” If done right, a PRA can provide results that will allow you to replace qualitative conclusions like these with quantitative conclusions – actual numbers – about probability and consequences, and therefore risk. And the results can be surprising.

Event Tree Here is how you do a PRA, using a simple example. First you need to identify the “bad” event of concern. This is extremely important and can be very tricky, and I will return to it later, but for discussion purposes let me identify it as missing a deadline for the submission of a paper. The sequence of events starts when the student wakes up late on the day the paper is due with final editing of the paper yet to be completed. We first need to construct an “event tree,” which is a bottom up approach to identify the possible outcomes when an initiating event is known – here waking up late. The event tree might look like this. As shown, a number of factors could lead to the paper being late. The alternative outcomes are shown in the far right-hand column (“Late!”), as either “Yes” or

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Figure 1. Example event tree structure.

“No” for the outcome of the path. By tracing back from the outcomes toward the left-hand side of the tree along the horizontal paths, a series of vertical branches labeled “Y” (for Yes) and “N” (for No) connect to earlier paths. Each of the vertical branches represents the response (Yes or No) to a question that appears at the top of the tree. So, tracing back from the first “Yes” under “Late!” the first branch labeled Y/N is “Editing Problem?” The upper branch represents “Yes,” meaning that there was an editing problem and therefore the paper was late. The lower branch “No” means that there was no editing problem and the paper was not late. The earliest path or branch after getting up late addresses the question “Computer Started?” and, if the computer started (“Y”), we may proceed directly to the “Editing Problem” branch. If the computer started, then there is no need to consider the backup alternative of using a spare computer. The illustration also shows the various alternative outcomes if the computer does not start. In the logic structure of the event tree, events or options that are dependent on other events lie to the right of those events. Usually this means that the events in the tree are time-sequenced from left to right.

Fault Tree The event tree portrays alternative outcomes after the initiating event. Probabilities of each of the outcomes or branches need to be assessed to estimate the likelihood of submitting the paper late, given waking up late. These probabilities could be based on experience of how often computers fail to start, how often a spare computer is available, and so forth. However, assessing the probabilities may not be possible based simply on past experience. This problem is addressed by developing a “fault tree.”

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Figure 2. Example fault tree.

This shows a simplified fault tree for one of the events in the event tree: the computer failing to start. This event, termed the fault tree’s “top event,” is the same as an event in the event tree. This allows the calculated probabilities from the fault tree to be plugged directly into the event tree. Fault trees are usually composed of two kinds of logical structures: AND gates and OR gates. A gate has several inputs and one output; the inputs are at the bottom and the output is at the top. In the case of an AND gate, the output is “true” only if all the inputs are true. An OR gate has a “true” output if any input is true. All modeling is performed using computer software. The figure above simplifies things by limiting the analysis to two reasons for a computer not starting: no power or a computer problem. Thus the top event (“Computer does not start”) is true if either of the inputs to the OR gate (“no power” or “computer problem”) is “true” or if both are true. “No power” is true if the battery is dead and power is not available from an electric outlet in the house, as shown by the logic of the AND gate. To estimate the likelihood of the computer not starting for these reasons, analysts use probabilities of failures of these lower-level components to estimate the overall probabilities of failure to start. Mathematics provides rules and

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formulae to estimate the probabilities in combinations, depending on the type of logic gate.

Pra Problems The selection of the “bad” event or consequence of concern is important and often tricky. Using our example, if we are not really concerned so much about submitting the paper late as getting a bad grade on the course, new branches would be added to the event tree moving to the right, such as will excellent grades on other papers or exams make up for a poor grade on a late paper. And with these come more fault trees and a more complicated analysis. But, if a getting a bad grade is what we are worried about, a truncated event tree stopping at a late paper will be only somewhat helpful or may even be useless. Also, a poor selection of the initiating event or events will affect the credibility and usefulness of a PRA. If we are concerned about getting a bad grade, but the teacher cares less about timeliness than the quality of the paper, then being hung over from a late night celebration with friends may lead to a poor editing job and dominate the risk of a bad grade. If getting a bad grade is the “bad” event or consequence of concern and you omit a hangover from initiating events in the event tree, the PRA will be misleading at best. A so-called “worst case” analyses – selection of the worst possible end result as the single “bad” event – can result in an underestimation of the total risk. If the frequency of the worst case event is very small, the risk (accounting for probability and consequences) may also be small. Events with higher frequencies but less severe consequences, and correspondingly greater risk, will be ignored. Plus defining worst cases can lead to endless speculation. The most common PRA technical problems relate to data uncertainty – the garbage in, garbage out syndrome – and improper construction of the event and fault trees. Almost always, severe “bad” events occur infrequently. This means that historical data regarding the frequency of severe “bad” events, such as serious nuclear plant accidents or very large oil spills, is often an insufficient basis to estimate probabilities. Indeed, this is why we construct event and fault trees. Even if a particular kind of bad event has never occurred – say you have never missed a deadline for a paper – we may still have good data to estimate the frequency of the individual events in the event tree, say the likelihood the computer will not start. We can use this data to produce a PRA. However, failure probabilities needed for the event and fault tree analyses are often missing or uncertain. We can compensate for missing failure data by using data from analogous systems, but this requires good judgment. For example, we should not use historical electrical switch failure data from nuclear power industry sources in a PRA for an offshore oil platform using similar switches

220   Martin G. Malsch without consideration of the relative effectiveness of the applicable quality control and maintenance programs. When failure data is available but spread over some range of numerical values we can use Monte Carlo or similar statistical techniques to calculate an end result that accounts for the uncertainties, but even here good judgment will be required. For example, assumptions about how failure data is distributed about a mean (average) or median (half above and half below) will affect the results of a Monte Carlo analysis. A major source of PRA uncertainty, even misleading PRA results, is model uncertainty. In my example of a late paper, the PRA result will be wrong if we have omitted an important event in the event tree “model,” for example the probability the computer will be lost or stolen. The alert reader may notice that we have failed to recognize that the spare computer may not start. Also, are we thorough in selecting initiating events (the left side of the event tree)? Are there other initial events that will lead to submitting a later paper, such as a loss of the previous draft. We can address this by working very hard on the event tree, using historical data, other PRA experience, or simple brainstorming. And, do we have a proper understanding about how a system operates in actual practice in constructing fault trees? Sometimes there are complex interactions among systems that defy simple linear sequences with yes or no answers. A good PRA must be comprehensive because otherwise significant contributors to risk will be left out. One result of the early PRAs for nuclear power plants was that failures in non-nuclear systems such as off-site power supplies could be major contributors to risk. This was a surprise. Similarly, natural initiating events such as earthquakes and floods turned out to be important. Finally, there is one last thing that in my experience warrants special attention – screening out initiating events. Certain events of very low frequency are almost always screened out from the PRA–-not included at all – to simplify the analysis. For example, we might screen out meteorite impacts or certain very large earthquakes from a nuclear plant PRA, or we may screen out large rogue waves from a PRA for an offshore platform. However, event screening must be done very carefully. Infrequent events can be important in estimating the risk because of their severe consequences, and often there are large uncertainties in estimating the frequency of supposedly rare events. For example, volcanic eruptions were a major contributor to the risk from the proposed Yucca Mountain high-level waste repository in the United States even though their estimated frequency was on the order on one in one-hundred million per year.

General Uses of a Pra A comprehensive PRA will provide quantitative information about the overall risk in a complex technological or natural system. This could be useful in deciding

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whether a proposed system should be pursued or approved, from both a public policy and a financial risk perspective, and in estimating insurance premiums. However, “bottom line” risk numbers derived from a PRA are often too uncertain to be used for these purposes without taking other factors into account. This is why the U.S. Nuclear Regulatory Commission generally uses the words “risk informed” rather than “risk based” in describing its use of PRAs. More often the PRA, specifically the event and fault tree analyses, will reveal the existence of previously undiscovered vulnerabilities or indicate that features of the system that have received little attention are in fact major contributors to overall risk. This enables the developer (or regulator) to focus attention on the important aspects of design, operation and maintenance and make (or order) prudent improvements. Sometimes a PRA will suggest the possibility that inexpensive fixes will result in major reductions in risk.

Pras in Licensing and Reguatory Programs Whether or how a PRA can be used in governmental licensing and regulation depends of course on the legal framework. For discussion purposes, let me divide health, safety, and pollution regulatory frameworks into four general categories. First, there are “pure risk” frameworks establishing an absolute obligation to avoid the creation of a certain hazard or hazards regardless of other considerations. These include frameworks requiring that the risk be zero and frameworks requiring that the risk be constrained so that it does not exceed a certain level, often expressed in qualitative statutory terms like “adequate” protection or “protect health.” Second, there are frameworks using “utility-based” criteria. These include frameworks requiring that costs and benefits be considered, as for example a requirement that an activity may be licensed only if the benefits exceed the costs. Third, there are frameworks using “technology-based” criteria. These include frameworks requiring the use of “best available” or “best practical” technology. If what is “best available” or “best practical” depends on economics, this becomes a kind of “utility-based” framework. Fourth, there are hybrid combinations of the above. A requirement that pollution be “prevented” suggests a pure risk framework, with zero pollution risk as the criterion. A requirement that pollution be “reduced” or “controlled” suggests an application of a utility-based or technology-based framework. A combined requirement that pollution be prevented, reduced, and controlled suggests the application of a hybrid framework, with judgment to be exercised regarding which kinds of pollution risk are to be prevented in a zero risk framework and which kinds of pollution risk are to be managed in a utilitybased or technology-based framework.

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PRA Uses A PRA could in theory be used in all four frameworks except the third, which would ordinarily require the application of an available technology regardless of how much risk reduction is accomplished and would deem the result acceptable regardless of whether the risk remaining after the technology is applied (the residual risk) is large or small. A PRA would be irrelevant in these circumstances although a PRA would provide useful information about residual risk that might be used to advocate changes to the decision framework. The most interesting application of a PRA would be in a pure risk framework. A good PRA will tell you what the risk actually is, and if it exceeds the risk criterion then the proposal cannot be approved without further reduction in the risk. This sounds simple, but using a PRA in a pure risk framework is very complicated in actual practice, as explained below, and PRA uncertainties may make it unwise to rely on PRA results to the exclusion of other information. A good PRA could also be useful in a utility-based framework because the benefits in any consideration of the balance of costs and benefits would include reduction in risk, and a PRA would provide a quantitative estimate of the reduction in risk.

Regulatory Problems in Using PRAs As indicated above, the most interesting application of a PRA would be in a pure risk framework, but using a PRA in a pure risk framework is fraught with difficulty in actual practice. First, a PRA will almost always inform the regulator that the overall risk is not zero, which will lead to a disapproval of a proposal or application in a pure risk framework calling for absolute assurance, absolute prevention, or zero risk. Perhaps for this reason pure zero risk regimes are rare. And, when legal documents appear at first blush to call for zero total risk, extraordinary efforts are made to avoid such an interpretation by, for example, deeming certain hazards to be trivial or sufficiently small that they can be ignored. This may lead to a serious problem if the hazard being ignored is defined solely in terms of probability. As noted above, low probability events can pose a significant risk and should not always be ignored. A hybrid framework, almost by definition, cannot require zero overall risk because zero overall risk leaves no room for the necessary additional application of utility-based or technology-based regulatory regimes. PRAs can be very expensive, and sometimes the necessary expertise is hard to find. Moreover, a PRA is often subjected to a peer review. For these reasons, PRAs are usually conducted by the applicant, owner or operator, following good industry practices and regulatory guidelines, rather than by a government regulatory agency.

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But the most serious problem with using a PRA in a regulatory setting is uncertainty. A good PRA will not likely produce a single risk number. Instead, there will likely be a distribution of risk numbers. This gives rise to the obvious question whether the mean, median, or other risk number should be used for regulatory purposes. Moreover, failure data may be missing or suspect, resulting in parameter distributions that are incomplete, misshapen, or completely wrong. To further complicate things, the distribution of risk numbers may only take account of parameter uncertainty, leaving uncertainty arising from improper construction of the event and fault trees completely unknown. A PRA with unknown uncertainty cannot be used as the sole basis for a decision; it will need to be supplemented by engineering judgment, perhaps as applied to confidence building measures like safety system redundancies and defense in depth. For these reasons, “bottom line” PRA risk results must be used cautiously. Also, PRAs are often closely held, both because they reveal proprietary or even classified information and because they may serve as a recipe for a terrorist or saboteur. Therefore reliance on a PRA may pose problems of transparency in regulatory decision-making. A PRA requires careful planning, both in regard to how it is done and in regard to what will be done with it after it is completed. Moreover, if a PRA is to be used on an ongoing basis, for example to prioritize preventative maintenance activities, then it will need to be updated periodically to reflect changes in design, operation, maintenance or training.

PRA Advantages While PRAs pose problems, they also offer very significant benefits. A “bottom line” risk number can be used to decide whether a project should go forward or be abandoned although, as indicated above, “bottom line” risk numbers should be used cautiously. A PRA can provide a scientific basis for eliminating myths (“that accident will never occur”) and bureaucratic inertia (“we do not worry about this kind of thing”) by focusing attention on significant risks. It will provide information about hidden vulnerabilities that can be addressed. Often, vulnerabilities posing significant risks can be eliminated by simple, inexpensive means. A PRA will reveal areas of significant uncertainty, and these may be addressed by adding redundancy and diversity in safety and environmental protection systems. A PRA can provide information that can be used to focus research on the most important topics and to justify financial investments to improve performance and minimize risks.

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Conclusion Ignorance about the risk in complex engineering or natural systems is not bliss and a properly conducted PRA will tell you things about risk you really should know. However, careful PRA planning and execution are essential. Moreover, using a PRA in a regulatory setting requires good judgment based on knowledge of how a PRA is conducted and its limitations.

DISASTERS AND THE CONTINENTAL SHELF: EXPLORING NEW FRONTIERS OF RISK Bruce C. Glavovic1 Abstract The coastal margin is the locus of humanity’s struggle to come to terms with the limits to growth on a finite planet. This margin includes the coastal zone and extends from coastlands along the seashore out to the continental shelf and slope. Humanity derives a cornucopia of benefits from coastal margins. The coastal zone is home to the majority of the world’s population and is an arena of intensive economic development; and the continental shelf is the new frontier for resource exploitation. But business as usual is unsustainable, and disaster risk is escalating. Learning how to build sustainable, hazard-resilient coastal communities is thus the pre-eminent challenge of the 21st century. The BP oil spill is a compelling story about coastal disasters, risk, resilience and sustainability. What can we learn from this disaster narrative to inform future efforts to foster resilience and sustainability on coastal margins? At face value, the BP oil spill is a story about a technological disaster and the challenges associated with the clean-up and how to hold business accountable for the risks it takes. But this story is far more complex. It has its roots in historical choices about exploitation of the Louisiana wetlands and continental shelf of the Gulf, and evolving human-nature relationships. It raises fundamental questions about rights and responsibilities for creating, bearing and sharing risk on coastal margins. Business and technological innovations have reaped huge rewards but imperil coastal communities because past and prevailing practices have destroyed, transformed and degraded the ecosystems that sustain coastal livelihoods. Moreover, exposure and vulnerability to hazards is increasing exponentially and future prospects are bleak in the face of deltaic subsidence, wetland loss and climate change impacts and sea level rise in particular. The BP oil spill disaster underscores the importance and complexity of the choices we make on coastal margins. Governance innovations have done little to stem the tide of unsustainable coastal activities. Paradoxically, innovation is necessary to navigate a way out of the ‘vulnerability trap’ that past innovation has unwittingly set. We need to reframe our understanding of coastal disasters, risk and recovery, and transform the governance processes that shape resilience and sustainability on coastal margins. An important point of departure is to recognise that coastal systems are complex and that our knowledge is incomplete. Conventional risk analysis is an invaluable tool when uncertainty is measurable. But there is a tendency to use these techniques even when it is not possible to determine credible probabilities of uncertainty, and when ambiguity and ignorance prevail. It is important to recognise that knowledge about ocean and coastal risk, resilience and sustainability is partial, plural, contingent and contested. This has significant implications for how to make social choices on coastal margins. 1 EQC Chair in Natural Hazards Planning, School of People, Environment and Planning, Massey University, New Zealand. Email: [email protected]. His PowerPoint is available at .

226   Bruce C. Glavovic Ocean and coastal management need to be reconceptualised as a transformative practice of deliberative governance. A new conceptual framework, comprising four deliberative or process outcomes, is posited. First, human and social capital needs to be built through issue learning and improved democratic attitudes and skills. Attention then shifts to facilitating community oriented action and improving institutional capacity and decision-making. Together these endeavours enable improved community problem-solving. The ultimate process goal is to build more collaborative communities. Instituting transformative deliberative governance will chart new sustainability pathways and help to reduce disaster risk on coastal margins. Keywords: coastal margin, BP oil spill, coastal disasters, risk, deliberation, governance

* * * Already, this oil spill is the worst environmental disaster America has ever faced. And unlike an earthquake or a hurricane, it is not a single event that does its damage in a matter of minutes or days. The millions of gallons of oil that have spilled into the Gulf of Mexico are more like an epidemic, one that we will be fighting for months and even years (President Barack Obama).2

Introduction About 70 per cent of the planet is covered by oceans and it is an obvious truism that healthy oceans sustain life on earth. The Third United Nations Convention on the Law of the Sea (UNCLOS III) established the legal framework for oceans governance: the primary regulatory regime for marine activities and resource exploitation. The 10th of December 2012 marked the 30th anniversary of the signing of UNCLOS III and it is over 50 years since UNCLOS I was signed in 1958. It is opportune to take stock of the adequacy of this regime for dealing with the intensification of high-risk activities that are now taking place on coastal margins and on the continental shelf in particular. This chapter focuses on lessons learned from the 2010 BP-Deepwater Horizon (BP-DWH) oil spill disaster in the United States (US) Gulf of Mexico. This disaster is a tragic but timely parable about managing risk on coastal margins with significant implications for marine law and ocean and coastal governance more generally. This chapter has four main sections. The first section locates ocean and coastal sustainability in a global context. It underscores the pivotal role that coastal margins play in sustaining life on earth. Overexploitation and degradation of coastal resources and ecosystems have stimulated accelerating exploration and exploitation in ever deeper and more remote oceanic realms, with attendant escalating 2 Remarks by the President to the Nation on the BP oil spill, 15 June 2010, http://www.whitehouse .gov/the-press-office/remarks-president-nation-bp-oil-spill (Accessed 17 December, 2012).

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disaster risk. The transition from prevailing unsustainable practices to more resilient and sustainable pathways will be won or lost on the coastal margin. Sage regulation of continental shelf development is therefore of pivotal importance. The second section explores the BP-DWH oil spill disaster to learn lessons and inform future efforts to reduce risk and build resilience and sustainability at the margin. This event was much more than a technological disaster. It needs to be understood in a wider historical, geographic and societal context. It reveals why prevailing practices are inexorably risky and unsustainable, despite past innovations in the governance of risk and coasts more generally. It also raises fundamental questions about how to manage risk at the margin, and the roles and responsibilities of key actors from the private sector, government and civil society. The third section focuses on the need to better understand complexity and risk at the margin; and considers the implications for how social choices are made under conditions of complexity, scientific uncertainty and socio-political ambiguity. It highlights significant developments in risk governance and integrated coastal management (ICM). Building on these developments, the fourth section outlines key elements of a new conceptual framework for risk reduction and resilience and sustainability on coastal margins. A deliberative practice of ocean and coastal governance is proposed. Founded on four deliberative or process outcomes, the framework emphasises the need to build human and social capital through issue learning and improving democratic attitudes and skills. Then deliberation can foster community-oriented action and strengthen institutional capacity and decision-making. Community problem-solving capacity can be improved by further investment in deliberative engagement. This foundational deliberative capacity helps to build more collaborative communities to navigate the ‘black tide’ of unsustainable practices – epitomised by the BP-DWH oil spill – that prevail at the margin. However, making this transition to sustainability requires a volte-face in thinking and action at the margin. Transformative change at various scales has been achieved in the past and offers hope for future governance innovation on coastal margins.

Pushing the Boundaries: Risk at the Margin The coastal margin is the locus of humanity’s struggle to build resilient, sustainable communities – the pre-eminent challenge of the 21st century. This section shows how exploitation of the resources of the continental shelf and beyond is intensifying in pace and scale with incredible technological innovations that promise a myriad of benefits from the ocean depths. But disaster risk is increasing at an exponential rate at this new frontier. Technological innovations are pushing the boundaries of ocean and coastal ecosystems to sustain accelerating

228   Bruce C. Glavovic exploitation, and are exceeding the ability of prevailing governance arrangements to manage risk and build resilience. Urgent transformative action is needed to realise the potential of coastal margins without irreversibly impacting the coastal and ocean ecosystems that sustain life on earth. Pushing the Boundaries The Stratigraphy Commission of the Geological Society of London is considering the introduction of a new post-Holocene epoch – the Anthropocene. Coined by Eugene Stoermer and popularised by Nobel-Laureate Paul Crutzen, the Anthropocene denotes the dominant influence human activities now have on earth (Crutzen & Stoermer, 2000; Crutzen, 2002; Zalasiewicz et al., 2011). Since the Industrial Revolution, the human enterprise has increased exponentially in what has been described as the Great Acceleration (Steffen et al., 2007) and now plays a signature role in global biogeochemical processes. There is growing concern that critical planetary boundaries, such as biodiversity, climate change and nutrient cycling, are being transgressed (Rockström et al., 2009) with dire implications for planetary health and human well-being (MEA, 2005). A global sustainability crisis has been precipitated that jeopardises life on earth as we know it. Even an optimistic framing of this prognosis highlights the need for urgent attention (DeFries et al., 2012). The land-sea interface is the frontline of this sustainability crisis (Glavovic, 2013a). Broadly speaking, the coastal margin includes the coastal zone, which extends from coastlands to the seashore into shallow coastal waters, territorial seas and the continental shelf and slope. This coastal realm provides a cornucopia of resources and opportunities that sustain the majority of the world’s population. The total value of coastal ecosystem services (including supporting services like nutrient cycling, provisioning services like food and energy, regulating services such as carbon sequestration, and cultural services such as recreation) is estimated to be over USD25 trillion per annum – about 77 per cent of the value of all ecosystem services (Martinez et al., 2007). This narrow interface between land and the high seas – comprising only 1.2–12 per cent of the earth’s surface – is thus disproportionately productive and valuable. The landward strip along the seashore has become the primary habitat of humanity. About 40–50 per cent of the human population lives within 100km of the sea, 21 of the world’s megacities are coastal and 41–45 per cent of global economic activity is concentrated here (Hinrichsen, 1999; Martinez et al., 2007; Patterson, 2008). But the coastal and marine ecosystems that underpin coastal livelihoods have been overexploited and transformed to a greater extent, and are deteriorating faster, than any terrestrial ecosystem (MEA, 2005; Nellemann & Corcoran, 2006; Brown et al., 2007; Nelleman et al., 2008). Prevailing practices jeopardise these life-sustaining ecosystems and their ability to sustain human development (Crossland et al., 2005).

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The demise of many coastal zone resources, coupled with technological and regulatory innovations, has ‘pushed’ the search for and exploitation of resources into ever deeper and more remote areas and onto the continental shelf in particular. There are incredible benefits to be gained by exploiting previously inaccessible resources up to the edge of the coastal margin and even beyond. But pushing these boundaries has potentially dire consequences and exposes humanity to a new risk frontier – as brought home by the BP-DWH oil spill disaster. The New Frontier: Risk at the Margin An array of activities, including maritime transport, fishing, mining, dumping and communications installations, has long been carried out on coastal margins in depths of up to about 200m. But intensified exploitation is taking place in very remote and deep waters and a plethora of new activities is underway, including exploitation of hydrocarbons, renewable energies, recreational uses, mariculture, mining and dumping (Lacroix & Pioch, 2011). Wind farm arrays are already in place in the North Sea and even more extensive constructions have been mandated by Germany and the United Kingdom as part of their ‘green energy’ strategies; and this activity is spreading to southern Europe and North America (Musial & Ram, 2010; Kaiser & Snyder, 2012). Offshore mining is dominated by hydrocarbon production followed by marine sand and gravel mining, and then various sites of placer mineral deposits such as diamond mining off southwest Africa, tin mining off southeast Australia and intermittent gold mining off the northwest United States (Rona, 2008). Oil and gas exploration and exploitation is extending into very remote regions, like north of the Arctic Circle that could hold about 30 per cent and 13 per cent of the world’s undiscovered gas and oil respectively; mostly in less than 500m of water (Gautier et al., 2009). The world’s deepest offshore production well is operated by Shell from the Perdido platform at a depth of more than 2,850m below the sea surface. The financial returns from deep-water drilling are staggering – fueling innovation, exploration and production at the margin.3 The continental shelf, slope and strategically located resources of the deep ocean thus constitute the new frontier for resource exploitation. Humanity is at the cusp of the next Great Acceleration in resource use at this frontier. For many, the resources of this vast oceanic realm appear limitless. But evidence is accumulating that planetary boundaries are being transgressed (MEA, 2005; Rockström et al., 2009), and the impacts on ocean and coastal systems is unequivocal. The combustion of fossil fuels, fertiliser use and industrial pollution has altered ocean chemistry (Tyrrell, 2011). Observed trends include acidification, 3 http://www.reuters.com/article/2012/08/17/us-oil-offshore-scale-idUSBRE87G0N620120817 (Accessed 17 December 2012).

230   Bruce C. Glavovic reduced subsurface oxygen in near-shore waters and the open ocean, increasing nitrogen levels in coastal waters, and a pervasive increase in mercury and persistent organic pollutants; and these trends are expected to intensify in coming decades (Doney, 2012), affecting marine processes, ecosystems and species and impacting the ecosystem services that people depend upon (Cooley, 2012). Rapidly rising greenhouse gas concentrations are transforming ocean systems in ways and at rates that are unprecedented in millions of years (Hoegh-Guldberg & Bruno, 2010). Habitat transformation, over-fishing and escalating land-based and marine pollution, and their interactions compounded by climate variability and change, are already having a deleterious impact on coastal and continental shelf systems (Perry et al., 2010) and deep-water ecosystems (Ramirez-Llodra et al., 2010). For example, bottom trawling – pulling heavy nets and gear along the seafloor – has the potential to modify the morphology of the upper continental slope and generate impacts on the deep seafloor analogous to agricultural ploughing on land (Puig et al., 2012). Even the most distant reaches of coastal margins are seldom pristine. A study of the Exclusive Economic Zone (EEZ) of British Columbia, Canada, found that at least 83 per cent of the continental shelf and slope is already used by humans and that up to 98 per cent of this realm is affected by stressors from human activities (Ban & Alder, 2008). Halpern et al. (2012) score the health of the global ocean system within the EEZ 60 out of 100 (range 36–86); with 32 per cent of countries scoring lower than 50 and only 5 per cent scoring higher than 70. These findings raise probing questions about the adequacy of UNCLOS III. The international community has much to do to the secure sustainable use of resources at the margin. Coastal margins also constitute the new risk frontier. In the last three decades, oil spills from tankers have decreased significantly but spills from old, poorly maintained or sabotaged pipelines in places like Arctic Russia, northwest Amazon and the Niger delta are on the rise (Jernelöv, 2010a). Furthermore, oil spill disaster risk is increasing exponentially because hydrocarbon exploration and exploitation is heading into deeper, remoter and icier waters. Blowouts are much harder to cap at depth and there is increasing exposure of fragile and/ or ecologically distinctive coastal-marine ecosystems. Thus, despite significant improvements in oil spill prevention in recent decades due to the interventions and regulations of many governments as well as corporate social responsibility measures – though the impact of the latter is less clear – prevailing governance arrangements are inadequate; and new hybrid forms of regulations that combine both voluntary and mandatory dimensions are needed (Frynas, 2012). To compound matters further, risk is intensifying because synergistic and cumulative impacts are inevitable with the multiplicity of interacting activities now taking place on coastal margins. The transition from unsustainable, high-risk practices towards globally resilient and sustainable pathways will be won or lost on the coastal margin. Past

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and prevailing resource use in the coastal zone is a troubling harbinger of things to come for the deeper waters of the continental shelf and beyond. There is a narrow window of time to make this transition at the inflection of the next Great Acceleration of resource exploitation taking place at the margin. The BP-DWH oil spill disaster is a timely warning of what can happen if exploitation of coastal margin resources is undertaken with persistent hubris. It demonstrates without question that business as usual is untenable. New ways of thinking and working must be invented to chart less-risky pathways towards sustainability at the margin.

The BP-Deepwater Horizon Oil Spill: A Parable About Risk At face value, the BP-DWH oil spill is a story about a technological disaster and the challenges of how to stop a blowout at depth, hold accountable the companies that caused the disaster and ensure an effective recovery. But the story is far more complex. It is rooted in historical choices about exploitation of the Louisiana wetlands and the continental shelf of the Gulf of Mexico, and evolving human-nature relationships more generally. It raises fundamental questions about rights and responsibilities for creating, bearing and sharing risk on coastal margins. What can be learned from this disaster narrative to inform future efforts to reduce risk and nurture resilience and sustainability at the margin? The BP-DWH Oil Spill Scenes of the DWH platform bursting into flames on the 20th of April 2010 reverberated around the world. A jet of methane gas had risen up from a wellhead being prepared under about 1,500m of water. It ignited and consumed the DWH platform, killing 11 workers, injuring another 17 and causing the worst environmental disaster in US history. The global ramifications for human activities at the margin, and hydrocarbon exploitation in particular, are still unfolding. The story of events leading up to the explosion, the immediate response and recovery to date has been told in a number of popular books (Achenbach, 2011; Bergin, 2011; Juhasz, 2011; Lustgarten, 2012), analysed by the National Commission on the BP-DWH oil spill and Offshore Drilling (National Commission, 2011) and scientific studies (Solomon & Janssen, 2010; Birkin & Asher, 2011; Freudenburg & Gramling, 2011; Committee on the Effects of the Deepwater Horizon Mississippi Canyon-252 oil spill on Ecosystem Services in the Gulf of Mexico, 2012; Gill et al., 2012; Gramling & Freudenburg, 2012; Silliman et al. 2012; Sylves & Comfort, 2012), and will be scrutinised for years to come. The DWH drilling unit was a dynamically positioned rig that could operate in water up to 2,400m deep and drill down to more than 9,100m. Owned by

232   Bruce C. Glavovic Transocean, and operating under the Marshallese flag of convenience, it was leased to BP from March 2008 to September 2013. An exploratory well was being drilled to a depth of about 4,000m below the seabed, in the Macondo Prospect, about 66km off the coast of Louisiana in the US EEZ. Halliburton Energy Services had been installing production casing to prepare the well for testing and production when the explosion occurred. Efforts to douse the flames were unsuccessful and about 36 hours later the rig sank, destroying the drilling riser that runs up to the rig from the wellhead on the seabed. On the 22nd of April, a large oil slick began to spread from the site of the rig. Containing a blowout at such depths is incredibly difficult. By the time it was contained, 87 days later, about five million barrels of crude oil had gushed into the Gulf. Massive efforts were mobilised to deal with the disaster: to contain the oil on the surface away from sensitive localities; dilute and disperse the oil in less sensitive areas; and remove it from the water. An unprecedented amount of dispersant was used – over 6.8 million litres – notwithstanding direct threats to human health from inhalation or dermal contact, as well as indirect threats to seafood safety and mental health (Solomon & Janssen, 2010). Estimates vary but, by mid-2012, media sources4 estimated that BP could face costs of about USD38 billion; including about USD14 billion in response and clean-up costs, USD1 billion in restoration projects, USD9 billion in compensation pay-outs, and USD7.8 billion to resolve outstanding claims. The costs to those whose livelihoods have been and continue to be impacted by the oil spill and clean-up are, however, much higher. A ‘back of the envelope’ calculation by Costanza et al., (2010) indicates that the loss of ecosystem services due to the oil spill could range from USD34–670 billion. It is still too early to estimate with precision the full extent of impacts and costs; and it is expected that the impacts will continue to reverberate in the Gulf for many years (National Commission, 2011; Committee on the Effects of the Deepwater Horizon Mississippi Canyon-252 oil spill on Ecosystem Services in the Gulf of Mexico, 2012; Gill et al., 2012; Silliman et al. 2012). In the short term, about 200,000 square kilometres of the US EEZ were closed to fishing, with massive direct impacts on commercial and recreational fishers as well as direct and indirect impacts on those whose livelihoods and lifestyles are connected to the Gulf now and into the foreseeable future (Gill et al., 2012; Lee & Blanchard, 2012). In November 2012, BP representatives pleaded guilty to criminal charges and agreed to pay USD4 billion to the US Justice Department arising from the charges and a further USD525 million to the US Securities and Exchange Commission for having misled investigators about the rate of oil flow into the Gulf. This was followed by a US Environmental Protection Agency led ban on BP having access 4 See e.g., http://www.guardian.co.uk/business/2012/jul/31/bp-deepwater-horizon-costs (Accessed 20 December 2012).

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to government contracts due to “lack of business integrity” stemming from the oil spill; a ban that is expected to be in place until BP can demonstrate that it meets Federal Business standards. It is expected that civil proceedings will begin in February 2013 as the US Government seeks as much as USD 17 billion in civil damages under inter alia the Clean Water Act. But why did this disaster occur; and what lessons does it offer for future exploitation and regulation of coastal margin resources? The findings of the National Commission (2011: vii), released in January 2011, summarised below, provide valuable insights: • The explosion and loss of the Macondo well could have been prevented; • The immediate causes of the blowout were due to a series of identifiable mistakes made by BP, Halliburton and Transocean that reveal systemic failures in risk management that raise questions about the safety culture of the entire industry; • The exploration and production of energy in deep water pushes the boundaries of experience and involves risks for which neither the industry nor government had been adequately prepared; • Regulatory oversight of leasing, energy exploration and production require reforms beyond those initiated since the disaster occurred to assure human safety and environmental protection. Fundamental reform will be needed in both the structure of those responsible for regulatory oversight and their internal decisionmaking processes to ensure their political autonomy, technical expertise, and their full consideration of environmental concerns; • Regulatory oversight alone will not be sufficient. The oil and gas industry will be required to take its own, unilateral steps to increase dramatically safety throughout the industry; • The technology, laws and regulations, and practices for containing, responding to, and cleaning up oil spills lags behind the real risks arising from drilling into large, high-pressure reservoirs of oil and gas located far offshore and thousands of feet below the sea surface. Government must close the gap with active industry support rather than resistance; and • Scientific understanding of environmental conditions in sensitive environments in deep Gulf waters, the region’s coastal habitats, and in areas proposed for more drilling, such as the Arctic, is inadequate; as is understanding of the human and natural impacts of oil spills.

The stain of the ‘black tide’ that spread from the site of the DWH rig back in April 2010 persists for many who live in the bayous of Louisiana. Locating the BP-DWH oil spill disaster in its historical, geographical and societal context is key to understanding and addressing the root causes of the disaster. Living with Disaster Risk: Oil, Hurricanes, Climate Change The Mississippi delta has drawn people for millennia – from Native Americans to more recent settlers as ethnically diverse as Acadians and Vietnamese. They have thrived on the abundant resources of the region that are sustained by ecosystems dependent on the interaction of fresh and salt water, the supply of riverine sediments and nutrients, and periodic floods and storms. Natural hazard risk has

234   Bruce C. Glavovic thus always been a reality for those living in the delta and they have developed inherent resilience in the face of adversity: drawing on intimate local knowledge, and deep family and social networks (Burley, 2010; Colten et al., 2012). But future prospects are bleak because past and prevailing practices are destroying the very ecosystems that sustain these communities and many others whose livelihoods depend on the delta. Since the 1930s, human intervention has been the primary driver of the loss of nearly 6,000 square kilometres of wetlands. After the 1927 flood, extensive channelising and leveeing of the Mississippi River helped to contain annual flooding (Barry, 1998). But deltaic ecosystems have been starved of essential sediment and nutrients. To compound matters, since the 1930s, oil and gas exploration and production have intensified in the marshes and extended farther out into the Gulf. The wetlands are now criss-crossed by a myriad of navigation channels and pipelines. Extraction of hydrocarbons has accelerated naturally occurring subsidence. Salt-intolerant ecosystems have been increasingly exposed to seawater. Wetland loss has reduced the natural capacity of these systems to attenuate the impact of coastal storms and hurricanes. Gulf communities are thus more exposed to storm impacts, viz. the impact of Hurricanes Katrina, Rita and Wilma in 2005. To make matters even worse, the delta is a global hotspot for the adverse impacts of climate change (IPCC, 2007). Consequently, there is little that is ‘natural’ about the escalating risk that delta communities are exposed to (Freudenburg et al., 2008). The BP-DWH oil spill has helped to focus increased attention on the imperative to stem the loss of wetlands and restore the ecosystems of this region. This is, however, a complex and massive undertaking that will require an investment of tens of billions of dollars and the active and coordinated involvement of government, civil society and the private sector from local to national level, informed by local knowledge and scientific research (Stokstad, 2010; Barbier, 2011; Bjorndal et al., 2011). Drawing on lessons learned inter alia from Hurricanes Katrina and Rita (Day et al., 2007), plans have been drawn up and funding mechanisms put in place to restore the wetlands; including about USD2.5 billion from the BP fine to initiate restoration and research projects (Malakoff, 2012). But central to realising this goal is sustained political will to make these plans a reality. It requires a paradigm shift in how Gulf resources are exploited and how risk is understood and addressed by all concerned. The BP-DWH oil spill disaster was not simply the result of one company’s prioritisation of corporate profit over public safety and sustainability (Bergin, 2011; National Commission, 2011; Lustgarten, 2012). It is woven into the fabric of how resources have been exploited for at least the last century. Rather than acting as stewards of these fertile wetlands, many private companies, resource users and successive governments have actively encouraged and/or exploited the resources of this region as if they were infinite; and this ‘frontier mentality’ prevails in coastal margins around the world.

Disasters and the Continental Shelf   235 It would be easy to blame the BP blowout on a single company, but it would be wrong. The United States, and much of the rest of the industrial world, has for the past century followed an easy path to dependence on a flexible and abundant source of energy, oil. U.S. policy (or lack thereof ) has encouraged (or allowed) the growth of the consumption of this incredibly useful resource, transferred much of the remaining public reserves of this resource into private hands, encouraged these private corporations to engage in risk exploitation of these remaining resources, and allowed oversight of these exploitations to become perfunctory in nature. The predictable result was Macondo (Gramling & Freudenburg, 2012: 70).

The National Commission (2011: 306) concluded that “both government and industry must make dramatic changes to establish the level of safety in drilling operations on the outer continental shelf that the American public has the right to expect and to demand. . . . Respect for the 11 lives lost on that tragic day last April requires no less.” But the need for dramatic change goes well beyond the US Gulf and extends to coastal margins around the world; and consequently to those responsible for the next generation of UNCLOS. For the BP-DWH oil spill disaster is not unprecedented and future oil spill disasters are inevitable. There was a blowout at the Ixtoc I well in 1979 in the Bay of Campeche, Gulf of Mexico; and there are striking similarities between these two disasters (Jernelöv, 2010a). Technologies for drilling have improved remarkably, but oil spill response options have stayed much the same – to the extent that the same response measures were used in both cases (Jernelöv, 2010b). Comparing the 1989 Exxon Valdez and the BP-DWH oil spill disasters, Sylves & Comfort (2012) conclude that governments and industry learn from experience but that evolving government regulation vacillates between stringency and co-optation, and the continuing challenge is to navigate and regulate the complexity of large-scale, interconnected socio-technical systems. Commentators are at best pessimistic about the prospect of the BP-DWH disaster becoming a ‘cultural anomaly’ that leads to systemic change in environmental governance and fossil fuel production (Hoffman & Jennings, 2011). Many argue that the root causes of the disaster must be confronted: including questions of corporate power, corruption and accountability; the complexity of socio-technological risk; government de-regulation; fossil fuel dependence; and inability to envision a shift to a safe, clean energy future (Bergin, 2011; Freudenburg & Gramling, 2011; Juhasz, 2011; Ladd, 2012; Lustgarten, 2012). Prospects are, however, bleak for reducing the risk of future oil spill disasters because of the domineering influence of corporate power, a timid Congress, and the control exerted by the fossil fuel industry over the US economy, culture and energy policy (Freudenburg & Gramling, 2011; Gramling & Freudenburg, 2012; Ladd, 2012). Failing to bring about the ‘dramatic change’ called for by the National Commission (2011) will inevitably lead to a far worse scenario than the BP-DWH oil spill disaster; viz. a massive blowout in the fragile Arctic (Achenbach, 2011). It is therefore deeply troubling, but perhaps not surprising, that two years after the BP-DWH blowout one of the two scientists on

236   Bruce C. Glavovic the National Commission wrote that the United States is “largely failing to act on the lessons learned from that experience to ensure that deep-water drilling and production is safe and environmentally compatible” (Boesch, 2012). Business and technological innovations have reaped huge rewards for companies like BP but imperil coastal communities because the cumulative impact of private and public actions is destroying the ecosystems that sustain coastal livelihoods. Exposure and vulnerability to hazards is increasing exponentially and future prospects are dismal in the face of deltaic subsidence, wetland loss and climate change impacts. Paradoxically, innovation is necessary to navigate a way out of the ‘vulnerability’ trap that past innovation has unwittingly set. Business and technological innovation needs to be outpaced by governance innovations to ensure less risky and more resilient and sustainable practices at the margin (Glavovic, 2013a). The BP-DWH oil spill disaster thus underscores why coasts are the frontline of the global sustainability crisis – and why new governance modalities are needed for coastal margins. Locating this disaster narrative in its wider historical, geographical and societal context shows the extent to which past and prevailing practices have intensified risk and are pushing boundaries that imperil coastal livelihoods. Charting sustainability pathways at the margin requires more critical reflection on the nature and interplay of complexity, risk, leadership and the law.

Complexity, Risk, Leadership and Law at the Margin Complexity at the Margin The ways in which the BP-DWH oil spill is woven into the history, lifestyles and politics of the Mississippi delta, and far beyond, underscores the complexity of coastal margins. The past is integrated with the present and connects to the future; and system components of coastal margins co-evolve with one another in ways that are irreversible. Connections reach deep into inland catchments and extend out to the continental shelf and high seas. Coastal margins have remarkable biophysical diversity and coast-dependent communities display inter- and intra-heterogeneity. It is a coupled social-ecological system, with a myriad of interacting elements and biogeochemical linkages as well as cultural, social, political and economic connections that extend from the local to global scales. Interactions are non-linear, and minor changes can produce disproportionately major consequences. Whilst defining biophysical characteristics of the marine environment, like temperature, ionic composition, etc., remain relatively stable, the coastal margin is in constant flux–from daily tidal exchanges to seasonal and longer-term changes across all social-ecological dimensions. The coastal margin is thus dynamic and complex. Knowledge of and understanding about

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this realm and its dynamic interactions is still evolving. As is typical of complex systems, the coastal margin is characterised by unpredictability, non-linearity and evolving behaviour, with intricate feedback loops. The whole is greater than the sum of the parts. Emergent system characteristics can thus only be partially understood by isolating system elements and re-aggregating them. The BPDWH oil spill disaster demonstrates that navigating pathways to sustainability on coastal margins constitutes the archetypal ‘wicked problem’ characterised by deep uncertainty, contradictory and changing requirements that are difficult to recognise; and the prospect that promising solutions for existing problems will generate even more intractable problems (Rittel & Weber, 1973). Technical, legal or ‘blueprint’ solutions cannot be pulled ‘off the shelf ’ and business as usual is untenable. Consequently, there are no straightforward solutions to assessing and managing risk at the margin. Risk at the Margin For the best part of a century, risk has been defined in terms of probability and consequence – in other words ‘measurable uncertainty’ (after Knight, 1921). Traditional quantitative risk analysis can be used to accurately assess ‘simple risk,’ such as car accidents, where the causes are well known, potential impacts are obvious, scientific uncertainty is low and there is little ambiguity over how to interpret risk (Aven & Renn, 2009). But not all risk is simple – as the BP-DWH oil spill shows. In a review of a series of studies on risk governance in the Baltic Sea, Renn et al., (2011: 236) observed that it is a consistent finding that in most of these cases, the risks are treated, assessed and managed as if they were simple. The assessment and management routines in place do not do justice to the nature of such risks. The consequences of this maltreatment ranges from social amplification or irresponsible attenuation of the risk, sustained controversy, deadlocks, legitimacy problems, unintelligible decision-making, trade conflicts, border conflicts, expensive rebound measures, and lock-ins.

Like risk in the Baltic Sea, treating as ‘simple’ the risk posed by activities underway on coastal margins, like deep-sea drilling in the US Gulf coast, is not merely inappropriate but a significant contributor to the coastal sustainability problématique. The need to distinguish between different types of ‘risk’ is underscored by a growing number of risk scholars (e.g., Stirling, 2003, 2010; Renn, 2008; Aven & Renn, 2009, 2010). Renn and colleagues (Klinke & Renn, 2002, 2010, 2012; IRGC, 2005; Klinke et al., 2006; Renn, 2008) distinguish between different risk characteristics arising from a lack of knowledge and/or competing knowledge claims about a risk problem. They describe these characteristics as complexity (the difficulty of identifying and quantifying causal links between multiple potential causal agents and specific observed effects), scientific uncertainty (the difficulty of predicting the occurrence of events and/or their consequences because

238   Bruce C. Glavovic of limited or lack of scientific knowledge) and socio-political ambiguity (divergent but legitimate interpretations and values about the same risk phenomena and their circumstances). They recognise that most risks are a combination of these characteristics e.g., passive smoking has low complexity and uncertainty but high ambiguity; nuclear power has high complexity, low uncertainty and high ambiguity; and recovery after the BP-DWH oil spill disaster is characterised by high complexity, high uncertainty and high ambiguity. By contrast, a simple risk has linear cause-effect relationships that are widely recognised, there is little uncertainty about the relationship between the event and consequences, and the values at stake are non-controversial. Understanding these different risk characteristics has important implications for how to assess and manage risk. Public risk problems that rank low on dimensions of complexity, uncertainty and ambiguity can be addressed routinely by regulators using traditional quantitative risk assessment techniques because the risks are well-known, there is ample knowledge about risk parameters and no major controversy about cause and effects or value conflicts. Stakeholder engagement is not necessary but instrumental discourse amongst relevant agencies, those directly affected and enforcement personnel is advisable. If risks rank high on complexity but low on uncertainty and ambiguity, systemic expert deliberation is required to better understand the risk problem. Scientists and experts can draw upon a range of expanded risk assessment techniques to develop a risk-informed management approach that reduces the cognitive conflicts generated by complexity. Stakeholder and public engagement will only be necessary if specific knowledge from stakeholders or the public can help to resolve complexity. If risk problems exhibit high scientific uncertainty but low ambiguity, investment in knowledge acquisition may help to reduce uncertainty, and thus shift the risk problem back into the arena of complex risk. However, if additional knowledge acquisition doesn’t reduce uncertainty, the appropriate risk management strategy is to adopt precautionary and resilience-building approaches to reduce vulnerability and avoid irreversible impacts. Stakeholders need to be involved in reflective discourse to decide on the level of investment needed to secure the desired margin of safety. If, however, risk problems are characterised by a high level of ambiguity, participative discourse, or deliberation, involving stakeholders and the public is necessary to build a shared understanding of divergent perspectives, beliefs and values about the risk. The goal is to reach a negotiated agreement about the nature of the risk (where evidence is controversial) and its acceptability and tolerability (where values are divergent). In a similar vein, Stirling (2010) distinguishes between risk characteristics in an ‘uncertainty matrix’ based on the extent to which knowledge about probabilities and possibilities varies from unproblematic to problematic. Where knowledge about probabilities and possibilities is unproblematic, risk is effectively ‘measurable uncertainty’ and traditional risk assessment approaches are appropriate.

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Where knowledge about probabilities is problematic but knowledge about possibilities is unproblematic, ‘immeasurable uncertainty’ prevails that cannot be resolved by traditional risk assessment techniques. Ambiguity arises where knowledge about possibilities is problematic but that about probabilities is not so; and plural and conditional treatment through participatory and deliberative processes is required. Ignorance prevails when knowledge about both probabilities and possibilities is problematic; and maintaining options and building resilience is key. An overly narrow focus on risk [i.e., measurable uncertainty] is an inadequate response to incomplete knowledge. It leaves science advice vulnerable to the social dynamics of groups – and to manipulation by political pressures seeking legitimacy, justification and blame management. When the intrinsically plural, conditional nature of knowledge is recognized . . . science advice can become rigorous, robust and democratically accountable (Stirling, 2010: 1029).

Technocentric risk assessment and management processes that are suitable for simple risk are thus ill-suited for ‘wicked problems’ such as those experienced in the aftermath of the BP-DWH oil spill disaster, or as encountered in Baltic Sea risk governance (Assmuth, 2011; Renn et al., 2011). Narrowly prescribed risk assessment and management yields illusionary certainty, and traditional sectoral, top-down decision-making processes need to be complemented by more deliberative, open and flexible governance modalities, depending on the levels of complexity, uncertainty and ambiguity. The BP-DWH oil spill disaster response and recovery experience is instructive for understanding the practicalities of the multi-faceted and dynamic nature of societal risk and its implications for making social choices through leadership and the law. Disasters, Complexity, Risk, Leadership and the Law at the Margin The pivotal role of leadership and the law in making social choices before, during and after a disaster was writ clear in the BP-DWH blowout. Different leadership styles need to be adopted under different circumstances. Much like the inappropriate use of traditional quantitative risk assessment in ‘non-simple’ risk situations, it is invariably inappropriate to use a leadership style that works well in simple situations in more complex circumstances. Using a different framing of the term ‘complexity’ than that used by Renn and others above, Snowdon & Boone (2007) distinguish complex settings from those that are simple, complicated and chaotic and explain what leadership styles are appropriate under these different circumstances. Simple settings are typically stable and exhibit straightforward cause-and-effect relationships that are widely understood. It is the domain of ‘known knowns’ and established best practice can guide effective management efforts. Leaders need to assess the facts of the situation, categorise them and respond based on established best practice. Routine procedures need

240   Bruce C. Glavovic to be in place. Extensive interactive communication may not be necessary but communication needs to be clear and direct. In complicated situations the relationship between cause and effect may not be readily apparent, and there can be multiple right answers to a problem. It is the domain of ‘known unknowns.’ Different options need to be analysed to determine the best solution and leaders need to make decisions based on expert advice. Riding a bicycle is a simple task; fixing a jet engine is a complicated task; restoring the Mississippi wetlands is a complex undertaking. Complexity is the domain of ‘unknown unknowns’ where, as outlined above, dynamic unpredictability prevails and past experience can be a poor guide for deciding how to address an emerging situation. There are divergent legitimate views about how to deal with a complex problem and innovative, inclusive and deliberative processes help to chart the way forward. Leaders need to facilitate interactive communication. Safe opportunities need to be created for experimentation to generate diverse new ideas that might help to discern patterns. Some situations are chaotic with indeterminate cause-effect relationships and a high degree of turbulence. It is the domain of ‘unknowable unknowns’ and, instead of searching for the ‘correct answer,’ doing what works well in the situation at the time may be the best course of action viz. what to do immediately after the explosion on the DWH rig. Leaders must take prompt action to re-establish order and use clear, direct communication. Situations on coastal margins are, however, seldom static and leaders need to adapt their decision-making and managerial styles to suit changing circumstances. The BP-DWH oil spill disaster is instructive. In the immediate aftermath of the explosion, when danger levels were extremely high, there was chaos but little dispute about immediate response imperatives: rescue, triage and treat injured people, minimise exposure to danger, and stop the blowout as quickly as possible to contain harm. A military-style intervention is likely to be most effective under these circumstances; to marshal resources efficiently, stabilise the situation and buy time. The leadership style of the archetypal ‘alpha male’ is apt and drawing on the full powers of command and control under the law is justified. When transitioning into the post-disaster recovery phase, danger levels dissipate but dispute intensifies about recovery imperatives and the best ways forward. There might be universal agreement about the ideal of enabling a recovery process that secures the ecological and social resilience and sustainability of the Gulf. But achieving this ideal is fraught with controversy and complexity, as articulated by Snowdon & Boone (2007), or high degrees of complexity, scientific uncertainty and socio-political ambiguity as defined above by Renn and colleagues. There are many legitimate and plausible pathways to achieve this recovery ideal and many divergent values, entrenched views and vested interests that make this a fraught endeavour. Under these circumstances, there is compelling need to empower adversely affected Gulf-dependent communities to shape the recovery process in ways that meet their long-term needs; and secure the public interest

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in this national heritage. The leadership model that might be most appropriate under these circumstances is that of the ‘nurturing female’ – which is not a gendered statement because some men can play the ‘nurturing female’ role as well as some women can play the ‘alpha male’ role. Governance modalities under such circumstances need to be inclusive, reflexive and able to adapt to changing circumstances. The BP-DWH oil spill disaster showed that technical and scientific uncertainty is compounded by overlapping and fragmented legislation and legal uncertainty. Osofsky (2011) identifies five cross-cutting dimensions of applicable law that hampered the effectiveness of the governance of deep-water drilling and the response after the blowout: complex interactions within and between entities involved in horizontal (e.g., sectoral agency responsibilities) and vertical (from local to international responsibilities) interactions; difficulties in determining the direction of hierarchy, especially between federal and smaller-scale government entities involved in the response; inadequate cooperation and conflict between entities; and problematic public-private dynamics. According to Osofsky (2011: 23): “The regulatory process and spill response are rife with crosscutting interactions of law and of government and nongovernmental entities, each of which poses difficult governance issues. Cumulatively, these issues create a daunting morass.” The need to progress the response and recovery as efficiently as possible contradicts the imperative to involve key stakeholders and the public. The complexity of the situation was compounded further by the imperative to resolve social inequities arising from disproportionate harm experienced by marginalised groups and communities. The BP-DWH oil spill disaster exposed the limits and inadequacies of prevailing law and corporate social responsibility (Cherry & Snierson, 2010). More fundamentally, the current law of the sea provides a regulatory framework that might address adequately specific problems in isolation, but it is incapable of responding adequately to the complex array of issues and risks that confront humankind at the margin in the Anthropocene (Vidas, 2011). Framing coastal margins as complex social-ecological systems has profound implications for the roles and responsibilities of leaders, the law and way in which social choices are made – as this exploration of the BP-DWH oil spill disaster attests. There is a compelling need to recognise that effective leadership doesn’t necessarily reside within an individual’s symbolic, motivational or charismatic actions. Rather, from a complexity perspective, leadership can be conceived of as an emergent process, the outcome of relational interactions amongst different actors and networks; and ‘leaders’ enable the conditions within which the process can emerge but are not direct instigators of change (Lichtenstein et al., 2006; Marion & Uhl-Bien, 2007). From this perspective, leadership is a complex interactive dynamic that facilitates adaptive outcomes, including innovation, social learning and adaptive capacity (Uhl-Bien et al., 2007). Similarly,

242   Bruce C. Glavovic from a complexity perspective, the law can and perhaps should be viewed as an evolving, interactive and adaptive process that shapes and is shaped by society (see e.g., Ruhl, 1996a, b, 1997; Ruhl & Ruhl, 1997). This complexity vantage point underscores the pivotal roles that leadership and the law play in dealing with disaster risk, response and recovery on coastal margins. But an even broader governance perspective is needed to better understand what risks are socially acceptable, tolerable or intolerable; and to develop an equitable and resilient regime of rights and responsibilities for creating, bearing and sharing risk on coastal margins. From Management of Coastal Risk and Activities to Governance of Coastal Margins Governance transcends ‘government’ – the formal organisation of the state or public sector – and refers to the interactions of the state, civil society and the private sector as they address societal problems through power sharing, social coordination and collective action (Kooiman, 2003). In short, in the public arena, governance refers to the processes and structures through which society makes collectively binding decisions. The institutions of governance include formal organisational structures, mechanisms and rules for making social choices as well as an array of informal social structures, processes and norms that construct public values, perceptions and choices. In recent decades, there has been a pronounced shift from state-centric top-down management regimes to more devolved, networked approaches involving more communicative, associational and collaborative planning and decision-making processes (Rhodes, 1996, 1997; Stoker, 2000; Newman, 2001; Bang, 2003; Boyte, 2005). There has been a parallel trend away from state-centric top-down risk management approaches towards more devolved, networked governance of societal risk involving a wide array of actors with divergent values, perceptions, knowledge and interests (Renn, 2008; Renn et al., 2011; Van Asselt & Renn, 2011; Klinke & Renn, 2012). Risk governance thus refers to the processes and structures through which society makes decisions about how to deal with risk problems (Renn, 2008). This diversity of actors and institutions offers a number of advantages for dealing with risk that is complex, uncertain and ambiguous because risk problems of different scopes can be addressed in relevant settings at appropriate scales; the inevitable redundancy creates in-built resilience whereas more linear hierarchical approaches can be very fragile; and this diversity is conducive to experimentation and social learning (Renn, 2008; Klinke & Renn, 2012). Disadvantages include the possible commodification of risk; fragmentation of risk governance processes; the cost and inefficiency of decision-making with so many actors; and potential erosion of democratic accountability (Klinke & Renn, 2012). Renn and colleagues have developed a governance model that locates

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classic risk-handling approaches in this wider multi-actor and multi-objective setting to deal with inevitable value and interest conflicts, conflicting claims of evidence and divergent views about risk tolerability. Building on the risk governance model advocated by the IRGC (2005), their adaptive and integrated risk governance model seeks to enable society to collectively devise and implement a systematic process for resolving cognitive, evaluative and normative problems and conflicts of risk (Klinke & Renn, 2012). It is an adaptive process of social learning and adjustment. The steps comprise: pre-estimation, interdisciplinary estimation, risk characterisation and evaluation, risk management, and monitoring and adaptation. The pre-estimation phase involves major political and societal actors in a screening process to decide whether and how phenomena are framed as societally relevant risk problems. Interdisciplinary risk estimation involves scientific assessment of the risks to human health, the environment and relevant socio-economic implications. This assessment draws on the natural and social sciences in an estimate of potential physical harm (risk assessment) and possible societal concern about the risk (concern assessment). If the assessment shows that the risk problem has low levels of complexity, uncertainty and ambiguity then traditional quantitative risk assessment and risk-benefit analysis can be carried out by regulators. If, however, risk is characterised by high complexity, uncertainty or ambiguity, comprehensive characterisation of the risk is necessary to determine how best to deal with it. The risk evaluation phase involves the difficult challenge of judging a given risk and determining its societal acceptability or tolerability. Typically, a risk is deemed ‘acceptable’ if the probability of occurrence is very unlikely and impacts are negligible; and no intervention by public regulators is required. Private risk managers can be used and public regulators monitor the situation over time for possible changes. A risk is ‘intolerable’ if catastrophic impacts are likely and, regardless of associated benefits, actions that generate such risk need to be prohibited or substituted. A risk is deemed ‘tolerable’ if serious impacts might occur occasionally but the benefits outweigh the risk. Risk reduction and mitigation measures then need to be put in place. Drawing the line between ‘acceptable’, ‘tolerable’ and ‘intolerable’ is a fraught and controversial part of the risk governance process. Risk management builds on the foregoing steps and, as indicated previously, if risks are deemed acceptable, private actors manage the risk. If risk is intolerable, topdown regulation is needed to prohibit or substitute the hazardous activity. If the risk is tolerable, the appropriate management response is determined by the extent to which high complexity, uncertainty or ambiguity, or some mix thereof, characterises the risk. When complexity is high, expert-driven risk-informed management is appropriate. When uncertainty is high, stakeholders need to be engaged in reflective processes and precaution-based management. When ambiguity prevails, participative discourse- or deliberative-management is required. This risk governance framework is undergirded by three principles that need to

244   Bruce C. Glavovic be woven into each stage of the risk governance process: communication and inclusion, integration and reflection (van Asselt & Renn, 2011). Importantly, risk governance takes place in the daily planning and decision-making processes of real-world actors as they navigate formal and informal institutional opportunities and constraints and to address real-world problems through routines, trust, shared understanding and, in so doing, pursue individual and collective goals (Bohom et al., 2012). It is therefore constructive to locate risk governance in the context of more general coastal governance endeavours. The trend from top-down state-centric to more networked governance modalities is mirrored in efforts to manage the resources of the coastal margin. Traditional coastal management efforts can be characterised as ad hoc, fragmented and sector-specific. Ocean and coastal management evolved as parallel discourses (Glavovic, 2008a), despite calls for integration (Cicin-Sain & Knecht, 1998). Since the 1980s, Integrated Coastal Management (ICM) has developed into a distinct field of international practice. ICM is defined as . . . a process that unites government and the community, science and management, sectoral and public interests in preparing and implementing an integrated plan for the protection and development of coastal ecosystems and resources. The overall goal of ICM is to improve the quality of life of human communities who depend on coastal resources while maintaining the biological diversity and productivity of coastal ecosystems (GESAMP, 1996).

ICM promotes a holistic view of the coast as a complex social-ecological system. It deliberately seeks to promote vertical and horizontal integration to bridge divergent interests that are otherwise compartmentalised along sector-specific, administrative, spatial and temporal lines. It therefore advocates inclusive governance institutions and processes that foster cooperation, coordination and integration within and between coastal actors and networks, sectors and interests at different scales. It promotes integration of science and local and traditional knowledge. Effective implementation requires critical thinking, context-relevant application and reflexivity informed by monitoring and social learning. Functional ICM activities range from economic development to protected area planning that can be sequenced in a typical policy cycle of issue identification and assessment, programme planning and preparation, formal adoption and funding, implementation, evaluation and adaptation through iterative cycles of policy implementation (GESAMP, 1996). But, despite four decades of intensive international ICM endeavour, the coastal problématique persists and translating ICM intentions into practical reality has proved to be exceedingly difficult. Leading ICM scholar-practitioner Stephen Olsen (2002, 2003) and colleagues (Olsen et al., 2009) proposed an ‘Order of Outcomes’ framework to complement the ICM policy cycle to isolate and overcome the barriers to implementation. This framework recognises that ICM initiatives are long-term undertakings that

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require systemic change from prevailing unsustainable practices. Each Order of Outcomes thus represents a step-wise change in the behaviours and practices of coastal managers and resource users. The first Order of Outcomes comprises four enabling conditions for sustained ICM practice, namely (i) a core group of wellinformed and supportive constituencies comprising key actors from civil society, the private sector and government; (ii) sufficient institutional capacity in those responsible for developing and implementing ICM policies and a plan of action; (iii) government commitment to the ICM policies and allocation of necessary authorities and resources for long-term implementation; and (iv) agreement on unambiguous goals for desired coastal outcomes against which ICM efforts can be evaluated. The second Order of Outcomes specifies actions that signal the implementation of ICM policies and plans of action and comprise changes in the behaviour of governmental institutions, groups involved in resource use and exploitation, and those making financial investments in the coast that influence ICM goals. Generating sustainable funding for long-term ICM programme implementation is a key factor here. The third Order of Outcomes specifies the interconnected social-ecological goals for the ICM initiative. Realising these goals provides pathways for achieving longer term sustainable coastal development that marks the fourth Order of Outcomes. Experience in a number of countries shows that the persistent implementation gap makes assembling the first order enabling conditions the pivotal challenge (Glavovic, 2008b; Burbridge et al., 2012). Authentic engagement of stakeholders and the wider public in reflective deliberation about appropriate pathways to coastal sustainability is foundational for bridging this gap and underpins contemporary ICM endeavours (Krishnamurthy et al., 2008; Olsen et al., 2009). Recent innovations in risk governance and ICM offer much promise for dealing with escalating risk on coastal margins in the Anthropocene. The essential challenge revealed by these innovations is to construct practical inclusive and integrated deliberative processes for tackling the complexity, uncertainty and ambiguity of emerging issues and risk at this new frontier for resource exploitation.

Rethinking Governance at the Margin: Towards a Conceptual Framework Prevailing ocean and coastal management need to be reconceptualised as a transformative practice of deliberative governance (Glavovic, 2013b). Building on the evolution in thinking about risk and coastal governance, and in particular the Order of Outcomes framework explained above, a foundation comprising four deliberative or process outcomes is posited (see Figure 1). First, human and social capital needs to be built through issue learning and improved democratic attitudes and skills. Attention then shifts to facilitating community oriented action and improving institutional capacity and decision-making. Together these

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Figure 1. Deliberative coastal governance (Source: Glavovic, 2013b).

endeavours enable improved community problem-solving capacity. The ultimate process goal is to build more collaborative communities. Instituting transformative deliberative governance will chart new sustainability pathways and help to reduce disaster risk on coastal margins. Towards Transformative Deliberative Governance of Coastal Margins What is deliberation? According to Chambers (2003), it is debate and discussion that seeks to generate reasonable and well-informed views that evolve through informed dialogue, new information and participant exchange. It is non-coercive communicative interaction that promotes reflection on values, preferences and interests (Dryzek, 2000). It is not simply ‘talk’ for the sake of ‘talk.’ Public deliberation takes place in formal and informal public forums and needs to be authentic, inclusive and consequential so that it legitimately shapes collective decisions and social outcomes (Dryzek, 2009). Deliberative processes and systems have considerable transformative potential for advancing sustainability in general (Fischer, 2000; Baber & Bartlett, 2005; Goodin & Dryzek, 2006; Gupte & Bartlett, 2007; Dryzek, 2011) and for helping communities navigate the complexity of decision-making in coastal margins in particular.

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A suite of process Order of Outcomes needs to be explicitly recognised as foundational to the coastal Order of Outcomes advocated by Olsen and colleagues (Note: The coastal outcomes in Figure 1 are adapted from Olsen 2002, 2003; see Glavovic, b). These process Order of Outcomes draw on insights from the deliberative democracy literature and, in particular, the work of Carcasson (2009), Dryzek (1990, 2000, 2009, 2011), Fischer (2000, 2003, 2006), Fung (2003, 2004, 2006) and Fung & Wright (2001, 2003). In practice, these outcomes progress sequentially in an organic manner from first to higher orders, with feedback loops and reversion to earlier orders if necessary. The first order process outcomes are issue learning, and improved democratic attitudes and skills. With respect to the former, deliberative engagement can help to overcome the limitations of traditional disciplinary studies of complex coastal issues and engage stakeholders more meaningfully in framing and joint learning about these issues. It can also help to bridge the gap between science, policy and practice. The previously explained distinction between complexity, scientific uncertainty and socio-political ambiguity is instructive in this context because it demonstrates that the nature and extent of stakeholder and public engagement in decision-making about coastal risk problems ought to be contingent. With respect to the latter, deliberative processes can foster an infectious ‘public spiritedness’ that deepens and expands awareness, appreciation and tolerance of the perspectives of others. Deliberation can also help to improve the communication and judgement skills that are pivotal for improved group interactions and decision-making. Together, these first order process outcomes provide an educational and democratic foundation that is crucial for establishing the enabling conditions of the coastal Order of Outcomes. The second order process outcomes are community-oriented action and improved institutional capacity and decision-making. Community-oriented action is often hampered by pervasive individualism and political alienation. Deliberation helps participants to develop a common purpose and invest in shared community concerns by taking practical steps to reconcile individual and community interests. Deliberation can improve institutional capacity and decision-making by actively engaging those with divergent interests and helping them overcome insularity and adversarial interactions, and thus enhance the legitimacy of public decisions. These process outcomes are thus foundational for achieving the second order coastal outcome of implementation through behavioural change. The third order process outcome is improved community problem-solving capacity. Community-wide deliberation helps participants deepen and extend their understanding of the issues they face as well as themselves and their community roles and responsibilities and, in so doing, transforms community relationships. The preceding process outcomes enable discursive exploration of community relationships that help community members reframe issues and

248   Bruce C. Glavovic develop novel solutions for seemingly intractable problems. Deliberation can deepen empathy and encourage tolerance even in the face of persistent conflict, creating a self-reinforcing positive feedback loop for on-going deliberation and community problem-solving. Community problem-solving is neither simple nor linear. It is invariably fraught and contested. But deliberation improves internal community problem-solving capacity and is vital for realising the coastal sustainability goals that constitute the third order coastal outcomes. The fourth order process outcome is collaborative communities which sustain and are sustained by deliberative processes of authentic and inclusive dialogue, visioning, negotiation and cooperation to achieve sustainability outcomes that transcend the interests of any particular community. A plurality of formal and informal institutional structures and processes is needed to facilitate cross-scalar and multi-level deliberation. Working deliberatively within and between coastal communities at various geographic scales is vital for realising the elusive ideal of sustainable coastal development that constitutes the fourth order coastal outcome. This conceptual framework identifies foundational process outcomes that support the coastal Order of Outcomes that together enable progressive changes in the behaviour of coastal actors and the development of cognitive, democratic, social and political capacity to address the complexity of social choices that prevail on coastal margins. A volte-face in ways of thinking and working is required to put the principles and process of deliberative coastal governance into practice. Many obstacles will be faced. But transformative change has occurred throughout history and offers hope for change at the margin. Transformative Innovation in Practice The UNCLOS process is a concrete example of ground-breaking institutional change in ocean and coastal governance in the international arena. But, as explained, there is a compelling need for even deeper and more transformative change to secure a sustainable future for coastal margins as the locus of the next Great Acceleration. Such change is possible. There are many examples of innovative transformative change in human history, viz. the abolition of slavery, nuclear disarmament and the end of apartheid. In nearly all such transitions, formidable obstacles have had to be overcome–from deeply entrenched vested interests to institutional rigidity. There is emerging scholarship that provides valuable insights about the opportunities and challenges for making the transition towards sustainability; with insights informed and applied by inter alia the Dutch government in seeking to bring about transformative change in reforming energy systems and environmental policy (Rotmans et al., 2001; Kemp et al., 2007; Loorbach, 2007; Kemp & Rotmans, 2009). It is clear that such transformative change requires innovative modalities of engagement that include all principal

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governance actors (Hendriks, 2008, 2009; Leach et al., 2010a, b; Smith & Stirling, 2010). Hence the deliberative foundation advocated above. Whilst governments play a catalytic role in transformative change, non-governmental organisations, community-based organisations and other scientific, civil society and private sector interests are already playing important roles in prising open the boundaries between the state and society in addressing pernicious community and societal challenges (Velasquez et al., 2005; Fischer, 2006; Goodin & Dryzek, 2006). New modalities of deliberative engagement are therefore required as parties prepare for the next generation of UNCLOS to regulate activities on coastal margins around the world.

Conclusion The BP-DWH blowout poured a ‘black tide’ of oil into the waters of the Gulf and Louisiana wetlands that was described by President Obama as the worst environmental disaster in US history and an epidemic that will take years to fight (see footnote 2). The blowout reverberated beyond the US and is a clarion call to address spiralling disaster risk that stems from intensified exploitation of coastal margins around the world. Humanity faces a coastal innovation paradox. Truly remarkable technological innovations over the last century have enabled exploitation of resources in ever deeper and more remote coastal regions – including hydrocarbons on the continental shelf and in extreme environments like the Arctic. Notable innovations in oceans and coastal governance have been achieved over the last 50 years. But these governance innovations have not kept pace with business and technological innovation, and have failed to prevent or in many instances actively encouraged overexploitation and degradation of the coastal and ocean ecosystems that regulate key biogeochemical processes and sustain the majority of the human population. Critical planetary boundaries are being transgressed. The next Great Acceleration in resource exploitation is already underway on the continental shelf. There is a narrow window of time to transform prevailing high risk, unsustainable practices and navigate towards sustainable pathways at the frontline of the global sustainability crisis. Paradoxically, innovation is needed to escape the vulnerability trap set by past coastal innovations. The architecture and modalities of ocean and coastal governance need to be transmogrified to make this transition. The starting point is to reframe our understanding of coastal disasters, risk and resilience; recognising the complexity of coastal margins and that our knowledge of and understanding about this interconnected social-ecological system is incomplete. Conventional risk assessment and management techniques work well for tackling simple risk but are inappropriate for dealing with many coastal margin risk problems. Innovations in risk governance underscore the need to distinguish

250   Bruce C. Glavovic different types of risk and to adopt context relevant approaches depending on levels of complexity, scientific uncertainty and socio-political ambiguity. Experience in ICM highlights the imperative to establish enabling conditions that facilitate the behavioural changes necessary for sustained implementation of ICM policies and plans of action. Innovations in both risk governance and ICM provide invaluable insights for future coastal margin governance. However, as the BP-DWH oil spill disaster attests, achieving the necessary volte-face is a deeply contested and fraught endeavour. The root causes and drivers of unsustainable practices must be addressed and this necessitates inter alia overcoming reliance on fossil fuels and ensuring that the safety, resilience and sustainability of coastal communities trumps private interests and corporate profit. The stakes could not be higher because coastal margins are the frontline of the global sustainability crisis. Institutionalising transformative and deliberative governance practices is pivotal to making this transition. To this end, a new conceptual framework is proposed that is founded on deliberative processes to support issue learning and improved democratic attitudes and skills. The processes include communityoriented action and enhanced institutional capacity and decision-making as well as community problem-solving capacity that together enable communities to collaborate through sustained processes of authentic and inclusive dialogue, visioning, negotiation and cooperation. The BP-DWH oil spill disaster was avoidable. The challenge for those crafting the next generation of UNCLOS is to apply the lessons learned from this tragedy in a deliberative and transformative manner appropriate to the complex morass of issues and risks that humanity faces on coastal margins in the Anthropocene.

Acknowledgements I wish to thank Professors Helmuth Thomas, Aldo Chircop and Myron Nordquist for inviting me to participate in the Halifax conference and associated activities and Dalhousie University, IMBER and LOICZ for financial support to cover the costs of attending the conference and related meetings. I gratefully acknowledge the financial support of the New Zealand Earthquake Commission that enabled me to undertake the research that underpins this chapter. The views expressed here reflect solely the views of the author.

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part 5

Decommissioning of Offshore Installations and Structures

Global Legal Regime on the Decommissioning of Offshore Installations and Structures Robert Beckman1 Abstract This paper outlines the global legal regime for offshore installations and structures in so far as it is relevant to the decommissioning of offshore oil and gas installations and structures. Several points can be made about the current global legal regime. First, the provisions in UNCLOS set the standard for all States. Second, as provided in article 60(3) and article 80 of UNCLOS, any installations or structures in the EEZ or on the continental shelf which are abandoned or disused must be removed to ensure safety of navigation, taking into account any generally accepted international rules and standards, including the 1989 IMO Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone. Third, the abandonment or disposal of installations or structures in any maritime zone except internal waters would be classified as “dumping”, and constitutes a breach of the obligations set out in article 210 of UNCLOS and the 1972 London Convention on dumping. Fourth, the placement of installations and structures on the seabed for purposes other than disposal, such as for conversion to an artificial reef, are not classified as dumping under the 1982 Convention or under the 1972 London Convention or its 1996 Protocol. Finally, States have an obligation under article 208 of UNCLOS to adopt laws and regulations and take other measures to prevent, reduce and control pollution of the marine environment arising from or in connection with seabed activities subject to their jurisdiction. Such laws and regulations and measures shall be no less effective than the “global and regional rules, standards and recommended practices and procedures” established by States through competent international organizations or diplomatic conferences. Unfortunately, the international community has yet to establish any global rules, standards and recommended practices and procedures. Some regions have established such rules, standards and recommended practices and procedures, but others have not. This is the major gap in the existing legal regime. The international community should make the development of such rules a high priority.

Introduction The purpose of this paper is to outline the global legal regime for offshore installations and structures in so far as it is relevant to the decommissioning 1 Director, Centre for International Law, National University of Singapore. The author’s PowerPoint is available at .

260   Robert Beckman of offshore oil and gas installations and structures. After briefly describing the jurisdiction of coastal States over offshore installations and structures, I will outline the global legal regime governing the following matters: (1) the removal of disused or abandoned installations and structures; (2) the disposal of offshore installations and structures by dumping; and (3) pollution of the marine environment from offshore installations and structures. I will then analyze the extent to which this legal regime governs the use of offshore installations and structures for new purposes, such as for the creation of artificial reefs. I will then draw some conclusions from the analysis.

Jurisdiction of Coastal States over Installations and Structures Coastal States have sovereignty in their internal waters, archipelagic waters2 and territorial sea.3 In these maritime zones States have jurisdiction to apply their domestic laws and regulations, subject to the rules concerning passage of foreign ships through the territorial sea and archipelagic waters. Therefore, coastal States have the right to govern installations and structures located in these zones. The Exclusive Economic Zone (EEZ) and the continental shelf are resource or economic zones which are not subject to the sovereignty of the coastal State. However, the United Nations Convention on the Law of the Sea (UNCLOS) expressly provides that in these zones the coastal State has “the exclusive right to construct and to authorize and regulate the construction, operation and use of . . . installations and structures” for the purpose of exploring and exploiting the natural resources and for other economic purposes.4

The Removal of Disused or Abandoned Offshore Installations or Structures 1958 Convention on the Continental Shelf The maritime zone known as the continental shelf arose after World War II. It began with the Truman Proclamation in 1946,5 whereby the United States announced that it regarded the natural resources of the sea bed and subsoil of the continental shelf beneath the high seas but contiguous to the coasts of the United States as appertaining to the United States, and subject to its jurisdiction and control. 2 United Nations Convention on the Law of the Sea (UNCLOS), article 49. 3 Ibid., article 2. 4 Ibid., articles 60(1) and 80. 5 Presidential Proclamation No. 2667, September 28, 1945, 59 Stat. 884 (1945), 13 Dept. of State Bulletin 485 (1945).

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The International Law Commission (ILC) undertook a study on the continental shelf in 1951 as part of its wider study on the law of the sea. In 1956 the ILC completed its study and incorporated all of its draft articles concerning the law of the sea into a final draft on the law of the sea.6 Following the discussion of the report of the ILC, the General Assembly adopted resolution 1105 (XI) of 21 February 1957, by which it decided to convene the United Nations Conference on the Law of the Sea (First LOS Conference) in Geneva from 24 February to 27 April of 1958. Eighty-six states participated in the conference. Four separate conventions were adopted on 29 April 1958 by the First LOS Conference.7 One of the conventions adopted was the 1958 Convention on the Continental Shelf (1958 Convention).8 The 1958 Convention was based on the draft articles on the continental shelf prepared by the ILC, with some changes. One of the changes made at the First LOS Conference concerned the removal of offshore installations. The draft adopted by the ILC contained no provision on the removal of abandoned or disused installations from the continental shelf. However, at the First LOS Conference the delegation from the United Kingdom proposed the addition of a provision on the removal of offshore platforms.9 As a result, the 1958 Convention contains the following language in article 5(5): “Any installations which are abandoned or disused must be entirely removed”. 1982 UNCLOS, Articles 60 and 80 The Third United Nations Conference on the Law of the Sea (Third LOS Conference)10 began in 1973 and concluded with the adoption of UNCLOS in 1982. The early drafts at the Third LOS Conference contained the same language as that of the 1958 Convention on the removal of installations. The early drafts contained a clause stating that “Any installations or structures which are abandoned or disused must be entirely removed”.11 However, at the Ninth Session of the Third LOS Conference in 1980 concern was expressed about the provision establishing an unconditional obligation to  6 Report of the International Law Commission, 1956, UNGAOR, 11th Session, Supp. No. 9 (A/3159) at 40, [1956] 2 YBIL 253.  7 For a history of the First LOS Conference and the records of the proceedings, see .   8 Adopted in Geneva on 27 April 1958, entered into force on 10 June 1964, 499 UNTS 311.  9 Official Records of the United Nations Conference on the Law of the Sea, Volume VI: Fourth Committee (Continental Shelf) Summary Records, Fifth Meeting, 7 March 1958, page 4. 10 For a history of the Third LOS Conference on the Law of the Sea, see . 11 Myron H. Nordquist, ed., United Nations Convention on the Law of the Sea: A Commentary, Volume II, Satya Nandan & Shabtai Rosenne, eds., (Center for Oceans Law and Policy, Martinus Nijhoff) 579–580.

262   Robert Beckman remove installations in the event that they were abandoned or no longer used.12 A memorandum from the oil and gas industry proposed that removal should be required only when the installations or structures present a danger to navigation or to other legitimate uses of the sea or the environment. It was argued that such a provision would avoid the potentially enormous cost of removing all installations and structures entirely.13 At the Tenth Session in 1981 the United Kingdom and Canada submitted informal proposals to clarify the obligation to remove installations and platforms, but these proposals were not accepted. At the Eleventh Session in 1982 the United Kingdom submitted a modified version of its earlier proposal. This draft, with minor adjustments recommended by the Drafting Committee, was included in the text of UNCLOS.14 The final provision is contained in article 60(3), and reads as follows: 3. Due notice must be given of the construction of such artificial islands, installations or structures, and permanent means for giving warning of their presence must be maintained. Any installations or structures which are abandoned or disused shall be removed to ensure safety of navigation, taking into account any generally accepted international standards established in this regard by the competent international organization. Such removal shall also have due regard to fishing, the protection of the marine environment and the rights and duties of other States. Appropriate publicity shall be given to the depth, position and dimensions of any installations or structures not entirely removed.

Several observations can be made about article 60(3). First, article 60 applies to installations and structures in the EEZ. Article 80 provides that article 60 applies mutatis mutandis to installations and structures on the continental shelf. The provisions on the removal of installations and structures do not apply in maritime zones under the sovereignty of the coastal State, i.e., in the territorial sea, archipelagic waters or internal waters. Second, article 60(3) requires removal of abandoned or disused platforms to ensure safety of navigation, taking into account any generally accepted international standards established by the competent international organization. The primarily reason for requiring removal is the threat posed by installations and structures to navigation. However, decisions on removal must also have due regard to fishing, the protection of the marine environment and the rights and duties of other States. Third, article 60(3) imposes an obligation on coastal States to warn of the presence of the structures and installations. The first line of the provision requires that due notice must be given of the construction of such installations and 12 Ibid., at 582. 13 Ibid. 14 Ibid., at 583.

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structures, and that a “permanent” means for giving warning of their presence must be maintained. The last line provides that appropriate publicity shall be given to the depth, position and dimensions of any installations or structures not entirely removed. Fourth, the language in the last line referring to “installations and structures not entirely removed” makes it clear that partial removal was envisaged. Fifth, article 60 refers to generally accepted international standards established by the “competent international organization”, without specifying a particular organization. However, since the purpose of the removal is to ensure the safety of navigation, the competent international organization would be the International Maritime Organization (IMO). 1989 IMO Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone (1989 Guidelines) History of the 1989 Guidelines The 1989 IMO Guidelines were drafted by IMO Maritime Safety Committee (MSC) and approved by the MSC during its 55th Session in 1988.15 It is logical that the Guidelines were prepared by the MSC because responsibility for the safety of navigation lies with the IMO body, and also because article 60(3) of UNCLOS expressly provides that “Any installations or structures which are abandoned or disused shall be removed to ensure safety of navigation, taking into account any generally accepted international standards established in this regard by the competent international organization”. However, article 60(3) also provides that “Such removal shall also have due regard to fishing, the protection of the marine environment and the rights and duties of other States”. Commentators have argued that the draft Guidelines should have been submitted at an early stage to the UN bodies responsible for these matters, including the Food and Agricultural Organization Fisheries Division, the United Nations Environment Programme (UNEP), and the Contracting Parties of the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (1972 London Convention). The draft Guidelines were not referred to these organizations until after they had been adopted by the MSC. The draft Guidelines were reconsidered by the MSC during its 57th session in April 1989 in light of the comments and recommendations from the above organizations as well as the International Hydrographic Bureau. UNEP had been especially critical of the Guidelines because they did not give sufficient priority 15 For an excellent history of the Guidelines, see George C. Kasoulides, “Removal of offshore platforms and the development of international standards”, Marine Policy 13 (1989) 249–265; as updated in Marine Policy 14 (1990) 84–86.

264   Robert Beckman to protecting the marine environment. The MSC discussed the recommendations submitted by the other organizations briefly, but did not consider it necessary to make any changes to its draft Guidelines. The MSC then submitted a draft resolution to the Assembly of the IMO, which adopted the resolution containing the Guidelines in November 1989. As the title of the 1989 Guidelines suggests, they are tied to articles 60 and 80 of UNCLOS, and they apply only to installations and structures in the EEZ or on the continental shelf. They do not apply to installations and structures in the territorial sea, archipelagic waters or internal waters. As discussed earlier, article 60(3) of UNCLOS provides that any installations or structures which are abandoned or disused shall be removed to ensure safety of navigation, taking into account any generally accepted international standards established in this regard by the competent international organization. The 1989 Guidelines were adopted by the Assembly, the governing body of the IMO which consists of all 170 member States and meets every two years. Resolutions of the Assembly are normally adopted by consensus and accordingly reflect global agreement by all IMO Members. Parties to UNCLOS are expected to conform to these rules and standards, bearing in mind the need to adapt them to the particular circumstances of each case.16 Therefore, States Parties to UNCLOS must take the 1989 Guidelines into account when deciding how to remove abandoned or disused platforms. In other words, the 1989 Guidelines are not legally binding, but they must be taken into account. Summary of the 1989 Guidelines The 1989 Guidelines are divided into three parts – General Removal Requirement, Guidelines and Standards. The General Removal Requirement provides that abandoned or disused offshore installations or structures on any continental shelf or in any EEZ are to be removed, except where non-removal or partial removal is consistent with the Guidelines and Standards. The Guidelines provide that the decision to allow an offshore installation, structure, or parts thereof, to remain on the sea-bed should be based, in particular, on a case-by-case evaluation by the coastal State with jurisdiction over the installation or structure. The evaluation should include the following matters: 1) any potential effect on the safety of surface or subsurface navigation, or of other uses of the sea; 16 On the relationship between UNCLOS and IMO instruments, see “Implications of the United Nations Convention on the Law of the Sea for the International Maritime Organization”, Study by the Secretariat of the International Maritime Organization, IMO Doc. LEG/MISC.6, 10 September 2008. Available online at .

Global Legal Regime on Decommissioning   265 2) the rate of deterioration of the material and its present and possible future effect on the marine environment; 3) the potential effect on the marine environment, including living resources; 4) the risk that the material will shift from its position at some future time; 5) the costs, technical feasibility, and risks of injury to personnel associated with removal of the installation or structure; and 6) the determination of a new use or other reasonable justification for allowing the installation or structure or parts thereof to remain on the sea-bed.

The Guidelines also provide that the process for allowing an offshore installation or structure, or parts thereof, to remain on the sea-bed should include the following actions by the coastal State: 1) special conditions under which an installation or structure, or parts thereof, will be allowed to remain on the sea-bed; 2) the drawing up of a specific plan, adopted by the coastal State, to monitor the accumulation and deterioration of material left on the sea-bed to ensure there is no subsequent adverse impact on navigation, other uses of the sea or the marine environment; 3) advance notice to mariners as to the specific position, dimensions, surveyed depth and markings of any installations or structures not entirely removed from the sea­bed; and 4) advance notice to appropriate hydrographic services to allow for timely revision of nautical charts.

The Standards provide that one category of installations or structures should be entirely removed without any exceptions. These are installations and structures located in approaches to or in straits used for international navigation or routes used for international navigation through archipelagic waters, in customary deep-draught sea lanes, or in, or immediately adjacent to, routeing systems which have been adopted by the IMO, provided that they no longer serve the primary purpose for which they were originally designed or installed. The Standards also provide that two other categories of installations and structures should be entirely removed, unless entire removal is not technically feasible or would involve extreme cost or an unacceptable risk to person­nel or the marine environment. These categories are: 1) all abandoned or disused installations or structures standing in less than 75 m of water and weighing less than 4,000 tonnes in air, excluding the deck and superstructure; and 2) all abandoned or disused installations or structures emplaced on the sea-bed on or after 1 January 1998, standing in less than 100 m of water and weighing less than 4,000 tonnes in air, excluding the deck and superstructure.

The Standards also provide that after 1 January 1998, all installations are to be designed and built so that their entire removal is feasible.

266   Robert Beckman Analysis of the 1989 Guidelines Some experts have suggested that these provisions requiring removal except in very limited circumstances show that the ultimate goal of the Guidelines is complete removal, and that the allowance in the Guidelines for partial removal is only a transitional measure.17 However, the Guidelines contain several provisions which indicate that partial removal and placement (rather than disposal) are available options. First, they provide that an unobstructed water column sufficient to ensure safety of navigation, but not less than 55 m, should be pro­vided above any partially removed installation or structure which does not project above the surface of the sea.18 Second, they provide that the coastal State should ensure that the position, surveyed depth and dimensions of material from any installation or structure which has not been entirely removed from the sea-bed are indicated on nautical charts and that any remains are, where necessary, properly marked with aids to navigation.19 The Standards also provide for the possibility of converting installations or structures into artificial reefs. Paragraph 3.12 provides that where living resources can be enhanced by the placement on the sea-bed of material from removed installations or structures (e.g. to create an artificial reef), such material should be located well away from customary traffic lanes, taking into account these Guidelines and Standards and other relevant standards for the maintenance of mari­time safety. The 1989 Guidelines have been criticized on several counts. First, they do not address the issue of the removal or decommissioning of pipelines associated with the installations and structures or the surrounding debris resulting from operations or cutting piles. Second, they are primarily concerned with safety of navigation, and do not give sufficient consideration to fishing interests.20 Third, they do not give sufficient weight to environmental protection, in that they do not require an environmental impact assessment, and do not contain provisions for environmental rehabilitation and site monitoring.21 Fourth, they fail to address the procedures and standards that should be followed for the placement of an installation or structure for purposes other than mere disposal.

17 Zhiguo Gao, “Current Issues of International Law of Offshore Abandonment, with Special Reference to the United Kingdom”, Ocean Development and International Law, 28:59–78 (1997) at 71. 18 Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone, (IMO Resolution A.672 (16), adopted on 19 October 1989) para. 3.6. 19 Ibid., para. 3.8. 20 Gao, supra note 17, at 73. 21 Kasoulides, supra note 15, “Marine Policy Update” at 85.

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Judge Zhiguo Gao of the International Tribunal of the Law of the Sea opined in 1997 that there is a general feeling and belief that the Guidelines will be widely followed because of their rationality and practicality.22 He also submitted that it is politically feasible and practically desirable to transform the Guidelines into legally binding rules, although he did not say how this could be accomplished. However, as will be seen in the next section, the Contracting Parties to the 1972 London Convention continued to be concerned about the issue. Residual Liability for Abandoned or Partially Removed Installations and Structures Article 60(2) of UNCLOS provides that the coastal State has exclusive jurisdiction over installations and structures in its EEZ or on its continental shelf. Article 60(3) provides that due notice must be given of the construction of installations and structures, and “permanent means for giving warning of their presence must be maintained”. Article 60(3) of UNCLOS also requires removal of abandoned or disused platforms to ensure safety of navigation, taking into account any generally accepted international standards established by the competent international organization. In addition, it provides that appropriate publicity shall be given to the depth, position and dimensions of any installations or structures not entirely removed. Paragraph 2.4 of the 1989 Guidelines further provides that the process for allowing an offshore installation or structure, or parts thereof, to remain on the sea-bed should include the following actions by the coastal State with official authorization identifying the jurisdiction over the installation or structure: 1) the adoption of measures defining special conditions under which an installation or structure, or parts thereof, will be allowed to remain on the sea-bed; 2) the drawing up of a specific plan, adopted by the coastal State, to monitor the accumulation and deterioration of material left on the sea-bed to ensure there is no subsequent adverse impact on navigation, other uses of the sea or the marine envi­ronment; 3) giving advance notice to mariners as to the specific position, dimensions, surveyed depth and markings of any installations or structures not entirely removed from the sea­bed; and 4) giving advance notice to appropriate hydrographic services to allow for timely revision of nautical charts.

The 1989 Guidelines also provide that the coastal State has the following additional obligations with respect to installations or structures that are not entirely removed:

22 Gao, supra note 17, at 72.

268   Robert Beckman 3.3 Removal should be performed in such a way as to cause no significant adverse effects upon navigation or the marine environment. Installations should continue to be marked in accordance with IALA recommendations prior to the completion of any partial or complete removal that may be required. Details of the position and dimensions of any installations remaining after the removal operations should be promptly passed to the relevant national authorities and to one of the world charting hydrographic authorities. The means of removal or partial removal should not cause a significant adverse effect on living resources of the marine environment, especially threatened and endangered species. 3.6 Any abandoned or disused installation or structure, or part thereof, which projects above the surface of the sea should be adequately maintained to prevent structural failure. In cases of partial removal referred to in paragraphs 3.4.2 or 3.5, an unobstructed water column sufficient to ensure safety of navigation, but not less than 55 m, should be pro­vided above any partially removed installation or structure which does not project above the surface of the sea. 3.8 The coastal State should ensure that the position, surveyed depth and dimensions of material from any installation or structure which has not been entirely removed from the sea-bed are indicated on nautical charts and that any remains are, where necessary, properly marked with aids to navigation. The coastal State should also ensure that advance notice of at least 120 days is issued to advise mariners and appropriate hydrographic ser­vices of the change in the status of the installation or structure. 3.9 Prior to giving consent to the partial removal of any installation or structure, the coastal State should satisfy itself that any remaining materials will remain on location on the sea-bed and not move under the influence of waves, tides, currents, storms or other foreseeable natural causes so as to cause a hazard to navigation. 3.10 The coastal State should identify the party responsible for maintaining the aids to navigation if they are deemed necessary to mark the position of any obstruction to navigation, and for monitoring the condition of remaining material. The coastal State should also ensure that the responsible party conducts periodic monitoring, as necessary, to ensure continued compliance with these guidelines and standards. 3.11 The coastal State should ensure that legal title to installations and structures which have not been entirely removed from the sea-bed is unambiguous and that responsibility for maintenance and the financial ability to assume liability for future damages are clearly established.

The phrase “party responsible” in paragraph 3.10 refers to any juridical or physical person identified by the coastal State for a purpose mentioned in that paragraph. These provisions suggest that the coastal State has a significant number of obligations with respect to installations or structures that are not totally removed. They also suggest that the coastal State has a significant amount of potential residual liability for installations and structures which are not totally removed. These potential costs must be weighed against any advantages in only partially removing the installations and structures.

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It must be remembered that the 1989 IMO Guidelines apply only to installations and structures in the EEZ and on the continental shelf. They do not apply to installations and structures in the territorial sea or in archipelagic waters. The only obligation that applies in the territorial sea is article 24(2) of UNCLOS, which provides that the coastal State “shall give publicity to any danger to navigation, of which it has knowledge, within its territorial sea”. There is no equivalent obligation on coastal States in UNCLOS to warn of dangers in archipelagic waters or internal waters.

Disposal of Offshore Installations and Structures by Dumping 1972 London Convention The Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter, known as the 1972 London Convention, was adopted at an international conference in London in 1972. The 1972 London Convention entered into force on 30 August 1975, and has 87 States Parties as of 30 April 2012. Under the 1972 London Convention, the definition of dumping includes the deliberate disposal at sea of platforms or other manmade structures. However, dumping does not include “the placement of matter for a purpose other than mere disposal thereof, provided such placement is not contrary to the aims of the Convention”. Under these definitions, the disposal of platforms or installations would be dumping, but their placement on the seabed for the purposes of creating an artificial reef may not be dumping. The 1972 London Convention applies to dumping at “sea”, and sea is defined as all marine waters other than the internal waters of States. Therefore, the Convention applies to the disposal of platforms or other structures in the territorial sea or on the high seas as well as on the continental shelf. Under the 1972 London Convention installations or platforms can be disposed of at sea if a special permit is issued as required for wastes listed in Annex II.23 The requirements for the granting of a permit include the completion of a full risk assessment including a thorough environmental impact assessment. The general considerations when issuing a permit for disposal at sea include the following: Possible effects on other uses of the sea (e.g. impairment of water quality for industrial use, underwater corrosion of structures, interference with ship operations from floating materials, interference with fishing or navigation through deposit of waste 23 1972 London Convention article 4(1)(b).

270   Robert Beckman or solid objects on the sea floor and protection of areas of special importance for scientific or conservation purposes). The practical availability of alternative land-based methods of treatment, disposal or elimination, or of treatment to render the matter less harmful for dumping at sea.

1982 UNCLOS Provisions on Dumping The 1972 London Convention was adopted just before the start of negotiations for the Third Conference on the Law of the Sea. Therefore, it is not surprising that the London Convention provisions on dumping were taken into account in UNCLOS. The definition of dumping in article 2 of UNCLOS is almost the same as those in the 1972 Convention. Article 2 provides that dumping includes any deliberate disposal of platforms or other man-made structures at sea. It further provides that dumping does not include placement of matter for a purpose other than the mere disposal, provided that such placement is not contrary to the aims of the Convention. UNCLOS imposes obligations on coastal States to protect and preserve the marine environment from the dumping of waste and other matter in the EEZ. Article 210 requires all States to adopt laws and regulations and other measures to prevent, reduce and control pollution of the marine environment from dumping. It further provides that such national laws and measures shall be “no less effective” than the global rules and standards. The global rules and standards are arguably the 1972 London Convention. Therefore, the 1972 London Convention in effect becomes the minimum standard which must be followed by States Parties to UNCLOS. States need not follow the exact scheme provided for in UNCLOS, but they must adopt laws and regulations, and these laws and regulations must be at least as effective as the 1972 London Convention in preventing, reducing and controlling pollution from dumping. Article 216 of UNCLOS obligates coastal States to enforce their laws and regulations with regard to dumping in their territorial sea or their EEZ or on their continental shelf. 1996 Protocol to the 1972 London Convention In 1996, the “London Protocol” was agreed to further modernize the Convention and, eventually, to replace it. The Protocol entered into force on 24 March 2006 and there are currently 41 States Parties. It is not clear how many States need to ratify the 1996 Protocol to the London Convention before it will be accepted as setting out the “global rules and standards” referred to in article 210(6) of UNCLOS.

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Under the Protocol all dumping is prohibited, except possibly acceptable wastes on the so-called “reverse list”. The definition of dumping contained in the 1996 Protocol is the same as that contained in UNCLOS and in the 1972 London Convention, except that the London Protocol has expanded the definition of dumping to include “any abandonment or toppling at site of platforms or other man-made structures as sea, for the sole purpose of deliberate disposal”. The 1996 Protocol contains the same exclusion as the 1972 London Convention. Article 1(4)(2) provides that dumping does not include placement of matter for a purpose other than the mere disposal thereof, provided that such placement is not contrary to the aims of the Protocol. In addition, the Protocol adds a new exception to dumping by providing that dumping does not include “abandonment in the sea of matter (e.g., cables, pipelines and marine research devices) placed for a purpose other than the mere disposal thereof ”. The geographic scope of the 1996 Protocol is slightly wider than the 1972 London Convention. The Protocol provides for dumping at sea, and “sea” is defined as all marine waters other than the internal waters of States, as was the case in the 1972 London Convention. However, the 1996 Protocol also provides that the sea includes the seabed and subsoil. In addition, the 1996 Protocol contains a separate provision on internal waters. Article 7(1) provides that it applies to internal waters to the extent provided for in paragraphs 2 and 3 of that article. The article reads as follows: 2. Each Contracting Party shall at its discretion either apply the provisions of this Protocol or adopt other effective permitting and regulatory measures to control the deliberate disposal of wastes or other matter in marine internal waters where such disposal would be “dumping” or “incineration at sea” within the meaning of Article 1, if conducted at sea. 3. Each Contracting Party should provide the Organization with information on legislation and institutional mechanisms regarding implementation, compliance and enforcement in marine internal waters. Contracting Parties should also use their best efforts to provide on a voluntary basis summary reports on the type and nature of the materials dumped in marine internal waters.

The 1996 Protocol regulates the deliberate disposal of platforms or other manmade structures at sea, as well as the abandonment or toppling of such installations or structures for the sole purpose of disposal. However, the placement of platforms or other man-made structures on the sea-bed for other purposes, such as creating an artificial reef, is not governed by the 1996 Protocol. Annex I of the 1996 Protocol expressly provides that platforms and other manmade structures at sea may be considered to be dumping under the procedures set out in the Protocol. Platforms and structures may be considered dumping under article 4(1) and Annex I provided that:

272   Robert Beckman (1) a permit is issued following a process which meets the conditions set out in Annex II, which include a waste prevention audit, a review of waste management options, an analysis of the toxicity of the waste, EIA, monitoring measures, etc.; and (2) material capable of creating debris or otherwise contributing to pollution of the marine environment has been removed to the maximum extent and provided that the material dumped poses no serious obstacle to fishing or navigation.24

2000 London Convention Guidelines for the Assessment of Wastes or Other Matter That May Be Considered for Dumping At the 22nd Consultative Meeting of the Contracting Parties to the 1972 London Convention in 2000, the Consultative Meeting adopted eight wastes-specific Guidelines. It was intended that the Guidelines be used by national authorities responsible for regulating dumping of wastes and embody a mechanism to guide national authorities in evaluating applications for dumping of wastes in a manner consistent with the provisions of the London Convention 1972 or the 1996 Protocol thereto. One of the eight wastes-specific Guidelines is for the assessment of platforms and other man-made structures at sea.25 The Guidelines were prepared by the Scientific Committee of the London Convention. At the time the Guidelines were adopted there were 78 contracting States to the London Convention, and 33 of these States attended the meeting of contracting States which adopted the Guidelines. These Guidelines are not legally binding, even on parties to the 1972 London Convention or the 1996 Protocol, but they are intended to be used as Guidelines by national authorities in deciding whether to issue a permit for the disposal of platforms. States Parties to UNCLOS are under an obligation, pursuant to article 210, to adopt laws and regulations and measures to prevent, reduce and control pollution from dumping, and such rules and standards must be no less effective than the global rules and standards. It is reasonable to conclude that the global rules and standards would be those contained in the 1972 London Convention. When deciding whether a State Party to UNCLOS has adopted laws and regulations and measures as effective as those in the 1972 London Convention, it would be reasonable to take into consideration the total effect of the rules and standards in 24 1996 Protocol to the 1972 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter, Annex 1, article 2. 25 Report of the Twenty-Second Consultative Meeting of the Contracting Parties to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and other Matter 1972, 25 October 2000, LC 22/14, pages 18 and Annex 7. The text of the Guidelines is available on the IMO web site at .

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the 1972 London Convention as well as in the 2000 London Convention Guidelines for the Assessment of Wastes or Other Matter that May be Considered for Dumping.

Pollution from the Decommissioning of Offshore Installations and Structures 1982 UNCLOS Article 194 Article 194 of UNCLOS places a general obligation on States to take all measures consistent with the Convention that are necessary to prevent, reduce and control pollution of the marine environment from any source. These measures shall include those designed to minimize, to the fullest possible extent, pollution from installations and devices used in exploration or exploitation of the natural resources of the seabed and subsoil.26 The measures taken in accordance Part XII on the environment 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.27 1982 UNCLOS Articles 208 and 214 UNCLOS also gives coastal States rights and obligations to protect and preserve the marine environment from sea-bed activities under national jurisdiction, including offshore installations and structures subject to their jurisdiction. Article 208(1) requires that coastal States: 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.

Article 208(2) provides that States shall take “other measures as may be necessary to prevent, reduce and control such pollution”. Article 208(3) provides that “such laws, regulations and measures shall be no less effective than international rules, standards and recommended practices and procedures” (emphasis added). The obligation on coastal States under article 208 applies to seabed activities “subject to their jurisdiction” and from artificial islands, installations and structures under their jurisdiction. Therefore it is quite wide in scope. It would apply not only to seabed activities in the coastal State’s internal waters, territorial sea 26 UNCLOS, article 194(3)(c). 27 Ibid., article 194(5).

274   Robert Beckman and archipelagic waters, but also to seabed activities in their EEZ and on their continental shelf. Offshore installations and structures usually have pipelines connected to them and such pipelines carry oil, gas and other noxious substances. It is not clear whether these pipelines would be considered part of the installation or structure and would have to be removed together with the installation or structure. Although UNCLOS is silent on the removal of pipelines, article 79(2) gives States the right to adopt laws and regulations for the prevention, reduction and control of pollution from pipelines. Also, it can be argued that the obligations of States under article 208 to adopt laws and regulations to prevent, reduce and control pollution of the marine environment from seabed activities under national jurisdiction would obligate States to adopt laws and regulations on pollution from pipelines.

Using Offshore Installations and Structures for New Purposes Introduction The issue which will be addressed in this section is how the legal regime described above would apply to offshore oil and gas installations which are either converted to other uses or placed on the seabed for other purposes. For example, an offshore oil installation could be converted into a research facility or a hotel for scuba divers. Or an offshore installation could be dismantled (completely or partially) and placed on the seabed to construct an artificial reef or to create a breakwater. There is a significant amount of literature on the use of installations and structures for the purpose of creating artificial reefs. The term “rigs-to-reefs” is often used to describe the practice of using obsolete offshore installations and structures to create artificial reefs for recreation, research or marine management purposes. The conversion involves either toppling in place, partial removal or relocating a structure from another area of the seabed in order to create a habitat for fisheries and other marine life. Rigs-to-reefs programmes in the United States have been used in relatively shallow waters to assist with habitat conservation and fisheries management. Recent literature suggests that rigsto-reefs should also be considered for deep-sea locations.28 In addition, some

28 Peter I. Macreadie, Ashley M. Fowler and David J Booth, “Rigs-to-reefs: will the deep sea benefit from artificial habitat?” Front Ecol Environ 2011; 9(8): 455–461, (published online 24 March 2011).

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scientists are calling for the revision of OSPAR29 Guidelines to permit rigs-toreefs in the North Sea on a case-by-case basis. They argue that the most up-todate science has concluded artificial reefs in deep-water may be beneficial to some species, and that the categorical exclusion of rigs-to-reefs is not scientifically justifiable.30 Obligation to Remove Installations and Structures in the EEZ and on the Continental Shelf There are no international laws or regulations governing the removal of installations or structures in internal waters, archipelagic waters or the territorial sea. The UNCLOS provisions on the removal of abandoned or disused installations and structures in the EEZ and on the continental shelf would also apply to installations and structures intended for other uses. The 1989 IMO Guidelines would also be applicable to installations and structures in the EEZ and on the continental shelf. The same issues of residual liability for partially removed installations and structures in the EEZ and on the continental shelf would also apply. There are three methods by which installations or structures could be used for the creation of artificial reefs. First, the top part could be removed and the bottom of the structure left in-situ, with sufficient clearance so that it does not pose a threat to navigation. Second, the structure could be toppled on site with sufficient clearance so that it does not pose a threat to navigation. Third, the structure could be cut up and parts of it moved to specific locations to attract marine life. If rigs-to-reefs is a viable option and benefits the marine environment, then the provisions in the 1989 IMO Guidelines requiring the complete removal of all installations and structures in shallow waters in the EEZ and on the continental shelf may pose a problem. The issue which arises is whether States are strictly bound by the Standards in the 1989 IMO Guidelines, or whether they are simply required to take the Standards into account, and are free to decide not to completely remove all the structures if they are confident that the structures do not pose a threat to navigation or the marine environment and could enhance biological diversity. This is a difficult legal question, and the answer may depend on the extent to which the coastal State relies upon a thorough risk assessment and environmental impact assessment in reaching its decision.

29 OSPAR is the mechanism by which fifteen Governments of the western coasts and catchments of Europe, together with the European Community, cooperate to protect the marine environment of the North-East Atlantic. 30 Dolly Jorgensen, “OSPAR’s exclusion of rigs-to-reefs in the North Sea” Ocean & Coastal Management 58 (2012) 57–61.

276   Robert Beckman If offshore installations and structures in the EEZ or on the continental shelf are converted to a new use such as a research facility or an artificial reef, the obligations to give notice and to remove them if they are abandoned or disused would continue to apply. The residual liability issues would also continue to apply. Pollution from Seabed Activities and from Installations and Devices The UNCLOS provisions on protection and preservation of the marine environment contained in articles 194, 208 and 214 would apply to the conversion of installations and structures to other uses (such as research facilities) or to the placement of installations and structures for other purposes (such as the construction of artificial reefs). The provisions would apply to the conversion process and would continue to apply to the converted installations or structures. Dumping of Installations and Structures The placement of installations for the purpose of constructing an artificial reef does not constitute dumping pursuant to the London Convention because the definition of dumping excludes “placement of matter for a purpose other than the mere disposal, provided that such placement is not contrary to the aims of the Convention”. Given that the purpose of an artificial reef is to promote fisheries and marine biological diversity, such placement would not be contrary to the aims of the London Convention. In fact, States which utilize the rigs-to-reefs option could argue that converting installations and structures to artificial reefs is consistent with their obligations under the 1992 Convention on Biological Diversity (if they are States Parties). Article 8(f) of the Biological Diversity Convention provides that States shall “rehabilitate and restore degraded ecosystems and promote the recovery of threatened species, inter alia, through the development and implementation of plans or other management strategies”. Although the placement of platforms and other man-made structures at sea is not governed by the London Convention, some members at the consultative meeting of the parties in 2000 expressed the view that the London Convention meeting of Contracting Parties should develop guidelines to distinguish placement from dumping and to ensure that placement should not be used as an excuse for disposing of waste. The 22nd and 23rd Consultative Meetings (2000 and 2001) therefore developed the following elements of policy guidance concerning the placement of matter for a propose other than the mere disposal thereof: 1) placement should not be used as an excuse for disposal at sea of waste materials; 2) placement should not be contrary to the aims of the Convention;

Global Legal Regime on Decommissioning   277 3) information on placement activities by Contracting Parties should be provided to the Secretariat, as available; and 4) materials used for placement activities should be assessed in accordance with the relevant Specific Guidelines.31

The third requirement was quite controversial, given that placement activities are not considered dumping, and are therefore not governed by the 1972 London Convention or its 1996 Protocol. Therefore, it is not surprising that this requirement was subsequently qualified to provide that voluntary reporting by Contracting Parties on “placement” should focus on instances where waste materials were used.32 2009 London Convention and Protocol/UNEP Guidelines for the Placement of Artificial Reefs The concern of some member States of the London Convention on the placement of artificial reefs was shared by some member States of the United Nations Environment Programme (UNEP). In 2006, the governing bodies endorsed a work plan prepared by the Scientific Groups to develop such guidance under the lead of Spain as Chair of the Scientific Groups’ Correspondence Group on Artificial Reefs (CGAR). The Guidelines were prepared by consultants with financial and in-kind assistance from the UNEP, the Technical Cooperation and Assistance Programme of the London Convention, and the Governments of Spain and the United States.33 The final draft of the Guidelines was approved by the meetings of the thirtieth consultative meeting of Contracting Parties to the 1972 London Convention and the third meeting of Contracting Parties to the 1996 Protocol in October 2008.34 The Guidelines were published in 2009 as the London Convention and Protocol / UNEP Guidelines for the Placement of Artificial Reefs.35 The purpose of the Guidelines is to assist those countries that have recognized the need to assess proposals for the placement of artificial reefs on the basis of scientifically sound criteria, as well as to develop an appropriate regulatory framework; to assist with the implementation of regulations in those countries where such regulations are already in place, but where there is nevertheless a need for such guidance; and to assist in updating existing guidelines or 31 London Convention and Protocol /UNEP “Guidelines for the Placement of Artificial Reefs” 2009, para. 2.1.1. 32 Report of London Convention, 26/15, paras. 6, 12. 33 Guidelines, supra note 31, Acknowledgements, p. iv. 34 Report of the Thirtieth Consultative Meeting and the Third Meeting of Contracting Parties, LC 30/16, 9 December 2008, para. 8.6. 35 The Guidelines are available online at .

278   Robert Beckman regulations.36 The Guidelines also state that one of their broader objectives is to ensure that the placement of artificial reefs is not used as a mechanism to circumvent the provisions of the London Convention on the “dumping” of wastes. The Guidelines further state in paragraph 2.1.1 that: Contracting Parties to the London Convention and/or the London Protocol that are considering proposals to deploy an artificial reef constructed using waste material, or consisting of previously used structures or materials, should assess the proposal taking into account the above policy guidance and impose appropriate conditions.

At the meeting in 2008 when the Guidelines were adopted, the delegation of Japan reiterated its view that placement activities did not fall within the mandate of the London Convention and its Protocol. It also reiterated its view that the Guidelines were not legally binding, as agreed in 2007 by the governing bodies. However, the delegation of Japan stated that it strongly supported the purpose of the Guidelines. It stressed that the placement of artificial reefs should not provide an excuse for dumping waste or other materials that would be contrary to the aims of the London Convention and Protocol. It also stated that the Guidelines could be beneficial as a reference point, particularly for developing countries that did not have any form of regulation.37 The Guidelines themselves specifically provide that “Although these Guidelines have been developed within the context of the London Convention and Protocol, they are not legally binding on any country”. Given the history of these Guidelines, it is not possible to consider them to be the international rules, standards and recommended practices and procedures referred to in article 208 of UNCLOS. Also, paragraph 5 of article 208 makes it clear that “States, acting through competent international organizations or diplomatic conference” shall establish global and regional rules, standards and recommended practices and procedures. It would be difficult to argue that a meeting the Contracting States to the 1972 London Convention and its 1996 Protocol fulfills this requirement, particularly given doubts as to whether the issue of the placement of installations and structures is even within the mandate of the London Convention and Protocol.

Conclusions The global regime governing the decommissioning of offshore platforms is complex and confusing. However, several conclusions can be drawn from the above analysis. 36 Report of LC 30/16, supra note 34, paras. 8.1–8.2. 37 Ibid., para. 8.9.

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First, the provisions in UNCLOS set the standard for all States, even non-parties. UNCLOS has been universally accepted, and its provisions can be regarded in many respects as a reflection of obligations under customary international law. This would include the rights and obligations of States with respect to installations and structures in their EEZ and on their continental shelf as set out in articles 60 and 80. In addition, States have obligations under articles 194, 208, 210, 214 and 216 to prevent pollution of the marine environment in all maritime zones under their jurisdiction. Second, as provided in article 60(3) and article 80 of UNCLOS, any installations or structures in the EEZ or on the continental shelf which are abandoned or disused must be removed to ensure safety of navigation, taking into account any generally accepted international rules and standards, including the 1989 IMO Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone. Third, the abandonment or disposal of installations or structures in any maritime zone except internal waters would be classified as “dumping”, and constitutes a breach of the obligations set out in article 210 of UNCLOS. Even if a State Party to UNCLOS is not a party to either the 1972 London Convention or its 1996 Protocol it is required, under article 210, to adopt laws and regulations and take measures that are no less effective in preventing, reducing and controlling pollution from dumping as “the global rules and standards”. The global rules and standards would be the 1972 London Convention and the Guidelines and Standards adopted by the Contracting Parties to the London Convention, including the 2000 London Convention Guidelines for the Assessment of Wastes or Other Matter. Fourth, the placement of installations and structures on the seabed for purposes other than disposal, such as for conversion to an artificial reef, are not classified as dumping under the 1982 Convention or under the 1972 London Convention or its 1996 Protocol. The placement of such platforms in the EEZ or on the continental shelf must be undertaken in conformity with the 1989 IMO Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone. There are no legally binding rules on the placement of installations and structures on the seabed in the territorial sea and in archipelagic waters. However, the 2009 London Convention and Protocol/UNEP Guidelines for the Placement of Artificial Reefs set out non-binding Guidelines to assist States that have recognized the need to assess proposals for the placement of artificial reefs on the basis of scientifically sound criteria. Fifth, States have an obligation under article 208 of UNCLOS to adopt laws and regulations and take other measures to prevent, reduce and control pollution of the marine environment arising from or in connection with seabed activities subject to their jurisdiction. Such laws and regulations and measures shall be no less effective than the “global and regional rules, standards and

280   Robert Beckman recommended practices and procedures” established by States through competent international organizations or diplomatic conferences. Unfortunately, the international community has yet to establish any global rules, standards and recommended practices and procedures. Some regions have established such rules, standards and recommended practices and procedures, but others have not. Sixth, the existing global legal regime allows States to place installations and structures on the seabed for the purpose of constructing artificial reefs. The placement of installations and structures on the seabed for the purpose of creating artificial reefs is not dumping under 1982 UNCLOS, the 1972 London Convention or the 1996 London Protocol. There are no global rules governing the use of installations and platforms in the territorial sea or archipelagic waters for the purpose of constructing artificial reefs. The removal of installations and structures in the EEZ and on the continental shelf is governed by articles 60 and 80 of UNCLOS, taking into account the generally accepted international rules and standards set out in the 1989 IMO Guidelines. However, the phrase “taking into account” suggests that States have some discretion in deciding whether or not to comply strictly with the Guidelines. Although the 2009 London Convention/ UNEP Guidelines are not legally binding, States which decide to use installations or platforms to construct artificial reefs would be well advised to use the Guidelines to develop a regulatory framework which ensures that the construction of artificial reefs is done on the basis of scientifically sound criteria which protects the marine environment. Finally, the biggest gap in the current global regime is the absence of global rules, standards and recommended practices and procedures for the prevention, reduction and control of pollution from seabed activities under national jurisdiction as referred to in article 208 of UNCLOS. The international community should make the development of such rules a high priority. If the IMO is not considered to be the competent international organization for this purpose, then interested States should draft a global convention and convene a global diplomatic conference to consider its adoption.

REGIONAL REGULATION OF OFFSHORE OIL AND GAS INDUSTRY DECOMMISSIONING BY THE OSPAR COMMISSION David Johnson1 Abstract This paper explains the role and remit of the OSPAR Commission (OSPAR) with particular reference to regulating the marine environmental impact of the oil and gas industry. The Quality Status Report 2010 provides an up-to-date overview of the success of OSPAR’s efforts to deliver its offshore industry strategy and decommissioning is one of several impacts taken into account. OSPAR is now in the process of moving to implement a risk-based approach in line with an updated overarching ecosystem approach. The history of OSPAR’s legally binding decommissioning measure for the North-East Atlantic is put in context with details of an inventory of decommissioned installations illustrated by the most recent derogation case. Any predictions of future decommissioning can only be indicative and are notoriously inaccurate as these are essentially commercial decisions. However, as North Sea facilities reach the end of their operational lifetimes, companies involved in seeking permissions from national regulators have to plan for long lead in times, involving detailed environmental impact studies, complex and expensive logistical options and comprehensive engagement with stakeholders. In Europe both industry and NGOs are divided as to the environmental benefits of decommissioning. The author speculates that in future OSPAR may need to debate Decision 98/3 in the light of more holistic and integrated European marine governance. In particular the biodiversity protection ambitions of the EU Marine Strategy Framework Directive will demand new financial resources. The question to be asked is whether some oil and gas industry decommissioning costs can be redirected by regulators to provide transitional finance towards comprehensive monitoring and assessment informing a more robust regime that halts marine biodiversity loss?

Introduction The Convention for the Protection of the Marine Environment of the North-East Atlantic (the OSPAR Convention) was opened for signature at the Ministerial Meeting of the former Oslo and Paris Commissions in Paris on 22 September 1992. The Convention entered into force on 25 March 1998. It has been ratified by Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Luxembourg,

1 David Johnson is immediate past Executive Secretary to the OSPAR Commission and Bonn Agreement based in London and Emeritus Professor of Coastal Management at the Southampton Solent University, United Kingdom. The author’s PowerPoint is available at .

282   David Johnson Netherlands, Norway, Portugal, Sweden, Switzerland and the United Kingdom and approved by the European Union and Spain (http://www.ospar.org). The former Oslo Convention (1972) for the Prevention of Marine Pollution by Dumping from Ships and Aircraft established an initial legal regime, identifying a ‘black’ list of substances whose dumping was forbidden and a ‘grey’ list of substances for which ‘special care’ needed to be taken and for which dumping was permitted subject to a specific permit when such substances were present in the waste in significant quantities. As explained later in this paper, Contracting Parties to the Oslo Convention then subsequently developed Guidelines and a Decision (OSCOM Decision 95/1) concerning the disposal of offshore installations. The OSPAR Convention consolidated this work and its obligations provided the context for regulation. In particular, Article 2.1a of the OSPAR Convention states that: The Contracting Parties shall, in accordance with the provisions of the Convention, take all possible steps to prevent and eliminate pollution and shall take the necessary measures to protect the maritime area against the adverse effects of human activities so as to safeguard human health and to conserve marine ecosystems and, when practicable, restore marine areas which have been adversely affected.

More specifically, Annex III to the OSPAR Convention relating to pollution from offshore sources established: a. under Article 5 that i. a permit is needed for dumping of disused offshore installations and pipelines and for leaving an installation in place; ii. the relevant Decisions, Recommendations and Other Agreements shall be implemented when granting a permit; iii. no permits shall be issued if dumping is likely to result in hazards, harm damage or interference with other uses; iv. information and consultation is required; and v. details of these activities must be reported to the OSPAR Commission. b. under Article 8 that placement for a purpose other than that for which it was originally designed or constructed needs authorisation or regulation.

OSPAR also adopted ‘so-called’ guiding principles, namely the precautionary principle, the polluter pays principle and the principle to use best available technology (BAT) and best environmental practice (BEP), and encouraged the participation of Observer organisations (both industry bodies such as the Oil and Gas Producers Association and green non-governmental organisations such as Greenpeace). In 1994 OSPAR sub-divided the OSPAR Maritime Area into five sub-regions for the purposes of monitoring and assessment. Furthermore, in 1998 a series of Strategies were developed operationalizing the Annexes to the OSPAR Convention

Regional Regulation of Offshore Oil and Gas Industry Decommissioning   283 Table 1. OSPAR Convention Annexes and corresponding strategies. Annex

Strategy

I. Pollution from Land-based sources

Hazardous Substances, Eutrophication, Radioactive Substances II. Pollution by Dumping or Incineration Biological Diversity and Ecosystems III. Pollution from Offshore Sources Offshore Oil and Gas Industry IV. Assessment of the Quality of the Joint Environmental Assessment and Marine Environment Monitoring Programme V. Protection and Conservation of the Biological Diversity and Ecosystems Ecosystems and Biological Diversity

(as summarised below in Table 1). These strategies were updated in 2010 and set within an overarching Ecosystem Approach (OSPAR, 2010a). OSPAR Strategy objectives for the offshore oil and gas industry are to prevent and eliminate pollution and take the necessary measures to protect the maritime area against the adverse effects of offshore activities; and to safeguard human health and conserve marine ecosystems and, where practicable, restore marine areas which have been adversely affected. Pressures are greatest in the North Sea and are expected to increase in the Arctic. Potentially polluting activities are subject to a wide range of measures and oil discharges have been reduced, discharges of contaminated cuttings piles have largely stopped and in 2008 discharges of priority chemicals were 90 per cent lower than in 2003. This situation is summarised in the most recent OSPAR Quality Status Report (OSPAR 2010b), based on collective assessments, and tools for targets and indicators (Johnson, 2008) such as the set of Ecological Quality Objectives (EcoQOs) developed for the North Sea. For example, the average proportion of oiled common guillemots in all winter months (November to April) should be 10 per cent or less of the total found dead or dying in each of the 15 areas of the North Sea over a period of at least 5 years. Offshore oil and gas activities have developed in the OSPAR Maritime Area since the early 1970s. It is estimated that more than 50,000km of pipelines transport oil and gas products from over 1300 installations. The major offshore oil and gas developments within the OSPAR Maritime Area are in the North Sea and Norwegian Sea (see Figure 1), with installations at a variety of depths and distances from shore. In Norwegian waters for example, where oil was first discovered in 1969 and production started in 1971, most installations are operating at 60–400m depth (with one at 1100m) and between 45–320km from shore. Thus, whilst environmental impacts occur throughout the lifecycle of these activities, and a risk-based approach is currently the favoured approach to ensure sustainable development, decommissioning of an ageing infrastructure is a specific issue to be considered on a case by case basis. This final phase of an oil and gas

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Figure 1. Offshore oil and gas fields under exploitation, new discoveries not yet in production and pipelines in 2009 (Source: OSPAR 2010b, p. 64).

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field development involving activities such as plugging of wells and removal of infrastructure is the focus of this paper.

Establishing a North-East Atlantic Regulatory Regime for Decommissioning Rodriguez-Lucas (2012) traces the origins of decommissioning legislation within OSPAR. She recalls that in 1984 the Oslo Commission first established that, through an interpretation of Article 60 of the 1982 United Nations Convention of the Law of the Sea (UNCLOS), it had a mandate to consider the dumping of platforms at sea. Furthermore, whilst the International Maritime Organisation subsequently provided Guidelines to be followed by coastal States regarding the removal of abandoned or disused installations and structures (Kasoulides, 1989; Ijlstra, 1989; IMO, 1991), disposal of such installations remained a key concern of the Oslo Commission. The adoption of Oslo Commission Guidelines in 1991 was a first step towards the adoption in 1992 by the inaugural ministerial meeting of the Oslo and Paris Commissions of not only the OSPAR Convention but also a Final Declaration and an Action Plan that made explicit reference to environmentally sound disposal of offshore installations. The fourth International Conference on the Protection of the North Sea (Esbjerg 9 June 1995), agreed (subject to reservations by France, Norway and the United Kingdom) to re-use or disposal on land of offshore installation. This North Sea Conference immediately preceded the seventh meeting of the Oslo and Paris Commissions (Brussels 26–30 June 1995) which adopted OSCOM Decision 95/1, informed by a Shell Abandonment Impact Hypothesis (1994) and Greenpeace direct action protest (1995) concerning the Brent Spar (Side, 1997). OSCOM Decision 95/1 placed a moratorium on the disposal at sea of decommissioned offshore installation pending further consideration. Background issues and facts were subsequently established by: a. Input from the Oil Industry International Exploration & Production Forum (Rules, Guidelines and Standards, Topside facilities, Concrete gravity based structures, large North Sea steel structures) in a report entitled ‘finding the right balance’; b. A UK House of Lords Select Committee on Decommissioning of Oil and Gas Installations (March 1996); c. A UK Scientific Group on Decommissioning Offshore Structures (NERC for DTI April 1996); and d. An OSPAR Ad Hoc Working Group on the Disposal of Offshore Installations (December, 1996).

During the same period the European Community conducted a detailed technical review (EC, 1996). This study concluded that:

286   David Johnson a. a legal presumption existed that all installations should/could be entirely removed with possible exemptions linked to safety, navigation, environment, fishing industry, risks of leaving them in situ (based upon the Geneva Conference 1958, UNCLOS 1982, IMO Guidelines 1989, and the mandate of Regional Agreements which can set minimum guidelines for Contracting Parties, although these do not apply directly to individuals or private sector, and whose obligations are defined by national legislation, and for which licenses could be granted on a case-by-case basis by the competent state authority); b. Decommissioning was predicted to peak in the period 2010–2020 (estimated at 25 installations annually); c. For most steel structures total removal should be technically feasible but for some very large steel and concrete substructures there were technical difficulties; d. Partial removal and/or toppling in situ (after cleaning), was practical only in 80m+ depth and this involved consideration of liabilities in perpetuity; e. Dumping of decommissioned structures in another location was practical only for re-floated structures and again this would potentially involve liabilities in perpetuity; f. The main issue of concern for regulators should be large platforms in the Northern North Sea (e.g. Magnus 65,000 tonnes in186m depth); and g. Concrete substructures pose the greatest problem (of which Norway has 14 (6m tonnes) and UK has 9 (2m tonnes)), especially some that have been used for oil storage and it will be difficult to remove completely oily residues.

In 1998 the OSPAR Convention entered into force and replaced the Oslo and Paris Conventions. Legally binding OSPAR Decision 98/3 on the Disposal of Disused Offshore Installations in turn replaced OSCOM Decision 95/3 and entered into force on 9 February 1999. OSPAR Decision 98/3 (OSPAR, 1998): a. Recalled Articles 2 and 5 of the OSPAR Convention; UNCLOS; the increasing number of installations approaching the end of their operational life; the precautionary principle; a preference for disposal on land; and national legal liabilities b. Defined concrete installations, disused offshore installations, steel installations, topsides and footings; c. Prohibited dumping and leaving wholly or partly in place; d. Provided for derogation of certain categories (Annex 1); on grounds of significant reasons (Assessment procedure Annex 2); on the basis of national permits subject to consultation with other Parties (Annex 3); and with implementation reporting (Annex 4); and e. Required an Inventory to be maintained by the Secretariat (with reports every 2 years)

Regular review of Annex 1 to this Decision was stipulated as follows: §7: in light of experience in decommissioning offshore installations and in light of relevant research and exchange of information, the Commission shall try to achieve unanimous support for amendments to Annex I in order to reduce the scope of possible derogations

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In practice such a review has taken place every 5 years following adoption of Decision 98/3. At the 2003 meeting of the OSPAR Commission the only derogation permit that had been issued was to leave in place a gravity-based installation at the Ecofisk field in Norway. OSPAR took note of Report No. 338 ‘Disposal of disused concrete gravity platforms’ presented by the Oil and Gas Producers Association (OGP) and concluded at the time that there was insufficient evidence to enable any revision of the Annex to the Decision. Similarly in 2008 the Commission reached the same conclusion, although by this time four more permits had been issued (three permits to leave gravity-based concrete installations at the Frigg Field and a permit for leaving steel footings NW Hutton-UK). The next review is due in 2013.

The Current Status of Decommissioning in the OSPAR Maritime Area As required by OSPAR Decision 98/3 the OSPAR Secretariat maintains an inventory of decommissioned installations. In 2012: a. 92 operations had been decommissioned; b. there had been seven derogations; and c. as an estimate of future derogation options within the OSPAR Maritime Area there remain 59 steel installations (with a substructure >10,000t) and 22 gravitybased concrete structures.

By way of illustration the most recent derogation case to be considered by the OSPAR Commission is the footings of the Miller Steel installation jacket proposed by the operator (British Petroleum (BP)) to be disposed of in its current location in the Miller Field. Following cessation of production (September 2007), BP issued an assessment to support this proposal (November 2010). This assessment comprised a detailed investigation of alternative use, removal and disposal options. This was supported by a comparative assessment process (40+ studies) setting out environmental, social, technical and economic aspects of different solutions including environmental impact assessment and debris clearance and monitoring. These studies concluded that full jacket removal or partial removal of the jacket footings was not appropriate due to uncertainties and unacceptably high levels of safety and technical risk required to execute these options. The conclusion was supported by an independent verification. As the structure weighs over 10,000 tonnes it qualifies for consideration under ‘footings’ category of OSPAR Decision 98/3 and derogation is supported by the UK government. The procedure in terms of OSPAR Commission involvement and response to the Miller Steel installation jacket derogation proposal has been to note that consultation between UK and other OSPAR Contracting Parties (§3 Decision 98/3) took place in March 2011 and no objections to the UK proposal were

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Figure 2. Decommissioned structures in the OSPAR Maritime Area, June 2012.

received. Written comments from Denmark, Germany, Netherlands and Norway comprised requests for clarification on specific technical procedures including mitigation, longer-term liability (as established in the Abandonment Programme and to be subject to the conditions of the permit), potential risk to fishermen, future monitoring and/or intervention in the context of developing technologies. The United Kingdom made formal responses to these comments and the consultation is now complete. As a result the UK Department for Energy and Climate Change (DECC) as the relevant competent authority for the United Kingdom can move to issue a permit as and when BP and their partners indicate they are in a position to submit the Programme for approval by the UK Secretary of State. A full version of the Programme is available at . Preparations are also well underway for the next most likely major North Sea ‘Brent decommissioning’ project. Cessation of production on Brent Delta

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on 31 December 2011, after 34 years of production, marked the start of a postproduction period for the four Brent platforms. For Brent Delta an ‘engineering down’ phase (isolating production systems and cleaning them of remaining hydrocarbons) will proceed a deconstruction campaign (2013/14) followed by removal (2015). The operators Shell2 have embarked upon detailed technical, economic and health, safety and environmental considerations coupled with a comprehensive public consultation exercise. Environmental impact assessments and comparative assessments precede preparation of a formal Decommissioning Programme for submission and consultation with regulators. This transparent process currently envisages: a. recycling (with a target of 95 per cent) of steel topsides on shore with partial reuse of certain equipment (e.g. pumps, large valves). This involves the challenge of reverse installation module lifts (the Brent platform modules are typically 1,000 tonnes each and the module support frames weigh around 8,000 tonnes) or a single lift of 20,000 tonnes using a new single lift vessel currently under construction; b. application for derogation to leave the gravity base structures (GBS) in place with removal of attic oil and oily water from the cells and on-going studies to consider how to deal with remaining cell content sediment; c. application for derogations to leave both the footings of the Brent Alpha steel jacket on the seabed and GBS ‘legs left up’ for the other structures subject to the installation of lights and other navigational aids.

On the basis of experience to date, future challenges can be summarised as follows: a. Many structures are old (early 1970s) and corroded. Many were put together in a hurry without CAD (in the North Sea ageing installations with a projected life of 20 years are now 50 years old); b. The North Sea can be a hostile environment and dangerous sea states result in limited time (within any year) available for work given safety considerations; c. Logistics are complex: detailed engineering solutions challenged by the sheer scale of structures and limited availability of barges/cranes. These are 10–15 year projects (up to four times longer duration than commissioning) involving considerable costs and energy budgets; d. Disturbance carries a risk of possible release of pollutants from structures during decommissioning and disposal of contaminants on-shore; e. Decommissioning remains an emotive issue and the stakeholder process must be comprehensive and transparent (lessons have been learned from Brent Spar); and f. monitoring programme and liability issues deserve further consideration.

2 Shell is operator of the Brent Field for and on behalf of Shell UK Ltd and Esso exploration and production UK Ltd.

290   David Johnson As a consequence any predictions of future decommissioning rates can only be indicative and are notoriously inaccurate as these are essentially commercial decisions. However, as North Sea facilities reach the end of their operational lifetimes, companies involved in seeking permissions from national regulators have to plan for long lead in times, involving detailed environmental impact studies, complex and expensive logistical options and comprehensive engagement with stakeholders. Sharing good practice is therefore critical in an offshore decommissioning market the size of which in the North Sea is estimated to be in the order of £35bn during the period 2012–2040. Since 2004 Annual North Sea Decommissioning Conferences have brought together experts, operators and decision makers.

Re-Examining Environmental Benefits of Decommissioning In terms of rethinking International Standards, in the opinion of the author, the real environmental issue may indeed not be clearing the visible or underwater structures but making completely sure the wells do not flow again. For many North Sea fields the well profile is very complex with significant vertical depths. Industry practice is to set steel tubulars and concrete plugs but Portland cement only has a 100-year track record and the plugs must last indefinitely. Furthermore, once concrete plugs have been installed and tested the wellhead is severed approximately 3m below the seabed (usually using explosives) making it virtually impossible to establish a reconnection if needed. In addition, in the United Kingdom at least, the environmental economics might be questioned. In the United Kingdom, the more established offshore operators have paid significant tax revenues to the government: 75 per cent petroleum revenue tax on all profits; 15 per cent royalty; and 23 per cent corporation tax. In reality the tax payer is now liable for decommissioning costs as industry expenses will be offset against tax for the big fields. Furthermore, in the United Kingdom decommissioning is also a major disincentive to exploitation by new smaller operators who for approximately the last 10 years have had to find provision for decommissioning costs up front (up to £150m). As stated previously decommissioning is ultimately a commercial decision. Abandonment is not attractive whilst oil prices are high and as a consequence proper evaluation is postponed. Why not take this opportunity to build ‘biodiversity gain good works’ into the derogation permit? In the United States attention has been given to addressing loss of ecosystem services using aging infrastructure to provide opportunities for restoring degraded ecosystems (Doyle et al., 2008). So-called ‘rigs to reefs’ programmes have found favour in the Gulf of Mexico providing fisheries enhancement (refuges for juvenile fish) and securing industry donations to state environment management trust funds. Studies in California have also sought to establish relationships

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between fish assemblages and man-made infrastructures (e.g. Love and York, 2006) but with more cautious recommendations, concluding a preference for a case by case approach (Schroeder and Love, 2004; Bernstein, 2010). In Europe the OSPAR Commission has developed clear Guidelines on Artificial Reefs in relation to Living Marine Resources (OSPAR, 2012) covering materials (which must be inert), design, placement, administrative action, monitoring, scientific experiments, management and liabilities. A differentiation is made between ‘dumping’ and ‘placement’. The Guidelines address those structures specifically built for protecting, regenerating, concentrating and/or increasing the production of living marine resources. In 2011 OSPAR Jurists and Linguist experts (JL) gave detailed consideration to the interpretation of the OSPAR Guidelines on Artificial Reefs (in the context of the language of the 1972 London Convention and its 1996 Protocol). Currently there is no political will to further revise the Guidelines. However, thought is being given to this by IMSA (a Dutch think tank) and a diverse group of stakeholders interested in the ‘bigger picture’ regarding ecological options and possibilities, considering impacts of decommissioning on the local ecosystem (at and around platforms), with preliminary conclusions that leaving structures (and fisheries no take zones) in place provides some advantages in the North Sea particularly for epifauna and flora.

Conclusion For the North-East Atlantic progress has been made to counter adverse environmental impacts of the oil and gas industry (OSPAR, 2010b). The OSPAR Convention provides an appropriate legal framework for regional decommissioning. This includes cases where a derogation to leave all or parts of some structures in situ is the most appropriate course of action, however to date numbers of derogation cases have been limited. Experts expect an escalation of decommissioning (and derogations) as North Sea resources phase out although decommissioning is essentially a commercial decision. The OSPAR framework is effective and to date has been successfully implemented by OSPAR Contracting Parties. Other Regional Seas Conventions and Action Plans have expressed interest in how this has been achieved and in 2011 a capacity building workshop was held in Gabon jointly organised by the Abidjan Convention, the OSPAR Convention and the International Maritime Organisation. It is also clear that regulatory decisions may have unforeseen consequences and should be revisited following experience with implementation. Case studies of decommissioning projects confirm the long timescales involved and the real technical challenges such as limited shore side facilities to cope with huge decommissioned structures. Efforts are underway to promote discussion and

292   David Johnson re-evaluation of OSPAR Decision 98/3. One idea is a ‘landfill tax’ for the sea whereby a proportion of costs of disposal might be offset in a special fund and re-invested to benefit of the environment and civil society. In the opinion of the author any rethinking should take into account safety concerns, financial burden, indirect benefits of infrastructure to biodiversity, and other maritime uses including a full socio-economic analysis. In other words a proper holistic ecosystem approach debate is needed to take all aspects into consideration preferably driven by regulators rather than industry or non-governmental organisations.

Acknowledgements The views expressed in this paper are those of the author and do not reflect any official position of the OSPAR Commission unless otherwise stated. Thanks are due to Alan Simcock, Austin Hand, Mike Coulthard, Jenny Garcia-Miller and Han Lindeboom for their insights and to Corinne Michel and Chris Moulton for their support.

References Bernstein, B. (ed.) Evaluating Alternatives for Decommissioning California’s Offshore Oil and Gas Platforms: A Technical Analysis to Inform State Policy. California Ocean Science Trust, 2010. Doyle, M.W., Stanley, E.H., Havlick, D.G., Kaiser, M.J., Steinback, G., Graf, W.L., Galloway, G.E. and Riggsbee, J.A., ‘Aging Infrastructure and Ecosystem Restoration’, Science Vol. 319 (18 January 2008), 286–287. European Commission, A Technical Review of the Possible Methods of Decommissioning and Disposing of Offshore Oil and Gas Installations. Contract No. B4–3040/96/000259/MAR/D1, Project No. 096926, November 1996. Ijlstra, T., ‘Removal and Disposal of Offshore Installations’, Marine Policy Report 1/4, (1989), 271–273. IMO Resolution A.672 (16), Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone, Assembly Sixteenth period of sessions, 9–20 October 1989, Resolutions and Decisions, Resolutions 639–679, London, 1991. Johnson, D.E., ‘Environmental indicators: their utility in meeting the OSPAR Convention’s regulatory needs’, ICES Journal of Marine Science 65 (2008), 1387–1391. Kasoulides, G.C., ‘Removal of Offshore Platforms and the Development of International Standards’, Marine Policy 13/3 (1989), 250–261. Love, M.S. and York, A., ‘Relationships between fish assemblages and bottom horizontal beams of oil platforms’, Fish Bull. 104 (2006), 542–549. OSPAR Decision 98/3 on the Disposal of Disused Offshore Installations. Adopted by OSPAR Commission Ministers, Sintra, June 1998 (Summary Record OSPAR 98/14/1, Annex 33). OSPAR (2010a) North-East Atlantic Environment Strategy. Adopted by OSPAR Commission Ministers, Bergen, September 2010. —— (2010b) Quality Status Report 2010. OSPAR Commission, London 176 pp.

Regional Regulation of Offshore Oil and Gas Industry Decommissioning   293 —— (2012) OSPAR Guidelines on Artificial Reefs in Relation to Living Marine Resources. Adopted by OSPAR Commission, Bonn, June 2012. Rodriguez-Lucas, L. (in press) Legal framework governing the disposal of disused offshore installations in the OSPAR Maritime Area. https://www.globelawandbusiness.com/OGP. Schroeder, D.M. and Love, M.S., ‘Ecological and political issues surrounding decommissioning of offshore oil facilities in the Southern California Bight’, Ocean & Coastal Management 47 (2004), 21–48. Side, J., ‘The future of North Sea oil industry abandonment in the light of the Brent Spar decision’, Marine Policy 21/1 (1997), 45–52.

PART 6

Liability and Compensation

The Regime for Liability and Compensation for Oil Pollution Damage from Ships Alfred Popp1 Abstract This paper provides background on the international regime of liability and compensation for oil pollution caused by ships. The regime is confined to oil spills originating from tankers carrying persistent oil in bulk as cargo. The owner of the ship is liable for accidental discharges of oil causing damage on a strict liability basis up to a specified limit of liability calculated as a function of the ship’s tonnage. To the extent that uncompensated damage remains, either because the owner’s limit has been reached or the owner is unable to pay, compensation is available from International Oil Pollution Compensation Funds (IOPC Funds). The original regime, adopted in the wake of the Torrey Canyon incident is contained in the 1969 Convention on Civil Liability for Oil Pollution Damage (1969 CLC) and the 1971 Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (1971 Fund Convention). The current regime is embodied in the 1992 Protocols to the two original conventions, as further supplemented by compensation made available under the 2003 Supplementary Fund Protocol. The paper will also refer to two industry agreements (STOPIA and TOPIA) concluded in 2006, aimed at providing some relief to the IOPC Funds in respect of compensation payable by them. There is also reference to the Canadian regime of ship-source oil pollution. Initially Canada chose to go it alone, but since 1989 it has elected to adopt the international regime. The Canadian regime includes a domestic fund, the Ship-source Oil Pollution Claims Fund (SOPF).

Introduction An international regime of liability and compensation for oil pollution caused by tankers has been in place for close to 45 years. Fairly recently international rules governing oil spills caused by ships’ bunkers have been put in place, but this paper will only deal with the tanker regime, the purpose being to provide some historical background for the development of that regime, as well as to describe its essential elements. The regime represents a highly successful mechanism for the payment of compensation for oil spills involving tankers. 1 Alfred Popp, QC, is Administrator of the Ship-source Oil Pollution Fund (SOPF), Ottawa, Canada. His PowerPoint is available at .

298   Alfred Popp

History The starting point of any examination of the international regime covering tanker spills is the Torrey Canyon incident in March 1967 off the south west coast of the United Kingdom, involving the grounding of a Liberian flagged tanker in what was at the time international waters. The incident attracted wide spread media coverage, a first for this kind of incident, and illustrated the extensive damage to the coastline and related interests in both the United Kingdom and France caused by the release of large quantities of oil as a consequence of the grounding of the tanker. Besides the enormous physical damage, the incident also illustrated some significant shortcomings in international rules to deal with the consequences of such incidents. The grounded vessel, as already mentioned, was technically in international waters and consequently there were no clear-cut rules to guide coastal States in any intervention to remove or mitigate the threat of the catastrophic spill. The incident also highlighted the lack of uniform, internationally accepted rules governing liability and compensation for damage caused by the spill. The arrangements regarding the ownership, chartering, management and operation of the ship were complex, giving rise to difficult questions about who to approach and, if necessary, to sue for compensation for damage suffered or costs incurred for measures to mitigate damage. Further, there was the difficult issue of which courts had jurisdiction to resolve disputes arising out of such incidents.2 These questions were raised as a matter of urgency in the governing bodies of the Intergovernmental Maritime Consultative Organization (IMCO), today known as the International Maritime Organization (IMO), by the British and French governments. The matter was referred to the newly created Legal Committee of the organization.3 In 1969 a diplomatic conference was convened in Brussels which adopted two conventions, based on drafts prepared in IMCO, namely, the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (Intervention Convention),4 to deal with the 2 For a summary of the legal issues raised by the incident, see Alfred Popp, QC, “ ‘Special Rules for Special Situations’: Some Developments in Civil Liability in Maritime Law Over the Last Fifty Years,” in Koichi Hamada, Mitsuo Matsushita, and Chikara Komura, eds., Dreams and Dilemmas, Economic Friction and Dispute Resolution in the Asia-Pacific (Tokyo: Institute of Southeast Asian Studies, Seiki University, 2000), 339–363, at 345–347. 3 For an instructive discussion of the beginnings of the IMO Legal Committee, see the paper by Rosalie Balkin, Director of the Legal Affairs and External Division, IMO, “The Establishment and Work of the IMO Legal Committee,” in Myron H. Nordquist and John Norton Moore, eds., Current Maritime Issues and the International Maritime Organization (The Hague: Martinus Nijhoff Publishers, 1999), 291–305. 4 970 U.N.T.S. 211.

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public international law issues, and the International Convention on Civil Liability for Oil Pollution Damage (CLC)5 to deal with issues of liability and compensation. Another diplomatic conference in Brussels in 1971 adopted a further convention, aimed at supplementing compensation available from tanker owners under the CLC, namely, the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (Fund Convention).6 About ten years later, in 1978, another tanker incident, the stranding of the Liberian tanker, Amoco Cadiz, off the northern coast of France, drew further attention to the devastating consequences of incidents caused by these giant vessels. It was quickly concluded that the amount of compensation offered by the original 1969/71 regime was inadequate for such large spills, leading to proposals in the Legal Committee of the IMO to amend it. In 1984 a diplomatic conference at the IMO headquarters in London adopted two protocols, respectively, amending the 1969 CLC and the 1971 Fund Convention. The main aim of the new protocols was to increase the amount of compensation available under the regime. Unfortunately the 1984 Protocols, as they came to be known, never entered into force. One of the aims of the protocols was to attract new membership to the regime, particularly from North America, notably absent from the original scheme. To allay the fears of large contributors to the original 1969/1971 regime, particularly Japan, that increased compensation offered would unduly burden those contributors, the entry into force provisions to the 1984 Protocol to 1971 Fund Convention were framed in such a way as to require United States participation.7 Efforts within the United States Administration to achieve endorsement of the protocols ultimately failed in the wake of the Exxon Valdez incident in 1989 in Alaska. Instead of joining the international regime, the United States opted for a national scheme embodied in the Oil Pollution Act of 1990 (OPA ’90),8 containing provisions inconsistent with the international conventions. The United States

5 973 U.N.T.S. 3. 6 1110 U.N.T.S. 57. 7 One of the conditions for the entry into force of the protocol, reads as follows: This protocol shall enter into force twelve months following the date on which the following requirements are fulfilled: (a) . . . . (b) “The Secretary-General of the Organization has received information in accordance with Article 29 that those persons who would be liable to contribute pursuant to Article 10 of the 1971 Fund Convention as amended by this Protocol have received during the preceding calendar year a total quantity of at least 600 million tons of contributing oil.” see Article 30, Protocol of 1984 to Amend the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1971, 23 I.L.M., Art. 30. 8 101 H.R. 1465, P.L. 101–380.

300   Alfred Popp remains outside the international regime and there are currently no indications that it will join any time soon.9 In order not to lose the benefits of what had been agreed to in the 1984 protocols, the content of those protocols was eventually incorporated into two new protocols, with small but significant modifications, which came to be known as the 1992 Protocols. Those modifications lowered the amount of contributing oil to be reported to the Secretary General of IMO to trigger entry into force of the 1992 Protocol to the 1971 Fund Convention from 600 million tons to 450 million tons, a threshold that could be reached without United States participation within the existing membership of the international regime. But even the significantly enhanced scheme represented by the 1992 Protocols proved to be insufficient within a few years. In the wake of further incidents, notably the Erika (2000), some considered compensation under the 1992 regime to be inadequate. This was not necessarily a unanimous view. With a growing membership participating in the scheme, consisting of both developed and developing nations, with differing priorities and aspirations, not everyone, including the insurers, was convinced that further amendment to increase compensation amounts was necessary. Also, it was obvious that amendment of the scheme was a difficult matter, as illustrated by the complex transitional provisions contained in both the 1984 and 1992 Protocols.10 A partial remedy to the problem was to activate the amendment procedures that had been included in the 1992 Protocols, which allowed the Legal Committee of the IMO to increase amounts of compensation under the two instruments in accordance with a specific, somewhat restrictive, formula.11 In 2000 the Legal Committee adopted two resolutions, respectively increasing the amounts available under the two instruments. However, since the increases were limited, in accordance with the formula, some thought that those increases were not sufficient, given the time that had elapsed since the adoption of the 1992 Protocols. To resolve the issue of adequate compensation, it was decided to create an additional fund. In 2003 a protocol was adopted, establishing the Supplementary Fund. The Fund, technically an independent fund from the 1992 IOPC Fund, offers substantial additional compensation. Membership in the Supplementary Fund is on a voluntary basis, but a state in order to participate in that fund has to be a contracting state in the two underlying conventions, namely, the 1992 CLC and Fund Convention. To complete the picture, mention should be made of two industry agreements, aimed at providing some relief for contributors, respectively, to the 1992 Fund 9 Another notable absentee from the regime is Mainland China. Under special arrangements, Hong Kong Special Administrative Region participates in the regime. 10 See, e.g., Article 36 bis of the 1984 Protocol to amend the 1971 Fund Convention. 11 Article 15, 1992 Protocol to CLC and Article 24, 1992 Protocol to the Fund Convention.

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and the Supplementary Fund. Those agreements further emphasize that the international compensation regime for tanker spills is based on the notion of shared responsibility between tanker owners and cargo interests. In 2006 the International Group of P&I Clubs (IG)12 concluded two voluntary agreements aimed at providing indemnification for the 1992 Fund and the Supplementary Fund. Under the Small Tanker Oil Pollution Indemnification Agreement (STOPIA), small tanker owners (up to 29,548 gross registered tons (GRT)) and their insurers agree to the minimum liability for those tankers, of 20 million SDR for pollution damage caused in states parties to the 1992 Fund. A further agreement was concluded later that year, the Tanker Oil Pollution Indemnification Agreement (TOPIA), whereby tanker owners and their insurers agreed to indemnify the Supplementary Fund for up to 50% of the compensation paid by the Fund in respect of oil pollution caused by tankers entered in the agreement.13 These agreements played a key role in avoiding revision of the 1992 conventions, which, as previously noted, would have been a complex matter. Not all states believed that voluntary industry agreements were an adequate response, but in the end the pragmatic solution represented by the industry agreements prevailed and no further amendments have been made.14

Regime An examination of the elements of the international regime providing compensation for tanker spills will show that it was designed essentially to address the problems of the Torrey Canyon incident. While subsequent amendments have modified certain aspects – the amount of compensation, the geographic scope of application, and extension to empty tankers under certain circumstances – the basic elements of the scheme have remained the same. Five elements of the regime illustrate this point. First it should be noted that the regime is confined to providing compensation for pollution damage caused by tankers carrying cargoes of persistent oil.15 12 P&I refers to Protection and Indemnity Clubs, set up by shipowners to provide insurance cover for third party liability. 13 For the way these agreements operate, see IOPC Fund Annual Report, 2011, at 7–8. Available online at . 14 Canada, for example, was one of the countries that strongly advocated amendment of the conventions, believing that reliance on industry agreements to deal with shortcomings in conventional or statutory regimes was unsatisfactory, since such agreements could be significantly modified or even abolished at will by the industry. 15 Article 1.5, 1992 CLC, defines oil as “any persistent hydrocarbon mineral oil such as crude oil, fuel oil, heavy diesel oil and lubricating oil, whether carried on board a ship as cargo or in the bunker of such a ship.”

302   Alfred Popp In later years, as noted above, the regime was extended to empty tankers under certain conditions. Secondly, the registered owner is identified as the primary party liable for any damage caused by the tanker. Claimants are consequently relieved of the often difficult task of determining who was actually responsible for the management and operation of the tanker at the time of the incident. In the absence of such clear identification, a number of parties, often located in different jurisdictions, might arise for consideration as targets to be pursued for compensation in addition to the registered owner, notably, the charterer, the manager and the operator of the vessel. The exclusivity of the registered owner as the liable party was further buttressed in the 1992 version of the CLC by a detailed channeling provision, specifically exempting from liability a number of parties, including the charterer, manager and operator.16 The object was to ensure the most effective and economical use of insurance cover. Only one party, the registered owner, had to ensure that insurance cover was in place for this kind of loss. Next, the registered owner is subject to strict liability. Proof of fault or negligence is not required and the owner can only escape liability on the basis of a very limited number of narrowly defined defenses.17 This simplifies matters for claimants, since they only have to furnish proof that the tanker caused the damage and the extent of the damage they have suffered. To simplify matters further for claimants, the registered owner of a tanker carrying more than 2000 tons of oil as cargo is obliged to furnish proof of insurance coverage that gives claimants the right to bring their claims directly against the insurer.18 In 1969 this obligation represented a significant breakthrough. Until that time marine insurance had been viewed essentially as a contract of indemnification, that is to say, the insured (shipowner) had to pay the claim in order to be paid (indemnified) by the insurer, often referred to as the “pay to be paid” principle. The introduction of compulsory insurance as provided by the CLC does away with that principle, at least for claims governed by this convention. As already noted, the compensation regime provided by the CLC and the Fund Convention shares responsibility for the payment of compensation for tanker spills between two industry groups – the owners of tankers and their insurers, on the one hand, and cargo interests, on the other. In exchange for strict liability, backed by compulsory insurance, the tanker owner enjoys a limit of liability. Recognizing, however, that the amount of compensation available from the registered owner will, in large spills, be insufficient, cargo interests through the

16 Article III. 4, CLC. 17 Article III, CLC. 18 Article VII, CLC.

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mechanism of the Fund Convention are required to assume some of the burden of ensuring that adequate compensation is available. The International Oil Pollution Compensation Fund (IOPC Fund), set up under the Fund Convention is available to pay compensation to the extent that compensation for damage caused by a tanker spill is insufficient or not available from the registered owner or the insurer.19 The Fund has an overall limit, which includes any amounts of compensation recovered from the owner or insurers. Compensation paid by the IOPC Fund is financed by contributions levied from receivers of “contributing oil”.20 One final element of the regime should be mentioned, namely the question of jurisdiction. Article IX of the 1992 CLC resolves this matter as follows: 1. Where an incident has caused pollution damage in the territory, including the territorial sea or an area referred to in Article II, of one or more Contracting States or preventative measures have been taken to prevent or minimize pollution damage in such territory including the territorial sea or area, actions for compensation may only be brought in the Courts of any such Contracting State or States. Reasonable notice of any action shall be given to the defendant. 2. Each Contracting State shall ensure that its Courts possess the necessary jurisdiction to entertain such actions for compensation. 3. After the fund has been constituted in accordance with Article V the Courts of the State in which the fund is constituted shall be exclusively competent to determine all matters relating to the apportionment and distribution of the fund.

Compensation The total amount of compensation available under the international regime for tanker spills, expressed in Canadian dollars (currently approximately at par with the US dollar) may be summarized as follows: • $311.74 million payable by the 1992 IOPC Fund, which would include any amounts recovered from the shipowner under the 1992 CLC; and • $840.02 million payable by the Supplementary Fund, which would include any amounts recoverable from the shipowner under the 1992 CLC and the 1992 IOPC Fund. The grand total recoverable under the international scheme is therefore $1,151.76 billion. It should be noted that the actual amount paid by the tanker owner is 19  Article 4, Fund Convention. 20 Basically any person who, in any calendar year receives a total quantity of oil in ports or offshore installation, by sea, exceeding 150,000 tons, see Article 10, Fund Convention.

304   Alfred Popp based on the tonnage of the tanker. The maximum of $137.86 million, mentioned above, is reached when the tanker has a tonnage of 140,000 tons or more.21

The Canadian Experience Today Canada, unlike its neighbor to the south, is party to the international regime, described above. It was not always so. In 1970 Canada established its own domestic regime of liability and compensation for ship-source pollution. There were a variety of reasons for setting up this regime; most notably the passage of the US flagged tanker, the Manhattan, in 1969, through the Canadian Arctic and the Arrow incident in 1970 off the coast of Nova Scotia. These incidents raised awareness in Canada that there was no statutory regime of liability and compensations to deal with large scale oil pollution incidents caused by ships in waters under Canadian jurisdiction. Another important element in the decisions to create a made in Canada regime was Canadian dissatisfaction with the outcome of the 1969 Brussels Conference that resulted in the adoption of the 1969 CLC. Canada believed that the scope of the convention was too narrow and that a broader instrument should have been developed to deal with all sources if pollution caused by ships.22 In 1970 Parliament adopted the Arctic Waters Pollution Prevention Act (AWPPA),23 which dealt with all forms of pollution in Arctic waters, including pollution emanating from ships. The Act applied to the Canadian Arctic north of the 60th parallel and contained important provisions governing liability and compensation for pollution caused by ships navigating in Arctic waters.24 The adoption of the AWPPA was followed, in 1971, by an amendment to the Canada Shipping Act (CSA), adding a new part to the Act, Part XX, governing liability and compensation for pollution caused by ships navigating in waters under Canadian jurisdiction south of the 60th parallel.25 The amendment to the CSA made provision for a domestic fund to supplement compensation provided by the shipowners. The Maritime Pollution Claims Fund (MPCF) was financed from a levy imposed on oil movements by ship into and within Canada. The MPCF was essentially a fund of last resort, meaning that it could only be accessed to the extent that claimants were unable to obtain 21 For a graphic view of the various layers of compensation, see Annual Report, supra note 13. 22 Canada’s dissatisfaction was articulated at the conference by the Minister of Transport, the Hon. Donald Jamieson, see INTERNATIONAL LEGAL CONFERENCE ON MARINE POLLUTION DAMAGE, OFFICIAL RECORDS 84 (1969). 23 Revised Statutes of Canada, (R.S.C.), ch. A-12 (1985). 24 See definition of “arctic waters” in section 2 of the Act, as read with subsection 3(2). 25 R.S.C., ch. 27 (2d Supp. 1970).

Regime for Liability and Compensation for Oil Pollution Damage   305

adequate compensation from the shipowner. In subsequent amendments, the Fund was renamed the Ship-source Oil Pollution Fund (SOPF). The provisions governing liability in the new part added to the CSA bore a striking similarity to those contained in the 1969 CLC, but with significant differences that prevented Canada from the joining the international regime when it became operational in 1975. For one thing, the provisions were not limited to oil pollution caused by tankers carrying cargos of persistent oil but extended to all vessels capable of causing pollution. This lack of consistency with the international regime not only prevented Canadian participation in that regime, but it also hindered Canada in the implementation of important features of its domestic legislation, most notably the compulsory insurance provisions included in Part XX. These provisions remained inoperative for many years until, eventually, the legislation was amended to bring it into compliance with the international conventions. The International Group of P & I Clubs was not willing to provide the kind of cover mandated by the provisions, including right of direct access against the insurers, outside the scope of the CLC. In 1989 Canada joined the 1969 CLC and the 1971 Fund Convention. For almost 18 years Canada had operated its purely domestic regime. It was fortunate that in those years there were relatively few tanker accidents affecting Canadian waters. The few that did occur demonstrated the disadvantages of operating outside the international regime created by the CLC and Fund Convention. Ten years later, in 1999, Canada denounced the 1969 CLC and Fund Convention and joined the 1992 CLC and Fund Convention. The implementing provisions were transferred from the CSA to the newly adopted Marine Liability Act (MLA). In 2010, as a consequence of amendments to the MLA, implementing the 2003 Protocol setting up the Supplementary Fund, Canada joined that Fund.26 Today the SOPF plays a dual role. First, it provides an additional layer of compensation ($159,854,965) on top of what is available under the international regime for tanker spills. Secondly, it provides supplementary compensation for ship-source oil spills in waters under Canadian jurisdiction that are not covered by the international tanker regime. The SOPF has two other, important functions. It pays the contributions to the IOPC Fund on behalf of Canadian receivers of contributing oil under the relevant provisions of the Fund Convention.27 Further, claimants for compensation, in addition to any rights they have against the shipowner and their insurers, may submit their claims to the SOPF. The Administrator of the Fund is obliged to 26 S.C. 2001, ch. 6, as amended by S.C, 2010, ch. 21. 27 Under Article 14 of the Fund Convention, a contracting state may assume the obligation to pay contributions on behalf of any person liable to contribute to the IOPC Fund in accordance with Article 10 of the Convention. Canada availed itself of that option and accordingly Canadian contributions are paid out of the SOPF, see section 117, MLA.

306   Alfred Popp investigate the claims and to the extent that he or she finds them to be established, make an offer of compensation. Where the offer is accepted and payment is made out of the SOPF, the Administrator acquires the rights of the claimant by subrogation and must take all reasonable steps to recover the amount paid out to satisfy the claim from the owners or any other party that may be liable for the oil pollution.28

Conclusions The IOPC Fund system has been very successful in the assessment and payment of claims in the almost 35 years of its operation. The guiding principle followed by the governing bodies of the Fund and the Secretariat has always been that claims should be assessed and paid as quickly as possible. This has not always been possible, particularly in those instances where the total estimated value of claims exceeds the amount of compensation available under the conventions, necessitating a pro rating of claims, at least initially, to ensure that all claimants are treated on an equal footing.29 The vast majority of claims over the years have been settled amicably, without recourse to the courts. Over the last decade or so there has been a significant rise in the number of claims arising out of incidents dealt with by the IOPC Fund. One explanation for this rise may be the expanding membership of the IOPC Fund and the growing awareness of the availability of the Fund to pay compensation. This is in some sense fostered by the Fund itself, which in major incidents invariably sets up a claims office in the vicinity of the spill to receive and assess claims. The claims offices are usually operated in close collaboration with the shipowner’s insurers, using, wherever possible, the same experts to assess and approve claims in accordance with criteria established by the governing bodies of the Fund. In those cases where disputes have arisen about the assessment of claims and the amount of compensation offered by the Fund, it is noteworthy that the courts in most cases have upheld the assessments. In recent years the IOPC Fund has had to grapple with the problem of a vast number of very small claims in certain incidents. This poses two challenges. First, there is the physical challenge of assessing such a large number of claims, given the limited availability of qualified experts to do the work. Secondly, small

28 The assessment of the Administrators can only be overturned by appeal to the Admiralty Court (the Federal Court of Canada) see section 106, MLA. 29 See Article 4.5 Fund Convention.

Regime for Liability and Compensation for Oil Pollution Damage   307

claimants often do not have the documentary or other proof of the losses they claim to have suffered.30 The success of the international regime depends on proper implementation of the conventions in the legislation of member States. As noted above, the national courts finally resolve disputes between claimants and the IOPC Fund.31 To maintain the credibility of the system it is important that they apply the conventions in a consistent and reasonably predictable fashion.

30 The governing bodies of the IOPC Fund have set up a working group to study this and related problems, see 1992 sixth intercessional Working Group reported on in the IOPC Fund Annual Report, 2011, at pp. 32/3. 31  Article 10 of the CLC.

BENEFIT AND RISK OF THE NORTHERN SEA ROUTE TO THE NORTH PACIFIC Sung-Woo Lee1 Abstract Global warming and climate change have brought a new issue in the Arctic sea: a profound transformation of ice meltdown. This has enabled us to explore a new shipping route through the Arctic instead of the previously existing commercial shipping routes. In particular, the Northern Sea Route (hereinafter called ‘NSR’) is now becoming one of the feasible shipping routes. Increasing shipping frequency by using the NSR could bring tremendous shipping benefits. If the NSR becomes commercialized, it will be possible for shippers to save about 5,000 nautical miles (NMs) compared to the existing route via the Suez Canal. This study highlights some important findings and risks on the feasibility of commercializing the shipping routes through the Arctic. The NSR can definitely bring positive economic aspects, decreasing shipping distance and time. We need to take into account, however, an expensive passage toll fee that is currently imposed by the Russian government as well as invisible risks inherent in an Arctic voyage. A key issue is whether or not the NSR can be commercialized as a popular shipping route. If the NSR is used in 2030, the maximum cargo traffic between Asia and Europe of around 46 million TEU in container and bulk cargo traffic is expected to be about 85 million tons. This provides enough grounds to promote the commercialization of the NSR. Regarding economic benefits, the NSR will have significant economic effect in terms of distance-saving for supplying oil, natural gas, fishery, general goods, and mineral resources. All of these benefits are heavily dependent on the level of toll fees when using the route. Also, the voyage will face risks such as lack of waterway information, emergency management, and logistics variables, e.g. fuel price, insurance and return cargo. In conclusion, we need to explore the NSR to bring possible economic benefits to North Pacific countries by keeping up efforts for reducing the risks in the Arctic while protecting its environment. Keywords: northern sea route, Arctic Sea, benefit, risk, shipping, Russia, fees

1. Introduction Globalization has acquired a wide recognition among countries since the 1970s. This has stimulated world trade and revolutionized the global transportation system. In particular, the impact has been profound in the area of sea transport 1 International Logistics Research Department, Korea Maritime Institute. (Email: waterfront@kmi. re.kr). The author’s PowerPoint is available at http://www.virginia.edu/colp/pdf/Halifax-Lee.pdf.

310   Sung-Woo Lee 8.5 Extent (million square kilometers)

8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0

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Year Source: http://nsidc.org/icelights/2011/0/14/heading-towards-the-summer-minimum-ice-extent/ Image courtesy of the National Snow and Ice Data Center, University of Colorado, Boulder.

Figure 1. Average Monthly Arctic Sea Ice Extent September 1979 to 2010.

which handles more than 90 per cent of global trade movement. Due to the continuous dependence of world trade on sea transport, the function of port and logistics facilities has dramatically changed.2 However, the major commercial shipping routes have changed little since there has been no remarkable geographical change since the 20th century. As of the 2010s, global warming has been one of the significant factors directly affecting the world’s living and environment. As shown in figure 1, the Arctic sea area is definitely experiencing a critical transformation because its ice is melting down due to climate change and global warming phenomena. The graph shows how Arctic sea ice extent has changed in recent years. This data is based on the sea ice extent in September when it reaches its minimum annual level. Such changes or decrease enable us to explore a new shipping route through the Arctic instead of the previously existing commercial shipping routes. Especially the NSR, which is located between the North Atlantic and the Northern Pacific along the Arctic sea, is gradually becoming a feasible international shipping route. In 2010, there was a significant increase in the number of ships passing through the NSR, and we expect to see even more vessels using the route in the future. The 2 Lee, S., Ducruet, C., ‘Spatial Glocalization in Asia-Pacific Hub Port Cities: A Comparison of Hong Kong and Singapore’, Urban Geography, Vol. 30, 2009, 163.

Benefit and Risk of the Northern Sea Route   311

NSR can save about 5,000 nautical miles and weekly shipping time compared to the existing route via the Suez Canal if it becomes a common shipping route.3 According to Lee et al. (2011) study,4 East Asian countries would have a number of economic benefits using the NSR for commercial trading between East Asia and North Europe without paying a Russian ice breaking fee.5 Notably, Northeast Asian countries such as Korea, China, and Japan, would obtain higher benefits than other Asian countries by using the NSR.

2. Can the NSR Be Competitive by Comparison with the Suez Route? 2.1. Forecasted Traffic Volume via the NSR The Lee study (2011), in Table 1 reviews the possible container traffic from/to East Asia to/from Northern Europe if the NSR opens. The results indicate that China is expected to have the overwhelming volume of container traffic. According to the study, in 2010, were the NSR used, there would be about 13 million TEU of cargo traffic that would change. In 2030, about 46 million TEU of cargo traffic would have been increased. Especially, China’s TEU in 2010 is expected to reach about 40 million TEU in 2030, an 87 per cent growth rate. The study was based on an SP survey6 of the Suez Canal route (hereinafter called ‘SCR’) and the NSR. The survey respondents focused mostly on forwarders and logistics companies excluding shipping liners. Costs and time, which are the most important factors when it comes to choosing a shipping route, were taken into consideration in the study. In addition, Table 2 below shows the results from analysis of the SP survey. The analysis indicates that the share of the NSR is expected to be about 20 per cent if the shipping time through the NSR stays at the same level with the one through the SCR. If five days of shipping time is saved by using the NSR, and the shipping cost stays the same as the SCR, 72 per cent of respondents will be using NSR. Also, it turned out 96 per cent of respondents will be using the NSR, if the shipping time is reduced to ten days. Based on expert opinions, the study applied three stages of opening of the Arctic: three months in 2015, six months in 2020, and nine months in 2025, and 3 Verny, J., Container Shipping on the Northern Sea Route, International Transport Forum, 2009. 4 Lee, S., Benefit of the NSR to the North Pacific, KMI-KOTI-EWC International Conference, 2011. 5 According to Lee (2011), if an 8,000 TEU vessel transports a container shipment with a 60 per cent capacity, the fee imposed on the shipment amounts to 3.9 million dollars. This is approximately USD 780 per one fully loaded TEU (Russian Federal Tariff Service issued Order #122–t/1 from June 07, 2011, “Tariffs for Ice-breakers in Arctic Routes”). 6 The SP survey is a method that provides better estimates by asking respondents to select choices or prioritize options by a particular scenario that has not happened yet.

312   Sung-Woo Lee Table 1. Container traffic forecast by targeted countries. Unit: 1,000 TEU

2010 2015 2020 2025 2030 2010~2030

China

Korea

Japan

Taiwan

10,043 15,171 21,882 29,980 39,555 7.1%

1,416 1,715 2,284 2,635 2,982 3.8%

376 407 516 526 534 1.8%

296 376 503 583 666 4.1%

China Philippines (SAR HK) 636 804 1,075 1,276 1,494 4.4%

123 154 209 260 317 4.9%

Total 12,890 18,627 26,469 35,261 45,549 6.5%

Note: applying traffic O/D after forecast national traffic using real GDP growth. Source: Lee, S., Song, J., and Oh, Y., Shipping & Port Condition Changes and Throughput Prospects With Opening of the Northern Sea Route, Korea Maritime Institute, Seoul, 2011.12. p. 83; Raw data retrieved from CI-online, 2011.

Table 2. NSR shares by scenario. NSR Cost

NSR Time

NSR Shares

120% 110% 100% 80% 70% 120% 110% 100% 80% 70% 120% 110% 100% 80% 70%

30days 30days 30days 30days 30days 25days 25days 25days 25days 25days 20days 20days 20days 20days 20days

1% 5% 20% 86% 97% 10% 34% 72% 98% 100% 52% 84% 96% 100% 100%

Source: Lee, S., Song, J., and Oh, Y., Shipping & Port Condition Changes and Throughput Prospects With Opening of the Northern Sea Route, Korea Maritime Institute, Seoul, 2011.12. p. 89.

it assumed that the NSR will be commercialized by the year 2030. The study estimated the container traffic share of the NSR, as seen on Table 3. The container traffic was forecasted to reach about 29,000 TEU in 2015 and around three million TEU in 2030 under the condition that the sailing cost through NSR stays at the same level with the cost of the SCR. Also, the share of the NSR would be 1.6 per cent in 2015 and 64.1 per cent in 2030.

Benefit and Risk of the Northern Sea Route   313 Table 3. Container traffic forecast and share of NSR. NSR Cost 120% 110% 100% 80% 70%

Container traffic forecast

Unit: 1,000 TEU

Share

2015

2020

2025

2030

2015

2020

2025

2030

1 6 29 249 376

31 132 423 1,145 1,252

163 596 1,417 2,457 2,542

442 1,438 2,920 4,304 4,392

0.1% 0.3% 1.6% 13.3% 20.2%

1.2% 5.0% 16.0% 43.3% 47.3%

4.6% 16.9% 40.2% 69.7% 72.1%

9.7% 31.6% 64.1% 94.5% 96.4%

Source: Lee, S., Song, J., and Oh, Y., Shipping & Port Condition Changes and Throughput Prospects With Opening of the Northern Sea Route, Korea Maritime Institute, Seoul, 2011.12. p. 96, p. 101.

2.2. Cases for Analysis of the Cost Price via NSR To review the five possible scenarios for using NSR, the study analyzes the shipping costs. The length of SCR between Tokyo and Rotterdam is 11,285 NM, while the NSR is expected to be 7,445 NM long. The study divided the sailing costs into four categories: the charterage representing the capital expenses, the ship operating costs including labour costs and insurance fees, the fuel costs, and the passage toll fees. The passage toll fee is denoted as a Suez Canal toll for the route passing the Suez Canal, and as an ice breaking service fee for the NSR. Capital expense and operating costs will be increased when utilizing the NSR because of its special conditions and are generally estimated to add 20 per cent to 30 per cent extra costs. In the study, 20 per cent increase costs were selected. The analysis was based on the 8,000 TEU vessels which are mainly used in the sailing route between Asia and Europe. Also, the study utilized a general idea that the charterage per day stays at the level around 45,000 dollars and the ship operating cost would be at around 23,000 dollars.7 Consumption costs are based in the study on the assumption that ships will operate at an appropriate speed. On that basis the fuel consumption will be 0.3 ton per NM. The fuel cost is based on Fujairah Bunker C oil of IFO 380cst. The study deducted the lowest level of 445 dollars from the highest level of 720 dollars during the previous 12 months, and added this difference of 275 dollars to 720 dollars again to derive the future oil price estimate reflecting a possible rise in oil price. The study thus assumed three scenarios i.e. 444 dollars, 720 dollars and 995 dollars. The Suez Canal toll fee is known to be at around 550,000 dollars based on an 8,000 TEU vessel with 60 per cent of load factor. In addition, the ice breaking 7 Based on advice from experts and interviews with industry leaders.

314   Sung-Woo Lee service fee imposed by Russia was set at the publicly announced tariffs in 2005. This Russian fee is schemed to be imposed on the tonnage of shipments and the whole shipping routes respectively. For the container shipments, 1,048 roubles per tonnage was assumed. For transit cargo along the waterways of the NSR, 1,000 roubles was applied per ton of full displacement.8 Even if not announced in public, Russia is known to regard one TEU as 24 tons.9 Based on this, if the 8,000 TEU vessel transports the container shipment with its 60 per cent capacity, the fee imposed on the shipment amounts to 3.9 million dollars. Also, in case of 110,000 dead weight tons, the fee will be 3.6 million dollars. The total fee amounts to 7.6 million dollars for a single passage through the NSR. In the case of the Murmansk shipping company, we understand that it paid around 220,000 dollars in 2010 for 5,300 TEU vessels, and around 420 thousand dollars for 10,000 TEU vessels.10 However, this seems to be a national preferential treatment for shipping companies that would not apply for those vessels of other countries. In addition, the study estimated the shipping frequency on a yearly basis. The applied vessel speed was 18NM per hour for ice water and three NM per hour for non-ice water. The waiting time for the each SCR and the NSR would be respectively 4 days and 8 days per trip. As a result, the derived total was 30.1 shipping days per trip for the SCR. The expected shipping days will be 33.3 days if the NSR is open for three months, 28.7 days for six months, 26.4 days for nine months, and 25.2 days for twelve months. In case the NSR is not open, the study assumed using the SCR by chartering other vessels. The analysis showed that the shipping frequency per year will be 12.1 times via the SCR. Also, the shipping frequency via the NCR will be 11.9 times when the Arctic is open for three months, 12.4 times for six months, 13.4 times for nine months, and 14.5 times for twelve months. Such analysis indicates that the speed reduction effect of vessels in the ice water is bigger than the shipping distance-saving effects when the NSR is open only for three months. Therefore, the shipping frequency ended up decreasing. The conclusion was reached that the cost price of the NSR could be less expensive than the SCR if ice breaking service fees were excluded. If the total costs include the ice breaking service fee, the cost price of the NSR would increase about 25 per cent to 160 per cent. However, if the total cost does not include the ice breaking fee, the cost will be 11 per cent to 28 per cent less costly.

8 The exchange rate as of 2010 is 30.46 roubles per dollar, therefore 1,048 roubles are equivalent to around 34.4 dollars and 1,000 roubles to around 32.8 dollars. 9 Liu, M., Kronbak, J., The Potential Economic Viability of Using the Northern Sea Route (NSR) as an Alternative Route between Asia and Europe, Journal of Transport Geography, 2009. 7. 10 Based on data from interviews and observation trips of KMI.

Benefit and Risk of the Northern Sea Route   315 Table 4. Sailing cost per TEU between Tokyo and Rotterdam. Fuel Cost

Cost/ Rates

Suez Canal NSR excluding ice breaking service fee Route 3 6 9 12 (including Toll) months months months months

445$/ Cost ton Rate

855.2

720$/ Cost ton Rate

1,049.1

995$/ Cost ton Rate

1,243.1

748.3 12.5% 927.0 11.6%

717.3 16.1% 877.6 16.4%

674.8 21.1% 817.7 22.1%

636.0 25.6% 764.0 27.2%

NSR including ice breaking service fee 3 months 1,200.4 –40.4% 1,379.1 –31.5%

6 months 1,578.8

9 months 1,922.2

12 months 2,213.1

–84.6% –124.8% –158.8% 1,739.0 –65.8%

2,065.1

2,341.0

–96.8% –123.1%

1,105.7 1,037.9 960.5 892.0 1,557.9 1,899.3 2,207.9 2,469.0 11.1% 16.5% 22.7% 28.2% –25.3% –52.8% –77.6% –98.6%

Source: Lee, S., Song, J., and Oh, Y., Shipping & Port Condition Changes and Throughput Prospects With Opening of the Northern Sea Route, Korea Maritime Institute, Seoul, 2011.12. p. 96, p. 101.

3. Risks in the NSR Based on the previous section, it is possible to confirm economic benefits of the NSR. On the other hand, the route still has a number of obstacles to becoming a commercialized shipping route. To promote the NSR as a commonly used route in the near future, related obstacles and risks should be defined in advance. The first obstacle is the ice breaking fee imposed by Russia. To make the cost price of the NSR more competitive than the SCR, the ice breaking fee needs to be set at a rational level. This issue ought to be constantly raised with Russia. A key issue with Russia lies in whether or not the NSR becomes a popular shipping route because of this heavily imposed fee. In this context, Korea and Russia, as well as Northeast Asian countries and Russia should discuss a reasonable toll fee in the Arctic. The second obstacle is the lack of a comprehensive shipping management system. The NSR is a rough route with a bad marine environment, such as snowstorms and icebergs. A shipping management system with weather and sea information collection, waterway status reports, port construction cooperation, land-based support, environment protection etc. is needed to support a viable shipping operation. In this respect, the Arctic coastal States should prepare to respond to maritime emergencies with search and rescue responses to major disasters at sea, such as danger to lives, damage to vessels and oil spills. In addition, agreement between Russia and the United States on traffic separation and monitoring in the Bering Strait is an important step in addressing safety and security in the Arctic. The third obstacle is the lack of unified politics, policies, and laws. The NSR goes through Arctic coastal States including Russia and Canada. Due to the environmental protection thresholds set by corresponding countries, the use of the

316   Sung-Woo Lee NSR needs multilateral and diplomatic cooperation among the Arctic states and its prospective users. A practical international cooperation framework is needed. As an initial step, the annual North Pacific Arctic Conference could contribute to greater cooperation between the Arctic States and non-Arctic State users. The fourth obstacle is lack of a comprehensive information database on the NSR. The NSR is related to the world’s warming climate. Although many countries have investigated the NSR, information is limited. If an international cooperation framework is set up, a comprehensive information database of the NSR would be possible, and would benefit associated countries. Notably, Arctic coastal States should facilitate approval of foreign scientific research within their EEZs, promoting collaboration and ensuring sharing of data and findings. Successful multilateral polar science and investigating programs should be fostered and given access to non-security, non-commercial data from national sources. The fifth obstacle is the unique problem of environmental pollution in the Northern region. The Arctic area has value for the whole world. If the NSR is opened, the Arctic area may be polluted by a great number of shipping and tourist vessels. In this respect, Arctic States and non-Arctic States may have conflict over the environment issue. Currently, the International Maritime Organization (IMO) guidelines specifically address environmental protection and maritime safety in the Arctic: Guidelines for Ships Operating in Polar Waters (2009).11 The 2009 Guidelines are largely aimed at ensuring safe shipping by recommending construction and design standards for new Polar Class ships, and suggest various equipment, personal survival and crewing measures applicable to all ships engaged in international voyages in Arctic waters. However, it is not enough to protect the environment of the Arctic and to cope with commercialized shipping. Scientific and reasonable evaluation on the relevant pollution would be helpful to make corresponding laws and regulations in an international organization such as the IMO. For fully commercializing the NSR, the obstacles mentioned above must be overcome. However, all obstacles are related to unknowable changes in the Arctic environment and in the policy of Arctic coastal countries, notably Russia. As international issues, the obstacles cannot be solved quickly and simply. Therefore, an appropriate process ought to be developed gradually within an international cooperative framework. Depending on the opening period of the NSR, at the beginning point, the short ship distance from East Siberia to Northeast Asia ought to be used to obtain natural resources together with continuous pilot shipping between Asia and Europe through Arctic seas. In this context, Lasserre

11 International Maritime Organization, ‘Polar Shipping Guidelines’, Guidelines for ships operating in polar water, Resolution A.1024(26), 2009.

Benefit and Risk of the Northern Sea Route   317

(2011)12 observed that gateway traffic rather than transit (transhipment) traffic was the engine for NSR shipping growth, meaning that the NSR would mostly profit local communities and natural resource extraction plants situated along the coastline. This result was based on a survey of 142 global shipping companies. The study points out that the NSR will be opened but more time is needed in the global shipping market. Later, efforts can be undertaken to ship general commercial shipping such as container shipping in a full opening of the NSR. This idea will be developed more in on-going studies.

4. Concluding Remarks Due to global warming and an increasing number of technical constraints regarding navigation, the era of opening the NSR will come in the near future. An increase in sea trade volume resulting from greater globalization and international specialization reinforces the advantages of the NSR. Another reason to utilize the NSR comes from the fact that the entire industrialized world has pushed to explore the untapped natural resources in the Arctic sea area. In this respect, the current study addresses the possibility of commercial use and possible risks of the NSR. To elaborate, an important issue is that there should be an appropriate toll level to commercialize the NSR as a common shipping route. In addition, there should be an analysis of visible and invisible risks from using the NSR as a common shipping route. With such results from analysis, countries near the Arctic area should be sharing information and technologies to solve common problems and risks. I would like to suggest a few points in line with my study. First of all, it is important to discuss further how to maintain the toll fees at the appropriate level for the commercial use of NSR as Lee (2011) mentioned above. Second, laws and agreements should be established appropriate for the NSR. Third, development of appropriate vessels or ships is needed to use the NSR. Fourth, global cooperation between the countries near the Arctic is essentially needed to reinvigorate the use of NSR. Fifth, a sailor training course programme should be developed and promoted for those who will be actually sailing along the NSR. Sixth, appropriate ports along the coastal area in the Arctic are necessary to commercialize the NSR. Lastly, I believe there will be practical ways to link natural resources development and NSR usages to promote commercial use of the NSR. In conclusion, to bring about positive economic effects to North Pacific countries, especially in the logistics sector, every possible avenue should be explored 12 Lasserre, F., ‘China and the Arctic: Threat or Cooperation Potential for Canada?’, Canadian International Council China Papers, No. 11, 2010.

318   Sung-Woo Lee and analyzed. With such analysis, the countries will be able to deal with risks and solve problems which will eventually help them to protect the Arctic environment.

References Containerisation International, CI-online, 2011. International Maritime Organization, ‘Polar Shipping Guidelines’, Guidelines for ships operating in polar water, Resolution A.1024(26), 2009. Lasserre, F., ‘China and the Arctic: Threat or Cooperation Potential for Canada?’, Canadian International Council China Papers, No. 11, 2010. Lee, S., Benefit of the NSR to the North Pacific, KMI-KOTI-EWC International Conference, 2011. Lee, S., Ducruet, C., ‘Spatial Glocalization in Asia-Pacific Hub Port Cities: A Comparison of Hong Kong and Singapore’, Urban Geography, Vol. 30, 2009. Lee, S., Song, J., and Oh, Y., Shipping & Port Condition Changes and Throughput Prospects With Opening of the Northern Sea Route, Korea Maritime Institute, Seoul, 2011.12. Liu, M., Kronbak, J., The Potential Economic Viability of Using the Northern Sea Route (NSR) as an Alternative Route between Asia and Europe, Journal of Transport Geography, 2009. Verny, J., Container Shipping on the Northern Sea Route, International Transport Forum, 2009. http://nsidc.org/icelights/2011/0/14/heading-towards-the-summer-minimum-ice-extent.

Developing Arctic Hydrocarbon Resources: Delineating and Delimiting Boundaries for Field Development in the Arctic1 Timothy J. Tyler,2 James L. Loftis,3 Emilie E. Hawker,4 Hana V. Vizcarra,5 and M. Imad Khan6 Abstract The paper argues that an effective legal framework for oil and gas exploration and exploitation must address two principal concerns: delimitation of international boundaries and rules for developing fields that may be under two or more States’ territories. Delimitation should not cause major concerns because the majority of Arctic oil and gas resources lie either within a single State’s sovereign land or cross already delimited boundaries. Remaining boundaries can be delimited based on well-established principles. The economic and political pressures impelling oil and gas production have ensured that States focus on delineating the outer limits of their continental shelf; naturally, this will lead States without delimited boundaries to focus on establishing maritime boundaries with neighboring States. As for cross-boundary hydrocarbon-resource exploitation, the set of rules were sparse until the 2010 Barents Sea Agreement between Norway and Russia, which represents the 1 This paper substantially relies on and expands upon its companion paper published as: J.L. Loftis; T.J. Tyler; E.E. Hawker; “Gaps in the Ice: Maritime Boundaries and Hydrocarbon Field Development in the Arctic” OGEL 2 (2012), www.ogel.org. It has been updated for the purposes of the current publication. 2 Timothy J. Tyler is Counsel with Vinson & Elkins, Houston. His 15-year litigation practice emphasizes both international commercial and investor-state arbitration and U.S. litigation with a nonU.S. element. His work involving contracts with state parties has a strong focus on the oil and gas industry. In practice, he regularly advises on and drafts international arbitration clauses in contracts as well as structuring transactions to gain investment treaty protection. The author’s PowerPoint is available at . 3 James L. Loftis heads Vinson & Elkins’ International Dispute Resolution practice and focuses his practice on the arbitration and litigation of international commercial and investor-state disputes and on counseling clients involved in matters involving international law and treaties. 4 Emilie Hawker joined Vinson & Elkins’ London office in September 2010 and is now a member of the firm’s worldwide Finance practice group. During her training contract Emilie assisted on international boundary delimitation disputes in the oil and gas sector as well as spent five months in the firm’s Hong Kong office. 5 Hana V. Vizcarra joined the environmental practice group of Vinson & Elkins LLP in October 2010 after having worked in political campaign communications and research for seven years. 6 M. Imad Khan joined the complex commercial litigation practice group of Vinson & Elkins in October 2011.  Imad also serves as the team advisor to the University of Houston Law Center Philip C. Jessup International Moot Court.

320   Tyler, Loftis, Hawker, Vizcarra, and Khan state-of-the-art bilateral treaty that will effectively address cross-border hydrocarbon-field exploitation. This approach is expected to be preferred by the Arctic States for other boundaries. In addition to the 2010 Barents Sea Agreement, other useful practices at a finer level of detail will likely also form precedent for future bilateral treaties. Unitization agreements and Joint Operating Agreements, including those among private parties, will provide the finer details of field-level treaties or protocols.

I. Introduction The allure of the Arctic grows as the ice caps melt. The media remains fixated with the idea of a mother lode of offshore oil and gas setting off a “Great Game” in the North. The predictions of a “resource cold war” or maritime confrontations in the Arctic are further fuelled in the media by events such as Russia planting its flag on the seabed and purporting to stake its claim to vast portions of the Arctic. To this narrative, add the recent political tensions in a number of oil-rich regions that have highlighted the need for a stable supply of oil and gas, and growing internal and external pressure on the United States to become a party to the United Nations (UN) Convention on the Law of the Sea (“UNCLOS”). At the same time, Arctic oil and (especially) natural gas must compete with the immense, new gas potential that can now be exploited by hydraulic fracturing. Despite the hype, this economic imperative to develop Arctic hydrocarbon (and other) resources in this global market has encouraged Arctic States to both delimit their maritime boundaries and delineate the outer limits of their continental shelf in order to expand their boundaries into the Arctic Circle, and at the same time consider the most effective way to exploit their resources. This paper examines whether the existing legal framework, coupled with the States’ commercial interests, can act to prevent maritime disputes. Upon inspection, we conclude that the existing international law will most likely render this potentially explosive argument quite routine in practice. This is not to say that there are no more treaties to be concluded and cooperative regimes to develop; but the existing international legal framework, particularly in light of recent State practice7 on bilateral, cross-border hydrocarbon development, suggests that fear of a “new cold war” in the Arctic should be . . . put on ice. Even though maritime border delimitation principles are well known, the current “system” on Arctic border-straddling hydrocarbon fields is neither codified nor complete. It has instead developed organically through State and private actors seeking a practical approach to ensure effective exploitation of the many 7 Treaty between the Kingdom of Norway and the Russian Federation concerning Maritime Delimitation and Cooperation in the Barents Sea, and Arctic Ocean (2010) (hereinafter “2010 Barents Sea Agreement”).

Developing Arctic Hydrocarbon Resources   321

resources available in the Arctic region. This patchwork of norms on borderstraddling field regimes will be filled organically because those who fail to reach practical agreements will be unable to successfully exploit the resources. Part II of this paper considers (1) the international legal norms that govern maritime delimitation under UNCLOS and customary international law (“CIL”), (2) delineation of the outer limits of the continental shelf under UNCLOS, and (3) the less-developed norms on cross-border field development. We then apply international law to the authoritative United States Geological Survey map of hydrocarbon resource potential. We conclude that the vast majority of hydrocarbon resources lie in undisputed, national territories. Part III turns to State practice on cross-border hydrocarbon development of fields that may straddle an international boundary. Here, the recent Norway-Russia delimitation treaty represents a breakthrough in the Arctic: a state-of-the-art treaty with both delimitation and resource-development rules. This recent treaty should not surprise, as it continues Norway’s State practice from the North Sea oilfields. Nonetheless, outside of this treaty, the State practice of the other members of the Arctic Five remains far less developed, as we know. Finally, Part IV considers other practice, globally, as precedent for field-level exploitation treaties or protocols to existing treaties.

II. The Law of Border Delimitation and Cross-Border Hydrocarbon Development in the Arctic A. The International Legal Framework Governing the Arctic When assessing the legal system applicable to border straddling-hydrocarbon regions the following three sources of law need consideration:8 (i) international law, including CIL, UNCLOS, and multilateral and bilateral treaties regarding border delimitation, (ii) national laws, which a State may apply to sovereign resources, and (iii) private contracts between parties given rights on both sides of the boundary, which often mirror the international law. In this paper, we focus on the international framework. The starting point for natural resources is the well-established international law principle9 that States have the sovereign right to resources under their land. This makes it important to determine under which States’ land natural resources sit. In the Arctic, States have long agreed to terrestrial boundaries. However, agreeing on boundaries becomes more difficult when applied to offshore resources. As 8 Jacqueline L. Weaver & Davis F. Asmus, Unitizing Oil and Gas Fields Around the World: A Comparative Analysis of National Laws and Private Contracts. 28 Hous. J. Int’l L. 3 (2006). 9 See, e.g., UNCLOS, Art. 56.

322   Tyler, Loftis, Hawker, Vizcarra, and Khan the Arctic ice caps melt and exploitation technology develops, States are forging into areas that were until now largely inaccessible. The immense financial and energy-security stakes10 animating this drive into the Arctic offshore make the regulation of maritime boundaries and potential border-straddling fields more pressing. Applied in this context, the international law of hydrocarbon resource development has to account for three sets of norms: boundary-delimitation rules, extended continental shelf delineation rules, and cross-border, hydrocarbon-field development rules. Those norms are found in a variety of sources, detailed below. As for boundary-delimitation generally, maritime boundaries are determined based on principles of customary international law as reflected in UNCLOS. Under UNCLOS, the preferred method of delimitation is through bilateral agreement. Specifically for the Arctic, the “Arctic Five” (Canada, Denmark, Norway, the Russian Federation, and the United States of America) have reached bilateral agreements which now govern some Arctic maritime borders. These bilateral treaties allow the countries involved to actively protect their interests through negotiation rather than leaving delimitation of their borders to adjudication before international bodies. But bilateral treaties do not cover all Arctic maritime borders and in their absence UNCLOS, which largely mirrors CIL, sets out principles of delimitation that have been refined and applied by international case law. Rules concerning the delineation or definition of the extended continental shelf is playing an important role in the Arctic. Considering the wealth of natural resources that may exist in the Arctic Ocean, the Arctic Five are endeavoring to collect the necessary scientific and technical data in order to extend their continental shelf beyond the 200 nautical miles (“nm”) distance that each State is generally accorded. Article 76 and Annex II of UNCLOS provide the rules regarding extension of the continental shelf beyond the 200 nm limit; the Commission on the Limits of the Continental Shelf – a body created pursuant to Annex II of UNCLOS and consisting of 21 members who are experts in the field of geology, geophysics or hydrography – oversees the process of such delineation. Thus far, in the Arctic, only Norway has been able to secure a favorable recommendation from the Commission to extend its continental shelf. Cross-border hydrocarbon-development rules are also necessary because oil and gas reservoirs can straddle lines on a map, resulting in two or more States having sovereignty claims over the same deposit. As with border delimitation, CIL

10 United States Geological Survey, Circum-Arctic Resource Appraisal: Estimate of Undiscovered Oil and Gas North of the Arctic Circle, available at http://pubs.usgs.gov/fs/2008/3049/fs20083049.pdf.

Developing Arctic Hydrocarbon Resources   323

encourages cooperation between such States.11 Until the 2010 Barents Sea Agreement between Norway and Russia, discussed below, there were very few clear norms on point regarding how to construct such an agreement on hydrocarbon development in the Arctic. However, the 2010 Barents Sea Agreement does not definitively resolve these issues everywhere in the Arctic because it binds only Russia and Norway. Elsewhere in the Arctic, the ambiguity of potentially overlapping sovereign claims could obstruct efficient and effective exploitation of cross-border fields. Without a cooperative agreement in place, States may either act unilaterally, exposing themselves to potential claims from bordering States, or forego development entirely because of the risk of such claims. B. No Binding Pan-Arctic Treaty: Customary International Law and the United Nations Convention on the Law of the Sea UNCLOS presents the generally recognized framework on maritime boundary determination and resource use. The 1982 treaty created a comprehensive regime for governing the rights of nations with respect to the world’s oceans. The treaty addresses a wide range of topics, including, inter alia, navigational rights, economic rights, limits on the extension of national sovereignty over the oceans, pollution of the seas, conservation of marine life, scientific exploration, and piracy. UNCLOS is comprised of 320 articles and nine annexes, representing the codification of much of CIL regarding its subjects. UNCLOS negotiations stretched nine years from 1973 to 1982 and the agreement did not come into force until November 1994, nearly twelve years after its completion. It currently has 160 signatories and embodies the current CIL regarding border delimitation and resource development in the seas and the subjacent subsoil. UNCLOS replaced and built upon the principles of the 1958 conventions signed in Geneva including, the “Convention on the Territorial Sea and Contiguous Zone” and the “Convention on the Continental Shelf ” (the “Geneva Conventions”).12 UNCLOS does not present a completely binding, pan-Arctic solution to border delimitation however. As the United States has not ratified UNCLOS, it does not formally apply to any Arctic borders involving the United States. The United States did not initially sign the treaty due to “several major problems in the Convention’s deep seabed mining provisions [that appeared] 11 UNCLOS, Article 77, grants coastal States inherent and exclusive sovereign rights to explore the seabed and exploit its natural resources; however, the UN General Assembly Resolution 3129 (XXVI) and Resolution 328 (XXIX) require cooperation between countries in the exploitation of natural resources common to two or more States. 12 The United States was a party to both of the Geneva Conventions (see Appendix B). Article 311(1) of UNCLOS provides that “This Convention shall prevail, as between State Parties, over the Geneva Conventions on the Law of the Sea of 29 April 1958.”

324   Tyler, Loftis, Hawker, Vizcarra, and Khan contrary to the interests and principles of industrialized nations.”13 Nevertheless, President Reagan noted that the United States would follow many provisions of the Convention, such as navigational and flying rights, and adoption of the Exclusive Economic Zone (EEZ) introduced by UNCLOS. The United States also participated in negotiations to modify the problematic Part XI provisions and an amending agreement was finalized in July 1994. President Bill Clinton signed the Agreement in 1994, but the United States has yet to ratify the treaty despite multiple attempts by the Bush and Obama Administrations. However, the United States has followed the Convention and considers it to embody the current CIL by which the nation is bound. Even so, not having ratified the Convention does present problems for adjudication of disputes, in particular with regard to extended continental shelf claims in places like the Arctic. For that reason, despite accepting that the principles of law embodied in UNCLOS are applicable to the United States, officials of the past three administrations have actively pushed for ratification: President Bush urged the Senate to approve UNCLOS in 2007;14 on May 23, 2012, Secretary of State Hillary Clinton testified before the U.S. Senate Committee on Foreign Relations and argued for ratification of the treaty, buttressing similar testimony from Secretary of Defense Leon Panetta and Joint Chiefs of Staff Chairman General Martin Dempsey;15 Ambassador John Negraponte urged Congress to ratify the Convention stating that “merely treating the convention as customary law is not good enough.”16 Secretary of State Clinton pointed out that relying on CIL to invoke and enforce the norms in UNCLOS is risky because CIL can change over time.17 13 President Ronald Reagan, Statement on United States’ Ocean Policy (Mar. 10, 1983), available at http://www.gc.noaa.gov/documents/031083–reagan_ocean_policy.pdf. 14 President George W. Bush, Statement on Advancing U.S. Interests in the World’s Oceans (May 15, 2007), available at http://georgewbush-whitehouse.archives.gov/news/ releases/2007/05/20070515–2.html (stating that President Bush “urge[d] the Senate to act favorably on U.S. accession to the United Nations Convention on the Law of the Sea”). 15 The Law of the Sea Convention: The U.S. National Security and Strategic Imperatives for Ratification: Hearing Before the S. Comm. on Foreign Relations, 112th Cong. 8 (2012) (statement of the Honorable Hillary Rodham Clinton, Secretary of State), available at http://www.foreign.senate. gov/imo/media/doc/REVISED_Secretary_Clinton_Testimony.pdf. 16 The Law of the Sea Convention: Hearing Before the S. Comm. on Foreign Relations, 112th Cong. 1 (2012) (statement of Ambassador John Negroponte, Former U.S. Deputy Secretary of State), available at http://www.foreign.senate.gov/imo/media/doc/Negroponte_Testimony.pdf. 17 “As a non-party to the convention, the United States must rely on CIL as a legal basis for invoking and enforcing these norms. But it is risky to assume that CIL will preserve these norms forever. There are increasing pressures from some coastal States to augment their control over the activities of other nation’s vessels off their coasts in a manner that would alter the balance of interests struck in the convention. Joining the convention would secure our navigational rights and our ability to challenge other countries’ behavior on the firmest and most persuasive legal footing, including in critical areas such as the South China Sea and the Arctic.” The Law

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Maritime delimitation under UNCLOS is mainly governed by three articles, each of which apply to States with adjacent coasts: Article 15 addresses delimitation of the territorial sea; Article 74 addresses delimitation of the exclusive economic zone; and Article 83 addresses delimitation of the continental shelf. Although these three UNCLOS articles envisage that each maritime zone be separately delimited, these delimitations are increasingly being parceled together through agreements and judicial settlements, resulting in the drawing of a single maritime boundary to delimit the three maritime zones.18 The method of drawing the single boundary continues to be informed by the various UNCLOS provisions that govern the different maritime areas. Article 15 on delimitation of territorial seas provides that where the coasts of two States are adjacent or opposite to each other and there is no agreement between the States to the contrary, neither State “is entitled to extend its territorial sea beyond the median line every point of which is equidistant from the nearest point on the baseline from which the breadth of the territorial seas of each other the two States is measured.”19 This rule, however, does not apply where “it is necessary by reason of historic title or other special circumstances to delimit the territorial seas . . . in a way which is at variance therewith.”20 The ICJ has implemented the provisions of Article 15 by employing the equidistance method. Under this method, a provisional equidistance line is first drawn, and then the line is adjusted in light of any special circumstances,21 which include geographical considerations, mineral deposits, navigation and fishing rights, and historic facts. Notably, “this equidistance/special circumstances approach was held not to represent general international law in the North Sea Continental Shelf cases in 1969. Since that decision . . . the relevant rules of customary law have taken the form of equitable principles as elaborated in the course of the decisions of the International Court and other tribunals.”22 Nevertheless, this method of delimitation is still applicable under UNCLOS, and especially of the Sea Convention: The U.S. National Security and Strategic Imperatives for Ratification: Hearing Before the S. Comm. on Foreign Relations, 112th Cong. 8 (2012) (statement of the Honorable Hillary Rodham Clinton, Secretary of State), available at http://www.foreign.senate.gov/imo/ media/doc/REVISED_Secretary_Clinton_Testimony.pdf. 18 See Maritime Delimitation and Territorial Questions between Qatar and Bahrain (Qatar v. Bahrain), 2001 I.C.J. 93, ¶¶ 173–174). 19 UNCLOS, art. 15. 20 UNCLOS, art. 15 (emphasis added). 21 See Maritime Delimitation and Territorial Questions between Qatar and Bahrain (Qatar v. Bahrain), 2001 I.C.J. 94, ¶ 176); Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v. Honduras), 2007 I.C.J. 740, ¶¶ 267–268. 22 Ian Brownlie, Principles of Public International Law 214 (2008) (emphasis added). See also, North Sea Continental Shelf Cases (Federal Republic of Germany v. Denmark and the Netherlands) 1969 I.C.J. 3, 47.

326   Tyler, Loftis, Hawker, Vizcarra, and Khan appropriate, according to the ICJ, where the relevant coasts of the States involved are opposite, not adjacent.23 Articles 74 and 83 of UNCLOS instruct State parties with adjacent or opposite coasts to delimit their exclusive economic zones and continental shelf, respectively, by “agreement on the basis of international law . . . in order to achieve an equitable solution.”24 The ICJ has applied the equitable method to achieving the equitable result required under Articles 74 and 83.25 This method is similar to the equidistance method that is applicable in delimitation of the territorial sea. It “involves first drawing an equidistance line, then considering whether there are factors calling for an adjustment or shifting of that line in order to achieve an ‘equitable result.’ ”26 Unlike the equidistance principle, which shifts the provisional line on the limited basis of special circumstances, the equitable principle shifts the provisional line based on relevant circumstances. Recent jurisprudence of the ICJ, however, indicates that the process of delimitation is simplified to drawing the provisional median line, adjusting the provisional line based on different factors (both “relevant” and “special”, it would seem), and verifying that the adjusted provisional line is not disproportional in maritime areas, as compared to the ratio of the relative coastal lengths of parties.27 In this respect, the factors that courts apply to adjust the provisional median line include: the general configuration of the coasts of the parties, the presence of any unusual or special geological or maritime features, the natural resources available in the relevant maritime area, the continental shelf involved,28 the presence of islands or other formations, the past conduct of the parties,29 the

23 Maritime Boundary in the Area Between Greenland and Jan Mayen (Denmark v. Norway) 1993 I.C.J. 38, ¶¶ 61–63. 24 UNCLOS, arts. 74(1) and 83(1). Should the parties fail to reach an agreement within a reasonable time, parties are directed to applicable dispute settlement procedures under UNCLOS. UNCLOS, arts. 74(2) and 83(2). 25 Territorial and Maritime Dispute between Nicaragua and Honduras in the Caribbean Sea (Nicaragua v. Honduras), 2007 ICJ, p. 741, ¶ 271; see also Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equatorial Guinea intervening), Judgment, 2002 I.C.J. 441, ¶ 288. 26 Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria), 2002 I.C.J. 441, ¶ 288. 27 Territorial and Maritime Dispute (Nicaragua v. Colombia), 2001 I.C.J. ¶¶ 190–91; Case Concerning Maritime Delimitation in the Black Sea (Romania v. Ukraine), 2004 I.C.J., ¶ 198; James S. Baker & Michael Byers, Crossed Lines: The Curious Case of the Beaufort Sea Maritime Boundary Dispute, 43 Ocean Dev. & Int’l L. 70, 77 (2012). 28 North Sea Continental Shelf Cases, ¶¶ 63, 101. 29 See Guyana v. Suriname, ¶¶ 378–92. The conduct of the parties with regard to oil concessions was rejected as a reason for determining a specific final boundary line. The PCA said that only concessions based on an agreement between the parties could be taken into account. Id. at ¶ 390 (quoting Cameroon/Nigeria, Judgment 2002 I.C.J. 303, ¶ 304). See also, Tunisia v. Libyan

Developing Arctic Hydrocarbon Resources   327

element of a reasonable degree of proportionality,30 the population and economy of the maritime area, including any relevant islands, and the security of the parties.31 Notably, the ICJ has overwhelmingly applied the geographical factor to adjust the provisional median line and rejected recognizing geomorphology as a relevant factor; however, the geomorphological factor might play a role in delimitation in the delimitation between States by agreements where States are mapping the outer limits of their continental shelf. Part VI of UNCLOS establishes and governs the continental shelf of States. Article 76 in Part VI defines the continental shelf and provides that every coastal State has a continental shelf out to 200 nautical miles from its shore (or out to a maritime boundary with another coastal State).32 In some cases, coastal States may extend their continental shelf claims beyond 200 nautical miles by submitting scientific and technical information on the limits of the continental shelf beyond the prescribed limit to the Commission on the Limits of the Continental Shelf (“CLCS”).33 As mentioned above UNCLOS (codifying a principle of CIL) provides that coastal States may exercise sovereign rights over their continental shelf for the purpose of exploring it and exploiting its natural resources.34 With regard to cross-border resource deposits, UNCLOS requires that states act “in a spirit of understanding and cooperation, . . . . [to] make every effort to enter into provisional arrangements of a practical nature and, during this transitional period, not to jeopardize or hamper the reaching of the final agreement.”35 This reflects CIL and is addressed in cases such as Guyana v. Suriname where failure to “make every effort” resulted in a finding that the parties violated their obligations under UNCLOS.36 UNCLOS does provide a limited forum for dispute resolution; however, the procedure preferred by most States, and in CIL, is the negotiation of bilateral agreements. This increases the States’ control and scope for reaching a commercially viable conclusion. There is no express rule under international law requiring unitization for apportioning cross-border hydrocarbon deposits,37 although such an approach is often favored in bilateral agreements. Arab Jamahiriya, 1984 I.C.J. 18, and Case Concerning Maritime Delimitation in the Area between Greenland and Jan Mayen (Denmark v. Norway), 1993 I.C.J. 38. 30 Continental Shelf (Tunisia/Libyan Arab Jamahiriya), 1982 I.C.J., ¶¶ 75–88. 31 See Stuart Kaye, Lessons Learned from the Gulf of Main Case: The Development of Maritime Boundary Delimitation Jurisprudence Since UNCLOS III, 14 Ocean & Coastal L.J. 73, 90–93 (2008). 32 See UNCLOS, art. 76. 33 See UNCLOS, art. 76(8). UNCLOS Annex II established the CLCS. 34 UNCLOS, art. 77(1). 35 UNCLOS, art. 83(3). 36 See Guyana v. Suriname, ¶ 488(3). 37 See William T. Onorato, Appointment of an International Common Petroleum Deposit, 26 Int’l & Comp. L.Q. 324, 327 (1977) and Ana E. Bastida et al., Cross-Border Unitization and Joint Development Agreements: An International Law Perspective, 29 Hous. J. Int’l L. 355 (2007).

328   Tyler, Loftis, Hawker, Vizcarra, and Khan C. The Bilateral Treaty Framework Given States’ eagerness to control the delimitation of their boundaries and act cooperatively, bilateral treaties have been a popular method to deal with international oil and gas deposits. Moreover, advances in technology have eased some of the difficulties of negotiating bilateral treaties for cross-border resource development, by creating greater certainty over a field’s potential profits. The Arctic States have been engaging in mapping projects in the Arctic in an attempt to establish the extent of the hydrocarbon resources which can be found. However, most mapping activity is currently just offshore and not at the edge of the continental shelf, which will inevitably be the most disputed regions. As technology develops further it is increasingly possible to map resources under thick ice which will assist in the process of establishing reserves towards the edge of the continental shelf.38 Because upfront resource estimates have improved, post-hoc redetermination and reallocation are less critical, so “commercial terms” of a cross-border unitization can be agreed at an earlier stage. Greater certainty also opens up the possibility for earlier unitization of fields.39 While bilateral treaties are a popular choice for States globally (and in the Arctic), a bilateral treaty framework must nonetheless be comprehensive across the Arctic region. This requires considering the number of boundaries and location and type of resources. 1. International Maritime Boundaries in the Arctic As detailed in Table 1 below and the International Boundaries Research Unit’s (“IBRU’s”) ‘Maritime jurisdiction and boundaries in the Arctic region’ map,40 just seven Arctic international maritime boundaries require delimitation. Of these seven boundaries, four have bilateral treaties in place. That leaves just two to be governed by UNCLOS and one (between the United States and Canada) to be governed by the limited provisions of the 1958 Geneva Convention on the Continental Shelf and CIL. For those States without a maritime boundary, the possibility of extending their continental shelf highlights the issue of maritime delimitation between the States so as to resolve the delimitation issue in the near future. For those States with maritime boundaries, the possibility of an extended continental shelf raises, at the very least, the possibility that there may exist oil 38 James Helwig et al., Regional Seismic Interpretation of Crustal Framework, Canadian Passive Margin, Beaufort Sea, with comments on Petroleum Potential in Arctic Petroleum Geology (Geological Society of London 2011). 39 In the United States, domestic unitization agreements are usually only reached after primary production; however, the development of technology means that unitization can now be achieved immediately after the appraisal stage, while a development plan is being established. 40 Available at: https://www.dur.ac.uk/ibru/resources/arctic/.

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and gas reservoirs that may straddle an existing maritime boundary that extends into the Arctic Circle.41 As noted above, Part VI of UNCLOS governs the law of the sea relating to the continental shelf. It establishes that the continental shelf comprises the seabed and subsoil beyond the territorial sea of a coastal State “throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the baselines . . . where the outer edge of the continental margin does not extend up to that distance.”42 Thus, UNCLOS provides coastal States with two criteria based on which the State can determine the outer limits of its continental shelf: 1) the geomorphological criterion, and 2) the distance criterion.43 Based on the geomorphological criterion a coastal State may claim an outer limit of its continental shelf beyond 200 nm; and based on the distance criterion, a coastal State may extend its continental shelf to 200 nm from the baseline, regardless of the geomorphology of the seabed and subsoil.44 In the case of the Arctic Five, all five States seem to opt for geomorphological criterion on the basis of which they can extend their continental shelf and expand the natural resources that come with that continental shelf. Article 76(4) provides two formulas, both of which require determination of the foot of the continental slope, based on which States can determine the outer limits of their continental shelf. The first formula (commonly known as the Irish formula) provides for the determination of the outermost continental margin based on the thickness of the sedimentary rocks on the continental rise; under this formula, the continental margin extends to the point where the sedimentary rocks are at least 1 percent of the distance to the foot of the slope.45 The second formula (commonly referred to as the Hedberg formula) provides that the outer edge of the continental margin shall not be more than 60 nm from the foot of the continental slope.46 A visual depiction of both formulas is provided in Exhibit 1. Additionally, Article 76(5) provides two constraint lines beyond which States cannot claim an extended continental shelf, as shown in Exhibit 2. The first constraint line is 350 nm from the State’s shore, and the second constraint line is 100 nm

41 Recent seabed mapping by Canada and the United States has brought into focus the existence of coastal State rights over the extended continental shelf, in light of which the two States would benefit from delimiting their maritime boundary rather than extending their present claim as to their boundary beyond the 200 nm. See Baker & Byers, supra note 27. 42 UNCLOS, art. 76(1). 43 See Myron H. Nordquist, United Nations Convention on the Law of the Sea 1982: A Commentary Volume II 841 (1993). 44 Nordquist, supra note 42 at 841. 45 UNCLOS, art. 76(4)(a)(i); see Nordquist, supra note 42 at 876. 46 UNCLOS, art. 76(4)(a)(ii); see Nordquist, supra note 42 at 876.

330   Tyler, Loftis, Hawker, Vizcarra, and Khan seaward of the 2,500-m isobaths; States are permitted to use any combination of those constraint lines to maximize the extent of their continental shelf.47 Given that States would gain additional territory by extending their continental shelf, it is not surprising that the Arctic Five are interested in delineating a continental shelf beyond the 200 nm limit generally accorded to States pursuant to the distance criterion. To rely on the geomorphological criterion, however, the Arctic Five are required to submit to the CLCS information on the limits of its continental shelf beyond 200 nm.48 Based on the scientific and technical information provided to it, the CLCS would make recommendations on matters related to the establishment of the outer limits of their continental shelf; the requesting State can establish its continental shelf, and the limits of the shelf established by the State shall be “final and binding.”49 Notably, the Commission may not consider and qualify a CLCS submission made by any States concerned in a land or maritime dispute in the absence of “prior consent given by all States that are parties to such a dispute.”50 And in any case, “submissions made before the Commission and the recommendations approved by the Commission thereon shall not prejudice the position of States which are parties to a land or maritime dispute.”51 To date, Norway and Russia have submitted CLCS submissions delineating an extended continental shelf in the Arctic, but only Norway has obtained a recommendation from the Commission extending the delineation of its continental shelf. On 27 November 2006, the Kingdom of Norway submitted to the CLCS information on the limits of the continental shelf beyond 200 nautical miles concerning the Arctic region, specifically the “Loop Hole” in the Barents Sea and the Western Nansen Basin in the Arctic Ocean. After receiving a note verbale from Denmark, Iceland, and Russia in which they consented to allow the CLCS to undertake Norway’s request, the CLCS concluded and recommended that Norway proceed with the delineation of its continental shelf beyond 200 nm in the Western Nansen Basin in the Arctic and in the “Loop Hole” in the Barents Sea, but by agreement with Russia as to the latter.52 Pursuant to CLCS recommendations, Norway and Russia entered into the 2010 Barents Sea Agreement 47 See Nordquist, supra note 42 at 879. 48 UNCLOS, art. 76(8). 49 Id. 50 Rules of Procedure of the Commission on the Limits of the Continental Shelf, Annex I, R. 5(a). 51 Rules of Procedure of the Commission on the Limits of the Continental Shelf, Annex I, R. 5(b). 52 See Summary of the Recommendation of the Commission on the Limits of the Continental Shelf in Regard to the Submission made by Norway in Respect of Areas in the Arctic Ocean, the Barents Sea and the Norwegian Sea on 26 November 2006 (27 March 2009), available at http:// www.un.org/Depts/los/clcs_new/submissions_files/submission_nor.htm. The CLCS reached its recommendation after acknowledging that Norway had submitted the necessary technical and scientific data, in accordance with UNCLOS Article 76, with respect to the two areas.

Developing Arctic Hydrocarbon Resources   331

delimiting their maritime boundary in the region. Notably, Norway remains the only State to which the CLCS recommended an extended delineation of the continental shelf in the Arctic. On 20 December 2001, the Russian Federation made a CLCS submission in order to extend its continental shelf in the Arctic; however, both Canada and Denmark noted they could not analyze and comment on Russia’s submission without further supporting data.53 Consequently, the Commission requested that Russia submit additional information. The Russian Federation is planning to submit its revised claim in 2013.54 Denmark has conducted a series of expeditions in the Arctic as part of its continental shelf project, but further expeditions are planned for 2012 and 2013 with a goal to submit to the CLCS its claim to extend the Arctic continental shelf in 2014.55 Likewise, Canada and the United States (not a party to UNCLOS) have been working together to gather the necessary technical and scientific data to establish a claim for extension of their respective continental shelves in the Arctic.56 Both States have capabilities to provide data that the other needs, which saves each State millions of dollars. For example, the United States needs seismic reflection data, and Canada has successfully mastered this type of data collection. Likewise, Canada prefers to have the multi-beam bathymetric data, collected using a US vessel.57 While Canada will surely submit its information to the CLCS – probably around 2013 – the United States’ position is less clear considering that it has not yet ratified UNCLOS and may not avail itself of the procedure before the CLCS. It should be noted that extending a State’s continental shelf only defines the extent to which that State may delineate its continental shelf. Extension of the continental shelf does not change the delimitation of maritime boundaries. For example, the CLCS’s recommendation to Norway’s submission did not delimit the maritime boundary between Norway and Russia because the CLCS may not prejudice the territorial or maritime claims of States. Similarly, the extension of the Russia’s continental shelf will not prejudice the maritime delimitation between Russia and the United States because the two States delimited their 53 Canada: Notification regarding the Submission made by the Russian Federation to the Commission on the Limits of the Continental Shelf, CLCS.01.2001.LOS/CAN (26 February 2002); Denmark: Notification regarding the Submission made by the Russian Federation to the Commission on the Limits of the Continental Shelf, CLCS.01.2001.LOS/DNK (26 February 2002). 54 Matthew Fisher, Canada, Russia Will Share Arctic Riches, Scientist Predicts, The Gazette (8 October 2012). 55 See Kingdom of Denmark: Strategy for the Arctic 2011–2020, available at uk.nanoq.gl/~/ media/29cf0c2543b344ed901646a228c5bee8.ashx. 56 Baker & Byers, supra note 27. 57 U.S. Dep’t of State, Defining the Limits of the US Continental Shelf, available at http://www.state. gov/e/oes/continentalshelf.

332   Tyler, Loftis, Hawker, Vizcarra, and Khan maritime boundary in 1990. Nevertheless, gathering data with the aim to defining the extended continental shelf may influence maritime delimitation between States by highlighting areas where States still require a maritime border.58 Establishing the outer limits of the continental shelf may also color the way in which States delimit their maritime boundary; as States define their extended continental shelf, they will better understand how to divide their maritime areas in accordance with international law, especially the case of the United States and Canada border in the Beaufort Sea where historically claimed boundaries by either State may not be favorable beyond 200 nm.59 Additionally, the extended continental shelf may trigger further opportunities to jointly develop oil and gas resources that straddle the maritime border between two States. In other words, the extended portion of the continental shelf may cover oil and gas reservoirs that straddle the already-established or to-be-established maritime borders, and thus, give rise to issues of joint development of natural resources. By engaging in the process of extending their continental shelf, it is States like Canada and the United States (without a delimited maritime boundary) whose maritime border will likely be influenced by the delineation of the extended continental shelf in the Arctic. Establishing an extended continental shelf provides the two States with a better understanding of the parts of their Arctic border that require delimitation. It also allows both States to delimit their maritime border after they have established their extended continental shelf in accordance with international law, which requires that States delimit their maritime border based on principles of equity. The CLCS submission process affects Arctic States more because an extended continental shelf presents a potential source of additional oil and gas reservoirs, some of which may straddle the maritime border between States. This, in turn, raises issues of joint development of the oil and gas resources. Considering the abundance of natural resources in the region, therefore, both the delineation of the extended continental shelf and the delimitation of the maritime boundary are important in the Arctic. 2. The Arctic’s Oil- and Gas-Rich Provinces The United States Geological Survey (“USGS”)60 study estimates that twenty-five Arctic provinces have significant hydrocarbon deposits. Seven of them are in

58 In the case of the United States and Canada, this effort of expanding the continental shelf has not only highlighted the area between Alaska and Yukon that requires delimitation, but it has also revealed that the historical boundaries claimed by each State are not necessarily favorable as applied beyond the 200 nm point. See Baker & Byers, supra note 27. 59 Id. 60 United States Geological Survey, supra note 10.

Developing Arctic Hydrocarbon Resources   333

disputed territory or straddle international boundaries61 and, therefore, require a legal framework regarding cross border hydrocarbon resources. These provinces are: the East Barents Basin (“EBB”), the Amerasia Basin (“AM”), the West Greenland-East Canada (“WGEC”), the Eurasia Basin (“EB”), the LomonosovMakarov Basin (“LM”), the North Chukchi-Wrangel Foreland Basin (“NCWF”), and the Hope Basin (“HB”).62 These provinces are shown in the United States Geological Survey.63 Some of these seven oil- and gas-rich provinces straddle a single international boundary, meaning one bilateral agreement can establish the legal framework for more than one hydrocarbon rich province. Table 1 shows the maritime boundary delimitation treaties currently in place, and specifies the USGS provinces, if any, which straddle that boundary. This table provides an analysis of where the gaps in the treaty framework lie. Two oil-rich provinces (EBB and EB) straddle the international boundary between Russia and Norway.64 The 2010 Barents Sea Agreement delimited this boundary and provided for pre-unitization negotiations if hydrocarbon deposits straddle it. Two more of the oil rich provinces, NCWF and HB, straddle Arctic boundaries between Russia and the United States.65 The 1990 Maritime Delimitation Agreement between the United States and USSR, still in effect today, delimits this boundary and would govern disputes over these resources. One of the provinces, WGEC, is anticipated to have deposits under the Arctic boundaries between Denmark (through Greenland) and Canada. The border has been largely delimited, but the two States continue to dispute sovereignty over the tiny Hans Island itself.66 Not all bilateral treaties deal with the entire international boundary between States. As can be seen from the IBRU’s ‘Maritime jurisdiction and boundaries in the Arctic region’ map,67 four of the seven boundaries have been delimited, but not in their entirety. The Canada-Greenland boundary is delimited only in 61 It should be noted that some commentators argue that the USGS study is not an entirely accurate assessment of the oil and gas resources available in the Arctic, and it is by no means conclusive. However, for the purposes of this paper we have considered their assessment to be the most persuasive and extensive research carried out in the region. 62 Phillip Budzik, US Energy Information Administration Office of Integrated Analysis and Forecasting Oil and Gas Division, Arctic Oil and Natural Gas Potential, available at http://205.254.135.7/ oiaf/analysispaper/arctic/pdf/arctic_oil.pdf. See Appendix B. 63 United States Geological Survey, supra note 10. 64 Id.; see Appendix B. 65 Id. 66 Julie A. Paulson, Melting Ice Causing the Arctic to Boil Over: An Analysis of Possible Solutions to a Heated Problem, 19 Ind. Int’l & Comp L. Rev. 349, 371 (2009). 67 Available at http://www.dur.ac.uk/resources/ibru/arctic.pdf.

334   Tyler, Loftis, Hawker, Vizcarra, and Khan Table 1. Delimitation treaties in potentially disputed USGS Circum-Arctic Survey Provinces. Russia

Norway

Canada

Russia

***

2010 (EBB, EB)

Norway Canada

*** ***

*** ***

No bilateral treaty (LM) UNCLOS applies No border ***

Denmark USA

*** ***

*** ***

*** ***

Denmark

USA

No bilateral treaty 1990 (NCWF, HB) (LM) UNCLOS applies 1965, 1979 No border 1973 (WGEC) Geneva Convention on the Continental Shelf / CIL (AM) *** No border *** ***

part (in the Labrador Sea); the northern section of this boundary still requires delimitation. Similarly, small sections of the Denmark-Norway border remain un-delimited. The bilateral treaties also address the cross-border resource issue by urging, requiring, or formalizing procedures for negotiations on unitization. The extent to which the different treaties achieve this, however, is questionable and will be discussed below. This leaves two oil and gas rich provinces in which no bilateral treaty exists: 3. Resource Provinces Not Covered by Bilateral Treaties a. Amerasia Basin (AM) The AM province has no bilateral treaty in place governing the delimitation of the region or how to exploit cross-border resource deposits. Under CIL, which provides for States’ sovereign rights to extend 200 nautical miles beyond the continental shelf, both the United States and Canada would be able to lay claim to certain areas of the AM province.68 The applicable legal regime is the 1958 Geneva Convention on the Continental Shelf, as supplemented by CIL. As discussed above, these establish some very limited principles for use in delimiting borders. Baker suggests that “neither country [United States or Canada] has shown any strong interest in a model that would require harmonization of their legal and administrative regimes to jointly manage such common uses as hydrocarbon exploration”.69 But it is not anticipated that difficulties would arise if the two States sought to reach an agreement. Both have shown cooperation with other Arctic States in establishing frameworks, and Baker70 suggests that these other 68 Budzik, supra note 61. 69 Betsy Baker, Filling an Arctic Gap: Legal and Regulatory Possibilities for Canadian-U.S. Cooperation in the Beaufort Sea, 34 Vt. L. Rev. 57, 70, 100–04 (2009). 70 Id. at 67.

Developing Arctic Hydrocarbon Resources   335

agreements reached could stand as a backdrop to any agreements negotiated by the two States. However, the assistance such agreements provide for crossborder resource development may be limited. Because political risk in this basin may create reluctance from private parties to invest the vast sums to exploit these resources, it is likely that private parties’ expressing interest will be necessary to ignite the United States’ and Canada’s desire to delimit the boundary and address cross-border resource development. b. Lomonosov-Makarov Basin (LM) The LM province crosses boundaries among three States and thus presents an added layer of complication. The boundaries between Russia and Greenland, Russia and Canada and parts of the Canada and Greenland boundary are still to be delimited. Based upon UNCLOS principles, the LM province apparently spans all three boundaries.71 A tripartite agreement may therefore be necessary. But it is not urgent. The LM province lies so far north that ice covers much of the disputed region for the entire year. Exploitation, therefore, in the near or medium term is not feasible. 4. The Oil-Rich (and Most Economically Viable) Provinces Although the greatest challenge in border-straddling hydrocarbon development might appear to arise in the richest provinces, the economics of oil and gas exploration may prevent exploration in certain regions in the immediate future. A number of factors bear on whether to invest in the Arctic (see Nahkle and Shamsudinova),72 but a major factor will be the potential and type of reserves available.73 With oil being generally more transportable and thus generally more valuable than gas, interest turns to the Arctic Alaska (AA) province. That province has by far the most crude oil reserves in the Arctic: 29.96 billion barrels,74 i.e., 33% of the total projected crude oil reserves for the region. However, this province is indisputably within the United States’ territory. The AM province has the second most extensive projected undiscovered crude oil reserves, with 9.72 billion barrels75 (10.8% of the total projected crude oil reserves in the Arctic).76 As discussed above, this province has no effective legal 71  David M. Ong, Joint Development of Common Offshore Oil and Gas Deposits: “Mere” State Practice or Customary International Law? 93 Am. J. Int’l L. 771 (1999) at 801. 72 Carole Nahkle & Inga Shamsudinova, Arctic Oil and Gas Resources: Evaluating the Investment Climate, OGEL Special Edition on the Arctic (2012). 73 See Appendix B. 74 United States Geological Survey, supra note 10. 75 Id. 76 See Appendix B.

336   Tyler, Loftis, Hawker, Vizcarra, and Khan framework within which to deal with the exploitation of the plentiful resources. If this legal impediment is removed, there are great rewards to be made, particularly from the projected 56.89 trillion cubic feet of natural gas. The EBB province holds 8.24% of the total crude oil projected to be in the Arctic and is delimited by the 2010 Barents Sea Agreement. This treaty also deals with the boundary relevant to the EB province, which holds 1.5% of the Arctic’s projected crude oil reserves.77 Given the extensive natural gas potential in the EBB province, the 2010 Barents Sea Agreement was eagerly awaited and is likely to be put to use over the coming years as these resources are developed. The NCWF and HB basins are governed by the 1990 treaty between the United States and the Soviet Union. As can be seen from Appendix B, these two regions have very low oil and gas potential in comparison to the other Arctic regions. In conclusion, the vast majority of natural resource deposits in the Arctic face no sovereignty-related barriers to exploitation. Based on the delimitation principles in UNCLOS and CIL, over 70% of the projected crude oil and 72.5%78 of the projected natural gas deposits lie in regions belonging to one State only. Of the remaining provinces containing fields with reserves that sit across international boundaries, the majority have already been delimited, removing the potential for delimitation disputes. This leaves just 12% of the crude oil available in the Arctic with no governing bilateral treaty and 3.83% of the natural gas potentially in dispute. However, current bilateral treaties do not all address the issues of crossboundary resource exploitation, because disputes may arise on already delimited boundaries. The precedent set by other treaties and commercial practice will likely set the parameters for negotiations between States, and commercial players, to avoid such disputes. It is to this second area of Arctic treaty law that we now turn.

III. Bilateral Treaties as Precedents for Arctic Hydrocarbon-Field Development The difficulties of negotiating and reaching an effective multilateral agreement (across the Arctic or globally) will, in all likelihood, make it impractical to pursue a multilateral treaty to establish an effective and complete framework applicable to every boundary. That leaves bilateral treaties to deal with cross-border resource exploitation in the Arctic. Unitization, “the joint, coordinated operation of an oil or gas reservoir by all the owners of rights in the separate tracts overly77 See Appendix B. 78 See Appendix B.

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ing the reservoir or reservoirs,”79 is widely acknowledged as the most efficient and fair method for producing oil and gas that spans boundaries.80 The substance of such unitization, and the content of a bilateral unitization framework in the Arctic, is not yet clear, so current state practice may help establish it. Russian and Norwegian state practice relating to cross-border hydrocarbon development is addressed in the recent 2010 Barents Sea Agreement,81 but no similar examples by Arctic or non-Arctic States address this issue. Alternative sources of precedent must be considered for Canada, the United States and Denmark. A. The 2010 Barents Sea Agreement (Norway/Russian Federation) The 2010 Barents Sea Agreement demonstrates Norway and the Russian Federation’s commitment to exploit hydrocarbon resources in a timely and efficient manner.82 The 2010 treaty sets out a framework for joint development of crossborder hydrocarbon deposits that extend across the maritime delimitation line.83 Namely, joint development is to be carried out pursuant to the terms of a unitization agreement, some of the terms of which are set out in Annex II. Annex II, Article 1 acts as a “heads of terms” for unitization agreements to be agreed on each time a field is found. This gives the necessary certainty to the key commercial terms of the agreement, leaving flexibility to tailor each agreement to the field in question. For example, one of the key commercial terms agreed in Annex II concerns quantifying the hydrocarbon reserves.84 Annex II, Article 1(3) requires the unitization agreement to include “[a] statement of the total amount of the hydrocarbon reserves in place in the transboundary hydrocarbon deposit and the methodology used for such calculation, as well as the apportionment of the hydrocarbon reserves between the Parties.” The Annex does not, however, address potential re-determinations, which the State parties may not consider necessary, or they may not consider it critical enough for inclusion in the Heads of Terms, given the technological advancements discussed above. Some of the other key commercial terms are as follows: • Article 5 upholds UNCLOS principles of sovereignty, providing that no exploitation can occur until a unitization agreement is reached. This creates an incentive to flesh out the exact terms of the unitization agreement according to the 79 Jacqueline Lang Weaver, Unitization of Oil and Gas Fields in Texas: A Study of Legislative, Administrative, and Judicial Policies 1, 7 (1986). 80 Weaver & Asmus, supra note 8. 81 2010 Barents Sea Agreement, supra note 7. 82 See the recitals which recognize “the importance of efficient and responsible management of their hydrocarbon resources.” 83 With the delimitation line established in the treaty itself. 84 2010 Barents Sea Agreement, supra note 7 at Annex II, Article 1(3).

338   Tyler, Loftis, Hawker, Vizcarra, and Khan framework set out in Annex II. A trigger for the negotiation of the unitization agreement is set out and it is acknowledged that in some circumstances only one state may be able to exploit the cross-border resource.85 • A consultation on health, safety and environmental matters should follow the unitization agreement,86 and both states have the right to inspect procedures put in place by the other state or by a private party. This acknowledges the importance and ever-developing nature of health, safety and environmental measures: while they have not been dealt with in depth in the 2010 Barents Sea Agreement, a unitization agreement under the 2010 Barents Sea Agreement may give further details of the consultation to take place. • Private parties will be required to enter Joint Operating Agreements (“JOAs”) with one another but the provisions of these are not exhaustively listed in Annex II;87 however, such terms will likely largely mirror the unitization agreement. • Annex II provides for dispute-resolution procedures that encourage rapid resolution. Ad hoc arbitration is envisioned for occasions when the two states fail to agree on a unitization agreement and expert determination for disagreement over the apportionment of hydrocarbon deposits.88

As unitization agreements are developed pursuant to the heads of terms in the 2010 Barents Sea Agreement, Norwegian and Russian state practice will evolve. But it is clear that, for now, the Annex II Heads of Terms demonstrate the States’ intent to develop cross-border resources cooperatively. This statement of intent is coupled with financial pressure (to reach an agreement before exploitation can occur) and political pressure (to expedite negotiations so as to incentivize necessary private-party participation) which will ensure unitization agreements can be agreed upon efficiently and effectively. In recent months, Norway and Russia have been active in creating partnerships to develop the hydrocarbon resources in this newly delimited area.89 In May 2012, Statoil and Rosneft signed a cooperation agreement in order to establish a joint venture to explore in areas of the Russian Barents Sea, 33.3% of which would be held by Statoil. The Norwegian areas of the Barents Sea may also be developed pursuant to this agreement, as it gives Rosneft an option to co-develop interests held by Statoil in the Norwegian North and Barents Sea. Rosneft entered a further co-operation agreement with ENI in April 2012 to again develop areas of the Russian Barents Sea, but at the time of writing no fields in the Barents Sea have been developed which span the delimited boundary, meaning unitization across this boundary remains an unknown.

85 Id. at Article 5(2). 86 Id. at Annex II, Article 1(10). 87 Some provisions, however, are given in Article 1(6) of Annex II. 88 This, of course, could potentially serve as a redetermination mechanism. 89 This a result of the joint development agreement (the 2010 Barents Sea Agreement) between Norway and Russia.

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B. Additional Arctic Five State Practice 1. Norwegian State Practice Norway first addressed cross-border resource exploitation in 1965 with an agreement with the United Kingdom90 for resources in the North Sea. Article 4 of this treaty provides that: If any single geological petroleum structure or petroleum field, or any single geological structure or field of any other mineral deposit, including sand or gravel, extends across the dividing line and the part of such structure or field which is situated on one side of the dividing line is exploitable, wholly or in part, from the other side of the dividing line, the Contracting Parties shall, in consultation with the licensees, if any, seek to reach agreement as to the manner in which the structure or field shall be most effectively exploited and the manner in which the proceeds deriving therefrom shall be apportioned.

This demonstrates early Norwegian state practice of which three points merit attention. First, the mere existence of a cross-border field does not mandate cooperation in developing it; rather cooperation is necessary only when the reservoir can be exploited from the other side of the boundary. Second, unitization is not required to be the explicit mode of cooperation (although in practice, it eventually was). Finally, this provision enables existing licensees to assist in the unitization process, which creates a more efficient exploitation of the resource and recognizes the role played by private industry. As a result of the 1965 agreement a further agreement was reached in 1976,91 which provided for the Frigg field to be exploited as a single unit.92 This 1976 treaty, based upon the delimitation line established in the 1965 agreement,93 required the States to determine the split of profits from the reservoir.94 The 1976 treaty further provided that, where no such agreement on soliciting profits is reached, production can proceed based upon a provisional proposal or equal shares. If no solution is reached, article 2(4) provides for arbitration to settle the apportionment dispute. 90 Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of Norway Relating to the Delimitation of the Continental Shelf between the Two Countries (1965), UK Treaty Series No. 71 (1965) Cmnd. 2757, and later amended by the Agreement of 25 August 1998, UK Treaty series No. 21 (2002) Cmnd. 5513 and the Exchange of Notes dated 21 June 2001, UK Treaty series No. 43 (2001) Cmnd. 5258. 91 Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of Norway relating to the Exploitation of the Frigg Field Reservoir and the Use of the Installations and Pipelines for the Exploitation and Transmission of Hydrocarbons (1976), UK Treaty Series No. 113 (1977) Cmnd. 7043. 92 Id. at Articles 1(1)–1(2). 93 Id. at Article 2. 94 Id. at Articles 2(2)–2(3).

340   Tyler, Loftis, Hawker, Vizcarra, and Khan The 1976 agreement allows both States to retain significant control over the regulation of their respective parts of the field. Article 5 requires the field to be operated by a single operator over which neither State has exclusive jurisdiction and that each government may grant licenses and apply its own tax regime.95 However, uniform safety principles are to be applied by both governments.96 Norwegian state practice was further developed in the North Sea in 1979, for a field much more promising than the Frigg field, the Statfjord field.97 It was this field which triggered the two States to enter the 1965 agreement, but it took fourteen years for the unitization agreement to be reached. This delay may have been due to the fact that no heads of terms were established in the 1965 Agreement. The 1979 Statfjord Agreement largely mirrored the Frigg unitization agreement.98 One important difference, though, was to remedy the failure of the 1965 Agreement to provide for the transportation of the product of the reservoir. The Frigg Agreement provides for product to be transported to the United Kingdom by the United Kingdom Pipeline and the Norwegian Pipeline.99 A further difference was that the Statfjord Agreement provided a greater time period for redetermination of the reserves, although this state practice has arguably been extinguished in the 2010 Barents Sea Agreement. In 2005, Norway and the United Kingdom entered a new framework treaty to establish a mechanism that would apply to “cross-boundary co-operation between the United Kingdom Government and the Norwegian Government with regard to Petroleum activities.”100 Article 3.1 of the 2005 Agreement provided for cross-border resources to be “exploited as a single unit in accordance with the terms of this Agreement, unless otherwise agreed by the two Governments.” Chapter Three of the 2005 Agreement provides a procedure for unitization, under which the Blane-Enoch fields have been unitized, and hands greater control to licensees, while maintaining certain veto rights.101 Norway’s state practice has, therefore, evolved over time moving from a lengthy field-by-field procedure and moving to the two-stage, heads of terms procedure used in the 2010 Barents Sea Agreement.

95 Id. at Article 9. 96 Id. at Article 7. 97 Bastida et al., supra note 37. 98 Agreement between Norway and the United Kingdom, supra note 89. 99 Id. at Article 13. 100 Framework Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of Norway concerning Cross-Boundary Petroleum Co-operation, Article 1.1 (2005), UK Treaty Series No. 20 (2007) Cmnd. 7206. 101 Id. at Article 3.7.

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2. Other “Arctic Five” State Practice There is little precedent demonstrating Canadian, Danish and United States state practice of cross-border resource development. Treaties purely among Arctic States fail to address this issue in depth. The two Denmark/Norway treaties102 require another treaty: “an agreement concerning the exploitation of the natural resources in question.”103 The 1973 Canada/Demark treaty is weaker: only requiring those States’ parties to “seek to reach an agreement.” The United States/USSR treaty104 provides for each State to have sovereignty over its respective lands105 by applying international laws, i.e., CIL. No further agreements have been reached under any of these three treaties. As a result, Canadian, Danish and United States state practice is unclear on cross-border field development in the Arctic. These States’ treaties with nonArctic States106 add nothing to the story. C. State Practice Outside the Arctic 1. Trinidad and Tobago and Venezuela Agreement To the extent that Arctic States look beyond the 2010 Barents Sea Agreement, the Framework Treaty between Venezuela and Trinidad and Tobago relating to the unitization of hydrocarbon resources, signed in 2007,107 may assist as a precedent for the United States, Canada and Denmark. Article 2.1 provides that “any” 102 Agreement between the Government of the Kingdom of Denmark and Government of the Kingdom of Norway relating to the Delimitation of the Continental Shelf (1965); Agreement between the Government of the Kingdom of Denmark and the Government of the Kingdom of Norway concerning the Delimitation of the Continental Shelf in the Area between the Faroe Islands and Norway and concerning the Boundary between the Fishery Zone near the Faroe Islands and the Norwegian Economic Zone (1979). 103 1979 Agreement between Denmark and Norway, supra note 100 at Article 3. 104 Agreement between the Union of Soviet Socialist Republics and the United States of America on the Maritime Boundary, Article 3 (1990). 105 This wording is also reflected in 2010 Barents Sea Agreement, supra note 7 at Article 3. 106 Agreement on the Continental Shelf between Iceland and Jan Mayen (Norway) (1981); Agreement between Sweden and Norway concerning the Continental Shelf (1968); Agreement between Sweden and Denmark concerning the Delimitation of the Continental Shelf and Fishing Zones (1984); Treaty between the German Democratic Republic and the Kingdom of Denmark on the Delimitation of the Continental Shelf and the Fishery Zones (1988); Treaty between the Kingdom of Denmark and the Federal Republic of Germany concerning the Delimitation of the Continental Shelf under the North Sea (1971); and Agreement between the Government of the Kingdom of Denmark and the Government of the United Kingdom of Great Britain and Northern Ireland relating to the Delimitation of the Continental Shelf between the Two Countries (1971). 107 Framework Treaty relating to the Unitization of Hydrocarbon Reservoirs that Extend Across the Delimitation Line between the Republic of Trinidad and Tobago and the Bolivarian Republic of Venezuela (2007).

342   Tyler, Loftis, Hawker, Vizcarra, and Khan hydrocarbon reservoir extending over the delimitation line “shall be exploited as a unit in the most effective and efficient manner.” This very wide-reaching provision goes further than the Frigg Agreement, which only relates to resources that can be exploited from the other side of the delimiting boundary. Further, the Trinidad and Tobago/Venezuela Treaty focuses on establishing a ministerial commission to identify and determine the limits and volumes of reservoirs spanning the boundary and then to allocate them. Notwithstanding this requirement, development can proceed provisionally even without agreement on allocation.108 If no allocation is agreed, the dispute-resolution procedure (envisioning only negotiations) is followed.109 This agreement gives each State jurisdiction over the area in which that State exercises sovereignty,110 meaning the respective laws of each State apply as they relate to tax and other fiscal aspects and health and safety standards. Under article 9.1, however, the parties are jointly and severally liable for ensuring there is no damage to the marine environment, even though each State has jurisdiction over the implementation of pollution-regulation measures. This is a similar approach to the 1976 Norway and United Kingdom Treaty.111 Finally, the Trinidad and Tobago/Venezuela Treaty uses the “heads of terms” approach, much like the 2010 Barents Sea Agreement. Moreover, Article 17 requires the States to cooperate in the development of projects to “facilitate the monetization of each party’s hydrocarbon reserves.” Treaties like this which set out heads of terms maintain flexibility but progress to the development stage can be achieved quickly. Where no heads of terms are signed, the first agreement reached may be persuasive when negotiating in the second and third (as the Frigg Agreement was), but will not be binding. 2. Angola and Republic of Congo Agreement The bilateral treaty between Angola and the Republic of Congo was entered into in 2001, but only recently have ChevronTexaco announced their plans to develop the unitized area. The 2001 framework agreement was fleshed out by later agreement, in 2002. However, despite the 2002 agreements, the Congo/ Angola unitized Lianzi field demonstrates how States can develop a block without reaching agreement on a number of critical areas. Given the failure to agree, each State retained significant amounts of control. The “Protocol of Agreement Dated 10 September 2001 between The Republic of Congo and the Republic of Angola Approving Offshore Unitization Prospects 14K and A-IMI” (the “Protocol”) was ratified by Angola on 21 May 2002, but there 108 Id. at Article 3. 109 Id. at Article 21. 110 Id. at Article 15.1. 111  Id.

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is no record of Congo’s ratification. The agreement relates to two offshore blocks, Angolan Block 14 and the Congo Haute Mer concession, rather than the entire international boundary between these States. The States chose to share revenues equally from the unitized area irrespective of the location of the deposit, rather than draw an international boundary. Interestingly, both States have submitted claims to the CLCS since the date of the Protocol. The Protocol, therefore, demonstrates an ability to unitize a small, yet potentially lucrative area, without the need to reach an agreement on a boundary line which history dictates may take decades. Baker and Byers112 believe that there are three models of joint development agreement: (i) obligatory joint ventures between the states and private parties once a resource has been found in the zone, (ii) a joint commission for administering resources within the zone, and (iii) one state managing the zone on behalf of the other. While these are just models, Baker and Byers acknowledge that there is the potential for them to be used where a boundary has not been delimited, provided that the parties can agree upon the “zone” to which the joint development agreement shall apply, as Angola and Congo have been able to do. The framework created by the Protocol envisioned that subsequent agreements would provide the details, these were entered into in 2002 in order to: a. establish the Inter-state Unitization Body:113 the 27 November 2002 agreement establishes a joint body, consisting of a decision making committee and a technical committee. Despite the decision making committee having certain powers, the Ministers of Petroleum of Angola and Congo may still reach decisions jointly. This, along with the need for decisions of the joint body to be reached jointly has the potential to result in deadlock, with no effective deadlock resolution having been agreed; b. appoint ChevronTexaco as the operator of the unitized block:114 the concessionaires in Block 14 and the Haute Mer area had their interests multiplied by 50% in order to work out the interest they held in the unitized concession. As ChevronTexaco, by way of a Congolese and Angolan subsidiary, held the most significant interest in the unitized block (being 30.5%), they [sic] were chosen to be the most appropriate operator; and c. establish the fiscal terms of the unitization: this agreement was contradictory to the Protocol. The Protocol applies the fiscal, economic and legal conditions of Angola’s Block 14 (presumably given the greater development of the regulatory environment in Angola), but also retains flexibility by permitting the Haute Mer concessionaire’s to revert to the Haute Mer regulatory regime in the event of “difficulty of application.”115 The 22 December 2002 agreement, however, provides 112 Baker & Byers, supra note 27 at 70–95. 113 Agreement dated 27 November 2002 between Société Nationale des Pétroles du Congo and Societedade Nacional de Petróleos de Angola. 114 Agreement dated 26 March 2002. 115 Protocol, Article 6.2

344   Tyler, Loftis, Hawker, Vizcarra, and Khan for the fiscal regimes of each country to apply to the allocated shares of production and legal regimes to apply to matters within the relevant jurisdiction. This is despite the failure to delimit the boundary, and may, therefore, result in difficulty in choosing the applicable legal framework.

ChevronTexaco representatives announced that a discovery was made in 2009, and on 30 July 2012 further announced that they are proceeding with a US$2 billion investment in the field. The Lianzi field is, according to ChevronTexaco, expected to produce a maximum of 46,000 barrels of oil equivalent per day.116 This treaty demonstrates the ability to experience the financial gain from a single field without reaching a full agreement over the international border, while maintaining flexibility of the legal and fiscal regimes. Though the field is yet to be developed, meaning the regulatory regime applying to the production is yet to be tested, it demonstrates how the desire to develop can overcome the potential regulatory challenges involved in negotiating a unitization agreement.

IV. Commercial Unitization Forms and Commentary as Precedent for CrossBorder Field Development Given that state practice on cross-border field rules is so sparse, and that the existing precedent (outside the 2010 Barents Sea Agreement) is nonetheless quite general, it makes sense to look to private parties’ arrangements when a field crosses a boundary. In the United States, this occurs frequently, as landowners have rights to the subsurface minerals. In this respect, the Association of International Petroleum Negotiators (“AIPN”) 2006 Model Form International Unitization and Unit Operating Agreement is also of assistance as a precedent. While it is likely that this form will be persuasive as a recognized industry standard,117 the guidance notes to the agreement118 suggest it only applies to domestic unitization situations. Indeed, the complexities of cross-border unitization prevent a complete precedent from being established to deal with coordinating, for example, two States’ regulatory or financial regimes. Nonetheless, the AIPN Model Form adds a great level of detail to the general framework. 116 Chevron Sanctions the Lianzi Project offshore Angola and the Republic of Congo, Chevron Press Release, 30 July 2012 (available at: http://www.chevron.com/chevron/pressreleases/article/ 07302012_chevronsanctionsthelianziprojectoffshoreangolaandtherepublicofcongo.news). 117 David Pierce, Professor of Law, Washburn University School of Law, Transactional Evolution of Operating Agreements in the Oil and Gas Industry, presented at Rocky Mountain Mineral Law Foundation, Oil and Gas Agreements: Joint Operations (27 March 2008). 118 Guidance Notes to the AIPN Model Form International Unitization and Unit Operating Agreement.

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While certain provisions of the AIPN Model Form119 will be applicable to all unitization agreements, unitization is an art, and expertise in the precise nature of the resource in question and the legal systems of the two States is necessary. Therefore, the two-stage approach will be effective in establishing the heads of terms, leaving the precise terms to be addressed once the nature of the field is known. This is particularly relevant in the Arctic, where multiple external factors, including health, safety and environmental issues, will need to be addressed on a case-by-case basis thus ensuring that the two States (who may have differing health and safety regulations) provide adequate coverage for the sensitive Arctic environment. Nonetheless, unitization-agreement practice will be at the center of negotiations. A. Commentary as a Guide to Cross-Border Unitization Weaver120 writes authoritatively on the most important terms to include in a unitization agreement arguing that these include: • Unit Area, including surface area and depth: Weaver argues that a unitization agreement, to be truly effective, should deal with more than one stratum; • Unitized substances: Weaver argues that best practice is for a unitization agreement to address both oil and gas resources, both of which are found in the Arctic; • Effect of unitization: and the considerations of financial impact once a field is unitized; • Determination of tract and unit interests (including pre-unitization costs); • Redetermination of Tract Interests (including the basis, time and number of redeterminations): this question is particularly important in the Arctic, given the 2010 Barents Sea Agreement’s failure to address this issue. While it is clear that technology is developing in this area, there will likely be a particular need for redeterminations in the Arctic, given there has already been some dispute over the USGS survey’s findings; • Unit Decision making: The 2005 United Kingdom and Norway Treaty addresses this by allowing licensees to appoint the unit operator. Other international treaties address this issue by establishing a joint development commission, such as the East Timor Agreement; and • Non-unit Operations: and the conduct and financial agreements in place for those areas.

Weaver continues that the framework unitization agreement must take into account a number of additional considerations, including the effect of a failure to unitize, which generally precludes exploiting the field. If there is no unitization agreement, effective dispute resolution procedures should be included, as in

119 The AIPN 2006 Model Form International Unitization and Unit Operating Agreement. 120 Weaver & Asmus, supra note 8.

346   Tyler, Loftis, Hawker, Vizcarra, and Khan the Trinidad and Tobago/Venezuela Treaty. Failing adequate dispute resolution, the resource may not be exploitable. Weaver also argues that a bilateral treaty should address whether unitization is voluntary or compulsory. Arguably, a purely voluntary unitization procedure would work only if the States are dedicated to exploiting the resource. Weaver argues that best practice nonetheless dictates that domestic unitization laws should permit private parties to enter into unitization agreements voluntarily; but if an agreement is reached, compulsory unitization should be enforced by means of international arbitration. B. Joint Development Agreements Contracts between private parties also have a part to play in establishing a framework for cross-border resource development, as is recognized in Annex II of the 2010 Barents Sea Agreement. Many of the concepts included in the unitization agreement will also require address in a JOA or Licensee Agreement,121 but some will remain in the unitization agreement alone, such as those relating to the creation of the unit, the tract and unit interest and the non-unit operations.122 Given that JOAs will largely mirror unitization agreements they require little discussion. An authoritative commentator on this topic, Bastida,123 suggests that when establishing a successful joint development zone considerations include: • Sharing of resources: Lerer124 argues that equal sharing is by far the most popular approach; however, this is not universal, the Australia/East Timor Agreement provides for a 90% share to be given to East Timor; • Management: there are various mechanisms for management of the unitized resource, including: (a) one State managing the resource on behalf of both States, as in the case of the Saudi Arabia/Bahrain Agreement of 1948;125 or (b) the two States entering a joint venture to operate the field or form a joint authority with a separate legal authority. Bastida126 argues that establishing a joint authority is the best approach and highlights that the authority can be multi-tiered, as was the case with the East Timor unitization agreement;

121  Weaver & Asmus, supra note 8; see also 2010 Barents Sea Agreement, supra note 7 at Annex II, art. 1(6)(a). 122 Weaver & Asmus, supra note 8. 123 Bastida et al., supra note 37. 124 David Lerer, Joint Development Zones: Negotiating and Structuring a Joint Development Agreement, 101 Oil & Gas J. 38, 38 (2007). 125 Hazel Fox et al., Joint Development of Offshore Oil and Gas – A Model Agreement for States for Joint Development with Explanatory Commentary, 45, 54 (1989). 126 Bastida et al., supra note 37.

Developing Arctic Hydrocarbon Resources   347 • Applicable law: in general, environmental and criminal laws will be addressed by the host States’ domestic laws,127 but this is not universally the case. In the Arctic context, due to the heightened environmental difficulties, it is arguable that disaster response may be addressed in greater depth in the unitization agreement than has been seen in the past; • Operator: the party that is to act as Operator and that will deal with contractors; • Financial provisions; and • Pre-determined dispute resolution.

The 2010 Barents Sea Agreement deals with many of these provisions in respect of the unitization agreement and a JOA should mirror these.

V. Conclusion An extensive legal framework is already in place to deal with maritime boundary delimitation and continental shelf delineation in the Arctic. This framework extends to the most oil- and gas-rich regions, leaving just a few minor gaps in hydrocarbon provinces that are not the most hydrocarbon rich. Treaty gaps are likely to be filled by bilateral agreements regarding boundary delimitation among the Arctic Five. These bilateral treaties will rest almost entirely on UNCLOS principles, with some additional gap-filling from CIL; however, they will probably be influenced by the extended continental shelf delineations, as in the case of Canada and the United States. The financial and political pressures to sort out claims to Arctic resources, so eagerly watched, will enable the final pieces of the delimitation and delineation puzzle to be completed without resorting to an Arctic specific multilateral treaty. On the other hand, the issue of cross-border hydrocarbon resource development is a far greater challenge in the Arctic. There is no real “frame work” for this set of norms, but this gap is not immediately pressing for most provinces, because it is clear that the majority of oil and gas resources in the Arctic do not require cross-border unitization. The most extensive oil resources can be found comfortably within the United States and the vast majority of hydrocarbon resources are currently found within the territory of each of the States. Nonetheless, the framework must be developed for some resources’ provinces, especially considering that delineation of an extended continental shelf could present the issue of cross border hydrocarbon resources in territories that have not been sufficiently explored yet. Here, as with maritime boundary delimitation, the regime is not likely going to be multilateral. Indeed, the Arctic States have not shown willingness to have

127 Id.

348   Tyler, Loftis, Hawker, Vizcarra, and Khan a universally imposed regime in the Arctic. The Ilulissat Declaration acknowledged that the [current] framework provides a solid foundation for responsible management by the five costal states and other users of the Ocean through national implementation and application of relevant provisions. We therefore see no need to develop a new comprehensive legal regime to govern the Arctic Ocean. We will keep abreast of the developments in the Arctic Ocean and continue to implement appropriate measures.128

This illustrates how Arctic States wish to develop their resources: by establishing an effective bilateral series of agreements, which will maintain sufficient flexibility at the field level. As a precedent, the 2010 Barents Sea Agreement between Norway and Russia represents the state-of-the-art state practice of two of the Arctic Five. In its basic approach, the 2010 Barents Sea Agreement’s two-stage, heads-of-terms approach allows States to establish the parameters of their unitization agreements and consider the critical terms before the pressure of developing a particular hydrocarbon field arises. Much can be learned from the 2010 Barents Sea Agreement, but given its infancy, further issues at the field level require clarification, such as that of redetermination and the terms of the relevant unitization agreements and JOAs. Existing commercial unitization agreements used by mineral-rights owners will doubtless provide the precedent forms for efficient and, necessarily, marketoriented Arctic field development.

128 Ilulissat Declaration, 28 May 2008.

Developing Arctic Hydrocarbon Resources   349 Appendix A. State parties to conventions applicable in the Arctic relevant for the delimitation of boundaries.

State Canada

Geneva Convention Geneva on the Territorial Convention on Sea and Contiguous the Continental Zone Shelf UNCLOS Signed, but not ratified 4

4

4

4

4

Norway

No

4

4

Russia

4

4

4

United States

4

4

No

Denmark

Bilateral treaties 1973 Canada / Denmark Agreement129 1965 Norway / Denmark Agreement130 1979 Norway / Denmark Agreement131 1973 Canada / Denmark Agreement132 1965 Norway / Denmark Agreement133 1979 Norway / Denmark Agreement134 2010 Norway / Russia Agreement135 1990 United States / Russia Agreement136 2010 Norway / Russia Agreement137 1990 United States / Russia Agreement138

129 Agreement between the Government of the Kingdom of Denmark and the Government of Canada relating to the Delimitation of the Continental Shelf between Greenland and Canada (1973). 130 1965 Agreement between Denmark and Norway, supra note 100. 131 1979 Agreement between Denmark and Norway, supra note 100. 132 Agreement between Denmark and Canada, supra note 127. 133 1965 Agreement between Denmark and Norway, supra note 100. 134 1979 Agreement between Denmark and Norway, supra note 100. 135 2010 Barents Sea Agreement, supra note 7. 136 Agreement between the Union of Soviet Socialist Republics and the United States of America on the Maritime Boundary (1990). 137 2010 Barents Sea Agreement, supra note 7. 138 Agreement between Union of Soviet Socialist Republics and the United States of America, supra note 134.

1.49% 1.23% 0.10% 0.00% 29.94% 12% – 70.06%

1.34 1.11 0.09 0.002 26.942 10.83 89.98 63.038

139 United States Geological Survey, supra note 10. 140 Id.

Key: Provinces with undelimited boundaries

8.24% 10.80% 8.08%

7.41 9.72 7.27

East Barents Basin (EBB) Amerasia Basin (AM) West Greenland-East Canada (WGEC) Eurasia Basin (EB) Lomonosov-Makarov (LM) North Chukchi-Wrangel Foreland Basin (NCWF) Hope Basin (HB) Total (basins crossing international boundaries) Total (basins crossing undelimited international boundaries) Total (in the Arctic) Total (basins in a single state)

Crude oil (% of total in the Arctic)

Crude oil (billion barrels)

Province (as named in the USGS)140

1,668.66 1,209.03

64.05

0.65 459.63

19.48 7.16 6.07

317.56 56.89 51.82

Natural gas (trillion cubic feet)

– 72.46%

3.83%

0.04% 27.54%

1.17% 0.43% 0.36%

19.03% 3.41% 3.11%

Natural gas (% of total in the Arctic)

Appendix B. Estimates of oil and gas (technically recoverable) reserves north of the Arctic Circle and spanning international boundaries (based upon the USGS survey).139

350   Tyler, Loftis, Hawker, Vizcarra, and Khan

Developing Arctic Hydrocarbon Resources   351

Exhibit 1. Extended continental shelf formula lines.

Exhibit 2. Extended continental shelf constraint lines.

Part 7

Completing the Unfinished Business of Unclos III

Completing the Unfinished Business of Unclos III Brian Flemming1 I have not been at a conference like this for a number of years. My recent learned writing has tended, except for writing about the Arctic, not to have been about international law but about public policy issues such as the Global War on Terror, security and border issues, transportation policy in Canada and memories of my past. My skills, particularly those that require a detailed knowledge of the United Nations Convention on the Law of the Sea, 1982 (UNCLOS), therefore are rusty. Also, for two decades, I have lived – especially when I was writing a weekly syndicated newspaper column for 14 years – in a world where a premium was paid for being outrageous. So, some of what I will say today may fall into that category. As the old English cases on agency law used to say about agents who were acting beyond their authority, I am about to go “off on a frolic of my own.” So, indulge me, please. I am fond of quoting one of the most famous opening lines of any 20th century English novel. It comes from L.P. Hartley’s The Go-Between that was published in 1953: “The past is a foreign country: they do things differently there.” They certainly did things differently in the years leading up to December, 1982, when the most successful multilateral treaty in modern history was opened for signature in Kingston, Jamaica. Quite simply, UNCLOS has kept peace in the oceans of the world for three decades, and will, I expect, continue to keep that peace for many years to come. Many in this room today, including our moderator and my co-panelist, were central to the stunning success that was the forging of UNCLOS. They therefore deserve the thanks of all “mankind” to use the now out-of-date word that was so central to the calling of the law of the sea conference originally. Today, we would, in a politically correct way, refer to “the common heritage of all humankind.” As I look back at the incredible triumph of 1982 and what has happened in the 30 years since then, two questions spring to mind. The first is: could an UNCLOS be negotiated successfully in today’s world? My answer is: I doubt it. The age of big political ideas, nationally and internationally, seems to have ended. In a 1 Brian Flemming, CM, QC, is Counsel to the Atlantic Canada law firm of McInnes Cooper, Halifax. He is an Honorary Fellow of the Marine and Environmental Law Institute, Dalhousie University, Halifax, and a Research Fellow of the Canadian Defence and Foreign Affairs Institute in Calgary.

356   Brian Flemming world that is drowning in public and private debt, big ideas have retreated into the shadows – for now. They probably will not re-emerge in the lifetimes of most of us in this room. So, they really did “do things differently” in the “past.” The second question is the one I am really supposed to discuss this afternoon: what has changed in the oceans of the world since 1982 that needs the attention of the world community of nations? A few months ago, I wrote a short article for the Canadian Defence and Foreign Affairs Institute in Calgary, where I am a research fellow, in which I said that so many issues – such as the regulation of deep water drilling around the world and the impact of climate change, to name but two – needed attention. So I boldly suggested that the world should perhaps consider convening a Fourth United Nations Conference on the Law of the Sea – UNCLOS IV – to fill some of the growing gaps and to deal with the many issues that were unforeseen in the years leading up to 1982. When this idea began to circulate, I was lashed by law of the sea experts in various quarters, especially in the United States of America which, to the continued and justifiable embarrassment of my old friend, John Norton Moore, has yet to ratify a treaty that John correctly characterizes as the best “lottery ticket” his country has ever “purchased.” Most of my critics pointed out that the amendment procedures set forth in the UNCLOS – and the many “tweakings” over the years pertaining to the interpretation or implementation of the Convention – made it unnecessary to call another conference. As Jaya wisely said in his opening remarks, the Convention “should not be tampered with lightly.” But, we should never forget too what Ronán Long said in his paper, namely, that the law of the sea is a “never ending story.” One commentator, after observing that few, if any, treaties stand the test of lengthy time periods and therefore often need amending, said that calling a new conference would be a bridge too far. A better way to proceed would be to list some of the fundamental changes now underway and to show how they challenge or do not challenge the Convention’s basic framework. Many problems of the marine environment can be addressed through Part XII by agreeing to new Protocols or by concluding implementation agreements. The key question should always be: is the very structure of the Convention in some way challenged beyond its ability to respond to the problem? Has the impact of climate change on the oceans of the world, for example, affected them in a way that calls for a new way to cooperate, one that totally transcends sovereignty and other jurisdictional rights in the oceans? I am not wise enough to answer that question but it needs to be asked. Perhaps using the excellent groundwork laid by this conference, the next one should address that question, among others. Let me now widen the discussion by listing – not in order of importance or exhaustively – some of many things that have happened in the last 30 years that merit the attention of gatherings such as this conference:

Completing the Unfinished Business of Unclos III   357 1. The Great Arctic Melt If you have not seen a recent June, 2012, issue of The Economist, you should get it and read that journal’s excellent take on what is happening in the Arctic. Given what is happening there – and I have been to the High Arctic to see it for myself – a number of legal questions arise. Is, for example, Article 234 of the UNCLOS, the so-called “Canadian clause,” as useful for Nordic nations as it once was? Once the Arctic Ocean becomes largely ice-free for many months a year, does the principle of clausula rebus sic stantibus apply to the new “facts on the ground” or the “facts on the melting ice”? If so, can the Convention accommodate the changes or, as some have suggested, is it time to negotiate a separate “Treaty of the Arctic Ocean”? Or, at least, negotiate a Protocol to the Convention that is Arctic-centric? Or, as Larry Mayer suggested here, should we start “small” by having Canada and the US negotiate a new regime for accessing the resources of the Arctic? And, as Wylie Spicer asked at this conference, what principles of risk management should apply there? 2. The Increase in Deepwater Drilling Activity The Deepwater Horizon disaster has focused the attention of the world on the fragmented and inadequate nature of the regulations that apply to deepwater drilling, not only in the Gulf of Mexico but also off Brazil and West Africa and elsewhere. Professor Chang-Hoon Shin suggested that the Convention might have been too generous to coastal States with broad margins but said that it was too late to go back and correct this. Will drilling soon reach the areas of the oceans under the authority of the International Seabed Authority? And when and how will Michael Lodge and the ISA finally find out the limits of the Area? 3. Overfishing Worldwide I am embarrassed to tell you that much of the political support inside Canada during the UNCLOS negotiations came from those who claimed Canada could do a better job than any other country in conserving and protecting the fish in our EEZ and beyond if only we had jurisdiction to do this. Well, that’s not what happened in Canada or in most other coastal areas. The melting of the Arctic Ocean will expose some of its international fishing resources to high-tech fishing efforts. Can the Convention deal with something as basic as the moratorium that some are calling for on fishing in the Arctic Ocean? 4. The Acidification of the Oceans/Pollution Much of the acidification of the oceans comes from airborne sources. Pollution from plastics or disasters like that at Fukishima is increasing. Is a new treaty or a Protocol needed to cope with the imminent release of massive amounts of methane hydrates into the atmosphere, particularly in the Arctic, as it melts? Some say the latter process is not a problem; others say it poses huge new dangers for climate change. 5. Changing Coastlines Around the World Will the existing system be able to accommodate the coastal changes being created by climate change? The peaceful settlement of the dispute between Bangladesh and Myanmar in the Tribunal in Hamburg gives encouragement to all of us that ITLOS can be trusted to deal intelligently with some of these issues. The recent agreement

358   Brian Flemming between Norway and Russia to jointly exploit a contested area of the Barents Sea is a most hopeful development. Here’s a conundrum though: What happens if some island states disappear beneath the waves because of the rising levels of the oceans? Will their maritime zones disappear with them? 6. The Ongoing Failure of the US to Ratify Not much more can be done by the international community to reassure those in America who hate the UN and all its works or who believe the ISA and the tiny royalty on resources of the outer continental shelves of the world is a socialist plot to redistribute American wealth. Because of the dire consequences for the Convention if an UNCLOS IV were to be held and were to succeed, the US would then probably fight any attempt to undermine the current UNCLOS. Many years ago, in 1979 in Mexico City, I gave a paper predicting the US would never ratify and that it would resort to claiming the UNCLOS would, by virtue of its potential widespread acceptance – that has now occurred – become part of customary international law. I can still hear the guffaws of the great and the good from America following publication of that paper but I would note that this idea is not now as outre as it once was. 7. How About an “Audit UNCLOS” Meeting? If an UNCLOS IV is not in the cards, should the world consider calling a conference of some kind to “audit” the many holes or gaps in the Convention and to outline what needs to be done to cure these problems? In other words, should we build on what we have done here by becoming more specific about what needs to be done? What happens, for example, if a broad margin state, like the US or Canada, refuses to pay the Article 82 mandated royalty on resources taken from their extended continental shelves? How could the Commission on the Limits of the Continental Shelf be put in a position to interpret a provision of the Convention when it was never intended to have this power? How can the interpretive responsibilities of ITLOS be extended to help in this kind of dispute or others? 8. The Growing Glut of Claims Pending Before the UN Commission There are now, I understand, some 59 submissions pending before the UN Commission on the Limits of the Continental Shelf. New submissions are facing a 15-yearplus wait. This is clearly unacceptable, particularly for states that are not very wealthy. How can the logjam be broken? Is there a need for some kind of “confessional cleansing based on experience” on issues such as this one?

As an overarching issue, we all need to become more sophisticated in our approach to regulation, which is really subsidiary or subordinate legislation. Public regulation is not a “cure-all” for all ailments. It is a dirty word in many quarters, both left and right. It is best not done immediately in the wake of a disaster like Deepwater Horizon because then it is likely to be overdone. Finally, there is the issue of piracy that does not occur on the high seas, bioprospecting, carbon storage in the continental shelves of the world, exploiting the genetic resources of the deep oceans and so on and on. But, as they say in the oil and gas industry: if you drill and drill and still haven’t struck anything, stop boring. I will now stop boring.

Comments on the Unfinished Business of UNCLOS III John Norton Moore1 Permit me to begin by briefly addressing two issues. These are: first, why should we seek international and regional rules for the protection of the environment from continental shelf activities, and second, what kind of rules and how will they be enforced? I would also like to respond to questions as to where the United States stands today on moving forward for Senate advice and consent for UNCLOS III (the Law of the Sea Convention). I would like to give you a little more detail on the history of that battle and then tell you why I am optimistic that we may well see the Senate act on the Convention. In answer to the first question as to why we need international rules, we have the framework in Article 208, but the answer is very simple: it is an international problem. We tend to think of it as just a matter of United States regulations, or other countries such as Mexico regulating its continental shelf, but these have impacts going far beyond the continental shelf of any one country. In the United States we felt the impact of the Ixtoc oil spill in 1979 and Mexico has hopefully escaped much of the impact of the Macondo/Deepwater Horizon spill. The United States and Canada share remarkable fisheries on Georges Bank and yet we are both very interested in continental shelf development as well. The United States is subject to Cuba deciding that it wishes to develop the continental shelf. We have an interest in trying to understand the mutual impacts of offshore development in these regions. This is an international problem. The second part of why we should be looking for international rules and standards is because we can also learn from one another. I believe that my own country sadly, in the failure of appropriate regulations for the Macondo field, really had not learned from experiences in Norway, the United Kingdom, and some other countries. Had we done so, we might have been able to avoid this disaster. I certainly agree that like constitutions, you just can’t pick up an approach and apply it wholly to another country, but we can learn a great deal from one another. The kind of dialogue we might get into in regional and international negotiations could be very useful. What kind of regulations should there be? I don’t have specifics, but I would like to raise concerns about what we have as “first generation” environmental 1 Director, Center for Oceans Law and Policy at the University of Virginia School of Law and the Walter L. Brown Professor of Law at UVA.

360   John Norton Moore rules. First generation simply means something we have done across many environmental areas. We’ve tended to apply a so-called command and control approach. The idea is that the government will somehow in its wisdom find out precisely what technology is required and will mandate exactly the way it should be applied. The economists have long told us there are a number of problems with that approach and we saw it again in the Macondo/Deepwater Horizon blowout. One of those is that the government is unlikely to be able to keep up with the technology and how one might go about using it to solve the problem. Whether it is because we don’t pay government officials enough, or that technology develops faster in the private sector, for whatever the reason, the government is not going to be able to take advantage of technology as effectively as the private sector. The second thing the economists tell us is that a command and control approach will always produce the lowest common denominator. If someone in the industry comes up with a better approach but one that might cost a little bit more they are not going to do it. So you don’t want to impose a regulatory scheme of the lowest common denominator. Finally, the core of the problem is that the corporate structure and the governments involved with the various corporations we are talking about do not necessarily have a culture that has contributed to the kind of focus on risk avoidance that corresponds to the level of the risk that they are facing. I believe very strongly that had Exxon looked at the problem of ship driving in very large crude carriers and the potential risk involved that it would have quickly seen that they could have lowered that risk hugely – a multi-billion dollar damage judgment – by probably some very simple inexpensive actions in ship driving that could have been taken. My instinct is that is precisely the same with the Macondo well. My sense is that we want something that goes beyond the old environmental status approach where all you are really trying to do is to regulate specific technology. The best thing we’ve seen so far is what Marty Malsch has shown us from the nuclear industry and which I understand was also used in the space shuttle and a number of other areas of highly complex systems. That is to encourage the companies themselves to apply more effectively rigorous probabilistic risk assessment (PRA) analysis to try to look at ways not only that they spot where the principal risks are but they are able to dramatically reduce any of those risks at fairly low cost. Certainly mandated steps would likely be at enormously lower cost compared to the level of risk. BP in this particular case actually threatened the entire company itself with its failure at proper risk assessment and ended up with about half of the company being lost, and the CEO losing his job. Those are things that ought really to capture the attention of leadership at large corporations. I think part of the problem is if we have a regulatory structure that says “you don’t have to worry about it, it is the government that is going to regulate it, all you have to do is just do those things and you will be okay.” Instead, we need to try to get the companies more actively involved in the risk assessment.

Comments on the Unfinished Business of UNCLOS III   361

How do we accomplish this? I’ve tracked it to the framework provision in Article 208 that was put there deliberately to leave the way for new international or regional agreements to do this. But probably the best start is not a simple international conference. Rather, maybe the best start is for industry itself to be talking internationally in terms of trying to look at some new protocol in which industry itself adopts an approach of a PRA, for example, for certain types of deep water wells. Or, perhaps a number of countries, such as Canada and the United States which share substantial joint interests in how development takes place, might themselves work out something and put that in place with their own energy industries. Now to address a couple of other points. One – do we need a new Law of the Sea treaty? While I strongly agree with my colleague Brian Flemming on so many things, on this Brian is absolutely wrong. We are having enough trouble trying to move forward with compliance for the existing Law of the Sea treaty. In the United States it has already become a problem since we don’t have US accession. I can assure you that it’s not going to make it any easier to have a new process moving forward for a new treaty. But most importantly, I believe we did a pretty good job with UNCLOS III as a framework agreement. There are all kinds of ways within that framework whereby we can address every single one of these important issues that we are now talking about. With the fisheries issues we solved what was needed to be solved internationally, which was the common pool problem. What we didn’t solve was the basic government failure problem in terms of management within their EEZs and extended continental shelves, and you don’t solve that through an international agreement. It has to be something that we begin to focus on a little more. Understand government failure, understand that governments in response to political groups are able to externalize costs just like markets can externalize costs in some of those settings. The core of the fisheries problems is government failure. Approximately 20 billion USD in subsidies are put out to fisheries around the world to dramatically overfish. It is shocking, and it needs to be dealt with. But, we don’t need to change the Law of the Sea treaty to do that. We were able to revise UNCLOS III in relation to Part XI on deep seabed mining. When Canada had a special problem relating to straddling fish stocks, stocks beyond the 200-mile EEZ, Canada did a brilliant job in leading the world toward a new straddling stocks convention that is already in force for the United States and many other countries in the world. On the issues we are talking about today, the framework is even built in specifically. Let me turn briefly to the debate in the United States over adherence to the Law of the Sea Convention. We have to go back to the time that the treaty was concluded in 1982. At that point, the United States and many other countries in the world were very unhappy with Part XI. Other parts of the Convention were liked, with the exception of Part XI. At that time, the United States, because of

362   John Norton Moore the failure to reach an appropriate solution on Part XI on seabed mining, indicated that it was not going to sign the agreement. President Ronald Reagan had issued shortly before that a list of changes that he thought needed to be made to have the United States adhere to the Convention. That was not something that came only from the hard right, this was a widely shared view across the aisle – Republicans and Democrats. It was clearly understood that if we did not get those changes in Part XI that the United States would never be able to adhere to the treaty. Happily it was addressed, although it took too long. I don’t give high marks to the Reagan Administration on this because it had a chance to implement those negotiations and didn’t do it very effectively. But subsequently, in 1994, under the Clinton Administration we were able to get a full renegotiation of Part XI, which I believe substantially improved the Convention in the interests of every nation in the world, not simply the United States. It generated an extraordinarily good system for international development of the deep seabed. Indeed, I suspect it is a considerably better system than many states are using in the development of their own mineral resources in their own territories. In that setting, not surprisingly, the President of the United States immediately submitted the revised treaty to the Senate of the United States, strongly recommending advice and consent as every President since has. Unfortunately, at that time we had a chairman of the Senate Foreign Relations Committee from the hard right, Senator Helms, who basically opposed all things international. No matter how many times I tried to meet with his staff, it made no difference because this was an ideological issue. As long as he remained the Chairman of the Senate Foreign Relations Committee, he simply blocked any consideration of moving the treaty forward. Subsequently, we were blessed with a change in the chairmanship of the Foreign Relations Committee and very quickly the UNCLOS treaty went to the Committee and was voted through nearly unanimously in 2004, and came out of the Committee. But at that point, there were many things before the Senate, and unfortunately the Majority Leader did not submit the issue to the full Senate for a vote so it expired. The issue came back in 2007. It was again submitted to the Senate Foreign Relations Committee. There was a vote in the Committee and once again it was favorably reported out to the floor of the Senate, and once again the Majority Leader said at that time there were just too many things on the agenda to consider voting on the treaty. So why do I think that today is going to be different? I think it is different today because this is the first time in the United States we have seriously had an Administration committed at a high level to the battle for Senate advice and consent. The key to that is in fact due to an extremely bright and able Secretary of State, Hillary Clinton. I met with Secretary Clinton early on about this. She is one of the brightest graduates ever to come out of the Yale Law School and a few weeks ago was the star witness before the Senate Foreign Relations

Comments on the Unfinished Business of UNCLOS III   363

Committee where she just dazzled everybody. She knew every answer, was right on top of it, and I can tell you from meeting personally on this, Secretary Clinton is one serious person about getting this treaty through the US Senate. Senator John Kerry, who may well succeed Secretary Clinton, is also a strong advocate of the Convention. But it is more than that. It is also a setting in which unlike the past when we had civilian secretaries of defense that have been perhaps not particularly interested or perhaps even mildly negative, we have a setting in which we have a secretary of defense, Leon Panetta, who is an extremely strong supporter for the Law of the Sea treaty. He worked very closely on this issue with the Pew Foundation before he went in to be the head of the CIA, and then subsequently at the Department of Defense as the Secretary of Defense. So you have the two most important cabinet officers, in addition to what you’ve always had – the Joint Chiefs of Staff and the military at the top levels – all believing this is a top priority for the United States. One of the differences in this battle today is that Secretary of State Clinton has said we are going to do this thing and she has appointed a Deputy Secretary of State to oversee the effort and to coordinate US interests seeking to move forward. I’ve followed this over the years and US industry has always been supportive but never really part of a coalition fighting for it. This is completely different today. We have powerful support from virtually every industry, including deep seabed mining which is new with the CEO of Lockheed powerfully in support. Possibility because of the great support of Secretary of Defense Panetta who used to run the Pew Foundation effort or possibly because on their own, the Pew Foundation with substantial resources has now come into the fight and is assisting very powerfully from the private sector in a way that has never been done before. I can see it on a daily basis. I see the opponents putting out the usual misinformation about the Convention, but this time I see the responses coming in. I believe that we will go to a vote and we will win it. It is going to be a tough battle for us but this time I think the United States is going to carry through and win it and the difference is leadership. Where you have leadership it makes a difference and we have it on this particular occasion. The saddest side of this, in addition to the fact that for a quarter of a century the United States has lost its leadership in oceans law and policy, is that the opposition to the treaty is simply ideologically driven. It is a series of arguments that we hear over and over that make no sense at all. We hear over and over that we are turning over the oceans to the United Nations, or creating a new international bureaucracy to manage the oceans. I was astounded the other day to see a member of the Senate put out a letter saying he was going to oppose it because this treaty was going to basically place navigational freedom of the United States under some new international organization. That is just nonsense. In fact it is worse than that, it is 180 degrees off. For months we heard from the

364   John Norton Moore opponents that we shouldn’t get into the treaty because it was counter to the national security and defense interests of the United States. These are people who virtually know nothing about oceans policy or security policy relating to the Navy, and the real Navy experts are on the pro-treaty side. Finally the opponents began to realize that and became a little nervous about citing defense issues, so that seems to be fading. Their latest issue is to pick at the revenue sharing in Article 82 of the Convention – remember that very small price you have to pay to get a very expansive continental shelf for broad margin states – the United States being in fact the broadest margin state in the world. It’s an extraordinarily good deal for the United States. I agree with Admiral Robert J. Papp, Jr., Commandant of the United States Coast Guard, who said it is as though the United States won the lottery with this Convention but the opposition is preventing us from cashing in the ticket. Opposition arguments could not be further from the truth. For example, consider the argument being made concerning Article 82. The slippery part of it is that they never point out that during the negotiations we didn’t own the extended continental shelf. If you go back and look at the expectation in the international community it was geologic continental shelf, not at that point slope, it was not rise, it was just the geologic continental shelf. I’ve been looking at an overlay showing the 100-fathom curve from the Truman Proclamation and the 200-meter mark of the 1958 Convention and when we look at it on a chart you can’t see the difference: it overlays almost perfectly with the edge of the continental shelf. Then we had the Stratton Commission in 1969, the first major review of this, endeavoring to establish a clear boundary because of the uncertainties of the 1958 Convention with an exploitability criteria added to the 200 meters. They proposed something such as picking up the slope which would take us out basically to the 2500 meter isobath and 100 nautical miles on average instead of 50 miles and 200 meters. For those outer limits, the Commission realized we would have to have some kind of revenue sharing. They proposed only going to the base of the slope and picking up revenue sharing. Then we had the Nixon proposal that people forget about. All of the Presidents I negotiated for were Republicans. This is a thoroughly Republican operation in terms of the negotiations. The bottom line is that we got a very good deal in the overall negotiations – 200 miles, far beyond the base of the slope and even beyond that, the extended continental shelf. I will give you one other little figure on this. The proposal for revenue sharing from the Nixon proposal was really based on the Stratton Commission. Nixon just called it the Trusteeship Zone which was just the slope, it did not pick up the rise, was 50 percent to 66 2/3 percent to be paid to the international community. What is the average revenue sharing in let’s say a fifteen-year well, which is about an average well length? It is 3.2 percent over the life of the well, the United States getting more than 96 percent basically. This is somehow

Comments on the Unfinished Business of UNCLOS III   365

regarded as paying too much to the international community. Not to mention, we are the only country in the world with a permanent veto over how those funds get distributed to States Parties. I’m sorry to say there is a small ideologically-driven group which is very active. The group is the equivalent of the isolationists active during the interwar period between WWI and WWII, perhaps even worse. They have little interest in the reality of the Convention for the most part. A few do refine their arguments before the Senate Foreign Relations Committee. But over and over we just keep hearing the same old arguments that are completely false. I call the opponents the neo-know-nothing faction. Hopefully this time around they will be defeated. It is extremely important for the United States – and this is more important that even the Law of the Sea treaty – that the nation not be held hostage by a small ideologically-driven group in relation to our ability to enter into treaties.

part 8

Special Presentation

Beyond the Outer Limit: 60-Year Reflections for a Luncheon Address Edgar Gold 1 I am honoured to be presented with a magnificent book compiled by my many friends, former colleagues and students in the international maritime field.2 This is a singular honor as receiving a Festschrift, which this type of book is called, is so rare that there is not even an English translation of the word. I contributed an essay to such a book a few years ago in honor of Judge Thomas A. Mensah, whom many of us here also know, when he stepped down as President of the International Tribunal on the Law of the Sea.3 To make matters even more complicated, that book was called a Liber Amicorum, which seems to be an even fancier name than a Festschrift. We are all more familiar with writing tributes to honour colleagues who are no longer with us. Many of us did so only recently when we contributed essays in memory of our former colleague and friend, Professor Douglas M. Johnston, who is very much missing from this distinguished gathering of ocean leaders.4 I hope that you are not too concerned about the second part of the title of my brief address to you as I, certainly, have no intention of regaling you with my 60 years in what I call the ‘ocean business’, although you may have found some of it quite interesting. As a mariner, lawyer, academic, consultant, and sometime 1 Edgar Gold, AM, CM, QC is Adjunct Professor in the Schulich School of Law and with the Marine Affairs Program, Dalhousie University, Halifax, Canada. He was the founding Executive Director of the Dalhousie Ocean Studies Programme and continued with its subsequent manifestations. He is an Adjunct Professor of Maritime Law and former Canadian Member of the Board of Governors of the World Maritime University, Malmö, Sweden, and a member of the Governing Board of the IMO-International Maritime Law Institute, Malta. Dr. Gold was with the T.C. Beirne School of Law, University of Queensland, Australia, between 1997 and 2011. Dr. Gold is a Master Mariner (UK and Canada) and served at sea for 16 years, including several years in command. He was a senior partner with the law firm Huestis Ritch (now Ritch Durrnford) in Halifax. His special areas of interest and expertise include maritime law, international marine, offshore energy and environmental law and policy, maritime training, and international ocean development. 2 A. Chircop, N. Letalik, T.L. McDorman, & S.J. Rolston, Eds., The Regulation of International Shipping: International and Comparative Perspectives – Essays in Honour of Edgar Gold. (Leiden/ Boston: Nijhoff, 2012) 3 T.M. Ndiaye & R. Wolfrum, Eds., Law of the Sea, Environmental Law and Settlement of Disputes: Liber Amicorum Judge Thomas Mensah. (Leiden/Boston: Nijhoff, 2007). 4 A. Chircop, T.L. McDorman & S.J. Rolston, Eds., The Future of Ocean Regime-Building: Essays in Tribute to Douglas M. Johnston. (Leiden/Boston: Nijhoff, 2009).

370   Edgar Gold diplomat, I witnessed and, sometimes, even participated in many changes that included three UN Law of the Sea Conferences, the development of many UN, other international, as well non-governmental agencies with oceans responsibilities, hundreds of marine-related treaties, many ocean-based disputes (including some still not resolved), the development and collapse of the world fishery and, in the context of this conference, the incredible race to the seabed for precious resources. Although most seabed activities are still confined to energy exploration and exploitation, seabed mining, as foreseen by UNCLOS III will, certainly, be an activity in the future. Also, during this period marine technology, in all of its manifestations has probably moved along much further than it did in the previous four centuries. When I first went to sea, although I hasten to add not quite four centuries ago, a 4,000 ton hand-fired coal burning ship was the norm amongst the small number of vessels that had survived the Second World War. Radar and other electronic devices were virtually non-existent (although the marine accident rate was lower than it is today as we seemed to be a bit more careful when we couldn’t see what we could not see with our eyes!). Along came ever larger ships with the expansion of global shipbuilding capacity – especially in Asia – and soon we had super-tankers, followed by Very Large Crude Carriers (VLCC) and the ultimate Ultra Large Crude Carriers (ULCC) and today’s giant Liquid Natural Gas carriers (LNGC) . The dry bulk trade followed with Capesize vessels routinely exceeding 300,000 tons today. The container revolution, pioneered by an American trucker, also occurred during this period, and today’s general cargoes are almost exclusively carried on highly sophisticated ships that can now convey up to 16,000 containers. Even larger container ships are on the drawing board. In the passenger business the great ocean liners were driven to the scrap yards by the advent of the jumbo jets – especially the Boeing 707. The passenger trade has never since been able to compete with modern jet aircraft. However, passenger ships have quite successfully reinvented themselves as cruise ships. This business started very modestly with out-of-service liners, but is now one of the fastest growing sectors in the maritime world. Ranging from the small and luxurious to the immense and gaudy, the cruise ship fleet is continually expanding. Quite recently, the largest cruise ship in the world, the Allure of the Seas, went into operation. She is 362m long and comes in at over 225,000 GRT, carries 6,300 passengers on 16 passenger decks with a crew of 2,400. I will say more about cruising later. However, as this is a conference that addresses Continental Shelf issues I will slowly drift towards that area before I finish today. Given the expertise of the conference participants I have no intention at all of saying anything very substantive on the subject. Although I was quite heavily involved in offshore regulatory issues some years ago as a member of the Canada-Nova Scotia Offshore Petroleum Board, I have now been basically retired for several years and have,

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quite deliberately, reduced my exposure to these matters. It is, however, great to have what I almost see as a reincarnation of the famous old Law of the Sea Institute (LSI) back here in Halifax as it is almost 30 years to the day since we had the last LSI meeting here. The LSI was then based at the University of Rhode Island, under the leadership of US geographer Lew Alexander. In retrospect it is probably quite correct to say that the LSI, with its style of relatively informal and semi-private gatherings that attracted participants from the highest levels of government, the military, industry and academia, ensured that the outcome of UNCLOS III was as successful as it was. Certainly the benefits that this Convention brought to all states were probably developed as much at LSI meetings as at the more formal UN Conference sessions. In other words, being chosen to host a LSI Conference in those days was real coup – almost akin to hosting the Olympics! I am delighted to see the involvement of the Center for Oceans Law and Policy of the University of Virginia’s School of Law involved here today in cooperation with Dalhousie Law School where I studied and taught for many years. The University of Virginia also has a very distinguished record in the oceans area through the efforts of John Norton Moore and Myron Nordquist. John was a very formidable member of the US delegation at UNCLOS III and I very much regret that his efforts of negotiating so well on behalf of his country at the Conference have not yet led to US accession to one of the most important maritime treaties ever created. Just over a decade ago my wife and I were persuaded to go on a cruise, although having once served as staff captain on a cruise ship I had sworn never to set foot on one again. However, we did go on a small, rather exclusive cruise ship, were smitten, and have hardly stopped cruising since then. Earlier this year we decided to undertake a 109-day world cruise on a brand-new, small, very luxurious Seabourn cruise vessel. During this voyage, which took us to five continents, through five oceans and some 40 ports in almost as many countries, I had the opportunity to observe not only what was happening on the world’s continental shelves, but also with other marine activities and sectors. Even an expert body, such as that assembled for this conference, can probably not fully appreciate the amount of continental shelf energy exploration and exploitation activity that actually takes place today unless one sees it first-hand like we did from the deck of a cruise ship. Sailing South from Florida towards Brazil, we encountered oil rigs almost everywhere, operating in shallow and deep water, or being moved from one position to another. Off Rio de Janeiro’s magnificent harbour we counted at least 12 large oil rigs, several pipe-laying vessels, and many support vessels in addition to the numerous rigs we saw off the Brazilian coast. Brazil’s role in offshore energy development has become extremely important today. In 2011 alone 19 major oil and gas discoveries were made in offshore Brazil – much of it in very deep water. Even Brazil’s oil rig construction capacity

372   Edgar Gold is now world class with Brazilian shipyards holding firm contracts for 26 rigs for delivery within the next 4 to 6 years.5 After crossing the South Atlantic we saw similar activities off the coasts of Namibia, South Africa and Mozambique, both off the Atlantic and Indian Ocean coasts. Sailing further up through the Indian Ocean and then into SE Asian waters, there was vigorous activity off Sri Lanka, and also off Malaysia, Vietnam and China. It was interesting to realize, when sailing through the rather hazardous, island and atoll-studded South China Sea that this was an area that will undoubtedly continue to be the basis of festering disputes between several littoral and other states – despite the fact that there is so far not even much evidence of confirmed seabed resources! There were some 20 large rigs, plus several pipe-laying vessels, dive-support and seismic craft, and other highly sophisticated offshore support vessels, anchored off Singapore, one of the world’s busiest ports, awaiting work or reassignment. Sailing west again we saw significant offshore activity off India and, not surprisingly off Dubai, Sharjah and Oman. Off the coast of Yemen we passed through the notorious Somalia ‘pirate alley’ that is of great concern to the international maritime community these days. Our ship was festooned with razor wire, we had heavily armed private security guards on board, and there were naval escorts nearby, yet even here we saw operating oil rigs. In the Red Sea the offshore areas of Saudi Arabia and Egypt were studded with production and exploration platforms, and even in the Mediterranean there were significant activities, especially off the coasts of some of the Greek Islands and Italy. Not surprisingly, offshore oil and gas production is now a truly global industry and major sector of the energy industry. All of this is commensurate not only with incredibly high investment costs but also quantum leaps in offshore technology. Going back to my early days when offshore rigs were simply land-based rigs placed on a barge, we are now in the sixth generation of dynamically-positioned, frequently self-propelled, deepwater drilling rigs and even more sophisticated drill ships. We saw and were astounded by some of these marvellous machines during our cruise. No part of the seabed, regardless of depth or location, is now inaccessible to this technology. There are probably limits to this development. Some will be regulatory, as are being discussed at this gathering, and others will be financial, whilst much will depend on the supply and demand in the energy sector. For example, it appears that the United States, as the world’s largest energy consumer, may soon not only be self-sufficient in terms of natural gas, but may even become a gas exporter. This is due to the expansion of the on-land shale oil and gas exploitation technology that may not only have wider implication on global energy demands but 5 Reported at the Ship & Offshore Forum, Oslo, Norway, June 2012.

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also on continental shelf activities.6 On the other hand, the expansion of the use of natural gas into other sectors, such as for ship propulsion and similar ‘clean energy’ purposes, will also ensure continuing strong demand and further expansion of this sector. For example, Australia, where I now live, is currently the second largest LNG producer in the world (after Qatar) and is expected to overtake Qatar within the next decade. Almost all is produced offshore. At this year’s Ship & Offshore Forum in Oslo it was forecast that the global fleet of offshore rigs will need to double to 500 units by 2020 with expenditure on oil and gas production increasing by 50% in the next five years to meet global demand.7 However, our cruise did not only see positive maritime activities. Despite the fact that the offshore energy industry has a remarkably good safety record, especially when compared to the amount of work that is being undertaken – often under difficult conditions – there is great fear by coastal States of major disasters. Analogous to the shipping industry, coastal States very much want the benefits of continental shelf development but not the risks involved. Recent accidents off Brazil and in the Gulf of Mexico, which are also under discussion at this Conference, have not helped. But it must be clear that pollution from offshore activities can never be totally avoided even with the best safety systems in place. In this connection I believe that this is a very important conference, as I have sometimes felt that what you are discussing has been a little neglected at the international level. For many years continental shelf energy activities have been almost self-regulated by the industry. This has worked fairly well, as it has always been considered that an industry that is required to provide the highest investments anywhere would be commensurately careful in its operations. However, as I have just mentioned it appears that some of this confidence appears to have been lost as a result of recent accidents. It is also a fact that marine pollution originating from land-based sources is still the major marine environmental issue. We certainly saw lots and lots of this on the trip – even in the South Atlantic far from anywhere, such as near St. Helena, one of the world’s most isolated of islands, where we observed plastic bags and human activity garbage almost continually. This was so in every ocean we passed through. Closer to land it was even worse. Although we seem to have confronted ship-source and rig-based marine pollution quite successfully, we seem to be quite incapable of tackling land-based marine pollution. Fishing also appeared to be still in apparent decline. There seemed to be more fishing boats – especially in Asia – going after fewer fish, which now have very little chance, as even fishing operations based in some of the poorest states often

6 G. Chazan, ‘Terminal Decline No Longer’, Financial Times, 24 April 2012, p. 7. 7 See note 5 above.

374   Edgar Gold have fairly sophisticated equipment. It does not bode well so enjoy your seafood while you can! I would recommend to you all to take a trip on a cruise ship. At the very least it will get you out of your office and allow you to see the real maritime world out there. Thank you again for honouring me. I apologize for providing you with these far-from-erudite and very general remarks from a long-retired colleague.