The Oil & Gas Industry and the Environment
 Module 5: Solving Problems: Policy, Regulations & Codes
 

5

   Solving Problems:
    Policy, Regulations & Codes

Many aspects of oil and gas industry activities are covered by regulation at national, regional and international levels.
In this module we will review some of the multilateral agreements and regulatory approaches used to manage and regulate environmental impacts associated with the industry.

“As the petroleum industry has expanded, so too has attention on the impact of its activities. There has also been a growing recognition that industry must operate within the scope of social, cultural, economic and physical factors at the local level, while remaining in the global context of Agenda 21. Industry has recognized that future access to petroleum resources depends on finding methods of exploiting resources in an environmentally sustainable manner and in cooperation, rather than in conflict, with regulatory bodies”. Neil Gunningham  

 

 

 

 

 

 

 

 
 

 

 

Multilateral Environmental Agreements (MEA)
A MEA is an agreement by several parties to take certain steps to increase protection of the world’s natural resources or promote environmental quality. MEAs include international and regional conventions and protocols; where a convention provides a general framework for action, protocols outline steps to address specific problems.

At present, there are over 70 international conventions and agreements that deal directly with protecting the marine environment as well as a number of other MEAs that are of relevance to offshore oil and gas activities. However, the actual regulation of offshore oil and gas activities is handled either at the national level or within the framework of international conventions.

 

 

 

Regulatory Approaches  
There are primarily two approaches to regulating the environmental performance of industry:
  • the ‘prescriptive’ approach
  • the ‘performance based’ approach.

The prescriptive or ‘command and control’ approach is based on specific requirements made by government, to be met by operators. Technical prescriptions make it clear what is required and give the regulations legal certainty. This makes it relatively easy for government to determine, via an inspection procedure, whether an operator is meeting the requirements.

Performance based approaches place a greater emphasis on setting an objective or goal to be reached by industry.  Self regulation, an example of a performance based approach, is an agreement made between the operator and government with specified environmental standards. It is the responsibility of operators to define strategies on how they will achieve these standards and provide evidence to assure they are complying with the agreement.

More Information >>
 ■ OEF Introduction to Environmental Regulatory Frameworks
 ■ Books: Smart Regulation: Designing Environmental Policy (Neil Gunningham and Peter Gabosky, 1998) & Leaders and Laggards (Neil Gunningham and Darren Sinclair, 2002).
 
Which regulatory approach do you think is most effective?
 
On the OEF Website a series of national profiles demonstrate the variety of mechanisms- regulatory, co-regulatory and voluntary, in place between industry and governments.
■ Abu Dhabi
 ■ Australia
 ■ Malaysia
 ■ Norway
■ United Kingdom
 ■ United States of America

 

 

Voluntary Initiatives  
Government regulation is increasingly being supplemented by voluntary codes and agreements that cover aspects not easily achieved by conventional legislation, and if voluntary action is effective, there is less need for regulations. These measures can include codes of practice, industry association policies, standards and strategies. Voluntary initiatives include:
 
Responsible Care is the International Council of Chemical Associations  own, unique initiative - a voluntary programme that helps it to raise its standards and win greater trust from the public. Under Responsible Care, the worldwide chemical industry is committed to continual improvement in all aspects of health, safety and environmental performance and to open communication about its activities and achievements.  For more information visit the ICCA Web site or read the ICCA Responsible Care Status Report 2002

   
ARPEL - Regional Association of Oil and Natural Gas Companies in Latin America and the Caribbean, Code of Environmental Conduct.
   
Australian Petroleum Production and Exploration Association (APPEA) Code of Environmental Practice.
   
The American Petroleum Institute  STEP (Strategies for Today's Environmental Partnerships) Program.  This program serves to encourage petroleum industry members to commit to environmental stewardship in their policies and principles, and develop programs to ensure safe, environmentally sound operating practices.
   
International Organisation for Standardization: the generic management system standards ISO9000 and ISO14000

   
United Kingdom Offshore Operators Association (UKOOA) Strategy for Sustainable Development 'Striking a Balance' in the Upstream (Exploration and Production) industry.  Includes 58 commitments in the categories of Economy, Environment, Society and Stewardship, with an additional five relating to key processes for delivery - performance measurement and reporting, stakeholder engagement and best practice sharing throughout our industry.

Commitments include:

  • No. 38 Industry-wide adoption of EMS
  • No. 39 - Biodiversity and environmentally sensitive areas
  • No. 40 - Sharing good practice, ensuring guideline compliance

UKOOA Sustainability Strategy - "Striking a Balance" - First Report 2002  annual progress reviews and the report that follows sets out our industry's first report on performance to date against the commitments made, our successes, gaps, and our plans for improvement.