BETA


2015/2352(INI) Liability, compensation and financial security for offshore and gas operations

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead JURI CHRYSOGONOS Kostas (icon: GUE/NGL GUE/NGL) RADEV Emil (icon: PPE PPE), GUTELAND Jytte (icon: S&D S&D), DZHAMBAZKI Angel (icon: ECR ECR), USPASKICH Viktor (icon: ALDE ALDE), ANDERSSON Max (icon: Verts/ALE Verts/ALE)
Committee Opinion ENVI ANDROULAKIS Nikos (icon: S&D S&D) José Inácio FARIA (icon: ALDE ALDE)
Committee Opinion ITRE
Lead committee dossier:
Legal Basis:
RoP 54

Events

2017/03/27
   EC - Commission response to text adopted in plenary
Documents
2016/12/01
   EP - Results of vote in Parliament
2016/12/01
   EP - Decision by Parliament, 1st reading/single reading
Details

The European Parliament adopted by 506 votes to 106, with 15 abstentions, a resolution on liability, compensation and financial security for offshore oil and gas operations, following the Commission report on this issue.

Members recalled that offshore oil and gas operations are progressively taking place in increasingly extreme environments and could potentially have major and devastating consequences for the environment and economy of the sea and coastal areas. A number of studies, including one by the European Parliament Research Service and one by the Joint Research Centre, estimate in the thousands (more precisely, 9 700 between 1990 and 2007 ), the number of incidents in the EU oil and gas sector.

Bringing up to date and extending the system of compensation and financial security : whilst welcoming the adoption of the Offshore Safety Directive 2013/30/EU (OSD), which complements the Environmental Liability Directive 2004/35/EC (ELD), Parliament called on Member States to guarantee the independence of the competent authorities , and called on the Commission to assess the appropriateness of introducing further harmonised rules on liability, compensation and financial security with a view to preventing any further accidents with cross-border implications.

Parliament stressed that the effective application of the ‘polluter pays’ principle to offshore oil and gas operations should extend not only to the costs of preventing and remedying environmental damage, but also to the costs of remedying traditional damage claims , in line with the precautionary principle and the principle of sustainable development.

Liability to third parties : Members regretted that the OSD does not deal with liability for civil damage to either natural or legal persons, be it bodily injury, property damage or economic loss, whether direct or indirect.

Stressing that the way civil liability is handled varies considerably from one Member State to another and that there is no regime in the vast majority of Member States for compensation payments, Parliament stated that a European framework is needed, which should cover not only bodily injury and property damage but also pure economic loss, and should ensure effective compensation mechanisms for victims and for sectors that may be severely affected (e.g. fisheries and coastal tourism). It called in this respect on the Commission to assess whether a horizontal European framework of collective redress would be a possible solution.

Compensatory regimes : compensatory regimes must be able to address transboundary claims effectively, rapidly, within a reasonable timeframe and without discrimination between claimants from different EEA countries.

Parliament recommended:

that they cover both primary and secondary damage caused in all the affected areas; that strict civil liability rules should be established for offshore accidents in order to facilitate access to justice for victims (both legal and natural persons) of offshore accidents; that financial liability caps should be avoided .

The Commission was asked to revisit the need to introduce common EU standards for remedial and compensatory claim systems.

Financial security instruments : Members regretted the over-reliance on insurance to cover the damage caused by the most costly offshore accidents. They called for:

Member States to develop financial security instruments concerning compensation for traditional damage claims resulting from incidents linked to general offshore oil and gas activities or to offshore oil and gas transport, including in cases of insolvency; the assessment of the possibility of a fund to be established based on fees paid by the offshore industry.

Criminal liability : Parliament suggested analysing to what extent the introduction of criminal liability at EU level will add a layer of deterrence beyond civil penalties. While welcoming the EU’s introduction of the Environmental Crime Directive 2008/99/EC (ECD), it called for the harmonisation of the definitions of the criminal offences and of minimum sanctions when it comes to offshore safety breaches.

Documents
2016/12/01
   EP - End of procedure in Parliament
2016/11/30
   EP - Debate in Parliament
2016/10/19
   EP - Committee report tabled for plenary, single reading
Details

The Committee on Legal Affairs adopted an own-initiative report by Kostas CHRYSOGONOS (GUE/NGL, EL) on liability, compensation and financial security for offshore oil and gas operations, following the Commission report on this issue.

Members recalled that offshore oil and gas operations are progressively taking place in increasingly extreme environments and could potentially have major and devastating consequences for the environment and economy of the sea and coastal areas. A number of studies, including one by the European Parliament Research Service and one by the Joint Research Centre, estimate in the thousands (more precisely, 9 700 between 1990 and 2007 ), the number of incidents in the EU oil and gas sector.

Bringing up to date and extending the system of compensation and financial security : whilst welcoming the adoption of the Offshore Safety Directive 2013/30/EU (OSD), which complements the Environmental Liability Directive 2004/35/EC (ELD), the report called on Member States to guarantee the independence of the competent authorities , and called on the Commission to assess the appropriateness of introducing further harmonised rules on liability, compensation and financial security with a view to preventing any further accidents with cross-border implications.

Members stressed that the effective application of the ‘polluter pays’ principle to offshore oil and gas operations should extend not only to the costs of preventing and remedying environmental damage, but also to the costs of remedying traditional damage claims , in line with the precautionary principle and the principle of sustainable development.

Liability to third parties : Members regretted that the OSD does not deal with liability for civil damage to either natural or legal persons, be it bodily injury, property damage or economic loss, whether direct or indirect.

Stressing that the way civil liability is handled varies considerably from one Member State to another, Members believed that an European framework is needed, which should be based on the legislation of the most advanced Member States, should cover not only bodily injury and property damage but also pure economic loss, and should ensure effective compensation mechanisms for victims and for sectors that may be severely affected (e.g. fisheries and coastal tourism). They called in this respect on the Commission to assess whether a horizontal European framework of collective redress would be a possible solution.

Compensatory regimes : compensatory regimes must be able to address transboundary claims effectively, rapidly, within a reasonable timeframe and without discrimination between claimants from different EEA countries.

The report recommended that they cover both primary and secondary damage caused in all the affected areas. It considered that strict civil liability rules should be established for offshore accidents in order to facilitate access to justice for victims (both legal and natural persons) of offshore accidents, and that financial liability caps should be avoided .

The Commission was asked to revisit the need to introduce common EU standards for remedial and compensatory claim systems.

Members regretted the over-reliance on insurance and the lack of uptake of financial security instruments in the EU to cover the damage caused by the most costly offshore accidents. They asked the Commission to encourage Member States to develop financial security instruments concerning compensation for traditional damage claims resulting from incidents linked to general offshore oil and gas activities or to offshore oil and gas transport, including in cases of insolvency;

They also considered that in that context, the establishment of a fund based on fees paid by the offshore industry could also be assessed.

Lastly, the report noted it necessary to analyse to what extent the introduction of criminal liability at EU level will add a layer of deterrence beyond civil penalties. It also called for harmonisation of the definitions of the criminal offences and of minimum sanctions when it comes to offshore safety breaches.

Documents
2016/10/13
   EP - Vote in committee, 1st reading/single reading
2016/07/12
   EP - Committee opinion
Documents
2016/06/22
   EP - Amendments tabled in committee
Documents
2016/05/26
   EP - Committee draft report
Documents
2016/01/28
   EP - CHRYSOGONOS Kostas (GUE/NGL) appointed as rapporteur in JURI
2016/01/21
   EP - Committee referral announced in Parliament, 1st reading/single reading
2015/12/15
   EP - ANDROULAKIS Nikos (S&D) appointed as rapporteur in ENVI
2015/09/14
   EC - Follow-up document
Details

PURPOSE: to present an overview how liability for damage from offshore accidents in oil and gas prospection, exploration and production is addressed in the EU.

CONTENT: the Commission presents a report on liability, compensation and financial security for offshore oil and gas operations pursuant to Directive 2013/30/EU on the safety of offshore oil and gas operations (the Offshore Safety Directive or OSD). The OSD defines the elements of such a comprehensive EU-wide framework for preventing major accidents and limiting their consequences.

The report analyses how Europe deals with a series of societal dilemmas arising in relation to offshore oil and gas:

who is liable for what kinds of damage and loss to whom; how to ensure that liable parties have sufficient financial capacity to provide rightful compensation for the damage and loss they are liable for; how compensation should be disbursed so that it reaches legitimate claimants quickly and the risks of cascading impacts to the broader economy are minimised.

Liability regimes : whilst there are national differences in the way liability regimes govern access to justice for victims of offshore accidents, the Commission stated that no clear case can be made at the present time that any of the current approaches to civil liability in the Focal States is less effective in reinforcing the OSD's aim of ensuring the safety of offshore oil and gas operations across the EU.

The report highlighted the following aspects:

the transposition of the OSD in national law will prompt Member States to explore in which ways their liability rules will best protect general public interest in line with the compensation requirements of the OSD; in certain cases, the Brussels I and Rome II Regulations prevent differences in national regimes from disadvantaging claimants from other EU Member States; in addition, some Member States may be reappraising their existing liability regimes for offshore accidents in tandem with other changes introduced by the OSD.

The effects of the OSD , as implemented by Member States, will show in the coming years whether it is appropriate to bring certain conduct leading to major offshore accidents within the scope of criminal law for further re-enforcing offshore safety. When appropriate, the Commission will put forward a legislative proposal.

Broadening liability provisions through EU legislation does not appear appropriate at this juncture according to the Commission. However, the Commission will be able to conclude on the need for further steps by the time of the OSD's first implementation report.

Notably, the Commission can:

continue to advance liability issues through structured EUOAG discussions; focus on liability-related provisions in the OSD conformity checks; use EUOAG meetings for systematic data gathering covering all liability-related aspects of newly transposed laws.

Financial security and compensation mechanisms : the report noted that there is broad variety of financial security products available to hedge oil and gas companies’ operating risk. These range from self-insurance options, to third-party insurance, to mutual schemes such as the Offshore Pollution Liability Association Ltd (OPOL), to alternative risk transfer mechanisms and others.

Whilst not all of these products may currently be in widespread use by the offshore industry, the marketplace for financial security instruments appears to have the depth and innovation necessary to cater to all oil and gas companies operating under the current EEA liability obligations.

There is currently a lack of uptake of financial security instruments to fully cover the more infrequent and costly offshore accidents in the EEA. In addition, there are just two compensation mechanisms currently in place specifically for oil and gas accidents in the Focal States.

However, provisions in the OSD should lead to significant improvements in both of these areas. Such anticipated changes should be seen following the July 2015 implementation deadline for the OSD and the implementation of the Offshore Protocol of the Barcelona Convention.

Should the new national laws not improve the availability of financial security instruments and put in place procedures for ensuring prompt and adequate handling of compensation claims, the Commission will reassess whether and what further EU action could achieve these objectives.

The Commission encourages Member States to share their experiences on financial security instruments, liability, compensation and criminal penalties, first of all, in the framework of the European Offshore Authorities Group.

After the implementation of the Directive and based on experiences of Member States working with the new legal basis the Commission may update its assessment as provided by this report.

2015/09/14
   EC - Non-legislative basic document published
Details

The Commission presented a report on liability, compensation and financial security for offshore oil and gas operations pursuant to Directive 2013/30/EU on the safety of offshore oil and gas operations (the Offshore Safety Directive or OSD). The OSD defines the elements of such a comprehensive EU-wide framework for preventing major accidents and limiting their consequences.

This report provides an overview how liability for damage from offshore accidents in oil and gas prospection, exploration and production is addressed in the EU. In effect, it analyses how Europe deals with a series of societal dilemmas arising in relation to offshore oil and gas:

who is liable for what kinds of damage and loss to whom; how to ensure that liable parties have sufficient financial capacity to provide rightful compensation for the damage and loss they are liable for; how compensation should be disbursed so that it reaches legitimate claimants quickly and the risks of cascading impacts to the broader economy are minimised.

Liability regimes : whilst there are national differences in the way liability regimes govern access to justice for victims of offshore accidents, the Commission stated that no clear case can be made at the present time that any of the current approaches to civil liability in the Focal States is less effective in reinforcing the OSD's aim of ensuring the safety of offshore oil and gas operations across the EU.

The report highlighted the following aspects:

the transposition of the OSD in national law will prompt Member States to explore in which ways their liability rules will best protect general public interest in line with the compensation requirements of the OSD; in certain cases, the Brussels I and Rome II regulations prevent differences in national regimes from disadvantaging claimants from other EU Member States; in addition, some Member States may be reappraising their existing liability regimes for offshore accidents in tandem with other changes introduced by the OSD.

The effects of the OSD , as implemented by Member States, will show in the coming years whether it is appropriate to bring certain conduct leading to major offshore accidents within the scope of criminal law for further re-enforcing offshore safety. When appropriate, the Commission will put forward a legislative proposal.

Broadening liability provisions through EU legislation does not appear appropriate at this juncture according to the Commission. However, the Commission will be able to conclude on the need for further steps by the time of the OSD's first implementation report.

Notably, the Commission can:

continue to advance liability issues through structured EUOAG discussions; focus on liability-related provisions in the OSD conformity checks; use EUOAG meetings for systematic data gathering covering all liability-related aspects of newly transposed laws.

Financial security and compensation mechanisms : the report noted that there is broad variety of financial security products available to hedge oil and gas companies’ operating risk. These range from self-insurance options, to third-party insurance, to mutual schemes such as the Offshore Pollution Liability Association Ltd (OPOL), to alternative risk transfer mechanisms and others.

Whilst not all of these products may currently be in widespread use by the offshore industry, the marketplace for financial security instruments appears to have the depth and innovation necessary to cater to all oil and gas companies operating under the current EEA liability obligations.

There is currently a lack of uptake of financial security instruments to fully cover the more infrequent and costly offshore accidents in the EEA. In addition, there are just two compensation mechanisms currently in place specifically for oil and gas accidents in the Focal States.

However, provisions in the OSD should lead to significant improvements in both of these areas . Such anticipated changes should be seen following the July 2015 implementation deadline for the OSD and the implementation of the Offshore Protocol of the Barcelona Convention.

Should the new national laws not improve the availability of financial security instruments and put in place procedures for ensuring prompt and adequate handling of compensation claims, the Commission will reassess whether and what further EU action could achieve these objectives .

The Commission encourages Member States to share their experiences on financial security instruments, liability, compensation and criminal penalties, first of all, in the framework of the European Offshore Authorities Group.

After the implementation of the Directive and based on experiences of Member States working with the new legal basis the Commission may update its assessment as provided by this report.

Documents

Activities

Votes

A8-0308/2016 - Kostas Chrysogonos - Résolution

2016/12/01 Outcome: +: 506, -: 106, 0: 15
DE IT ES RO FR AT BE PT HU BG CZ SE FI NL HR LT SI EL IE LV EE MT LU SK DK CY PL GB
Total
79
62
42
24
59
17
21
17
15
16
16
16
13
23
11
8
8
18
10
6
6
6
5
12
9
4
47
56
icon: PPE PPE
182

Estonia PPE

For (1)

1

Luxembourg PPE

2
icon: S&D S&D
161
3

Netherlands S&D

2

Croatia S&D

2

Slovenia S&D

For (1)

1

Ireland S&D

For (1)

1

Latvia S&D

1

Estonia S&D

For (1)

1

Malta S&D

3

Luxembourg S&D

For (1)

1

Cyprus S&D

2
icon: ALDE ALDE
63

Romania ALDE

3

Austria ALDE

For (1)

1

Sweden ALDE

2

Croatia ALDE

2

Slovenia ALDE

For (1)

1

Ireland ALDE

For (1)

1

Latvia ALDE

1

Estonia ALDE

3

Luxembourg ALDE

For (1)

1

United Kingdom ALDE

1
icon: Verts/ALE Verts/ALE
42
4

Austria Verts/ALE

3

Belgium Verts/ALE

2

Hungary Verts/ALE

2

Sweden Verts/ALE

3

Finland Verts/ALE

For (1)

1

Netherlands Verts/ALE

2

Croatia Verts/ALE

For (1)

1

Lithuania Verts/ALE

For (1)

1

Slovenia Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Estonia Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

United Kingdom Verts/ALE

Against (1)

5
icon: GUE/NGL GUE/NGL
36

France GUE/NGL

2

Portugal GUE/NGL

For (1)

Against (1)

2

Czechia GUE/NGL

1

Sweden GUE/NGL

For (1)

1

Finland GUE/NGL

For (1)

1

Netherlands GUE/NGL

For (1)

3

Ireland GUE/NGL

4

Denmark GUE/NGL

Abstain (1)

1

Cyprus GUE/NGL

1

United Kingdom GUE/NGL

Abstain (1)

1
icon: EFDD EFDD
33

Germany EFDD

Against (1)

1

France EFDD

1

Sweden EFDD

2

Poland EFDD

1
icon: NI NI
14

Germany NI

1

Italy NI

1

France NI

2

Hungary NI

For (1)

1

Poland NI

Against (1)

1

United Kingdom NI

3
icon: ENF ENF
34

Germany ENF

Against (1)

1

Romania ENF

Against (1)

1

Belgium ENF

Abstain (1)

1

Netherlands ENF

3

Poland ENF

2

United Kingdom ENF

Against (1)

1
icon: ECR ECR
61

Italy ECR

2

Romania ECR

For (1)

1

Bulgaria ECR

2

Czechia ECR

2

Finland ECR

Abstain (1)

2

Netherlands ECR

2

Croatia ECR

Against (1)

1

Greece ECR

For (1)

1

Slovakia ECR

Abstain (1)

3

Denmark ECR

2

Cyprus ECR

Abstain (1)

1
AmendmentsDossier
232 2015/2352(INI)
2016/05/03 ENVI 84 amendments...
source: 582.275
2016/06/08 ITRE 56 amendments...
source: 584.089
2016/06/22 JURI 92 amendments...
source: 584.225

History

(these mark the time of scraping, not the official date of the change)

committees/0
type
Responsible Committee
body
EP
associated
False
committee_full
Legal Affairs
committee
JURI
rapporteur
name: CHRYSOGONOS Kostas date: 2016-01-28T00:00:00 group: European United Left - Nordic Green Left abbr: GUE/NGL
shadows
committees/0
type
Responsible Committee
body
EP
associated
False
committee_full
Legal Affairs
committee
JURI
date
2016-01-28T00:00:00
rapporteur
name: CHRYSOGONOS Kostas group: European United Left - Nordic Green Left abbr: GUE/NGL
shadows
committees/1
type
Committee Opinion
body
EP
associated
False
committee_full
Environment, Public Health and Food Safety
committee
ENVI
rapporteur
name: ANDROULAKIS Nikos date: 2015-12-15T00:00:00 group: Progressive Alliance of Socialists and Democrats abbr: S&D
committees/1
type
Committee Opinion
body
EP
associated
False
committee_full
Environment, Public Health and Food Safety
committee
ENVI
date
2015-12-15T00:00:00
rapporteur
name: ANDROULAKIS Nikos group: Progressive Alliance of Socialists and Democrats abbr: S&D
committees/2/date
    docs/0
    date
    2015-09-14T00:00:00
    docs
    summary
    type
    Follow-up document
    body
    EC
    docs/3
    date
    2017-03-27T00:00:00
    docs
    url: /oeil/spdoc.do?i=27734&j=0&l=en title: SP(2017)128
    type
    Commission response to text adopted in plenary
    docs/4
    date
    2017-03-27T00:00:00
    docs
    url: /oeil/spdoc.do?i=27734&j=0&l=en title: SP(2017)128
    type
    Commission response to text adopted in plenary
    docs/4/body
    EC
    events/0
    date
    2015-09-14T00:00:00
    type
    Non-legislative basic document published
    body
    EC
    docs
    summary
    events/0
    date
    2015-09-14T00:00:00
    type
    Non-legislative basic document published
    body
    EC
    docs
    summary
    events/3/docs/0/url
    Old
    http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2016-0308&language=EN
    New
    http://www.europarl.europa.eu/doceo/document/A-8-2016-0308_EN.html
    events/6/docs/0/url
    Old
    http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2016-0478
    New
    http://www.europarl.europa.eu/doceo/document/TA-8-2016-0478_EN.html
    commission
    • body: EC dg: Energy commissioner: ŠEFČOVIČ Maroš
    committees
    • type: Responsible Committee body: EP associated: False committee_full: Legal Affairs committee: JURI date: 2016-01-28T00:00:00 rapporteur: name: CHRYSOGONOS Kostas group: European United Left - Nordic Green Left abbr: GUE/NGL shadows: name: RADEV Emil group: European People's Party (Christian Democrats) abbr: PPE name: GUTELAND Jytte group: Progressive Alliance of Socialists and Democrats abbr: S&D name: DZHAMBAZKI Angel group: European Conservatives and Reformists abbr: ECR name: USPASKICH Viktor group: Alliance of Liberals and Democrats for Europe abbr: ALDE name: ANDERSSON Max group: Greens/European Free Alliance abbr: Verts/ALE
    • type: Committee Opinion body: EP associated: False committee_full: Environment, Public Health and Food Safety committee: ENVI date: 2015-12-15T00:00:00 rapporteur: name: ANDROULAKIS Nikos group: Progressive Alliance of Socialists and Democrats abbr: S&D
    • type: Committee Opinion body: EP associated: False committee_full: Industry, Research and Energy committee: ITRE date:
    docs
    • date: 2016-05-26T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE582.416 title: PE582.416 type: Committee draft report body: EP
    • date: 2016-06-22T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE584.225 title: PE584.225 type: Amendments tabled in committee body: EP
    • date: 2016-07-12T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE575.123&secondRef=02 title: PE575.123 committee: ENVI type: Committee opinion body: EP
    • date: 2017-03-27T00:00:00 docs: url: /oeil/spdoc.do?i=27734&j=0&l=en title: SP(2017)128 type: Commission response to text adopted in plenary
    events
    • date: 2015-09-14T00:00:00 type: Non-legislative basic document published body: EC docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2015/0422/COM_COM(2015)0422_EN.pdf title: COM(2015)0422 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2015&nu_doc=0422 title: EUR-Lex summary: PURPOSE: to present an overview how liability for damage from offshore accidents in oil and gas prospection, exploration and production is addressed in the EU. CONTENT: the Commission presents a report on liability, compensation and financial security for offshore oil and gas operations pursuant to Directive 2013/30/EU on the safety of offshore oil and gas operations (the Offshore Safety Directive or OSD). The OSD defines the elements of such a comprehensive EU-wide framework for preventing major accidents and limiting their consequences. The report analyses how Europe deals with a series of societal dilemmas arising in relation to offshore oil and gas: who is liable for what kinds of damage and loss to whom; how to ensure that liable parties have sufficient financial capacity to provide rightful compensation for the damage and loss they are liable for; how compensation should be disbursed so that it reaches legitimate claimants quickly and the risks of cascading impacts to the broader economy are minimised. Liability regimes : whilst there are national differences in the way liability regimes govern access to justice for victims of offshore accidents, the Commission stated that no clear case can be made at the present time that any of the current approaches to civil liability in the Focal States is less effective in reinforcing the OSD's aim of ensuring the safety of offshore oil and gas operations across the EU. The report highlighted the following aspects: the transposition of the OSD in national law will prompt Member States to explore in which ways their liability rules will best protect general public interest in line with the compensation requirements of the OSD; in certain cases, the Brussels I and Rome II Regulations prevent differences in national regimes from disadvantaging claimants from other EU Member States; in addition, some Member States may be reappraising their existing liability regimes for offshore accidents in tandem with other changes introduced by the OSD. The effects of the OSD , as implemented by Member States, will show in the coming years whether it is appropriate to bring certain conduct leading to major offshore accidents within the scope of criminal law for further re-enforcing offshore safety. When appropriate, the Commission will put forward a legislative proposal. Broadening liability provisions through EU legislation does not appear appropriate at this juncture according to the Commission. However, the Commission will be able to conclude on the need for further steps by the time of the OSD's first implementation report. Notably, the Commission can: continue to advance liability issues through structured EUOAG discussions; focus on liability-related provisions in the OSD conformity checks; use EUOAG meetings for systematic data gathering covering all liability-related aspects of newly transposed laws. Financial security and compensation mechanisms : the report noted that there is broad variety of financial security products available to hedge oil and gas companies’ operating risk. These range from self-insurance options, to third-party insurance, to mutual schemes such as the Offshore Pollution Liability Association Ltd (OPOL), to alternative risk transfer mechanisms and others. Whilst not all of these products may currently be in widespread use by the offshore industry, the marketplace for financial security instruments appears to have the depth and innovation necessary to cater to all oil and gas companies operating under the current EEA liability obligations. There is currently a lack of uptake of financial security instruments to fully cover the more infrequent and costly offshore accidents in the EEA. In addition, there are just two compensation mechanisms currently in place specifically for oil and gas accidents in the Focal States. However, provisions in the OSD should lead to significant improvements in both of these areas. Such anticipated changes should be seen following the July 2015 implementation deadline for the OSD and the implementation of the Offshore Protocol of the Barcelona Convention. Should the new national laws not improve the availability of financial security instruments and put in place procedures for ensuring prompt and adequate handling of compensation claims, the Commission will reassess whether and what further EU action could achieve these objectives. The Commission encourages Member States to share their experiences on financial security instruments, liability, compensation and criminal penalties, first of all, in the framework of the European Offshore Authorities Group. After the implementation of the Directive and based on experiences of Member States working with the new legal basis the Commission may update its assessment as provided by this report.
    • date: 2016-01-21T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
    • date: 2016-10-13T00:00:00 type: Vote in committee, 1st reading/single reading body: EP
    • date: 2016-10-19T00:00:00 type: Committee report tabled for plenary, single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2016-0308&language=EN title: A8-0308/2016 summary: The Committee on Legal Affairs adopted an own-initiative report by Kostas CHRYSOGONOS (GUE/NGL, EL) on liability, compensation and financial security for offshore oil and gas operations, following the Commission report on this issue. Members recalled that offshore oil and gas operations are progressively taking place in increasingly extreme environments and could potentially have major and devastating consequences for the environment and economy of the sea and coastal areas. A number of studies, including one by the European Parliament Research Service and one by the Joint Research Centre, estimate in the thousands (more precisely, 9 700 between 1990 and 2007 ), the number of incidents in the EU oil and gas sector. Bringing up to date and extending the system of compensation and financial security : whilst welcoming the adoption of the Offshore Safety Directive 2013/30/EU (OSD), which complements the Environmental Liability Directive 2004/35/EC (ELD), the report called on Member States to guarantee the independence of the competent authorities , and called on the Commission to assess the appropriateness of introducing further harmonised rules on liability, compensation and financial security with a view to preventing any further accidents with cross-border implications. Members stressed that the effective application of the ‘polluter pays’ principle to offshore oil and gas operations should extend not only to the costs of preventing and remedying environmental damage, but also to the costs of remedying traditional damage claims , in line with the precautionary principle and the principle of sustainable development. Liability to third parties : Members regretted that the OSD does not deal with liability for civil damage to either natural or legal persons, be it bodily injury, property damage or economic loss, whether direct or indirect. Stressing that the way civil liability is handled varies considerably from one Member State to another, Members believed that an European framework is needed, which should be based on the legislation of the most advanced Member States, should cover not only bodily injury and property damage but also pure economic loss, and should ensure effective compensation mechanisms for victims and for sectors that may be severely affected (e.g. fisheries and coastal tourism). They called in this respect on the Commission to assess whether a horizontal European framework of collective redress would be a possible solution. Compensatory regimes : compensatory regimes must be able to address transboundary claims effectively, rapidly, within a reasonable timeframe and without discrimination between claimants from different EEA countries. The report recommended that they cover both primary and secondary damage caused in all the affected areas. It considered that strict civil liability rules should be established for offshore accidents in order to facilitate access to justice for victims (both legal and natural persons) of offshore accidents, and that financial liability caps should be avoided . The Commission was asked to revisit the need to introduce common EU standards for remedial and compensatory claim systems. Members regretted the over-reliance on insurance and the lack of uptake of financial security instruments in the EU to cover the damage caused by the most costly offshore accidents. They asked the Commission to encourage Member States to develop financial security instruments concerning compensation for traditional damage claims resulting from incidents linked to general offshore oil and gas activities or to offshore oil and gas transport, including in cases of insolvency; They also considered that in that context, the establishment of a fund based on fees paid by the offshore industry could also be assessed. Lastly, the report noted it necessary to analyse to what extent the introduction of criminal liability at EU level will add a layer of deterrence beyond civil penalties. It also called for harmonisation of the definitions of the criminal offences and of minimum sanctions when it comes to offshore safety breaches.
    • date: 2016-11-30T00:00:00 type: Debate in Parliament body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?secondRef=TOC&language=EN&reference=20161130&type=CRE title: Debate in Parliament
    • date: 2016-12-01T00:00:00 type: Results of vote in Parliament body: EP docs: url: https://oeil.secure.europarl.europa.eu/oeil/popups/sda.do?id=27734&l=en title: Results of vote in Parliament
    • date: 2016-12-01T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2016-0478 title: T8-0478/2016 summary: The European Parliament adopted by 506 votes to 106, with 15 abstentions, a resolution on liability, compensation and financial security for offshore oil and gas operations, following the Commission report on this issue. Members recalled that offshore oil and gas operations are progressively taking place in increasingly extreme environments and could potentially have major and devastating consequences for the environment and economy of the sea and coastal areas. A number of studies, including one by the European Parliament Research Service and one by the Joint Research Centre, estimate in the thousands (more precisely, 9 700 between 1990 and 2007 ), the number of incidents in the EU oil and gas sector. Bringing up to date and extending the system of compensation and financial security : whilst welcoming the adoption of the Offshore Safety Directive 2013/30/EU (OSD), which complements the Environmental Liability Directive 2004/35/EC (ELD), Parliament called on Member States to guarantee the independence of the competent authorities , and called on the Commission to assess the appropriateness of introducing further harmonised rules on liability, compensation and financial security with a view to preventing any further accidents with cross-border implications. Parliament stressed that the effective application of the ‘polluter pays’ principle to offshore oil and gas operations should extend not only to the costs of preventing and remedying environmental damage, but also to the costs of remedying traditional damage claims , in line with the precautionary principle and the principle of sustainable development. Liability to third parties : Members regretted that the OSD does not deal with liability for civil damage to either natural or legal persons, be it bodily injury, property damage or economic loss, whether direct or indirect. Stressing that the way civil liability is handled varies considerably from one Member State to another and that there is no regime in the vast majority of Member States for compensation payments, Parliament stated that a European framework is needed, which should cover not only bodily injury and property damage but also pure economic loss, and should ensure effective compensation mechanisms for victims and for sectors that may be severely affected (e.g. fisheries and coastal tourism). It called in this respect on the Commission to assess whether a horizontal European framework of collective redress would be a possible solution. Compensatory regimes : compensatory regimes must be able to address transboundary claims effectively, rapidly, within a reasonable timeframe and without discrimination between claimants from different EEA countries. Parliament recommended: that they cover both primary and secondary damage caused in all the affected areas; that strict civil liability rules should be established for offshore accidents in order to facilitate access to justice for victims (both legal and natural persons) of offshore accidents; that financial liability caps should be avoided . The Commission was asked to revisit the need to introduce common EU standards for remedial and compensatory claim systems. Financial security instruments : Members regretted the over-reliance on insurance to cover the damage caused by the most costly offshore accidents. They called for: Member States to develop financial security instruments concerning compensation for traditional damage claims resulting from incidents linked to general offshore oil and gas activities or to offshore oil and gas transport, including in cases of insolvency; the assessment of the possibility of a fund to be established based on fees paid by the offshore industry. Criminal liability : Parliament suggested analysing to what extent the introduction of criminal liability at EU level will add a layer of deterrence beyond civil penalties. While welcoming the EU’s introduction of the Environmental Crime Directive 2008/99/EC (ECD), it called for the harmonisation of the definitions of the criminal offences and of minimum sanctions when it comes to offshore safety breaches.
    • date: 2016-12-01T00:00:00 type: End of procedure in Parliament body: EP
    procedure
    reference
    2015/2352(INI)
    title
    Liability, compensation and financial security for offshore and gas operations
    subject
    type
    INI - Own-initiative procedure
    subtype
    Initiative
    legal_basis
    Rules of Procedure EP 54
    Modified legal basis
    Rules of Procedure EP 159
    stage_reached
    Procedure completed
    dossier_of_the_committee
    JURI/8/05388