The Law on Environmental Liability with regard to the Prevention and Remedying of Environmental Damage (Law 189 (I)/2007) (the ELL) transposes Directive 2004/35/CE 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 ("the ELD"). They establish a framework of environmental liability based on the "polluter pays" principle, under which anyone causing pollution may be held liable for implementing and meeting the cost of any actions that may be required to deal with the resultant environmental damage.
Article 4(2) of the ELD provides that environmental damage covered by various international conventions relating to oil pollution at sea is outside its scope, and this is mirrored in the ELL.
However, Directive 2013/30/EU of the European Parliament and of the Council of 12 June 2013 on safety of offshore oil and gas operations ("the Safety Directive"), which applies to existing and future installations and operations, amends the ELD to bring offshore oil and gas activities within its scope.
The objective of the Safety Directive is to reduce the number of major accidents related to offshore oil and gas operations and to limit the consequences of any that do occur, by establishing minimum conditions for safe offshore exploration and exploitation of oil and gas and improving the response mechanisms in the event of an accident, with the aim of increasing the protection of the marine environment and coastal economies against pollution, and limiting possible disruptions to energy production.
The Safety Directive includes a broad definition of a major accident, as an incident such as explosion, fire, loss of well control, damage to installations, or release of oil or other substances involving, or with a significant potential to cause, fatalities or serious personal injury, together with any major environmental incident resulting from such an incident.
The Safety Directive was transposed into Cyprus legislation through the Law on External Emergency Response Plans in Offshore Oil and Gas Operations (Law 59 (I)/2016) ("the Safety Law"). It requires operators of oil and gas operations to put in place effective emergency response plans to cover all offshore oil and gas operations, any connected infrastructure and the areas which may be affected.
The production of the emergency response plan is the responsibility of the operator (meaning the entity appointed by the licensee or licensing authority to conduct offshore oil and gas operations), the entity or entities legally entitled to control the operation of a non-production installation, the holder or joint holders of a licence and the Department of Labour Inspection.
Plans must cover the installation concerned together with any connected infrastructure and a safety zone extending at least 500 metres from any part of the installation. A greater safety zone may be required under an order issued by the Minister of Transport, Communications and Works in accordance with the Safety Zones Regulations of 2013.
The Safety Law provides an effective means of identifying the responsibilities of the various parties involved and the resources available to deal with emergencies. Annex 1 of the Safety Law sets out the minimum requirements for external emergency response plans. Plans must clearly specify the role of all the parties concerned (operators, contractors and authorities) in dealing with emergency situations and the arrangements for liaison and coordination of their activities. Annex 2 requires the Ministry of Agriculture, Rural Development and Environment to maintain records of equipment and services available for response to emergency situations, together with arrangements for maintenance of the equipment and for review and updating of operating procedures.
The competent authority is responsible for communicating information on emergency response plans to the European Commission, to other member states that may be effected and to the public. It must ensure that the information notified does not pose any risk to the safety and protection of offshore oil and gas operations and their operation, and does not harm the economic or national interests of Cyprus or the personal security and prosperity of employees.
At least once per year, operators and owners must test their readiness to deal with major incidents, in close cooperation with the Cyprus authorities. This should ensure that deficiencies are identified early and rectified, and that plans keep abreast of best international practice.
It is apparent that safety and environmental protection are vital in offshore oil and gas operations, especially for a newcomer to the sector such as Cyprus. The new environmental liability regulatory framework provides the necessary legal framework to protect the marine ecosystem from damage. However, as is always the case, the ultimate outcome is dependent on effective implementation and enforcement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.