There is no doubt that the recent Montara and Deepwater Horizon oil spills were catastrophic; the clean up continues and litigation is likely to drag on for several years. Who is held liable for the cost and clean up of an oil pollution event? Are these spills likely to change the field—if so, in what ways? Will the present contracting and insurance practices of Australian industry players be sufficient to protect them in the future?
Offshore petroleum and gas production activities are covered by a range of sometimes confusing international, federal and state or territory laws. Operators, directors, contractors, financiers, co-venturers and other stakeholders may all have legal responsibilities in relation to pollution and other environmental impacts of offshore exploration and production activities. The Montara Commission of Inquiry has not yet been released, but the 2009 Productivity Commission Report has already focused attention on these issues.
With reference to contracting practices in the Australian offshore petroleum and gas production industry—in particular indemnities and provisions purporting to limit or exclude liability—this paper outlines the potential extent of stakeholders’ liabilities under relevant international conventions, federal and state or territory legislation, and the common law. It considers the effect of anticipated changes to the operating environment in Australia and lessons to be learned after Montara. This paper will be of interest to any prudent investors, operators or others involved in the industry.
Making Social Services Work for Everyone: a summary of the recent Productivity Commission inquiry
