Brief Comment on the Background and Current Status of the Draft Convention being prepared by the CMI IWG on Offshore Activities

It can be read in CMI Newsletter N° 1 2020, Minutes of the CMI Assembly meeting Mexican Colloquium, Working Group Reports (f) Offshore Activities Pollution Liability and Related Issues: Report of the undersigned. I began the report to the Assembly by reminding that, as the report to EXCO and Assembly in Genoa had explained, the way towards an international convention on Transboundary Pollution caused by Offshore Activities through the IMO Legal Committee had been closed. Patrick Griggs had reported that the Legal Committee had adopted a Guidance Document and had expressed the hope that it would prove useful and had agreed that no further work by the Committee would be necessary.  Accordingly, as far as IMO’s Legal Committee was concerned, there was, at the time, no interest in an international convention on the subject.

The ExCo authorized the IWG to work on a Convention limited to transboundary pollution caused by MODUs (Mobile Offshore Drilling Units) like the famous DEEPWATER HORIZON in the first instance -since there were possibilities that they would be considered vessels- and later it was extended to any type of Offshore artifacts as a consequence of new casualties that were not limited to MODUs.

Since first recognizing the need for an offshore Oil and Gas Convention (the OGA Convention for the initials of Oil and Gas in English) in 2020, the IWG on Offshore Activities convened a Committee to draft a first text, followed by its circulation to all IWG members for review and comment on October 2021. Initially modeled on the structure of the CLC/Fund, Bunkers and HNS Conventions, the draft was adapted to the particularities, uniqueness and diversity of the offshore oil and gas activities, first and foremost that they are actual industrial activities. Their components are much more than just tankers or other transport vessels.

After recognizing the need for an offshore Oil and Gas Convention in 2020, the IWG on Offshore Activities convened a Committee to draft a first text, to be followed by its circulation to all IWG members for review and comment. The basic premises underpinning the need for this OGA Convention were: The dangers of pollution and the increasingly high risks posed by worldwide offshore activities; the lack of comprehensive international compensation mechanisms for offshore pollution; the notable paucity of environmental protection and financial security provided by the existing international agreements on the waterborne transport of oil and gas and by the current worldwide trends towards compensating environmental damages caused by human activities.

The Drafting Committee was composed by: Jorge Radovich, Aldo Brandani, Stephen Rares, with several comments received and acknowledged from Aurelio Fernández Concheso. The drafting Committee produced a first draft version of the OGA Convention, circulated to all IWG Members on October 19, 2021.

Substantial comments and contributions were offered by IWG members Prof. Mans Jacobsson and Andrew Taylor, introduced into the main Convention text during the iteration of draft versions produced up to the beginning of 2024.

The application of our Convention is restricted to transboundary pollution as explained above.

Significant progress was made in the drafting of the OGA Convention. We have now a complete draft of the body of the Convention and the structuring of its Compensation Fund. During the several editing iterations consensus was reached on majority of points, even regarding contributions to the Fund, which must be contributed by the operator of the Offshore installation and not by the importer of the hydrocarbon as in the CLC/Fund Convention and others administered by the IOPC Fund.

This is because Offshore facilities constitute true industrial complexes that connect the Platforms through pipes with facilities on land, with vessels (if they can be considered vessels because they are not actually destined to navigation) that operate as storage tanks (FSOs) and others that are true refineries (FPSOs), and are also connected by pipes, so that the final destination of the hydrocarbons can be very diverse.

Definitions, grammatical and punctuation modifications aside, I think that the only serious dissent is whether only spills that cause economic damage should be covered and compensated, as in the CLC/Fund Convention, which is the minority opinion, or whether restoration of transboundary environmental damage caused by Offshore facilities should be included, as the ample majority maintains.

Mans Jacobsson has offered to prepare a consolidated draft highlighting the differences, which was gladly accepted by the undersigned. I accepted Mans’ proposal taking into account his knowledge and experience in drafting international conventions. Unfortunately, Mans has been extremely busy finishing a book and developing his work on the CMI Audit Committee, so to date we do not have – as was our intention – the consolidated version.

The consolidated draft will opportunely be discussed by the Group and my idea is to prepare a short questionnaire requesting the opinion of the National Maritime Law Associations on the consolidated draft Convention. In this way, we will have an important guide so that finally the ExCo could make a grounded decision on which direction to follow.

by  Jorge M. Radovich

Chair of the IWG on Offshore Activities