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Edited by Günther Handl and Kristoffer Svendsen

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Edited by Günther Handl and Kristoffer Svendsen

When the new millennium began, rather ominously, with a series of spectacular natural and man-made catastrophes, some commentators spoke of these events as the opening act of an ‘age of disaster’ in which the line between man-made and natural disasters was increasingly becoming blurred. For others this beginning symbolized, more dramatically still, the dawn of a new geological epoch, the Anthropocene, a period in which human activity has begun to affect the very mechanics of ‘system Earth’ as such. Whatever this inauspicious beginning’s larger significance (or eloquent characterization), it surely was also a prosaic reminder of the inexorable increase in discrete, intrinsically man-made hazards capable of causing significant accidental harm. Prime illustrations of this phenomenon are the accidents at the Montara Wellhead Platform and the Macondo (Deepwater Horizon – DWH) oil well, in 2009 and 2010 respectively, as well as the (earthquake and tsunami-triggered) disaster at the Fukushima Daiichi nuclear power plant in 2011. Whereas, post-Fukushima, the nuclear industry underwent critical appraisal of its international regulatory framework and a tightening of its safety and emergency preparedness and response requirements, in the wake of the Montara and DWH accidents, the offshore oil and gas industry escaped global-level scrutiny and regulatory attention for the simple reason that the industry had remained largely unregulated internationally. To be sure, the two offshore accidents did trigger reviews and, in a few instances, specific adjustments of national (and regional) laws and regulations applicable to offshore oil and gas operations. By contrast, at the global level, efforts at expanding the offshore industry’s international governance structure beyond its presently extremely limited scope, let alone at establishing globally binding criteria to manage critical aspects of the risk of offshore accidents, have largely been stymied. This lack of international regulatory attention to the offshore industry, however, is unjustifiable given enormous actual (as demonstrated by the Ixtoc I and Montara incidents) or potential (as hinted at by the DWH event) transboundary impacts of offshore accidents and the state of global regulatory interdependence characteristic of the industry as a whole.

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Managing the Risk of Offshore Oil and Gas Accidents

The International Legal Dimension

Edited by Günther Handl and Kristoffer Svendsen

This book addresses the international legal dimension of the management of the risk of accidents associated with offshore oil and gas activities. It focuses on the prevention and minimization of harm as well as the post-accident management of loss through liability and compensation arrangements and the processing of mass claims for compensation. Government officials of countries with offshore industries, international civil servants and academics in related fields will find the book a valuable resource.
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Kristoffer Svendsen and Andrey Kompaniets

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Vernon Valentine Palmer, Kristoffer Svendsen and Peter Wetterstein

In this chapter we present a new understanding of the recoverability of pure economic loss under the Oil Pollution Act of 1990. Our ‘unified test of causation’ expands the recovery of pure economic loss beyond the limits of proximate cause analysis, while maintaining a cutoff point derived from the Act’s language and structure. The test combines the use of factual causation, with the ‘scope and purpose’ of the statute functioning as its limiting principle. The question in every case should be whether the discharged oil was a ‘but for’ reason for the plaintiff’s economic loss and whether compensation for that loss falls within the intended scope and purpose of the statute. This chapter deals with the issue of compensating damage to the environment. Its focus is on ‘pure environmental damage,’ that is, damage inflicted on the common goods of nature. Com_pensating pure environmental damage raises many issues, such as its conceptual distinction from the more ‘traditional’ types of compensable damage, namely personal injury, property damage and economic loss; the legal prerequisites of a right to claim compensation for pure environmental damage; the legal remedies available to the claimant(s) – whether a claim for restoration of the damaged environment or a claim for monetary compensation or a combination of both; and, finally, the assessement of damages for loss or destruction of natural resources. To answer these questions, the chapter looks at applicable international legislation (basi_cally conventions), EU law and some national rules and solutions. After clarifying the legal framework, the chapter offers an evaluation and discusses possible improvements to the status quo.