Frequent Legal Issues for Contractors on
Sakhalin Oil and Gas Projects
(Appearing soon in the Russian Energy Law Journal)

XIII. Maritime Considerations: Oil Spill Prevention

Presented by Natalia Prisekina, senior associate attorney and Director of the Vladivostok branch office of Russin & Vecchi.

The Russian Federation is a party to several multilateral international conventions related to oil pollution issues. These include: 1) The International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties (Brussels, November 29, 1969)(recognizing the right of states to intervene in the open sea in the event of accidents or threatened accidents that could result in oil contamination of their coastlines, and incorporating a test for the adequacy of measures taken); 2) The International Convention For the Prevention of Pollution from Ships (November 2, 1973, as modified by the Protocol of 1978 relating thereto (except for Protocol of 1997)) (introducing strict rules for the prevention of oil contamination of the sea in Appendix I to the Convention); 3) The International Convention On Civil Liability for Oil Pollution Damage (Brussels, September 29, 1969, as amended by the protocol of 1992)(dealing with civil liability for oil pollution, establishing, inter alia, instances where liability is excluded and limited); and 4) The International Convention On the Establishment of an International Fund for Compensation for Oil Pollution Damage (Brussels, December 18, 1971, as amended by the protocol of 1992)(supplementing the International Convention On Civil Liability for Oil Pollution Damage (Brussels, September 29, 1969) and discussing the procedure and organization of the International Fund for compensating oil pollution damage within certain limits).

U.S. Secretary of Energy Spencer Abraham and Russian Energy Minister Igor Yusufov met in September 2003 to discuss energy issues of interest to both countries and to implement the oil spill prevention and response agreement the two countries developed over the past year. They signed the oil spill response protocol at the second U.S.-Russia Commercial Energy Summit.

The original proposal, signed in March 2003, recommended extensive mutual assistance from both countries in the areas of technology, logistics, training, regulatory issues and exchange programs. It also recognized their common commitment to environmentally sustainable development and transportation of oil.

The Russian Federation has already developed oil spill contingency plans for each of its regions, and has worked closely with local government officials on plans applicable to marine bodies from the Black and Caspian Seas to the Barents and Pacific coast. The U.S. has meanwhile developed similar response plans, employing cutting-edge technologies to clean up oil spills, and constantly updated and improved technologies to prevent oil spills. Under the auspices of the protocol, the U.S. and Russia will share ideas, information, technologies and methods in order to assist both countries in increasing the effectiveness of their oil spill regulation, prevention and response.

Russian legislation (148) requires organizations that have production facilities that are considered to be hazardous to have a plan with respect to the prevention and elimination of oil and petroleum products spills (149). As part of such a plan, the organization must estimate the amount of resources necessary to clean up spills that may occur. (150)

Various ministries of the Government must develop and approve lists of organizations responsible for the preparation of Oil Spill Response Plans (“OSRP”) (151). Such lists, according to their sectoral affiliation, are approved by a federal executive body in agreement with the Ministry of the Russian Federation for Civil Defense Affairs, Emergency Situations and the Elimination of the Aftermath of Natural Disasters, the Ministry of Natural Resources of the Russian Federation, and with the Federal Mining and Industrial Inspectorate of Russia.

Organizations responsible for preparing OSRPs must form their own units for oil and petroleum products spills elimination, perform attestation procedures for these units in compliance with the legislation of the Russian Federation, equip them with special technical facilities and conclude contracts with professional emergency rescue services companies performing oil and petroleum products spills elimination works, and which hold relevant licenses and/or which have been attested in the established manner. They must immediately notify relevant governmental bodies and local governments regarding the facts of oil and petroleum products spills, organize their localization and elimination, and maintain financial and logistical resource reserves for the purpose of oil and petroleum products spills localization and elimination. They must train employees in protective techniques and operations in emergency situations relating to oil and petroleum products spills, maintain technological equipment in operable condition, conduct engineering/technical measures in advance aimed at prevention of potential oil and petroleum products spills and/or reduction of the scope of danger from their aftermath. They must also take measures to protect the life and health of employees in the case of an oil and petroleum products spill, declare the industrial safety of hazardous production objects, monitor production and observe industrial safety requirements at hazardous production objects, adjust plans in the event of changes in initial data, allow only qualified operators at hazardous production objects, without medical contra-indications for such work. In addition, they must hold a hazardous industrial object operation license as required by Russian legislation, and form and maintain in operable condition oil and petroleum products spills detection systems as well as communications and warning systems. (152)

OSRP measures are deemed complete after compulsory performance of the following: 1) stopping the dumping of oil and petroleum products; 2) collecting spilled oil and petroleum products to the maximum possible level corresponding to the technical characteristics of the special technical facilities used; and 3) storage of collected oil and petroleum products for their later utilization excluding secondary pollution of production objects and the environment. (153)

In the event of an oil and petroleum products spill, the term of spill localization may not exceed four hours for spills in the area of water, and six hours for spills on the ground, timed from spill detection or receipt of information. (154)

Oil spill response plans must be capable of implementation on a 24-hour basis in all weather conditions (in the sea – when navigation and hydro meteorological conditions are admissible). (155)

Where oil and petroleum products spills take on regional and federal significance, the Minister of the Russian Federation for Civil Defense Affairs, Emergency Situations and the Elimination of the Aftermath of Natural Disasters, has the right to convene an Inter-Departmental Commission for Emergency Situation Prevention and Elimination. (156)

(148) Russian Federation Government Decree No. 613 “Concerning Urgent Measures on Prevention and Liquidation of Oil and Petroleum Products Emergency Spills,” August 21, 2000 (modified by RF Government Decree No. 240, “On the Procedure for Organizing Measures for Oil and Petroleum Products Spills Prevention and Elimination within the Territory of the Russian Federation,” April 15, 2002); and “Rules for Organizing Measures for Oil and Petroleum Products Spills Prevention and Elimination within the Territory of the Russian Federation.”
(149) Such plan must include the following:
a) forecast of potential oil and petroleum products spills;
b) estimate of resources required for liquidation of emergency situations connected with an oil and petroleum products spills and an assessment of the site capabilities in liquidation tasks and the need to employ professional emergency rescue units;
c) resource organization scheme;
d) description and location of resources;
e) organization of control, communications and notification;
f) procedure for resource preparedness with indication of the organizations responsible for keeping them at an established level of readiness;
g) communication system linking spill liquidation participants;
h) priority actions for emergency situation alert;
i) technical aspects (geographic, navigation-hydrographic, hydrometeorology and other) of spill area that must be taken into account in organizing and conducting liquidation operations;
j) assurances of safety of the population and the provision of medical aid;
k) timetable for oil and petroleum products spills liquidation operations;
l) organization of logistic, engineering and financial support of oil and petroleum products spills liquidation operations.
(150) The following factors must be considered in arriving at such an estimate:
a) maximum potential spill volume;
b) area covered by the spill;
c) year the object (source) was placed in service and the year of its most recent major repairs;
d) maximum spill volume at the object;
e) physical-chemical properties of the spill;
f) effect of the location of the object on the rate of spread of oil and petroleum products to determine the possibility of their ingress into seas, rivers and inland ponds;
g) technical conditions (hydro meteorological, hydro geological and other) at the object’s location;
h) capabilities of the object's available resources and also professional emergency rescue units stationed in the region (with an agreement in writing to participate in liquidation of oil and petroleum products spills);
i) availability of oil waste trans-shipment, storage and processing ranges;
j) transportation infrastructure in the area of a potential oil and petroleum products spill;
k) time of delivery of resources to the scene of the emergency situation;
l) time of localization of oil and petroleum products spill, which must not be more than 4 hours in the event of a water spill and 6 hours in the event of a land spill.
(151) RF Government Decree No. 240 “On the Procedure for Organizing Measures for Oil and Petroleum Products Spills Prevention and Elimination within the Territory of the Russian Federation,” April 15, 2002, (“Decree 240”), Item 3.
(152) Decree No. 240, Item 4.
(153) Decree No. 240, Item 8.
(154) Decree No. 240, Item 7.
(155) Decree No. 240, Item 7.
(156) Decree No. 240, Item 7.