Considered in Grand Committee
My Lords, I beg to move that the draft Works Detrimental to Navigation (Powers and Duties of Inspectors) Regulations 2018, which were laid before Parliament in January 2018, be approved.
We are moving on to a somewhat different and more technical subject, and I am very pleased to see the noble Lord, Lord Bradshaw, in his place. He will presumably bring a great deal of technical expertise to this debate. The regulations will provide inspectors in BEIS’s Offshore Petroleum Regulator for Environment and Decommissioning, which I will refer to as OPRED, with powers to conduct inspections to assess compliance by operators of offshore hydrocarbon installations with the conditions of consents to locate as granted under Part 4A of the Energy Act 2008.
OPRED inspectors travel to offshore installations to monitor compliance with our offshore environmental regulatory framework. However, they do not have powers to conduct inspections to assess operator compliance with consents to locate conditions. The regulations will close that gap in enforcement capabilities by enabling inspectors to board offshore installations to assess operator compliance with the consents to locate regime, inspect and investigate any legislative breaches, and take enforcement action where required.
Consents to locate are required before offshore activities likely to cause danger to navigation are carried out. A condition of consents to locate is the need for operators to maintain navigational aids, such as lighting, foghorns and other signage, to warn shipping of the presence of offshore installations. Part 4A of the 2008 Act gives the Secretary of State powers to make inspection regulations for enforcing the consents to locate regime and create criminal offences. Regulation 3 of the regulations contains powers to allow inspectors to undertake examinations and investigations and Regulation 6 sets out the offences and penalties that would apply to a failure to co-operate with inspectors. Inspectors would normally conduct checks on the consents to locate regime when undertaking routine visits to offshore installations to determine operator compliance with other environmental legislation.
The regulations are needed due to an increasing trend from 2015 onwards whereby non-compliances by some operators with the consents to locate conditions, primarily the obligation to maintain functioning navigational aids, have not been remedied timeously despite OPRED’s efforts. Although most operators initially responded to incidents of malfunctioning navigational aids by deploying temporary collision-avoidance measures, notably the use of guard vessels around installations, and eventually resolved breaches after protracted negotiations, this is not an ideal situation. Notwithstanding the instigation by operators of temporary solutions, the risk to shipping of a collision with an offshore installation at night, or during times of poor visibility, remains until functioning navigational systems are reinstated.
Without powers to access offshore installations and conduct inspections, we are reliant upon operator good will or evidence from third parties, namely the general lighthouse authorities and the Maritime and Coastguard Agency, in order to gather evidence to establish whether consents to locate requirements have been breached and to encourage operators to revert to compliance. The regulations would provide inspectors with powers to investigate and enforce an expedient return to compliance by operators, thus reducing the risk of offshore collisions occurring.
While the risk of a collision with shipping remains low and to date there have been no incidents of shipping colliding with UK offshore installations as a consequence of failed navigational aids, the human, environmental and economic impacts of a collision would be significant. There are invariably lengthy time lags before the resolution of non-compliances—in one instance it took four months before compliance was restored—which increases the risk of collisions at night or in adverse weather conditions.
The regulations will contribute to our aim of ensuring that offshore hydrocarbon activities are carried out in a safe, clean and environmentally sound manner. In 2017, OPRED conducted a consultation with the offshore sector on the regulations. Two responses were received seeking simple clarification. We replied to both consultees addressing their comments and agreeing to publish updated regulatory guidance once the regulations entered into force.
One substantive issue arose from the consultation regarding the provisions that would allow inspectors to take original documents as evidence in an investigation. To enforce the consents to locate regime effectively, it was our opinion that obtaining original documents would fulfil the legal obligation to gather the best evidence available should we need to pursue criminal proceedings against non-compliant operators. We decided to retain the power to seize original documents in the regulations, but took account of industry concerns by caveating it with limitations on the use of the power.
The objective of the regulations will be to achieve a high level of operator compliance with the consents to locate regime through inspections and the investigation of breaches, the use of enforcement notices instructing operators to take timely actions and the imposition of penalties. Given the need for the regulations, it would be useful if they entered into force on the day after they are made. I commend these regulations to the Committee.
My Lords, I would like to inquire into some of the background. I do not know whether the Minister has these details but, first, may we know how many real incidents there have been? Secondly, how many inspectors are there and what is the chance that a person who is not complying will actually be caught?
The system which the Government have in mind will obviously cost some money. I do not know whether they intend to expand the inspectorate or whether this is another duty to be laid upon the existing inspectors. Is there going to be any extra cost or extra inspectors? Can we also be clear whether this applies only to any obstruction which has an association with the hydrocarbon industry, or are other places such as old windfarm foundations covered in these regulations?
The Minister mentioned non-compliance. There is also some mention in the documentation of non-compliance, so is he able to tell us how much of it there was, or is, and why it is necessary to produce this further legislation? Can I please get some idea of the penalties which fall upon people who do not comply? For example, apart from fining them, is there any way in which they will be denied a licence in future to punish them, as it were, for not having cleared up any obstructions which they left behind them in the sea? I fully support what the Minister has said about the need to take precautions because the consequences of a ship spilling the oil which it might be carrying or injuring people are quite significant.
There is one other thing. Are these obstacles, if I may call them that, added continuously to the charts used by people who use the sea, and can ships therefore be forewarned that such obstructions are there? I would be grateful if the Minister can fill me in a bit on the background to this.
My Lords, like the noble Lord, Lord Bradshaw, I am supportive of the intention behind these regulations and have no wish to delay them in any sense. Before I start, I should like to say how nice it is to have had three Lords Chairman officiating over our modest debate. I am sure it must be a very interesting chance for the Lord Speaker to shine a spotlight into the activities of your Lordships’ House in a way that is not often possible.
Real life and marine life as well, as we are going to discover.
I have three main points but they are not at all major. First, as I think the Minister said, these regulations have been in force since 2009 as part of the implementation of the 2008 Act. Yet there seems to have been a sudden rush of activity since 2015, according to the Explanatory Memorandum. Can he give a little more detail about what is going on here? Is there some new interest in the area, arising from some activity which we were not aware of and, if so, why is all this litter being left around and causing difficulty to ships? I would be interested in the background if that is possible.
Secondly, I do not think the Explanatory Memorandum makes the case very well for OPRED’s lack of ability to force operators to return expediently to compliance. The powers now in these regulations would allow them to get more information in the form of paper and other documents. That would somehow seem to inform them better but I do not quite see how it will make anybody do anything they are not currently doing. I would be grateful if my puzzlement on that could be met with a bit more information.
In that respect, there was a four-week targeted consultation. I am not saying it is true of this occasion, but whenever I see the words “targeted consultation”, I wonder whether very many people have been involved. Given that there were only two responses from what seems to be a very large sector of our economy with many companies—indeed the Explanatory Memorandum states later on that there is a large number of small companies involved—maybe there could be a few words about whether, in the department’s view, the consultation was as effective as it could have been. There were only two responses, neither of which was significant in terms of what we are told here, but they did manage to persuade OPRED that there should be a change in relation to the power to seize original documents. Paragraph 8.3 says that OPRED decided to take,
“account of industry concerns by caveating it with sensible limitations on the use of the power”,
but does not say what those limitations are. Again, perhaps the Minister could just explain them.
However, my main concern is timing. Members of the department will be aware that every time BEIS comes in with a regulation, I think I have made a point of pointing out that the Government have accepted, as have previous Governments, that there should be adherence where possible to the common commencement dates of 6 April and 1 October. These common commencement dates are there for the benefit of businesses and to make sure that regulations do not sprinkle upon them like rain from the heavens but are brought up at two points in the year when they can anticipate that there will be regulations, plan for them and expect them to be implemented in an appropriate way. There may be some reason for the commencement date, but these regulations seem to be coming into force in a rather ad hoc way. They come into force the day after they are made. The Explanatory Memorandum comments that,
“the critical need for, and core objective of, the instrument”,
means that the regulations,
“will enter into force on the day after they are made and, if feasible, either prior to, or (if apposite) beyond, the next Common Commencement Date of 6 April 2018”.
It happens that 6 April 2018 is not very far away, so it would not have been very difficult, and certainly given the pressures on all concerned not impossible, for these regulations to come in on 6 April. There may be good reasons for bringing them in a few days before then, and I would be interested to hear what they are, but I worry more generally that the department does not, much as I would wish it to, try to work to the common commencement dates. I am sure the Minister will accept that they are important. They have been advertised and adhered to now for, I think, 15 years. It is something we should respect if we can. I would be grateful for his comments.
My Lords, we will try to stick to common commencement dates where appropriate, but as I think the noble Lord suggested, there has already been some concern that a degree of time has been taken getting these regulations ready. We therefore felt that this is one of those occasions when not sticking to the common commencement dates would be appropriate. Bearing in mind that there is always the risk of an accident, we thought it appropriate to move as quickly as possible. For that reason again, we thought that a relatively short, targeted consultation—going to what we thought would be the appropriate people—was appropriate. As a result, we obviously missed out the noble Lord.
I will take advice, but I am fairly sure it was a number greater than two. I do not know what it was, but on this occasion we did not need a general consultation including the noble Lord and others. We are talking about a fairly specific field that many of us do not know a great deal about. I will come to some of his other points later on, but will deal with points raised by the noble Lord, Lord Bradshaw, first and give him a little more background and detail about the amount of non-compliance there has been.
On average there are at least 49 incidents a year on offshore installations, a proportion of which seem to be in the southern North Sea, which is obviously a fairly busy shipping route. Nine offshore installations had components of their main or subsidiary lighting systems repeatedly fail completely, meaning that parts of the installations were not visible at night or at times of poor visibility due to intense fog. Thirty-two offshore installations had other types of repeated malfunctions relating to other navigational aids, including lights not flashing in unison and dim lighting systems causing reduced visibility from a distance. Five installations had fog signals that were repeatedly inaudible or not functioning, while the radar communications systems on three offshore installations repeatedly failed. Those are the numbers involved and reflect the scale of the issue. I hope that is useful to the noble Lord.
I will have to write to him about the number of inspectors and whether we think that that number needs to be increased. The important point is that the inspectors are already doing their job, but we are giving them extra powers to make sure that there is proper enforcement. He also asked about the appropriate penalties if operators are prosecuted under these regulations. An operator guilty of an offence as set out in Regulation 6 would be liable on summary conviction in England and Wales to an unlimited fine and on summary conviction in Scotland and Northern Ireland to a fine not exceeding the statutory maximum, which is £10,000 in Scotland and £5,000 in Northern Ireland. I hope that the noble Lord does not ask me why the fines are different among the nations, but if he has any concerns I will write to him about it. Conviction on indictment leads to an unlimited fine, which would usually be for an amount greater than the fine on summary conviction. I might be wrong, but that is probably the explanation for the difference between England and Wales and Scotland and Northern Ireland. In Scotland and Northern Ireland there is summary conviction or on indictment whereas in England and Wales there seems to be only summary conviction.
The noble Lord, Lord Stevenson, asked why after 2015 it became more difficult for operators to rectify promptly breaches of consents to locate obligations. Some have asked whether it coincided with the drop in the price of oil at the time. The reason it has become more difficult to get smaller operators to rectify breaches is not entirely clear. Contributing factors may have been the low oil price which has put pressure on operators, but whatever happens the situation is clearly unsatisfactory, given the critical nature of navigation aids, hence the need to put these regulations on to the statute book as quickly as possible. I appreciate that some will argue that we have taken our time to do this, but it is important to get on with them now.
I again thank both noble Lords for their contributions. I think that I have largely dealt with the points, but if I have missed any, I will write. I commend these regulations to the Committee.