Risk regulatory regimes of the Norwegian · NORSOK-standards Recognised industry standards Company...
Transcript of Risk regulatory regimes of the Norwegian · NORSOK-standards Recognised industry standards Company...
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Risk regulatory regimes of the Norwegian
Petroleum Sector and the “Nordic model”
Professor Ole Andreas Engen, University of Stavanger,
Norway
Outline
• The Norwegian offshore regime
– Context
– Values and culture: The ”Nordic model”
– A history of development
• Comparing the Norwegian, US-, and UK-regimes
• Discussion
– Assessing regimes
– Bottom-up or top-down
– A robust EU-regulation?
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The Robust Regulation Project
• Project goals:
– Understand and conceptualize the robustness of the Norwegian risk regulation regime
– Comparing the Norwegian regime with UK and US
– Assessing relation between regulation, Risk Management Systems and risk behaviour in the industry
• Partnership with industry, unions and regulators (PSA)
• Part of the Petromax research program
– Project periode: 2008 – 2012
– New program announced from 2012 - 2017
The tripartite model
Authority
Employer Unions Tripartite collaboration
Individual working contract
Employee
Safety organisation
National (workinglife)
Industry
Workplace
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1970-1990: A paradigm shift i risk regulation
Social production of wealth with increasing technical, ecological,
social and medical risk (Beck 1986)
Old regulation regime: Reactive and prescriptive with
technical requirements
New regulation regime: Pro-active with goal setting and functional requirements and “self-
regulation”
2000 1970 1990
Seveso (1976), Three Miles (1979), Alexander Kielland (1980), Bhopal (1984), Tjernobyl (1986) and Piper Alpha (1988) Robins report (1972), Nordic Work Environment Laws (1977+) and
Framework Directive 89/391 (1989)
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Phases, major accidents and regulations
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Time Major accident
UK-regulations Norwegian-regulations
US-regulations
1961-1970
Sea Gem (1965) Amoco Cadiz (1969)
Continental Shelf Act (1964)
Petroleum Act (1963) Outer Continental Shelf Lands Act (1953)
1971-1980
Bravo (1977) Alexander Kielland (1980)
Mineral Working (Offshore Installation) Act (1971)Robens report (1972) HSWA (1974) Burgoyne Committee (1977)
Regulations relating to safe practices (1975 and 1976). Work Environment Act (1977)
1981-1990
Piper Alpha (1988)
The Lord Cullen Report, 1990
Principles of internal control (1981), Petroleum Act (1985)
1991-2000
Offshore Safety Act (1992)
Petroleum Act (1996)
2001- 2011
BP Macondo (2010)
Offshore Installation (Safety Case) Regulations (2005)
Revised regulations (2011)
Separation of leasing function & creation of BOEMRE agency, new prescriptive rules & SEMS rule (2010, 2011)
Comparing NCS and US (I)
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Area Norwegian continental shelf
US outer continental shelf
Legal framework
Coherent integrated performance based framework with functional requirements. A framework regulation with four more detailed regulations
Many laws and regulations with prescriptive detailed rules with a multitude of legally-enforceable requirements.
Cost-benefit analysis
Ambiguous and not doctrinal Presidential directive with strong emphasis on defending burden of new regulations
Legal standards
Legal standards give flexibility and a space of interpretation. Companies follow industrial standards and are free to choose among these standards
Regulators adopt industrial standards for company implementation.
Lindøe, Baram & Braut (2011): Empowered agents or empowered agencies?
Assessing the Risk regulatory regimes in the Norwegian and US offshore oil and gas
industry
Comparing NCS and US (II)
Area Norwegian continental shelf
US outer continental shelf
Inspections and sanctions
One strong agency. Inspections announced and dialogue and trust based. Soft helpful approach.
More inspectorates. Unannounced inspections based on numerous checklists for “Potential Incidents for Non-Compliance” (PINC). Hard policing approach.
Involve-ment of work force
Strong involvement of unions in different arenas of cooperation; policy, industrial and company level
Non-involvement of workers, unions and occupational safety agency.
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Bottom-up or top-down?
NCS
• delegates control and presumes willingness and capability among the actors to collaborate upon an accepted standards for “good practice”
• uses the legislation to establish a binding framework for mutual activities striving for consensus among the actors
• Regulator’s role in enabling the process of continuous improvement
US • The regulator uses the legislation
as a means for giving clear distinctions between right and wrong as defined through norms expressing the societal expectations
• The legislation aims to solve disputes and conflicts
• Regulator role becomes more like a judge
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Different systems or a false dichotomy?
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Prescriptive rules and regulation
including industrial standards
(Command & Control)
Self-regulation with voluntary and
accepted standards
Voluntary industrial standards in
compliance with regulations
Regulator
Industry
Performance based rules
with functional requirements
Legal standards
Two logics of standard setting
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Knowledge-
production and science
Legal
binding
norms
Civil society
third party Politics: Legislation,
Administration, Inspection
Industry-
standards
Best
practise
Scope of
regulation
Value creation
Industrial activities
Value- and
policy-driven
Technology &
industry driven
Two different roles of the state
• State as protector of law and order where the primary task is, by the use of legitimate authority, forcing citizens/enterprises to follow laws and regulations
– The control role, anchored in this principle, creates an asymmetrical relationship between the regulator and the regulated
• State as service provider, stimulating towards growth in society (ref. welfare model in Scandinavia)
– This role works in a symmetrical way by developing mutual arenas for improvement, learning and building mutual confidence between state and public institutions, industrial sectors, etc.
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Legal norms and standards
Norms Main groups Examples
Legal binding
norms
Acts Petroleum Act, Working Environment Act
Regulations
The Framework Regulation (Royal Decree)
Regulations regarding (1) Management, Activity,
(2) Information and (3) Installation (Passed by
PSA)
Non-legal
norms
Regulatory
guidelines
Guidelines to the regulation
Letters of interpretation
Industrial
standards
ISO, IEC and CEN standards
NORSOK-standards
Recognised industry standards
Company
internal
Company specific requirements and guidelines
Project specific requirements
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Legal
standards
Complex roles and mixed norms in a regime of ”Enforced self-regulation”
Inspectors roles
Controller
Asymetrical relation
Service Provider
Symmetrical relation
Legal binding
norms
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Investigator of compliance:
How to interprete functional
laws and regulation?
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Counseling on legal issues:
Confusing legal norms with non-
legal norms and professional
standards?
Non-legal
norms and
standards
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Enforcing compliance with
non-legal standards:
Mismatch with own
standards and ethic codes?
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Aiming at improvement:
How to keep a necessary
distance to regulated?
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Legal
standards
Summing up (I)
• The UK and Norwegian regime has been developed during 30 – 40 years of experience, triggered by major accidents
– Risk- and purpose based with functional requirements
– Exchange of experience and ideas across the North Sea
– One strong coordinating regulatory body
• The US OCS-regimes has had almost the opposite characteristics
– American companies adaptet to the NCS-regime in the 1980s
– In US the opposed new regulation until 2010
• The ”Macondo accident” has vitalized a debate and re-orientation of offshore risk regime:
– In US, UK and Norway and the EU commission
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Summing up (II)
• The design and logics of the three regimes should be assessed in the perspectives of major accidents, industrial relations, legal and administrative practice and major as well as cultural values and norms.
• The NCS strategy may be chosen when one might expect the possibility to achieve consensus among actors with long lasting relations, but may fail if the main aim of the legislation is to define stable norms in an unambiguous way
• The proposed EU regulation combines elements from the Norwegian and UK (Safety case) regimes.
• Critics from Norway is that
– The tripartite system in not a part of the regulation
– An integrated and consistent regime in place, but mixed with a
“superior” EU regulation will be complicated and burdensome
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Robust Regulation
Thanks for your attention.
See website for the project:
www.uis.no/robustregulation
www.seros.uis.no
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