Published October 2018
The EU Directive on safety and environment for offshore oil and gas operations was adopted in July 2013. The aim of this Directive is to reduce, as far as possible, the occurrence of major accidents related to offshore oil and gas operations and to limit their consequences.
Article 4 of the new Directive states that evidence of provisions to cover potential liabilities shall be included in the application for a licence. Specifically, with reference to financial security the Directive states “…the Commission should undertake further analysis and studies of the appropriate measures to ensure an adequately robust liability regime for damages relating to offshore oil and gas operations, requirements on financial capacity including availability of appropriate financial security instruments or other arrangements…”
IUMI supports a voluntary financial security system rather than a legislative compensation system over and above existing provisions. This is likely to be most effective, given also the capabilities and limitations of insurance as a financial security instrument
New Zealand Maritime Transport Act
In 2017, the Ministry of Transport proposed, following consultation, to update the Marine Protection Rules, Part 102 certificates of insurance. The amendment increases the maximum level of financial assurance required for clean-up and compensation under the scaled framework from NZD 600 million to NZD 800 million. IUMI questions the insurance market’s ability to service the requirements as outlined by the consultation documents.
IUMI has recommended further engagement with insurers to assist with the development of a wording that takes into consideration the role of insurance products as tools for risk transfer rather than as financial guarantees. IUMI also warns about the possible difficulties in obtaining insurance cover with limits over and above existing provisions.