Health and Safety Laws in the Oil and Gas Sector

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Table of Contents

Introduction
Health and Safety Laws in the National and International Domain
Importance of Health and Safety Laws in the Oil and Gas Sector
Emerging Compliance Challenges
Conclusion
References

Introduction

The global oil and gas sector plays a central role in facilitating the operations of all countries. Economies rely on resources that are manufactured and supplied with the help of this sector to enhance their productivity in virtually all other industries. Considering the increasing global population growth, the need to increase the production capacity has led to the mining of more fossil fuels, some of which pose health and safety issues to human beings and other living organisms. Hence, the extraction of oil and gas in challenging environments implies that nations need to establish laws that guide and protect the health and safety of all stakeholders in the oil and gas sector. Oil separation and purification processes are potentially harmful to the environment. To protect the natural ecosystem and biodiversity, this paper emphasizes the need for implementing laws that define the standard safety and health practices to be adopted during the separation and purification of fossil fuels in the oil and gas sector.

Health and Safety Laws in the National and International Domain

Different national authorities adopt diverse regulatory frameworks and laws to guarantee occupational health and safety in the oil and gas sector. Each nation has different regulatory approaches, legal regimes, management systems, and institutional frameworks that govern the operations of oil and gas companies. Such systems and approaches are either performance-based or prescriptive (Antonsen, Skarholt, & Ringstad, 2012). For example, while Norway employs performance-based mechanisms, the U.S. adopts prescriptive regimes to regulate its oil and gas sector (Coleman, 2014; Blanchard et al., 2014). Performance-based approaches encourage operators to innovate mechanisms for enhancing occupational health and safety in the oil and gas industry. In contrast, prescriptive regimes call for compliance with the established laws, procedures, and guidelines on people’s health and safety.

Prescriptive regimes invest the power of specified health and safety requirements incompetent authorities while performance-based regime advocate for dialogue and negotiations between industry players and proficient authorities. In prescriptive governments, authorities engage in frequent comprehensive inspections to enhance compliance (Brousseau & Siebenhuner, 2012). This strategy opposes the performance-based approach in which operators adopt a health and safety culture in the oil and gas sector. Although no system is superior to the other, the increasing concerns of corporate governance have led to the shift towards performance-based regimes to steer the regulation of health and safety in the oil and gas sector.

Some nations such as Canada have adopted a hybrid system that was developed through the integration of performance-based and prescriptive approaches. Indeed, in 2014, the Canadian government developed the Offshore Health and Safety Act, which focuses on enhancing the safety of various offshore workers in the oil and gas sector. According to the International Labor Organization (2015), the law “clarifies roles and responsibilities, increases transparency, covers workers in transit to offshore platforms, and gives Offshore Safety and Health officers the power to enforce regulations” (p. 16). In other words, effective laws on health and safety in the oil and gas sector not only require operators to develop their internal structures for enhancing workers’ health and safety but also enhance enforcement mechanisms to facilitate compliance (Nordin, Sivapalan, Bhattacharyya, Ahmad, & Abdullah, 2014). Such policies are pivotal considering that some operators may not be willing to regulate themselves through corporate governance.

Consistent with the above argument, the case of Nigeria reveals the importance of government-oriented regulations in the oil and gas sector. The Nigerian government’s efforts to mitigate pollution through oil spillages suffer several drawbacks. Although different stakeholders value the need to foster environmental sustainability as a performance-based approach to enhancing health and safety in the oil and gas sector, players in the industry reluctantly implement government directives on environmental sustainability. According to Oke (2014), the goal here is to not only maximize profits but also explore personal interests. For example, political and business actors in the oil mining industry reluctantly implement recommendations on pollution due to corruption. However, such actors have much power to the extent that the respective governments experience challenges in enhancing compliance.

The case of assassinating activists who pushed for the proper management of oil spillage following the Ogoni incident substantiates the role of political power and the lack of political will to curb environmental devastation in Nigeria. Oke (2014) asserts that the absence of clear execution measures increased the leakage effects in the region to the extent of threatening the inhabitants’ safety and health. The Niger Delta Resource Damage Assessment and Restoration Project approximates that more than 27 million people living within the oil-rich landmass and its surroundings are becoming economically handicapped due to the observed decline in fishing and subsistence farming (Oke, 2014). These two activities are major sources of livelihood for people in Nigeria. Hence, prescriptive laws in the oil and gas sector in Nigeria and other nations come in handy, especially where players are reluctant to implement internal procedures and mechanisms for ensuring health and safety.

Regulations concerning health and safety in the oil and gas sector not only have national importance but also international significance. Indeed, the International Labor Organization (ILO) provides various minimal labor standards by prescribing legal frameworks that enhance conformity to occupational health and safety in the oil and gas sector (International Labor Organization, 2015). For example, the organization establishes laws in its constitution for protecting workers against sickness, injuries, and diseases that may emanate from companies that operate in the sector. Its legal instruments advocate for tripartite governments, workers, and various employers’ collective responsibilities in enhancing compliance with health and safety standards applicable to the oil and gas sector. The goal is to promote and ensure optimal health and safety in the sector.

Importance of Health and Safety Laws in the Oil and Gas Sector

Oil spillage during transportation exposes the environment to devastating effects. Indeed, such leakage can be disastrous, especially when it involves highly flammable products. Land transportation involves using tankers that are highly prone to fires due to collision issues, cargo explosion, and various forms of accidents at any point in the transportation process. Blowout and other accidents have severe consequences in areas with slow water circulation due to ground erosion (Allen, 2012). Water transportation involves the use of oil ships that are also susceptible to failure, a situation that may lead to spillage, including occupational health and safety risks. Apart from destroying the aquatic biodiversity, such spillage warrants the action of international pacts on high seas. To this extent, laws that seek to enhance health and safety in the oil and gas sector not only reduce work-related health and safety risky but also guarantee compliance with international pacts on high seas.

The main driving force that compels the ILO to develop laws and regulations in the oil and gas sector entails the need to have elaborate, concise, and effective principles that can help to prevent people’s exposure to various occupational hazards. This force culminated in the 15 ILO conventions, 17 recommendations, and the development of 1 protocol and ILO codes that seek to regulate practices in the oil and gas sector among member states. Recommendations constitute non-binding guidelines (International Labor Organization, 2015). However, conventions entail legally binding pacts to all member states. Representatives of workers, governments, and employers steer the conventions. Upon the ratification of the ILO conference in the oil and gas sector, respective nations are required by the agency’s constitution to apply the stipulated laws and practices while regularly reporting on progress. Through technical guidance, the ILO codes ensure that legal obligations are not created. The codes act as the guide to the implementation of binding principles.

Emerging Compliance Challenges

In ensuring that natural resources enhance economic development and/or facilitate environmental sustainability in line with the stipulations of the United Nations Environmental Program (2013), nations are obliged to design and implement institutional frameworks to enhance sustainability. Governance constitutes one of the essential institutional frameworks that facilitate the realization of functional operations coupled with the sustainability of national development agendas (Cleaver, 2012). In many nations that have massive natural resources, oil constitutes a major source of their economic development when well managed. Indeed, this mineral resource has global interest.

Amid the importance of oil in enhancing economic growth, it is imperative to ensure that practices in the oil and gas sector promote the health and safety of all workers in the sector. For example, in the Niger Delta and other Middle East regions, fossil fuels, especially gas and oil, are associated with ecological destruction. Illegal natural resource mining and extraction practices destroy habitats (UNDP, 2012). Cases of human rights violations, pollution problems, and geopolitical tribulations have been reported. This situation has made the region a center for internal controversies. In terms of efforts to promote environmental sustainability, the Niger Delta and Middle Eastern countries do not possess effective institutional frameworks such as governance concepts and procedures for dealing with health and safety problems. Operating in such challenging environments, the oil and gas extraction sector suffers from the inability to enhance compliance with health and safety laws.

The depleting traditional deposits of oil and gas underline the need to develop new extraction sites, which include deep and ultra-deep-water offshore locations. Other potential sites entail subarctic and polar climatic zones located in the northern hemisphere, especially in the Arctic Circle. Such locations present unique challenges when it comes to the enforcement of health and safety laws. For example, the Alaskan Exxon Valdez oil spill of 1989 confirms that Arctic oil leakage can have disastrous outcomes on both ecosystems and communities when it occurs during high storms, pervasive fog, and extensive sea ice or extreme colds (Haycox, 2012). These circumstances hamper the effective response from various support vessels. Indeed, concerns about the Shell Company’s pollution and safety controls led to the abandonment of oil drilling in Arctic regions in 2013.

In 2015, the Shell Company halted its oil and gas exploration in the Arctic region. Nevertheless, the magnitude of oil and gas deposits in the polar and subarctic climatic zones makes it attractive to exploit these sites. Antonsen, Skarholt, and Ringstad (2012) reveal how Arctic circles harbor more than 450 billion barrels of the undiscovered potential of oil and gas deposits. According to the International Labor Organization (2015), “The Arctic holds over 40 billion barrels of crude oil, 1,136 trillion cubic feet of natural gas, and 8 billion barrels of natural gas liquids in about 400 oil and gas fields, and 90 billion barrels in estimated undiscovered reserves” (p. 3). Indeed, the largest proportions of these deposits are most likely to be found in offshore locations.

Health and safety laws regulate the practices of entities that operate in the oil and gas sector to control and prevent hazards. Despite the adoption of various enforcement mechanisms, hazards still occur. They pose health and safety risks to not only workers and the societies surrounding the extraction sites but also to the wider biodiversity. For example, oil spillage constitutes a major cause of biodiversity destruction. Oil spillage may occur accidentally or due to negligence. Accidental spillage occurs following human errors, phenomena out of control by people, for instance, weather, or due to transportation and storage equipment failure. Although such leakages may be uncontrollable in some situations, Allen (2012) asserts that oil spillage leaves irreversible effects on the environment. For instance, drilling and exploration involve specialized procedures that lead to catastrophic incidents such as unexpected blowouts of gases and other hydrocarbons, which have negative impacts on workers’ occupational health and safety. Spills at this stage generate chronic impacts on the marine environment following the prolonged hydrocarbon gushing. Hence, spillage problems do not only apply to the crude oil or its purified products but also on other products obtained during its mining.

Although health and safety laws may fail to address unintentional health and safety risks, they should proactively consider the risks associated with negligence. In some cases, oil-mining companies do not focus on the proper treatment of products associated with the resource extraction process since they are of no economic importance to them. Thus, such companies look for the cheapest ways of disposing of them, a situation that increases the probability of their negligent spillage (Allen, 2012). Oil product storage involves the deployment of submerged reservoirs, which are constructed differently to suit the geological nature of a particular site and the type of oil products stored. Any spillage of stored products poses a major risk to the aquatic biodiversity, especially when the contents of storage reservoirs are toxic. The spillage of stored products also poses health and safety dangers when the contents react to emit harmful gases.

Conclusion

Laws and regulations in the oil and gas sector are important not only at the national but also at the international domain. In the local and national contexts, countries have prescriptive, performance-based, or hybrid systems for enhancing the occupational safety and health of workers in the oil and gas sector. The increasing concerns of corporate governance have led to a shift towards performance-based approaches in the development of laws and regulations in the sector. However, nations such as Canada have enacted hybrid laws intending to balance the role of players in the sector to develop their regulatory frameworks through corporate governance while at the same time complying with the laid-down prescriptive laws and regulations in the sector. This approach is important in situations such as those experienced in Nigeria and the Middle East where operators reluctantly develop or implement internal structures for promoting health and safety in the oil and gas sector. As evidenced by the ILO’s role in setting safety and regulatory guidelines, occupational health, and safety in the oil and gas sector are equally significant in the international domain.

References

Allen, F. (2012). Implementation of oil related environmental policies in Nigeria government inertia and conflict in the Niger Delta. Newcastle upon Tyne, UK: Cambridge.

Antonsen, S., Skarholt, K., & Ringstad, A. (2012). The role of standardization in safety management: A case study of a major oil and gas company.” Safety Science, 50(10), 2001-2009.

Blanchard, A., Hauge, K., Andersen, G., Fosså, J., Grøsvik, B., Handegard, N.,… Vikebø, F. (2014). Harmful routines? Uncertainty in science and conflicting views on routine petroleum operation in Norway. Marines Policy, 43(18), 313-320.

Brousseau, E., & Siebenhuner, B. (2012). Reflexive governance for global public goods. Cambridge, England: MIT Press.

Cleaver, F. (2012). Development through bricolage: Rethinking institutions for natural resource management. Abingdon, England: Routledge.

Coleman, N. (2014). Double nag at Norway offshore future. Oilgram News, 92(111), 1-4.

Haycox, S. (2012). Fetched up”: Unlearned lessons from the Exxon Valdez. Journal of American History, 99(1), 219-228.

International Labor Organization. (2015). Occupational safety and health and skills in the oil and gas industry operating in polar and subarctic climate zones of the Northern Hemisphere. Geneva, Switzerland: Sectoral Policies Department.

Nordin, S., Sivapalan, S., Bhattacharyya, E., Ahmad, H., & Abdullah, A. (2014). Organizational communication climate and conflict management: Communications management in an oil and gas company. Procedia – Social and Behavioral Sciences, 109, 1046-1058.

Oke, T. (2014). Financial crime prosecution, legal certainty, and exigency of policy: Case of Nigeria’s EFCC. Journal of Financial Crime, 21(3), 56-65.

UNDP. (2012). Nigeria’s path to sustainable development through green economy. New York, NY: UNDP.

United Nations Environmental Program. (2013). Global environment outlook 2000. Hoboken, NJ: Taylor and Francis.

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