Nord Stream pipeline and the international legal instruments that regulate mid-stream pipeline
projects. The focus is on the legal framework of UNCLOS and its related
treaties and transboundary submarine pipeline that crosses the Exclusive
Economic Zone and the continental shelf, with aspects of Environmental taken into consideration
The
significant impact on EU energy policy has been the rhetoric from all circles
and the dependencies on the Russian market. However, the attempt of this paper
will be to consider the analysis of this
project from the view point of international legal framework.
The Nord
Steam pipeline comprises of two lines: the planned commissioning of the first
pipeline is in 2011, and the second line is due to commence operating in 2012.
It is perhaps the longest long-distance gas transmission pipeline consisting of
1224 km enabling the export of natural gas from Russian Arctic to meet European
Union demand[1] which has been on a
substantial rise.[2]
The
following Chapters will attempt to address these issues but focusing as much as
possible on the legal frameworks of the case study. There is a temptation to
enter into the popular debate of energy security and dependencies, indeed on
the course of accumulating literature for this paper it is incredible how
loudest concern has been of dependency. Yet political sound bites are one thing
and economic necessity another. Therefore, we will only consider the legal
governance that are related to transboundary pipelines and discuss briefly the
energy sector in relations to the subject matter.
It should
also be pointed out that the focus is on offshore gas pipeline, as it is beyond
the scope of this paper to consider a comparative analysis on oil pipelines
with onshore issues.
The world consumption for energy will rise and this will ensure that
with it in parallel the requirement for more cross-border pipelines for oil and
gas. There are two factors that explain the reasons for this need: Reserves
close to traditional markets are being depleted.[3]
[1]
“Fact Sheet: The Nord Stream Pipeline project” (January 2011) http://www.nord-stream.com
[2] R
Gotz, “The Nord Steam Pipeline: The Energy Policy Background” (2009) 52 German
Yearbook of International Law 233.
[3] We
just have to look the north sea oil field as an example. http://dieoff.org/page180.htm
Newer, more
remote sources of oil and gas will be required. Many of these will require
pipeline delivery either because they are landlocked or, in the case of gas,[1]
because liquefied natural gas (LNG)[2]
projects are less attractive than pipelines, other than for distances in excess
of 3,000km. Many gas markets have in the past been constrained by regulatory
and institutional factors.[3]
In recent years these constraints have been eroded. A potential “dash for gas”
furthermore is being reinforced in many areas by a combination of gas sector
reform, creating gas-to-gas competition; electricity sector reform, leading to
strong demand for combined-cycle gas turbine (CCGT) generation; and concerns
about the environmental damage caused by the consumption of other hydrocarbons.
The problem is that cross-border oil and gas pipelines have a history of vulnerability
to disruption and of generating conflict. While it is true that most operating pipelines
have avoided such problems, the minority that have such a history have cast a much
greater shadow than their actual numbers might justify.
This negative perception inhibits
both the operation of existing lines and the building of new ones. In
particular, the risks perceived as inherent in cross-border pipelines may
increase the cost of finance. In addition to threatening the viability of
projects, higher financing costs also seriously impact the delivered cost of
the fuel. This is especially true for gas, for which the only viable
alternative is LNG; despite some improvements, conversion to LNG remains a costly
option and may deliver too much gas for many markets to absorb. All this has
serious consequences for the producers and consumers of oil and gas at both
ends of the line. The purpose of this report is to seek ways in which such disruption
and conflict can be prevented, mitigated, or contained. It especially focuses
on the ways in which the various players can contribute to this process, and in particular focuses on the respective roles of the public and private sectors. The starting point is to identify what causes conflict and disruption to throughput. The methodology is simple. Cross-border pipelines have three relevant dimensions: they involve the use of pipelines, the use of cross-border trade, and they may involve the use of transit. Each has certain innate characteristics that lead to consequences. Various combinations of these consequences lead to three results that in turn create conflict or the potential for conflict
[1] Gas also can be transported as “embodied gas,” by
which the gas is used to produce for export energy intensive goods such as
metals or petrochemicals. Gas-to-liquids technology provides another option,
but while a number of new plants are planned the use of this technology is
limited to a few pilot plants. A final option is “gas-by-wire” (the
transmission of gas-generated electricity), but the distance over which this
form of transportation is viable is limited by transmission losses.
[2] Philip Andrews-Speed, Xuanli Liao,
and Roland Dannreuther, “The Strategic
Implications of China’s Energy Needs,” Adelphi Paper 346, the International
Institute for Strategic Studies and Oxford University Press, 2002. Despite
these concerns, China appears still willing to import LNG.
[3] For a more detailed discussion of these issues, see Paul
Stevens, “Pipeline Regulation and the North Sea
Oil Infrastructure,”
in G. Mackerron and P.J.G. Pearson (eds), The UK Energy Experience: a Model
or a
Warning?, Imperial College Press, London, 1996: pp. 109–122.
1.1 INTERNATIONAL
LAW
International
law offers many vehicles for the necessary developments, custom, treaty, soft
law, general principles, and framework agreement and so on, this can be
utilised in a variety of ways to develop and revise the law to meet new
environmental concerns. Furthermore, the availability of scientific information
and its reliability along with social, economic, and political implications are
factors that affect the speed with which progress is determined by governments
to weigh against environmental demand. The focus will be on the UNCLOS and the
modern law of the seas with its which may put limitations on freedom to lay
submarine pipelines, the scope and boundaries of marine scientific research,
the obligation to consider alternatives in the course of an EIA.
1.2 E.U. GOVERNANCE
AND REGULATIONS
Since the
title of this paper is about governance and regulation, it is important to
start with this conception as it will at least help us to put into context of
this topic which is also intimately connected energy security[1]
and when infrastructure and energy needs are dependent on one source then who
governs and where does one redress becomes an important issue. The act of
governance, in the case of UN treaties, regional treaties and national ones
often at the behest of national interest often are all part of the legal
framework that regulate national objective, regional interest or in this case
transboundary pipelines. Governance which is becoming separate from the
institutions of government and often involving the private actor, who for
example, set a standard for industry or who regulate or even act in partnership
with public bodies. The EU does not have a government in traditional sense,
however, it does regulate socio-economic life.
1.3 EUROPEAN
ENERGY POLICY
The Maastricht Treaty introduced into the Treaty of Rome provisions[2]
that were designed to establish by encouragement the development of
trans-European networks which included amongst other things
energy infrastructures. Amongst the guidelines laid down was in the Council
Decision 1254/96/EC. Described in Article 2 to any type of infrastructure:
[1]
Kirsten Westphal Energy Policy between
Multilateral Governace and Geopolitic: Whither Europe? IPG 4/2006 European
Energy Policy
[2]
Art.129(b)(c)(d)
“high-pressure gas
pipeline, excluding those of distribution networks, making it possible to
supply regions of the community from internal or external sources.”[1]
The objectives of the Community and its priorities are laid
down in Art.3 and Art.4 and that is to promote the interconnection,
inter-operability and development of Trans-European Energy Network and access
to networks:
“allowing effective operation of the internal market in general and of
the internal energy market in particular;
Facilitating the development and reducing the isolation of the
less-favoured regions of the Community; and
Reinforcing the security of energy supplies, for example by
strengthening relations with third countries in the energy sector.”[2]
In relation
to gas network the priorities for action include:
“the introduction of
natural gas into new regions;
the connection of
isolated gas networks to the interconnected European networks, including the
improvements needed to the existing networks for this purpose and the
connection of the separate networks; and
increasing the
transmission (gas pipelines), reception (LNG) and storage capacities to satisfy
demand and diversity supply sources and routes.”[3]
Furthermore,
if parts of the project of common interest are situated within the territory of
third countries, the Commission may put forward proposals for projects to be
recognised as of reciprocal interest by the third countries concerned in order
to facilitate their implementation:
[1] Council
Decision 1254/96/EC Art2.
[2]
Ibid at Art.3
[3]
Ibid. Art.4
“The Community may
decide to co-operate with third countries
to promote projects of mutual interest and to ensure the inter-operability of
networks.”[1]
1.4 UNCLOS[2]
The area
known as “high seas” is the area of sea beyond national jurisdiction. This
basically means that the high seas commence from the outer edge of the
territorial sea or the outer edge of the EEZ. The Nord Stream project has
transboundary impact on the coastal countries of the Baltic Sea: Denmark,
Germany, Poland, Russia, Lithuania, Latvia, Estonia, Finland and Sweden. They
are all party to the 1982 United Nations Convention on the Law of the Sea, Art.
58(1), gives them the freedom to lay submarine pipelines in the coastal States
EEZ.[3]
The freedom to lay submarine pipelines on the continental shelf is granted
under Art.79(1)[4]and since all of the Baltic
Sea lies within 200 nautical miles from the coast, Nord Stream is subject to both
Part V[5]
of the LOSC[6] and part VI[7]
of the LOSC.
[1]
Treaty of Rome Art. 129(c) (3)
[2]
United Nations Convention on the Law of the Sea 1982
[3]
This include other internationally lawful uses of the sea related to this
freedom.
[4]
Law of the Seas Convention 1982
[5]
Concerned with EEZ
[6]
Law of the Seas Conventions 1982
[7]
Concerns with continental shelf-related issues.
2.1 NORD
STREAM
Nord Stream
runs along the territorial seas of Russia, Germany and Denmark[1]and
along the EEZ of Sweden and Finland. The project was fortunate that it the
narrowness of the Gulf of Finland.[2]Between
the two states of Finland and Estonia it had been established that outer limit
of the territorial sea, they will never reach more than 3 nautical mile (nm)
between the maritime boundary. Therefore, the sovereignty of the territory and
of both States in that area was excluded giving way to a 6 mile wide EEZ
created to maintain free passage.[3]If
the construction had been without this advantage the project would have been
subject to explicit consent of both coastal States and their respective
domestic regulations. If the Estonia and Finland were to amend the 1996
agreement on the boundary line which they signed[4]could
the possibility of the closure of the Gulf of Finland be excluded? It is a
strategic over flight route of Russian military aircraft and there will be
unlikely to be closed. Free passage in the Gulf of Finland remains intact
enabling the possibility to lay pipeline in the passage way of the 6nm-wide EEZ
subject to Part V and VI of the LOSC.
2.2 STATE
PERMISSION FOR COASTAL EEZ
In
accordance with the Article 56(2) of the LOSC a coastal State in its EEZ, “shall have due regard to the rights and
duties of other States and shall act in a manner compatible with the provisions
of this Convention.”[5]However, Art. 79(3)
provides:
[1]
Nord Stream had to by-pass the disputed area close to the Polish border, hence
Denmark offered its use of the territorial water.
[2]
Gulf of Finland is a 285 nm long inlet
[3] E
Karam Environmental and Energy: The
Baltic Gas Pipeline” (2008) 38 Journal of Baltic Studies 99, 107.
[4] No
33549 http://untreaty.un.org
[5]
Freedom to lay submarine pipelines provided in Article 58(1) and 79(1) of the
LOSC, may not be impeded. See North Sea
Continental Shelf (Federal Republic Germany/Denmark; Federal Republic of
Netherlands) [1969] ICJ Rep3, para 65
“The delineation of the
course for the laying of such pipelines on the continental shelf is subject to
the consent of a coastal state.”
Thus a clear
limitation on the freedom to lay submarine pipelines as it subjected to the
consent of the coastal State. Furthermore, subject to Article 192 of the LOSC
States have the obligation to protect and preserve the marine environment.
Hence all the necessary measures to prevent, reduce and control pollution of
the marine environment from any source in accordance with Article 194(1) of the
LOSC. As an international infrastructure project Nord Stream was also required
under the so-called “Espoo” process to help these countries to evaluate the
potential cross-border environmental impact of the project. The international
consultations therefore also included Poland, Lithuania, Latvia and
Estonia. Furthermore, Nord Stream invested more than 100 million Euros
in environmental surveys and route planning,
and consulted widely with governments, authorities, experts and stakeholders in
all Baltic Sea states to ensure that the design, routing, construction and operation of the pipeline is safe and environmentally sound.[1]
Article 194(3), stipulates measures also have
to include those designed to minimise, “pollution
from other installations and devices operating in the marine environment”. Moreover,
79(2) of the LOSC maintenance of these pipelines may not be impeded by the
coastal States. This is subject to its right to take reasonable measures for
the reduction and control of the pollution. [2]
Under LOSC States have the right to not to
grant a permit and this done by implementing their domestic legislation to
grant for the construction of a submarine pipeline in their EEZ or on their
continental shelf if there is hazard to the environment. However, due to the
lack of harmonised rules that would provide guidelines for the States acting
under Article 79(2) of the LOSC, it is a matter of interpretation if the
measures taken are the criterion of reasonableness. Since no international
legal instrument is established that would provide standards for prevention,
reduction and control of marine pollution from pipeline it would be interesting
to see if there will be further development in this since pipeline seems to be
a revival for the major producers and consumers, especially within Europe.
[2]
Ibid.
INSTALLATION AND STRUCTURES
Nord Stream as stated earlier is a
long-distance gas transmission pipeline, this needs to be distinguished from
the pipelines that constitute an essential part of offshore exploitation
operations.[1]Intra-field pipelines connect to two or more
installations within a geographical limited area, inter-field pipelines connect
installations in different States. Both are part of the installation and thus
fall under the scope of Article 60 and 80 LOSC.[2]
Installation and structures may not be defined
in LOSC but they are certainly had to have an economic purpose.[3]All proposals to make all installations subject to
Article 60 were rejected at UNCLOS III[4]. The term “installation” and “structures” cover “facilities to be constructed to take
advantage of all economic resources in and on the seabed, and in and above the
water column,”[5].
2.4 PIPELINES TECHNICAL FEATURES
Construction of the Russian overland pipeline
began on the 8th of December 2005, the pipeline is designed and
solely operated by Gazprom and will be part of the integrated gas transport
network or Russia connecting existing grid with coastal compressor. The length
of the subsea pipeline will be 1,222 km[6]and the Western European part through southern
pipeline with further gas delivery to the UK. [7] an enduring project which is expected to cost up to
on the Russian and German territory 6 billion Euros and offshore project
expected to cost 8.8 billion Euros.[8]
[1]
Art208 and 214 of the LOSC coastal State has enforcement rights with regards to
intra-and intra-field pipelines.
[2]
They relate to artificial islands , installation and structures.
[3]
Art 60(1)(b) of the LOSC
[4]
Rothwell and Stephens The International
Law of the Sea (Hart publishing;2010) p91
[5]
Ibid.
[6] Natural Gas Pipelines in Europe (published
by Books LLC, Memphis. 2010) p94
[7]
Ibid.
[8]
Ibid.
3.1
ENVIRONMENTAL ASPECTS. [1]
The concerns
that were raised in regards to the environment were that the construction of
the pipeline would disturb the seabed, dislodging World War II-era naval mines
and toxic materials including mines, chemical waste, chemical munitions and
other items dumped in the Baltic Sea in the past decades, and thereby toxic
substances could surface from the seabed damaging the Baltic’s sensitive
ecosystem. [2]Sweden’s three opposition
parties called for an examination of the possibility of rerouting the pipelines
onto dry land.
3.2 WWF
The world
Wide Fund for Nature (WWF) requests that countries party to the Baltic Marine
Environmental Protection Commission safeguard the Baltic marine habitat, the
Finnish branch was considering filing a court case if the company did not
properly asses a potential alternative route on the southern side of Hogland.
3.3 MARINE
SCIENCE
Traditionally
marine science research is understood as having the following meaning: “Any form of scientific investigation,
fundamental or applied, concerned with the the marine environment, ie that has
the marine environment as its object...... [including] subsoil or seabed in the
marine environment.”[3]This is addition to
the coastal State’s right to deny a permit the laying of a submarine pipeline
in its EEZ would require and needs to consider if the coastal State has the
right to withhold its consent in connection with projects that concern
scientific investigation in its EEZ.
[1]
Timo Koivurova Transboundary
Environmental Impact Assessment in the case of the Baltic Sea Gas Pipeline International
Journal of Marine and Coastal Law 25 (2010) 151-181
[3]
Ibid. Rothwell
3.4. EIA AND
THE ESPOO CONVENTION.
The Nord
Stream project has five parties of origin which under the EIA regime of the
Espoo Convention[1] it was complex due to the
large number of parties. An innovative approach was adopted by establishing
international coordination meetings. They ensured that the Nord stream
consortium conducts an environmental impact statement for the entire Nord
Stream pipeline in addition to the traditional assessment of the individual
sectors on the basis of national EIA legislation. [2]
4.1 BILATERAL
TREATIES[1]
Submarine
pipelines have some attributes that make them vulnerable to changing environments posing physical and legal risks
– ultimately economic risk to the investor and the nation States that is involved.
Such projects require enormous amounts of capital, massive capacity in manpower
and equipment, and substantial technological knowhow. Many of the cross-border
submarine pipeline mega projects are found in the North Sea. All of them are
noticeable even in a global context. With a bilateral
treaty in place a change of government is less likely to create unwelcome surprises
for the pipeline investor, the consumer or the other State party. Nation States
generally show restraint in deviating from obligations stipulated in binding
international agreements.[2] A
treaty offers a higher degree of predictability for cross-border project is no
guarantee, but it than when no such instrument is in place. It creates the
foundation for a framework within which public authorities may take action and
commercial operators may conduct business.
Once a submarine pipeline has been laid on the seabed it has few
alternative uses. Other facilities used for petroleum activities may be
disconnected from an individual project, moved and re-used on another project.
The cost, safety concerns, environmental exposure and logistics required to
remove submarine pipelines once it has been placed on the sea bed is still such
that pipelines tend to remain in place. Over time pipelines develop substantial
spare capacity. This occurs when the original field or fields goes into
production decline. The cost of utilizing spare capacity compared to the construction
cost for a new submarine pipeline is almost negligible. Unless properly regulated
physical and factual monopolies that pipelines with spare capacity represent
may be exploited to the detriment of petroleum producers and consumers alike.
Anticipating this development and addressing it in a cross-border treaty is a
way of limiting future sub-economic results. To a great extent natural gas
trunk pipelines are key strategic assets enabling development of entire
petroleum producing provinces. Properly structured and governed such pipelines are
powerful tools for resource owners and project developers.
Active management of the pipeline structure greatly affects and is closely tied
to the ability to optimize the depletion of fields. It is also fundamental to
the ability of a petroleum province to develop a long term steady stream of
natural gas to market. This is the story of the North Sea and Norway.
[2] Rule
of law in European Jurisdiction is stronger than outside the region.
The
established treaty structure enabled the Norwegian government in cooperation
with European partners and the commercial companies to secure a resource
management system leading to enhanced ultimate recovery of petroleum. It has
also reduced waste through limiting flaring and controlling venting. The
bilateral treaty structure established with its European neighbours was a
prerequisite of for the development of Norway as a substantial producer and
exporter of natural gas, but also a prerequisite for Norway becoming a substantial
producer and net exporter of crude oil. Production of cross-border fields would
also have been impossible without the treaty structure. Frigg[1]
is, but one such example. For Europe cross-border pipelines and their Cross-Border
Submarine Pipelines treaty structure created the foundation for a substantial new
source of energy and at their doorstep. A reliable source of energy enabling
Europe to increase security and diversification of supply, and to pursue its
efforts to convert to sources less harmful to the environment. Only in very few
cases have submarine trunk pipelines gotten a "new" life after the
initial use expired. Re-use of single purpose or dedicated submarine pipelines
has proven difficult. One exceptional case is the Norwegian Frigg Pipeline. But
the UK required adjustments to the original treaty text in order to allow the full
potential of Frigg secondary capacity to be fully realized. Without a basis and
common interest established through the Frigg Agreement it is not apparent that
the Frigg pipelines would have gotten a new life. Today the Norwegian Frigg
Pipeline is forming part of what is called "Vesterled". In
many ways Frigg is a good example on how treaties may be used and have affected
the thinking about efficient long term use of submarine pipelines.
4.2 CROSS
BORDER PIPELINE GOVERNANCE[2]
Cross-border submarine pipelines are subject to a number of rules and
regulations. Like all projects in the petroleum sector private entities enter
into commercially based contracts or agreements for the ownership, construction
and operation of pipelines. Companies will also enter into transportation
agreements and agreements on the sale and delivery of petroleum. These
agreements are always subject to a specific law and jurisdiction. The commercial
relationships are long term and involve substantial economic interest. The last
thing the commercial parties need is uncertainty with regard to governance and
dispute resolution. Lack of clarity in this regard is difficult to handle when
discovered after a disagreement has materialized and exposes the parties to
unacceptable risk, forum shopping being only one of them.
Even without
commercial agreements in place the commercial entities involved are subject to
legislation in one or more countries. This follows from the fact that they are incorporated
or operate their business there. In most cases a pipeline project is also
subject to the laws and jurisdiction where it is constructed or operated. A
treaty being an expression of public international law traditionally regulates
the relationship between nation States and their governments. Private legal- or
physical entities may generally not exercise rights directly on the basis of
treaty provisions. If States agree on the regulation of a pipeline and related
activities a treaty is often used to document the result of such agreement. The
agreement is binding regardless what the name of the document is as long as
certain core requirements have been fulfilled. Discussing the requirements for
having a binding bilateral agreement between states is outside of the scope of
this article.[1] Even if a bilateral treaty is not
entered into a generally applicable multilateral convention may contain rules
affecting or regulating the construction or
4.3 REGULATION OF SUBMARINE PIPELINES
The public international law issues related to submarine
pipelines occurs in at least 4 different types of situations:
1. When
a pipeline has its inlet flange connected to an installation placed on the
continental
shelf of one State and the outlet flange or end of the pipeline connected to a
facility located on the territory of another State. This is
often referred to a cross-border
"landing pipeline".
2. When a pipeline has its inlet flange connected to an
installation located on the
continental shelf of one State, crosses the continental
shelf of another State and the
outlet flange or end of the submarine pipeline is connected
to an installation subject to
the jurisdiction of the second State. Such a pipeline is normally
referred as an "inter
field pipeline". Inter
field pipelines must not be confused with intra-field pipelines which
are those pipelines that connect two or more installations
within the geographical
limited area of a single field or deposit. Intra-field
pipelines are generally considered to
be part of an installation and thus treated as such under
public international law.
3. When a pipeline laid across the continental shelf of a
coastal State without being
connected to any facility on the territory or subject to
that coastal State jurisdiction is
traditionally referred to as a "transit
pipeline".
4. When a pipeline connects facilities or infrastructure
which are under the jurisdiction of
different States.
Another term appearing in connection with the discussion on
cross-border pipelines is the "transmission" pipeline. In most
cases this refers to high pressure trunk pipelines conveying large volumes of
natural gas from one country to another. The inlet flange of transmission
pipeline is not connected to a production facility. In several cases it establishes
a link between two transmission or distribution grids. The transmission
pipeline operation does not as the other pipelines listed above directly affect
production operations and resource management issues. The gas transported is
close to commercial specification. Nation state concerns are therefore of a
different nature in relation to transmission pipelines compared to any of the
other pipelines described above.
Public international law at first glance appears reasonably
clear in this respect. Any state including its citizens may lay and maintain a
submarine cable or pipeline crossing the continental shelf unimpeded by another
state.
[1] See the 1969 Vienna Convention of the Law of Treaties.
Several legal authors also describes this issue, such as Brownlie in "Principles of Public International law"
fifth edition, Calderon Press, Oxford 1998, Part X International Transactions,
page 607, and Aust in "Modern Treaty
Law and Practice ", (Cambridge University Press 2000) chapter 2
"What is a treaty?", page 14.
Submarine pipelines are in general subject to the rules of
the freedom of the high seas. The principle regarding submarine pipelines was
first codified in the 1958 Geneva Convention on the High Seas. Article 2
contains the four fundamental freedoms of which “Freedom to lay submarine
cables and pipelines;” is listed in paragraph (3). The Convention,
including article 2, is according to its preamble to be regarded as declaratory
of general principles of international law.[1]
A number of states
that have not ratified UNCLOS are never the less parties to one or all of the
four 1958 Geneva Conventions and the Geneva Convention on the Continental Shelf
provides the coastal state with some limited jurisdiction.[2]
The new provisions of UNCLOS reiterate the customary international law principle
as well as having slightly increased the coastal State's rights compared with
that of the Geneva Convention. The new UNCLOS provisions include coastal State
right to take "reasonable measures" for the prevention or
reduction of pollution from a submarine pipeline. It can also take reasonable measures
"for the exploration and exploitation" of its continental
shelf "natural resources". The articles of UNCLOS are somewhat
broader in scope than those of the Geneva Conventions, particularly in relation
to pollution.23 It is also clearly stated that the delineation of the course of
the pipeline is dependent of the consent of the
coastal State. The main principles, however, remain the same as in the Geneva
Conventions.
[1] Some states have when signing or ratifying the
convention made reservations. .Each reservation will have to be studied in
detail. Iran
is such a
state that has reserved itself in relation the high seas convention regarding
the competence of the coastal state in relation to jurisdiction over submarine
pipelines on its continental shelf.
[2]
See Article 4.
The Geneva Continental Shelf Convention does not confer any
competence or jurisdiction upon the coastal State over pipelines or pipeline
activities undertaken by others, except in so far as to “take reasonable
measures” for the purpose of protecting the exploration and exploitation of
its own natural resources. The right of intervention is limited and qualified to
CS natural resources.[1]
A pipeline starting and ending on the continental shelf or
territory of one and the same country involves only a limited amount of
international law and no cross-border element. When laying any pipeline beyond
the territory the State under which jurisdiction the pipeline operates, shall
have due regard to cables and pipelines already in position, as well as other
lawful use of the Sea. The “due regard” obligation includes the
possibility to repair and maintain existing pipelines.
Pipelines starting on one continental shelf, crossing the
continental shelf subject to the jurisdiction of another state and finally
landing on the territory of that other state are in principle regulated by
Article 4 of the Geneva Convention and UNCLOS Article 79, both articles
considered to be declaratory of (expressing) customary international law. The
right to unimpeded laying and operation of pipelines on the continental shelf
may be of limited value if the coastal state fully exercises its jurisdiction
over that part of the pipeline which is located in its territorial waters and
on its land territory. States having jurisdiction over such objects may
stipulate conditions for the connection of a submarine pipeline initially under
the jurisdiction of another State.[2]
These conditions usually involve terms affecting the jurisdiction over the both
submarine pipeline and its owners. In some cases also the pipeline users.
[1] This rule corresponds to the 1958
Geneva High Seas Convention article 26.
[2] See UNCLOS Article 79 (4).
4.4 SOVEREIGNTY
Main
concepts of international law establishing government power are the concepts of
“territory”[1]
and State “sovereignty”. Why concern oneself with territory and
sovereignty when considering the regulation of submarine pipelines? The answer
may be sought in two quotes: “The importance of state territory lies in the
fact that it is the space within which the state exercises its supreme
and normally exclusive authority.”[2]“Whatever person or thing that is on, or enters into, that
territory, is ipso facto subject to the supreme authority of the state.”[3]
Sovereignty
extends to the landmass of the State, the territorial sea adjacent to such land
territory and certain portions of the air space above it. The reasons for
addressing sovereignty and territory in relation to submarine pipelines are
twofold. The 1982 United Nations Law of the Sea Convention ("UNCLOS")
establishes a comprehensive framework for the regulation of all ocean
space.[4] The convention supersedes the four
1958
Geneva Conventions[5]
and to a degree codifies customary international law on core Law of the Sea
subjects. UNCLOS allows the establishment of a territorial sea up to 12
nautical miles (nm)13 seaward of the "baseline" from which the
territorial sea is measured. But territorial sovereignty does not extend to
maritime areas beyond the territorial sea limit.
[1] “State territory is that defined
portion of the surface of the globe which is subject to the sovereignty of a
State.” See Oppenheim’s International Law, Vol. 1 (Peace; Ninth Edition, by
Jennings and Watts, 1992) at page 564.
[2] Encyclopaedic Dictionary of International
Law, (Second edition, Ed. By John P. Grant and J. Craig Barker, 2004) at page
501.
[3] Oppenheim’s International Law, Vol.
1 (Peace; Ninth Edition, by Jennings and Watts, 1992) at page 564.
[4] UNCLOS contains provisions governing, inter alia, the
limits of national jurisdiction over ocean space, access to the seas,
navigation, protection of the environment, exploitation of its resources,
including seabed mining, and other exploitation of non-living resources
[5] The four conventions are all done at Geneva 29 April
1958 being titled the following: Convention on the Territorial Sea and the
Contiguous Zone; Convention on the High Seas; Convention on Fishing and
Conservation of the Living Resources of the High Seas;
Convention
on the Continental Shelf. These conventions are normally referred to as the
1958 Geneva Conventions
When any person,
asset or activity moves beyond the limit of the territory, that State may no
longer automatically exercise sovereign power. It is not end of coastal State
jurisdiction, but it takes another form.
Outside its
territory the coastal State may exercise jurisdiction in relation to certain
objects or activities. In this area the core concepts such as “freedom of
the high seas” and the right to exercise “sovereign rights for the
purpose of exploration and exploitation of natural resources on the
continental shelf” apply. Beyond the limit of the territorial sea the UNCLOS
permits the creation of an exclusive economic zone ("EEZ") up
to 200 nm.[1] In the EEZ and on the continental
shelf ("CS") the coastal State governs the “establishment and
use of artificial islands, installations and structures.”[2] The coastal State has exclusive jurisdiction
over installations16 in the EEZ and on the CS. The jurisdiction is general in character.
The provision lists examples of the coastal State exclusive jurisdiction. The
list is not exhaustive and does not limit the scope of jurisdiction a coastal
State may exercise.
If other
States or commercial entities wish to place or operate an installation in the
EEZ or on the CS it requires the consent of the coastal State. But UNCLOS
maintained at the same time the basic notion of the Freedoms of the High Seas17
even with the newly created EEZ in place.18 The laying and operation of
pipelines and cables on the seabed of the High Seas is traditionally regarded
as one of the High Seas freedoms established by customary international law.
The 1958 Geneva Convention on the High seas clearly codifies this principle and
the same principle is also assumed by UNCLOS.19 Submarine pipelines are not
automatically considered "installations" as this term is understood
in a Law of the Sea context. In the area seaward of the territorial limit it is
important to be able to draw the distinction between a “submarine pipeline” and
an “installation”. International law rules concerning submarine
pipelines may also differ depending on the origin and purpose of the pipeline
in question. In other words a pipeline is not always a pipeline. Those
submarine pipelines not part of an offshore installation or located within a
limited geographical area are in principle not considered part of an installation,
but belong to another category – the submarine pipeline.
[1] See
UNCLOS Article 57 (1).
[2] See
UNCLOS on EEZ Art 60 and on CS Article 80.
It is
somewhat more complicated to draw the distinction between “installation” and
a pipeline. A typical offshore facility consists of one or several platforms
interconnected with pipelines and cables. These connections are usually
referred to a “flow-line” or an “umbilical” if their purpose is
to support the operation of the one or more platforms on an offshore field.
Flow-lines and umbilical’s are usually considered as generic parts of the platform
or installation and are thus subject to the exclusive right of the coastal
State to construct or authorise.[1] For the purpose of this memo we will
use the term “installation“ in relation to all such facilities. When
discussing the distinction between installations and pipelines also flow-lines
are mentioned. Flow-lines are those pipelines that transport the unprocessed
well stream from a subsea reservoir served by a template and onwards to a
processing facility on a platform, production shop or onshore facility.
In most
cases flow-lines are considered part of the installation because the pipeline
serves as a link between the subsea facility and the surface facility within a
geographically limited area. In other cases they are truly pipelines, but they
are not crossing any international border and thus fall outside the scope of
this article. But cross-border flow lines are currently planned in the North
Sea in developments referred to as cross-border tieback projects. The 1995
Framework Agreement contemplates the regulation of such projects and several
are currently in the making.
[1] Se
articles 60 concerning the EEZ and 80 concerning the CS.
CONCLUSION
Nord Stream
Pipeline has raised many issues, and has addressed them. One thing that will
always follow this project is energy security, and former soviet blocks will
always express concern. Energy is crucial for a successful economy Russia and
Europe will depend on each and this pipeline project has shown the possibility
of economic benefits accompanied by regulatory governance which is to the
interest of all parties concerned. It is in my opinion, this project and its regulatory governance will be a role model for projects around the globe. I have seen the failure of pipeline projects where the loose regulations have harmed the environment like the tragic case of the Niger Delta, or the lack of transparency has given way to corruption and incompetence by the guise of energy security, a good example is the Tripura pipeline between India, Bangladesh and Burma. One region that can truly benefit from this is the middle east, they have enough wealth to bypass concern that are raised due to poverty, by this I am referring to the failures in Africa and to some extent Asia, where poverty is the excuse that sways way to corruption, that does not mean I am saying corruption does not exist in the Middle East, but they can give pay more efforts to the environment. By far so many other examples can be used, south America, south Asia and the thirsty China which is developing pipeline projects from the former Soviet blocks, like Khazhakstan and Russia it self, but at what cost? Even at this point I must also express Transneft pipeline which could also modernise its regulatory body to the European standards. Nord Stream is a good role model to follow.
BIBLIOGRAPHY
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ARTICLES
Noel P
(2008) Challenging the Myths of Energy
Security Financial Times 10th of January.
Timo
Koivurova Transboundary Environmental
Impact Assessment in the case of the Baltic Sea Gas Pipeline International
Journal of Marine and Coastal Law 25 (2010) 151-181
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