‘OCEAN CORPORATE SOCIAL RESPONSIBILITY’: BUSINESS AND THE PROTECTION OF THE MARINE ENVIRONMENT

1. Dr. Angelica Bonfanti and Dr. Francesca Romanin Jacur Università degli Studi di Milano Angelica.Bonfanti@unimi.it and francesca.romanin@unimi.it ‘OCEAN CORPORATE SOCIAL RESPONSIBILITY’:BUSINESS AND THE PROTECTION OF THE MARINE ENVIRONMENT

2. Outline • (Re)defining Ocean Corporate Social Responsibility • Regulatory instruments addressing energy activities of private operators at sea: • “soft law” and “hard law” • Different ways of regimes interactions: • “legislation by reference”, integration, interpretation • The circulation of standards across the different regimes in theory and in practice: • the legal nature of standards • synergies and shortcomings

3. ‘Ocean Corporate Social Responsibility’ (OCSR) • the way in which private business operators give consideration to the impact of their activities in the field of marine energy exploitation on society and affirm their principles and values both in their own internal methods and processes and in their interaction with other actors and stakeholders. • In our view, with a broader approach, the OCSR legal framework includes: • a) the above mentioned environmental protection standards to be followed by business operators • and • b)the non-binding recommendations establishing OCSR general principles and standards, as adopted by States acting in the intergovernmental framework • and • c) Other normative instruments envisaging standards of conduct and principles (indirectly) addressed to the companies and multinational corporations operating in this field

4. Relevant legal framework (I) • “Soft law” legal regimes: • Voluntary initiatives: codes of conduct, 1974 Offshore Pollution Liability Agreement (OPOL)) • ISO, API (American Petroleum Institute), Global Industry Response Group (GIRG) b) Intergovernmental regimes: • OECD Guidelines for MNEs • UN Global Compact • IMO codes and recommendations: ex.: IMO Code for the construction and equipment of mobile offshore drilling units (2001) • the 2007 IFC Environmental, health, and safety guidelines for offshore oil and gas development

5. “Relevant legal framework (II) • “Hard law” regimes: • Treaty-based regimes: A) UNCLOS B) IMO: • MARPOL, SOLAS • Civil liability regimes

6. MARPOL 73/78 Convention • Main international regulatory regime addressing pollution from operation or accidents of (oil) transport at sea • Implements UNCLOS art. 211 (and art. 220) • The Annexes contain the detailed anti-pollution regulations and are subject to regular review and amendment by the IMO Marine Environment Protection Committee • With the acceptance by 2/3 of the Parties = 50% gross tonnage of the world merchant fleet • Ex.: Annex I contains rules on the carriage of oil • MARPOL Parties = 98% of merchant tonnage = “generally accepted international rules and standards”

7. MARPOL action in sustainable maritime transport • MARPOL Annex VI on regulation for the prevention of air pollution from ships by inclusion of new regulations on energy efficiency for ships • + the related 2012 guidelines (on the method of calculation of the attained energy efficiency design index (EEDI)) • Preamble: • RECOGNIZING that the amendments to MARPOL Annex VI requires the adoption of relevant guidelines for smooth and uniform implementation of the regulations and to provide sufficient time for industry to prepare • REQUESTS the Parties to MARPOL Annex VI and other Member Governments to bring the annexed Guidelines related to the Energy Efficiency Design Index (EEDI) to the attention of shipowners, ship operators, shipbuilders, ship designers and any other interested groups

8. MARPOL 2012 Guidelines on the method of calculation of the attained energy efficiency design index (EEDI) for new ships(Resolution MEPC.212(63)) • Purpose: establish a mechanism for a company to improve the energy efficiency of its ships • How: by enhancing a wider compliance of ship operators with international environmental standards • Regimes convergence: they provide that the Ship Energy Efficiency Management Plan should be linked to a broader corporate energy management policy for the company that owns, operates and controls the ship” and assume that “many companies will already have an environmental management plan (EMS) in place under ISO 14001

9. Different ways of regimes interactions (I): • Interpretation • Integration • “INDIRECT LEGISLATION BY REFERENCE”: • UNCLOS, art.211.1: States, acting through the competent international organization (…) shall establish international rules and standards to prevent, reduce and control pollution of the marine environment from vessels.(…) • States to adopt laws and regulations to prevent, reduce and control dumping (…)No less effective than global rules and standards

10. Different ways of regimes interactions (II): • DIRECT LEGISTLATION BY REFERENCE: • UNCLOS, art. 211.5: “Coastal States […] may in respect of EEZ adopt laws and regulations for the prevention, reduction and control of pollution from vessels conforming to and giving effect to generally accepted international rules and standards established through the competent international organization […]”. • art. 214 requires states to adopt laws and take other measures to implement applicable international rules and standards established through competent international organizations (…) to prevent, reduce and control pollution of the marine environment arising from or in connection with seabed activities subject to their jurisdiction and from artificial islands, installations and structures under their jurisdiction (…)

11. Legal effects of this “regimes interaction” • Broadening the scope ratione personae of the rules originally adopted within MARPOL: • They become applicable to UNCLOS Parties that may not be Parties to MARPOL (or that may voted against their adoption) • When incorporated into OCSR instruments, they apply to private operators • What is their (original) legal nature? • Standards of MARPOL Annexes: legally binding • Standards of MARPOL recommendations: non-legally binding (?) • OCSR voluntary standards : non-legally binding • Does their legal nature change when they are incorporated in another regime?

12. Addressing Environmental Disasters: the role of OCSR • OCSR mainlypursues a preventive function : • management of emergencies to reduce the amount of damages • Best practices and technical guidelines • standardization shows an outstanding convergence among the business associations, governments, IGOs (such as the IMO, the OECD, the OSPAR Commission) • The 1974 Offshore Pollution Liability Agreement (OPOL) : is an industry agreement among major oil companies, which provides compensation for damage caused by oil pollution originating from offshore fixed or mobile facilities belonging to these companies

13. Addressing Environmental Disasters: the role of treaty-based civil liability regimes • States generally do not recur to interstate claims - Pollution from ships is dealt with under national law and civil liability and compensation schemes • 1992 Civil Liability Convention and IOPC Fund Convention (ships) • The1977 (London) Convention on Civil Liability for Oil pollution Damage resulting from Exploration and Exploitation of Seabed Mineral Resources (offshore installations, as defined in the convention)

14. IMO Civil liability regimes • 3 tier of compensation: • A) 1992 CLC Convention: ship owner (strict liability regime) + exceptionally other operators (art. III.4) • B) 1992 IOPC Fund Convention: cargo owners = companies senders/receivers of oil in States Parties • C) 2003 Optional Supplementary Fund Protocol • Gradual implementation of the polluter-pays principle • Anyone in a Member State can bring a claim for compensation • Compensable types of damages: • Property damages, Clean-up, Economic losses (fishermen, tourism,…) • What about pure environmental damages? • “reasonable” costs of reinstatement measures… but what if there is an “irreparable damage”? • How should the “reasonableness” of measures be established? • What role for IOPC Fund Convention practice in handling claims?

15. The circulation of standards across the different regimes

16. From OCSR to a strengthened accountability of energy operators • in theory:formallytreaty-basedstandards are addressedto States • in practice: • they are to be complied with by the private companies (Preventive phase) • Civil liability funds are replenished by private operators = they are an accountability mechanism (compensation phase)

17. Issues for discussion: • What is the scope of UNCLOS provisions referring to “applicable international rules and standards established through competent international organizations”? • May UNLCOS incorporate also “pure” OCSR standards? • What is the effect on the legal nature of standards when they “move” across regimes? • Should non-compliance with voluntary standards be considered as “negligence” under treaty-based civil liability regimes? • Weaknesses: • Lack of uniform definitions across the different legal regimes… • Can offshore oil platforms be properly described as “vessels” or “ships”? • Civil liability treaty-based regimes do not cover environmental damage per se