Liability for pollution damage from offshore oil spills: The CLC and fund conventions, the EU's Environmental Liability Directive and their implications for New Zealand law

This thesis will apply conventional methods of legal analysis to ask how New Zealand’s offshore petroleum liability regime came to be created from a pair of international shipping liability and fund conventions, and explaining how the EU and Member States developed and implemented the Environmental Liability and Offshore Safety Directives. New Zealand’s government has actively encouraged growth in its offshore petroleum sector in the belief that seabed drilling can be carried out safely and profitably at any depth, and that the owners of offshore petroleum installations will pay administrative penalties and damages to compensate for all oil pollution claims. The recent Deepwater Horizon disaster has had global repercussions for operators and regulators, but has sparked little discussion of legal liability issues in the New Zealand context. New Zealand’s offshore petroleum liability regime used two international shipping conventions which had created a system of strict and limited liability for oil pollution damage, channelled to the shipowner, and backed up by mandatory insurance and an industry-fed compensation fund. The shipping conventions became the standard model for many regional and international environmental damage liability regimes, because there is no international offshore liability convention, but New Zealand’s offshore petroleum liability regime has diverged from this ideal. New Zealand sought to capture a broad range of owners and operators of offshore installations in a net of strict and unlimited liability, but without providing adequate mandatory insurance regulations or a compensation fund. Meanwhile, the European Union created its own environmental damage liability regime and only later applied it to offshore oil and gas operators, but also without providing harmonized mandatory insurance regulations or an EU-wide compensation fund. Much like New Zealand, EU Member States have struggled to implement consistent and predictable environmental liability laws, or to develop appropriate financial security guarantees. Analysing New Zealand’s offshore petroleum liability regime in this context accomplishes two overall objectives. First, a detailed examination of the international shipping conventions will provide guidance about how New Zealand should interpret, quantify and allocate liability for the key elements of pollution damage liability. Second, the comparison of New Zealand and the EU Member States’ experiences demonstrates the difficulties that nations face in adopting disparate over-arching international or supranational legal frameworks to create domestic statutory liability systems. The discussion has profound implications, not just for the specifics of any one country’s liability laws, but also for future attempts to create a practical and durable regional or international offshore petroleum liability and fund convention