Country Best Practices Template Accident Prevention in Spain

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1 SECRETARÍA DE ESTADO DE MEDIO AMBIENTE DIRECCIÓN GENERAL DE SOSTENIBILIDAD DE LA COSTA Y DEL MAR DIVISIÓN PARA LA PROTECCIÓN DEL MAR Country Best Practices Template Accident Prevention in Spain ANNEX NATIONAL REGULATORY FRAMEWORK IN SPAIN 1.1 Introduction to the national legal and institutional framework on offshore activities The 1978 Spanish Constitution (CE) organizes the Spanish State territory into municipalities, provinces and autonomous communities and recognizes their autonomy to manage their own interests. According to Article 2 of the Spanish Constitution, Spain is a nation where nationalities and regions have the right to be autonomous. The Spanish State is divided into 17 Autonomous Communities (Comunidades Autónomas, hereinafter CC.AA) and two Autonomous Cities (Ceuta y Melilla), each with their own institutional regime holding executive and legislative powers. Based on the principles of autonomy and territorial decentralization, the State (or Central Administration) and the Autonomous Communities hold competences at different levels for different policy areas. The distribution of competences between the State and the CC.AA is established by the Constitution (Articles 148 and 149). Article 148 CE establishes the themes whose competence can be attributed to Autonomous Communities through their Statutes (regional constitutions) and Article 149 establishes those under the competence of the State. It provides different levels of competence. This distribution of powers has certain similarities with the distribution of powers between the EU and its Member States. Certain areas are the exclusive competence of the State (e.g. Article 3 of the Treaty on the Functioning of the European Union (TFEU)) and other areas are of the exclusive competence of the CC.AA. Some areas are shared competence between the State and the CC.AA (similar to the EU Environmental Policy following Article 4 of the TFEU). In such cases, the State is usually responsible for establishing basic legislation that can be developed by the CC.AA through further legislation, provided the minimum requirements laid down by the basic legislation are respected. The legislation developed by a CC.AA then becomes preferential. In other cases, the CC.AA only has executive powers. Each of the CC.AA has listed in its Statute of Autonomy the responsibilities it has assumed. The Constitution contains a residual clause according to which any competence on matters not claimed by Statutes of Autonomy will fall on to the State. Article 150 CE provides the possibility to transfer State competences to Autonomous Communities through framework law, and organic law. Specifically on matters related to the Barcelona Convention s Offshore Protocol, Article 149 (1)13) and 25) of the CE and Article 3(2)b) of Law 34/1998 on the Hydrocarbons Sector, determine the competence of the State to grant authorisations for exploration, research permits and concessions for exploitation of hydrocarbons in the seabed and marine subsoil or in both terrestrial and marine seabed zones. The protection of the marine environment and the prevention and control of marine pollution originating from the sea falls within the State competence according to Article of the Spanish Constitution. The Constitutional Court endorsed, in its Judgment 40/1998, of 29 February, the constitutionality of the state competence for the prevention and control of marine pollution when it originates in the sea. Plaza San Juan de la Cruz s/n Madrid

2 In addition, Article CE provides for the exclusive competence of the Spanish Central State to approve basic legislation for environmental protection without detriment to the competence of the Autonomous Communities to establish additional protection measures and develop the basic legislation. On many occasions the Spanish Constitutional Court (TC) has examined the extension of the legislative competences of the State and of the Autonomous Communities for environmental protection. The Constitutional Court case STC 156/1995 summarises the jurisprudence on this issue: Nevertheless, in the recent decision in case 102/1995 we have departed from the previous ruling in case 149/1991, stating that the State when establishing the basic legislation for environmental protection cannot reach such a degree of detail that it would not allow Autonomous Communities with competence in the field of environmental protection legislation to develop that legislation which would imply that their competences would be without substance [F.8]. Linked to the decision in case 179/189, we have affirmed the function that basic performs is the provision of minimum requirements that must be respected but at the same time allows Autonomous Communities with competences in this field to establish higher protection requirements. Therefore, the nature of basic must be understood as minimum and indispensable for the protection of the environment. Outside the core of basic nature enters into play complementary and development rules with executive competences. All of them form a normative body. It is like a field with different layers where the State level must be sufficient and homogenous but it can also be subject to improvements to adapt it to the circumstances of each of the Autonomous Communities [F. 9]. Based on this interpretation of the CE, Autonomous Communities are allowed to adopt additional protection measures developing the provisions enacted by the State. Complimentary, Article CE provides that competence on environmental management can be attributed to Autonomous Communities. All Statutes of the Autonomous Communities claim this competence which implies that Autonomous Communities have executive competence. The Spanish TC held in Case STC 102/1995 that the executive or management powers in relation to the environment correspond to the Autonomous Communities in general and not to the State. Overview of the legal framework in Spain In accordance with Article 1(1) of the Spanish Civil Code, the sources of law include: laws or legal acts, customs, and general principles. In addition, rules derived from international treaties become part of the Spanish legal framework once they are ratified and are legally binding after publication in the Official Journal. Court judgments complete the legal system by providing interpretation of the main sources of law. The 1978 Spanish Constitution (CE) is the highest hierarchical level of the Spanish normative system. Subsequently, legal acts are defined by the CE as the norms published in the official journals that contain normative provisions issued by the bodies holding legislative power. These bodies are the General Chambers (the Spanish Senate and Parliament) as well as the Legislative Assemblies from the Autonomous Communities. The CE distinguishes between two kinds of Legal Acts: Leyes Orgánicas (Organic Laws) are those that develop fundamental rights and public freedoms (human rights), approve the Estatutos (Constitutions) of the Autonomous Communities and the general electoral regime, as well as those matters which require such a Law as provided in the CE itself. Leyes Ordinarias (Ordinary Laws) are the other legal acts.

3 In complement to the normal legislative procedure, Article 86 of the CE enables the Government to enact provisions with the status of legal acts if there is an extraordinary and urgent need. In this case, it is required that the Parliament discusses and votes on the Government act designated as a Law Decree (Decretos-leyes) within thirty days. The principle of hierarchy of norms under Article 9.3 of the CE establishes that the laws and provisions are subordinated to the CE. Organic laws follow in the legal hierarchy and ordinary Laws, Legislative Decrees and Law Decrees are under the organic laws. Laws from State or from CC.AA do not conflict as they cover different areas according to their competence. Further down in the hierarchy, Spanish public administrations hold regulatory powers, which allow them to adopt norms with a regulatory status. These norms are subordinate to legal acts and take the form of regulations, decrees or instructions. The regulatory acts must respect the provisions contained in legal acts. Regulations from CC.AA bodies must also cover areas under their competence or whose competence has been transferred to them. Royal Decrees are legally binding acts with regulatory status issued by the President of the Government or of the Council of Ministries. Royal Decrees follow the legal acts in the Spanish legal hierarchy and precede the Ministerial Orders, which can be approved by Ministries. The other kinds of norms are municipal ordinances, which have regulatory status and must respect legal acts. Municipal ordinances must be passed by the municipal assembly (pleno municipal). Introduction to the national legal and institutional framework on offshore exploration and exploitation activities For the purposes of article of the Spanish Constitution, hydrocarbon deposits and underground storage existing on State territory and in the territorial subsea and sea depths which are under the sovereignty of the Kingdom of Spain shall be deemed to be public property belonging to the State, pursuant to the current legislation in force and the international treaties and conventions to which Spain is a party. Spain acceded to the UNCLOS through its ratification on 15 January According to Article 56(1) of UNCLOS Part V, the coastal State has sovereign rights in the EEZ for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents and winds. The same article continues by recognising the coastal State jurisdiction with regard to... i) the establishment and use of artificial islands, installations and structures; ii) marine scientific research; iii) the protection and preservation of the marine environment. Through Law No 10/1977 of 4 January 1977 on the Territorial Sea, Spain claims jurisdiction in the 12 nautical miles of its territorial waters, including in the Mediterranean, which comprises the water column, the seabed, subsoil and the resources from the sea. According to Law No 15/1978 of 20 February 1978 on the economic zone, Spain has jurisdiction in the 200 n.m. of the exclusive economic zone (EEZ), from the external limit of the territorial sea, including the exploration and exploitation of the natural resources of the seabed and subsoil. However this law is not applicable in the Mediterranean Sea. Through the Royal Decree 1315/1997 of 1 August 1997 (amended by Royal Decree 431/2000 of 31 March) Spain has defined a protected fishing zone in the Mediterranean where its jurisdiction extends 37 n.m. beyond the territorial waters from the external limit of the Spanish Territorial Sea. This jurisdiction provides the Spanish government with sovereign rights on the conservation of the living resources and management and control over fisheries resources and fishing activity but does not affect jurisdiction over, inter alia, mineral or fossil resources.

4 The sovereign rights of a coastal State over the continental shelf are inherent and exclusive and therefore Spain does not need to declare its continental shelf, unlike the EEZ which requires declaration. The Continental shelf extends up to 200 n.m. from the baseline of the territorial sea. All parts of the Mediterranean seabed are within the continental shelves of its coastal States. These sovereign rights are exclusive in the sense that if Spain does not explore the continental shelf or exploit its natural resources, no one may undertake these activities without the Spanish government express consent (UNCLOS, art. 77.2) The Spanish sovereign rights in the continental shelf are related to the purposes of exploring the continental shelf and exploiting its natural resources. According to Article 77, paragraph 4 of the UNCLOS the natural resources includes the mineral and other non-living resources of the seabed and subsoil together with living organisms belonging to sedentary species... On this basis, Spain as a coastal State has the power to grant licences for the exploration and exploitation of energy resources and for the development of measures for the protection and preservation of the marine environment, which is supported by Article 132(2) of the Spanish Constitution where the maritime-terrestrial zone, the beaches, territorial waters and natural resources in the EEZ and the continental shelf are defined as national public domain. Law 34/1998, dated 7th October, on the Hydrocarbons Act prescribes the legal system for the exploration, research and mining of hydrocarbon deposits, the exploration, research and operation of underground stores for hydrocarbons and the transportation, storage and industrial handling of the hydrocarbons obtained whenever these activities are carried out by the researchers, miners or operators as a side-line activity using facilities attached to the production facilities. Any public or private body corporate (legal person) may carry out any of the activities referred to in this Title by obtaining the corresponding authorisations, permits and concessions. The authorisations, permits and concessions referred to are granted in accordance with the principles of objectivity, transparency and nondiscrimination and according to the procedure described in the section about licensing procedure.

5 List of Spanish legislation relevant for the protection of the sea against pollution from offshore activities The Spanish legislation relevant for the protection of the sea against pollution from offshore activities is: Transposing the Marine Strategy Framework Directive 2008/56/EC: Framework Law 41/2010 on the protection of the marine environment. Art 35 on waste. Transposing Directive 2005/35/EC on ship-source pollution and on the introduction of penalties for infringements: Royal Decree 394/2007 of 31 March on measures applicable to ships (includes floating devices) that cause pollution through discharges in Spanish maritime waters. Transposing Directive 2008/99 on the protection of the environment through criminal law: Organic Act 5/2010 amending the Spanish Criminal Code International regulation regarding marine pollution coming from ships or offshore activities: Convention for the Prevention of Pollution from Ships (MARPOL 73/78) National regulations on the law of the sea, coasts, fishing, marine pollution prevention: Law 10/1977, 4 of January, on the Territorial Sea. Royal Decree 1315/1997, 1 of August (modified by Royal Decree 431/2000, 31 March) establishing a fishing protected area in the Mediterranean. Law 22/1988 on the Coast which was further developed by Regulation of the Law of the Coast adopted through Royal Decree 1471/1989 of 1 December Law 3/2001 on Maritime fishing Royal Decree 253/2004 of 13 February establishing measures for pollution prevention and protection in operations of charge, discharge and manipulation of hydrocarbons in the maritime and port area is applicable since hydrocarbon platforms are expressly included in the scope of such Royal Decree. Law 27/92, 24 November on State Ports and Merchant Marine Transposing the Environmental Liability Directive 2004/35/CE: Law 26/2007, of 23 October on Environmental liability. Royal Decree 2090/2008 of 22 December, adopting the Regulation for the partial implementation of the Law 26/2007 of 23 October on Environmental liability. Transposing the Waste Framework Directive 2008/98/EC: Law 22/2011 of 28 July, on waste and contaminated soil. Law 10/1998 on waste Transposing the Environmental Impact Assessment Directive 85/337/EEC as amended in : Legislative Decree 1/2008 adopting the Spanish Law on the Impact Assessment for projects Transposing the Seveso Directive 96/82/EC: Royal Decree 1254/1999 of 16 July, adopting measures for the control of major accident hazards involving dangerous substances. Royal Decree 1196/2003, of 19 September, adopting the basic Directive on civil protection for the control and planning of major accident hazards involving dangerous substances.

6 Finally, the sectorial legislation on exploration and production should be mentioned: Law 34/1998 of 7 October of the Hydrocarbon Sector and Regulation on research/investigation and exploitation of hydrocarbons adopted through Royal Decree 2362/1976 of 30 July

7 1.2 Licensing and authorisation procedures According to National Legislation, exploration and exploitation activities are subject to prior written authorisation from the competent authorities. Authorisations should only be grated to those operators that satisfy certain requirements, including the necessary legal, technical and financial capacity to carry out the works involved. In Spain only the Central Government has competence for granting authorizations and concessions for the exploration and exploitation of hydrocarbons in the marine subsoil (Article 149(1)13) and 25) of CE).Hydrocarbon exploration and exploitation activities are regulated by Law 34/1998 of 7 October of the Hydrocarbon Sector. Moreover, according to the Second Transitory Provision of Law 34/1998, of 7 October, until the issuing of the specific regulations developing that Act, the corresponding provisions in force shall continue to be enforced, provided that they do no contradict the Hydrocarbons Act. This is the case of Royal Decree 2362/1976 of 30 July. According to Article 32 of Law 34/1998, hydrocarbon exploration and exploitation activities carried out in the seabed and its subsoil of the territorial sea or any seabed under the national sovereignty are subject to current national law regulating activities in the coast, territorial Sea, EEZ and continental self as well as International Agreements to which Spain is a Party. Current national law includes not only Law 34/1998 but also Law 22/1988 on the Coast which is further developed by its Regulation adopted through Royal Decree 1471/1989 of 1December 1989 and by Article 132(2) of the Spanish Constitution (CE) declares as national public domain the natural resources under the EEZ and the Continental shelf, including the hydrocarbon reservoirs and underground storage in the Spanish territory or in the subsoil of the territorial sea or any seabed under the sovereignty of Spain. Article 2 of Law 34/1998 refers to the Article of the CE confirming that hydrocarbon reservoirs and underground storage in the Spanish territory and the seabed that are under national sovereignty have the consideration of national public domain. Specifically, Article 3(2) recognises the competence of the General State Administration to grant exploration authorizations, investigation/prospection permits and exploitation concessions in seabed areas or areas comprising both terrestrial and marine subsoil. Authorisations and permits shall be awarded in accordance with the principles of objectivity, transparency and non-discrimination (Art 8(1)) and should only be granted to commercial companies with technical and financial capacity and whose objectives, listed in their statutes are the exploration and exploitation of fields and underground storages of hydrocarbons (Art 8(2)). Law 34/1998 and its Royal Decree 2362/1976, defines the procedure and requirements needed for authorisation and concessions for the exploration and exploitation of hydrocarbons, including underground storage. These activities can be carried out by any public or private body, national and foreigner, by obtaining the corresponding authorisations, permits and concessions. The exploration authorisation grants the holder the authority to carry out exploration work in free areas, meaning those geographical areas where no research permit nor mining concession is currently in force. These exploration activities include geophysical work or other work that does not include any deep drilling, this is to say, drilling that is more than 300 metres deep. The research permit entitles the holder to investigate, on an exclusive basis and within the granted area, the existence of hydrocarbons and underground storage for these hydrocarbons under the conditions set forth by applicable legislation and in the previously approved research plan during a period of up to 6 years that can be exceptionally extended for three more years. The granting of a research permit confers upon the holder the exclusive right to obtain mining concessions at any time during the term of the permit and within the same area, as long as they fulfil the required conditions for it. The exploitation concession enables the commercial company to carry out activities for the exploitation of the resources through their extraction, the use of structures and will have the right to pertinent authorisations for

8 the construction and use of installations needed for such activity provided that they comply with the applicable legislation. The right to carry out the exploitation would have a validity of 30 years that can be prolonged twice for periods of 10 years. Prior to commencement of the hydrocarbon exploration, research and mining or storage work, a civil liability insurance policy must be procured in order to secure any possible damage or loss caused to people or property as a result of the activities to be performed, in accordance with applicable regulations, depending on the nature of such activities. Leaving apart the authorisations for exploration that, as already mentioned, do not grant any exclusive right, the procedure is based on two phases, namely, permit and concession phases, although a company could apply directly for the second one: The first phase provides for a right to carry out the investigation/research activities for which the permit is requested. The investigation permit gives the holder the right to obtain concessions on the requested surface. Operators requesting a research/investigation permit should provide evidence of their legal, technical and economic capacity; the area demarcated for their geographical coordinates and whose surface must be between 10,000 and 100,000 hectares; a research plan, which must encompass the work schedule, investment plan, environmental protection measures and the restoration plan; and finally a financial guarantee that shall reflect compliance with investment, taxation, Social Security and restoration obligations, as well as any other obligations arising from the research permits. Operators requesting an exploitation concession are due to provide technical specifications detailing the position, area extension and technical data on the concession in support of their application; general mining development plan, investment programme, environmental impact study and, as the case may be, estimates of recoverable reserves and a production profile; and a plan to decommission and abandon the facilities once the concession over the deposit or underground storage has concluded and to restore the environment; and an insurance guarantee covering all requested obligations. This guarantee is intended to secure fulfilment of investment, taxation, Social Security, decommissioning and restoration obligations and any other obligations stemming from the exploitation concession. Article 12 imposes on the operator an information obligation towards the competent authorities and the data submitted would be considered confidential excepting technical information for statistical purposes. Article 103 of Law 34/1998, dated 7 th October, declares the public utility status for the compulsory purchase and the exercising of rights of way of any facility and service necessary to carry out research and mining activities of hydrocarbons. It further defines the requirements needed for authorisation and concessions for the exploration and exploitation of hydrocarbons. The Directorate General for Energy Policy and Mining should manage the registry of the requests for exploration/research and for the exploitation concessions. Finally the Act provides that the termination of a mining concession will imply that the exploitation will immediately revert to the State which may require the company to dismantle the facilities. Article 14 nominates the Ministry of Industry and Energy, nowadays the Ministry of Industry, Energy and Tourism as the competent authority to grant exploration authorisations in the maritime territory. According to articles 15 and 25, research permits and exploitation concessions are awarded by the Government by means of a Royal Decree. These latter include a previous report by the Autonomous Community. The aforementioned authorisations, permits and concessions are without prejudice to any other authorisations that might be required by the works, construction and facilities needed to implement them for reasons relating to taxation, spatial management and urban development, environmental protection or living

9 marine resources protection, or as required by the corresponding industry legislation or the safety of people and property. These other authorisations required for the offshore exploration, research and exploitation of hydrocarbons may include the concession for the occupation of the maritime-terrestrial public domain, as regulated in the Coastal Act. Article 3 of Law 22/1988 on the Coast defines the coast, the territorial sea and internal waters together with their bed and subsoil and the national resources in the Economic Zone and the continental shelf as national public domain whose use requires authorisation. Article 51 to 55 of Law 22/1988 regulates the conditions for granting these annual authorisations. Similarly Article 20(3) of Law 3/2001 on Maritime Fishing requires the opinion of the Ministry and of the relevant regions for any work or installation, removable or not, in offshore waters and the extraction of any material. Whenever the works, constructions and facilities covered by this Act are sited or have to be carried out within areas and facilities that have national defence interest status, authorisation from the Ministry of Defence shall be required in accordance with the provisions of Act 8/1975, dated 12 March and governing areas and facilities deemed in the interests of national defence and consolidating legislation. Whenever the works require use of ships flagging non-eu Countries, authorization of Ministry of Foreign Affairs is needed. As far as the works require use of mobile platforms or ships, the maritime administration in Ministry Fomento/Public Works should also provide previous authorization according to Law 27/92 24 November on State Ports and Merchant Marine. The Royal Legislative Decree 1/2008 adopting the Spanish Law on the Impact Assessment for projects requires an environmental impact assessment of Annex I projects for the extraction of oil and natural gas with commercial objectives, if the amount extracted is more than 500 tonnes/day (Group 2.d) and Annex II projects related to deep drilling and industrial installations in offshore for the extraction of oil if decided by the environmental competent authority. (Group 3.a) and b)). Although not included expressly, seismic campaigns are processed as projects in Annex II. Licensing and authorisation process Is an Environmental Impact Assessment (EIA) procedure compulsory for authorisation for exploration and exploitation? Is the company required to provide plans for removal of installations and/or to provide precaution measures for protected areas? Are any additional risk assessments required (such as those related to accidents)? What type of safety considerations within authorisation of offshore oil and gas activities are required? More specifically: is there a specific procedure for the approval of use and storage of chemicals by the competent authority? Are there measures in place to enforce standards on disposal of oil and oily mixtures from installations? Are there regulations on the disposal of sewage and garbage from installations? Yes Yes, both Yes, risk assessment related to accidents is required: probability, effects study, worst case scenario OSPAR regulations on offshore activities are also applicable: Regarding use of chemicals in offshore activities (PLONOR list, etc.) Regarding produced water, oily mixtures, etc. (all should be discharged onshore) Sewage and garbage should also be discharged onshore.

10 Which sanctions apply for the non-compliance with licensing or authorisation? Should the EIA conditions be disregarded, the Ministry of Agriculture, Food and Environment could withdraw EIA authorization and the activity should stop. Sanctions are treated on a case by case basis.

11 1.3 Liability and compensation schemes Under Article 27 of the Offshore Protocol to the Barcelona Convention, liability falls on the operator for damages resulting from its activities and the operator will be required to pay prompt and adequate compensation. The operator shall maintain insurance coverage or other financial security to ensure compensation for damages caused by the activities covered by the Protocol. The liability and compensation regime in Spain is first based on Article 45 of the Spanish Constitution which already refers to the citizens right to enjoy a clean environment as a prerequisite for individual development. It also refers to the polluter pays principle for repairing the environmental damage (in addition to any criminal or administrative sanctions) to be applied to those breaching the obligation of rational use of natural resources and nature conservation. The protection of the marine environment and the prevention and control of marine pollution originating from the sea is regulated by Law 27/1992 of November 24, State Ports and Merchant Marine. According to Article 6.1 this competence is attributed exclusively to the State following Article of the Spanish Constitution. Article 115 of Law 27/1992, of 24 November, on State Ports and Merchant Marine establishes a system that is not based on strict liability but liability linked to the guilt, negligence of the operator. A serious infringement is the pollution of the marine environment through negligent introduction, directly or indirectly, into the marine environment of substances, materials or forms of energy from ships or fixed platforms or other facilities in waters located in areas where Spain exercises its sovereignty or jurisdiction and which could pose a danger to human health, harm tourist, aesthetic or biological resources and marine life, or could damage amenities or interfere with other lawful uses of the sea. This infringement is qualified as such to the extent that such introduction was contrary to the law or did not count with authorisation. Article 115(4) defines as infringement regarding the prevention of marine pollution from fixed platforms any actions or omissions constituting a potential risk of marine pollution. The Spanish Criminal Code defines in Articles 325 the pollution of the marine environment as a crime against the environment in general) and Article 330 on damages to a protected area can also be applied in certain cases of discharges into the marine environment, as by Directive 2008/99 on the protection of the environment through criminal law. Law 26/2007 transposes Directive 2004/35/EC of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage. This Act establishes the same administrative system prescribed by the Directive enabling the public administration to apply a liability regime away from the classic civil liability that requires Court intervention to determine whether the requirements of dole/negligence that justify liability exist. Law 26/2007 establishes a system where, once the responsibility is determined, liability is unlimited, covering all damages up to the total restoration of the natural resources and the services they provide. The regime is based on strict liability where responsibility obligations are independent of any guilt, negligence or dole in the execution of the actions that caused the damage. This system complements the regime based on environmental liability derived from the breach of administrative or criminal rules already established in specific Spanish legislation. The limitations of the Spanish law are similar to the Directive, except that the Spanish law includes environmental damages caused to seashore and estuaries (out of the scope of the Directive). But there is still a

12 limitation regarding the scope of the law itself. Not all natural resources are protected by this Act but only those that fall under the concept of environmental damage, namely the damages to water, land, the seashore and estuaries, and damage to species of flora and fauna present permanently or temporarily in Spain and their habitats already protected by national, regional or International law, or mentioned in the national or regional catalogues of threatened species. Therefore responsibility for damages to the marine environment is limited to damages to the seashore considered public maritime-terrestrial domain goods (as regulated under Article 3(1) of Law 22/1988 on the Coasts). Damages to the marine species and habitats not in the seashore are not included. The damages to species and habitats exclude those damages already forecasted in the impact assessment according to Article 6(3) and (4) of the Habitats Directive or the Royal Decree 1997/1995 of 7 December laying down measures to contribute towards ensuring biodiversity conservation through the conservation of natural habitats and of wild fauna and flora. Similarly, not all damages on these natural resources will generate environmental responsibility. For the law to be applied, there should be damages or threats of harm or damage causing significant adverse effects on the natural resources. Article 2 limits the scope of the Act to damages to the seashore and the maritime side of the river having significant effects on the physical integrity and conservation and those affecting the achievement or maintenance of their appropriate quality level. The scope of the liability regime is complemented with Article 3 establishing that the application of this Act is limited to damages or imminent threats caused by activities listed in Annex III. Regarding discharges into the marine environment, activities under Annex III of Law 26/2007 include: All discharges into inland waters and the territorial sea are subject to approval in accordance with Law 22/1988 on the Coasts and regional applicable legislation. These activities are limited to discharges from land. The management of waste from extractive industries, in accordance with Directive 2006/21/EC of 15 March on the management of waste from extractive industries and amending Directive 2004/35/EC which excludes discharges in the marine environment from sea sources. This law does not include the discharges due to accidents from extractive industries. These activities are not mentioned in Annex III as they do not fall within the activities needing authorisation under Law 16/2002 on integrated pollution prevention and control. Annex I of Royal Decree 1254/1999 of 16 July approving measures to control the risks inherent in major accidents involving dangerous substances includes amongst the dangerous substances the liquefied extremely flammable gases (including LPG) and natural gas as well as products derived from petrol but not from petrol itself. However, the Spanish legislation goes further than the Directive and stipulates that Law 26/2007 on environmental liability applies as well to activities not listed under Annex III. In those cases, actions where guilt, negligence or dole can be proven would engender prevention, avoidance or reparation measures. In those cases, actions where guilt, negligence or dole do not exist, only prevention or avoidance measures would be required. Public administration that had awarded a contract or authorized an activity whose development would lead to environmental damage or the threat of it, will collaborate with the competent authority without environmental liability arising out of the public administration unless the operator s actions were in compliance with a mandatory order or instruction by the public administration.

13 Regarding the compensation regime for damages to the marine environment, Articles 24 to 26 of Law 26/2007 on environmental liability, establishes that only operators of the activities listed in Annex III shall provide a financial guarantee to enable them to cope with the environmental responsibility inherent to the activity to be developed. The minimum amount to be secured (not limiting the responsibility) shall be determined by the competent authority according to the intensity and extent of the potential damage that can be caused with that activity and according to regulatory criteria. The guaranteed amount is specifically and exclusively designed to meet the operator's environmental liabilities arising from the economic activity and shall be independent of any other liability, whether criminal, civil or administrative. The Civil Liability Convention for damage caused by oil pollution adopted under the auspices of IMO in 1969 and amended by the 1992 Protocol, is not applicable as its scope is limited to oil pollution damage caused by spills from oil tankers. The financial guarantee may be established by different forms as regulated by Article 26 of Law 26/2007 and which may be alternative or complementary to each other, both in amount and in the facts warranted: a. An insurance policy according to Law 50/1980 of 8 October, on Insurance Contract, signed with an insurance company authorized to do business in Spain. In this case, correspond to the Insurance Compensation Consortium functions referred to in Article 33. b. A guarantee granted by a financial institution authorized to operate in Spain. c. The constitution of technical reserves by allocating a fund ad hoc realized through financial investments backed by the public sector. The infringements established by Law 26/2007 are classified as very serious or serious. In the case of a very serious infringement according to Article 37, the sanctions established are: 1. A fine of EUR 50,001 to 2,000, Termination or suspension of the authorization to develop the activity for a minimum of one and a maximum of two years. The sanctions defined in the case of serious offenses are: 1. Fine of EUR 10,001 to 50, Suspension of authorization for a maximum period of one year. Liability and Compensation Are measures in place to ensure liability of the operators for damage to the environment caused by offshore activities (oil and gas)? Is compensation paid by the operators for environmental damage arising from offshore oil and gas activities? In particular, are operators required to have insurance/other financial security? Yes, the Ministry of Industry, Energy and Tourism requires a financial guarantee that covers unlimited liability for any damage to people, to property or to the environment, on top of the guarantee required in Law 34/1998, dated 7th October Yes, if that was the case. Yes

14 1.4 Prevention of pollution Prevention of pollution should contribute to the protection of the marine environment and in particular to the achievement of good environmental status by 2020 at the latest (Article 1(1) of Directive 2008/56/EC. In addition to the prevention measures established in the legislation on environmental liability already described, other measures include pollution prevention measures. Articles 17 and 18 of Law 26/2007 are dedicated to prevention and avoidance measures. They require the operator to apply prevention measures when there is an imminent risk of damage derived from economic activities as well as measures to avoid new damages according to the criteria established in its Annex II. Operators must inform the authorities of the damages or risk of damages and the prevention measures and those adopted to avoid new damages. According to Article 18 of this law, the competent authority may adopt a motivated resolution requiring the operator to adopt in case of threats of damages or of new damages specific prevention or avoidance measures. It can also execute the actions itself on the expenses of the operator. Spanish Law 41/2010, of 29 December on the protection of the marine environment transposes the Directive 2008/56/EC of 17 June 2008 establishing a framework for a community action in marine environmental policy (Marine Strategy Framework Directive 2008/56/EC). It introduces the obligation to achieve good environmental status of European marine waters by developing marine strategies with the ultimate goal of maintaining their biodiversity and ensuring that the oceans and seas are clean, healthy and productive, and whose exploitation is sustainable. This law, will also aim at achieving this objective through the prevention and reduction of pollution through discharges. This Act, following the term of the Directive, applies in the Mediterranean Sea to the marine waters in the territorial sea, the fisheries protection zone in the Mediterranean and the continental shelf and will only apply to the coastal waters (1 mile from baseline) as far as the current legislation on continental waters is not sufficient to ensure the good quality of the marine environment in that area. The purpose of this Act is to achieve good environmental status of the marine environment and one of the key tools to achieve this goal is to develop coherent planning of the activities carried out therein. The marine strategies are essential tools for this coherent planning. Law 41/2010 establishes five marine demarcations and for each of them, a marine strategy has to be developed, including an evaluation of the status of the marine environment, the definition of what specifically means good environmental status, the establishment of environmental objectives to achieve good environmental status. A monitoring plan needs to be determined together with a programme of measures to achieve good environmental status. In addition to this marine planning regime, Law 41/2010 includes other provisions aimed at the protection of the marine environment. It formally creates the Network of Marine Protected Areas selecting what spaces are integrated in it, their goals, mechanisms for their designation and management. The use of marine waters, including the bed, subsoil and natural resources, is considered by Law 41/2010 as free for uses consistent with the nature of the public good, pursuant to the provisions of Article 31 of Law 22/1988, and the preservation of its integrity. Outside the general common use of the marine environment, any other rights of use, exploitation and utilization (such as the exploration and exploitation of hydrocarbons) need to be authorized under the applicable sectoral legislation and should be planned according to the corresponding marine strategy. The legislation on the hydrocarbons sector ruling on the authorisation and permiting regime has already been described. According to Article 6 of Law 41/2010 the Spanish marine environment is divided in 2 regions: the Atlantic North Oriental and the Mediterranean region. The following demarcations are established for the Mediterranean region, which should be subject to its own marine strategy :

15 1. Strait and Alboran Marine demarcation: marine environment in which Spain has sovereignty or jurisdiction between Cape Espartel (and Punta de Tarifa in the Spanish side) and Cape of Gata. It includes the marine environment in which Spain has sovereignty or jurisdiction in the area of Ceuta, Melilla, Chafarinas islands, the island Parsley, Peñones de Vélez de la Gomera and Alhucemas and the island of Alboran. (clarification in brackets added by the author, not mentioned in the legislation) 2. Levantine-Balearic Marine Demarcation: Marine environment in which Spain has sovereignty or jurisdiction between Cape Gata and the limit of territorial waters between Spain and France in the Leon Gulf. Finally, this law sets up standards for discharges of waste and other substances from (ships, aircrafts,) platforms and other construction in the sea, for incineration at sea and the placement of materials in the seabed or subsoil, according to the Barcelona Convention for the Protection of the Marine Environment in the Mediterranean. Article 32 defines discharges as all deliberated release of wastes and other materials to the sea from platforms and other constructions in the sea as well as the storage of waste and other materials in the seabed or subsoil from platforms and other constructions in the sea. It excludes discharges of waste and other materials resulting directly or indirectly from the normal operations of platforms. This provision prohibits discharges into the marine environment of waste and other materials, which could only take place under prior authorisation by the competent marine authority. These authorisations would require prior positive opinion by the Ministry of Agriculture, Food and Environment which would determine the proposal s compatibility with the marine strategy. The request for authorisation of waste discharges should take into account the hierarchy of options for waste management as follows: - Waste prevention/reduction - Reuse - Recycling - Destruction of dangerous components - Recovery through treatment for the reduction of the dangerous components - Disposal in land, atmosphere or sea. Law 41/2010 refers to Law 26/2007 on environmental liability for the regulation of infringements and sanctions causing environmental damages. However, given the quasi-federal organisation of Spain, Article 36 enables the State, through the Council of Ministers, to declare the responsibility of any administrative body for the infringement and to define the compensation due according to the amounts that the State would be required to transfer in payment of the imputed responsibility. According to Royal Decree 2362/1976, dated 30 July, the maximum hydrocarbons concentration that can be disposed to the environment will be in accordance with the legislation in force in this field, particularly that related to the protection of the environment. Measures in place to enforce standards of disposal of oil and oily mixtures from installations are related to the impact assessment and include International law requirements such as those in the OSPAR Convention and MARPOL. Accident and pollution prevention Can you please describe the reporting obligations on environmental impact of offshore oil and gas activities? Reporting obligations, if any, can be described in the environmental impact assessment.

16 Are procedures established to allow anonymous reporting of environmental concerns related to offshore oil and gas operations? No regulated procedure in force. Anonymous reporting or concerns can be presented through e- mail to the Ministry of Environment mail box.

17 1.5 Accident prevention, emergency procedures and major hazards The operator shall take suitable measures to prevent major accidents from offshore oil and gas operations. The operator has to prepare internal emergency response plans that contain measures to prevent the escalation or limit consequences of accidents. Taking into account the plans prepared by the operators, the Spanish government elaborates external emergency response plans. Royal Decree 1254/1999 of 16 July approving measures to control the major accidents hazards involving dangerous substances transposes Council Directive 96/82/EC on the control of major-accident hazards. This Directive excludes the transport of dangerous substances by pipelines and the extractive activities for the exploration and exploitation of minerals including drilling. In addition, it includes amongst the dangerous substances the liquefied extremely flammable gases (including LPG) and natural gas as well as products derived from petrol but not petrol itself. The accident prevention and emergency response measures are regulated through the Royal legislative Decree 2/2011 of 5 September adopting the Law on State Ports and Merchant Marine and replacing Law 27/1992 modified by Law 62/1997 and Law 33/2010. Article 7 establishes that the policy of Merchant Shipping aims to ensure the protection of the marine environment and maritime security. In this context, it covers the platforms in waters of Spanish sovereignty destined for the exploration and exploitation of maritime resources, excluding the pipelines. Article 265 further develops this provision allocating to the Ministry of Development//Public Works (Fomento) the competence to regulate the organisation of maritime shipping, including security, in relation to the platforms in the sea under Spanish sovereignty. It corresponds to the State Central Administration s planning and organisation of inspections and technical controls, which might be carried out by other entities such as Maritime Captaincy (Harbour Master offices) which develops the functions of inspection and pollution prevention or fight against pollution due to an accident or serious incident. (Article 266) According to Article 268, the Spanish Maritime Safety Agency (SASEMAR) is a public entity in charge of prevention of marine pollution which might be to adopt measures for preventing or minimizing pollution as well as any activities derived from a maritime accident or incident. A national plan for rescue services of human life at sea and pollution of the marine environment (National Rescue Plan) shall be developed and approved by the Government at the proposal of the Minister of Development/Public Works (Fomento) as provided for in Article 87 of Law 27/92 of Ports and Merchant Shipping. This national plan would be needed to ensure coordination of the activities of the various governmental bodies and set up a system of maritime traffic control. The current one in force covers the period from 2010 to All installations are bound under Article 62 to adopt a contingency plan for accidental pollution, complementary to the Internal Contingency Plan of the area or port and to the National Contingency Plan to be developed by the Directorate General for Merchant Shipping. The National Contingency Plan for Accidental Marine Pollution provides for the organization of human and material resources to respond to a marine pollution incident. The current National Contingency Plan was adopted and approved by Ministerial Order of 23 February The maintenance and implementation of the plan are the responsibility of the Ministry of 1 Maritimo2010_2018.pdf

18 Public Works (Fomento) (DGMM, SASEMAR); the Coastal Autonomous Government and all installations handling hydrocarbons in port. The installation contingency plan is used when the consequences of the accident can be dealt with by the operator s resources. According to Article 65, emergency plans are to be developed by the competent authority and operators are due to comply with coordination obligations. These emergency plans have been further regulated through Royal Decree 253/2004 on prevention and pollution fighting measures in the scope of maritime or ports activities that involve hydrocarbons. Can you please describe the (reporting) obligations on safety impact of offshore oil and gas activities as well as accidents? Shortly describe the procedure following a major accident? Are operators required to set out their major accident prevention policy? Are procedures established to allow anonymous reporting of safety concerns related to offshore oil and gas operations? Accident and pollution prevention According to approved plans, accidents should always be reported immediately to the maritime administration (DGMM/SASEMAR) The ship or platform must contact the closest Maritime Rescue Coordination Center (SASEMAR), and take all appropriate measures to reduce or minimize pollution Yes, plans should be in place and approved by maritime administration Yes, Maritime Rescue Coordination Centers (SASEMAR) receives anonymous reporting. Emergency measures Does national legislation require the operators to have an internal and/or external emergency response plan? Has the European union member state established an external emergency plan covering all offshore oil and gas installations and potentially affected areas within their jurisdiction? Which documents does the CA require from the operator (such as hazards report or prevention policies)? Yes Yes, a national contingency plan was approved by Ministerial Order of 23 February 2001 Minimum content of plans (previous analysis, equipments, etc.) are described in Royal Decree 253/2004 on prevention and pollution fighting measures in the scope of maritime or ports activities that involve hydrocarbons. And also in Royal Decree 1695/2012 on the creation of a National Response System.

19 1.6 Inspection and monitoring Monitoring and inspection requirements are: Under Article 31 of Law 34/1998 on Hydrocarbons sector, the Ministry of Industry, Energy and Tourism may inspect the execution of the activities carried out in an exploration license, research permit or exploitation concession, to control the respect of the obligations and conditions set up in their authorisation. The Ministry of Industry, Energy and Tourism requires the operators to submit the annual accounts, requests them to be audited or requests complementary audits for specific elements that are necessary of the exploitation activity. According to article 12, the holders of the aforementioned authorisations are under the obligation to provide with the requested information about the characteristics of the deposit and the work, production and investment they carry out, together with the geological and geophysical reports relating to their authorisations and any other information that may be stipulated in regulations. Article 11 of Royal Decree 2363/1976, dated 30 th July, stipulates the obligation to furnish information with the submission of two annual reports: the first one with the works planned for the following year and the second describing the activities developed during the last year. Operators also have to submit a monthly report, an investment report every three months, and a weekly report during the drilling or perforation phase. Inspection is carried out by personnel on-site. In this regard, there is an Industry and Energy delegate in each province, reporting to the Government Sub-delegation attached to the Ministry of Territorial Policy and Public Administration. However, this delegate acts as a representative of the Ministry of Industry, Energy and Tourism in each province, and among other responsibilities, conducts the inspection of offshore oil and gas activities. Operators are obliged to notify any incidences, including the leakage of hydrocarbons, and to send a complete report about the facts as soon as possible. According to Article 266 of Royal legislative Decree 2/2011 of 5 September adopting the Law on State Ports and Merchant Marine, the State Central Administration (Ministry of Fomento) is responsible for the planning and organisation of inspections and technical controls, which might be carried out by other entities such as Maritime Captaincy. The latter develops the functions of inspection and pollution prevention or fight against pollution due to an accident or serious incident. (Article 266)

20 1.7 Best practice According to Art 8 of the Offshore Protocol to the Barcelona Convention, operators are obliged to use the best available, environmentally effective and economically appropriate techniques and to observe internationally accepted standards regarding wastes as well as the use, storage and discharge of harmful or noxious substances and materials with a view to minimizing the risks of pollution. In addition they should use international rules, standards and recommended practices and procedures (Art. 23 Offshore Protocol) The offshore activities in the Mediterranean area of Spain are limited to one installation in Tarragona called Casablanca. According to Article 35 of Royal Decree 2362/1976, dated 30 th July, operators have to make sure that equipment and installations are up to date and follow internationally accepted oil industry standards. The environmental requirements are linked to the Environmental Impact Assessment and follow the provisions of Law 26/2007 on Environmental liability. Best Practices In which areas are best practices or techniques required (environment, hazard, safety, accident prevention)? How are best available practices and techniques defined? Is there an obligation for operators to use best available techniques? Are there any guidance on best practices? All There is no specific definition in Spanish legislation, but there are definitions for best environmental practices and `best available techniques in the OSPAR Convention, of which Spain is a Contracting Party. Yes. According to article 35 of Royal Decree 2362/1976, dated 30th July, operators have to make sure that equipment and installations are up to date and follow internationally accepted oil industry standards. The environmental requirements are linked to the Environmental Impact Assessment and follow the provisions of Law 26/2007 on Environmental liability. No.

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