Latin lawyer event AJR

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The Environment Challenge
Rio de Janeiro, July 4, 2011

Contents
1.
 
Background
2.
 
Colombian Environmental Regulations for off-shore
drilling
3.
 
Government Institutions Involved.
4.
 
Environmental licensing
5.
 
Liability for environmental damage
2
Background

•
 
Very little experience with offshore drilling.
•
 
Of the 425 areas that are either in
exploration or in production, less than 20
(4%) of them are offshore areas.
•
 
Most offshore areas are still in exploration
stage and only one well has recently been
drilled >500 mts (Araza/Tayrona Block).
Background

•
 
According to Ministry of Environment,
additional licenses granted for drilling in
Ecopetrol’s Fuerte Sur and Norte Blocks
(104 -105,Sinu Offshore).
•
 
Reportedly, licenses in process for drilling
in RC 4 and RC 5 (Equion) than 20 (4%)
of them are offshore areas (173, 174).
3
Regulations

•
 
General Rule:

Any activity that may produce severe
damage to renewable resources or
environment will require a Environmental
License (
EL
). (Article 49,
Law 99/1993)
4
Regulations

•
 
Government determines by Decree specific
activities subject to EL.
•
 
Decree
2820 of 2010,
EL required for:
–
 
Offshore seismic acquisition at depths <
200 meters

–
 
Drilling of wells (exploration or
production)
Regulations

•
 
EL is granted based on an EIA.
•
 
EIA based on generic terms of reference
(i.e. onshore drilling) adapted to specific
project.
•
 
No TOR for offshore drilling or offshore
seismic. TOR for shallow water seismic in
preparation.
5
Regulations

Environmental authorities:
•
 
Need to build capacity to effectively
evaluate potential impacts of projects on
an objective basis.
•
 
Excessively reliant on companies and their
environmental policies.
•
 
Requesting unnecessary information or
funding basic research at companies’
expense.
Regulations

Possible Ethnic Consultation Issues
6
Government Institutions

•
 
Ministry of Mines and Energy (MME)
•
 
National Hydrocarbons Agency (ANH)
•
 
Ministry of Environment, Housing and
Territoral Devoplment (MAVDT)
•
 
General Marine Direction (Dimar
)
Government Institutions

Ministry of Mines and Energy:
•
 
The MME is the governing body and the
entity in charge of establishing the
technical regulations for oil and gas
activities.
•
 
MME has not issued any
specific regulation regarding
offshore drilling.
7
Government Institutions
ANH:
•
 
Manages Colombia’s hydrocarbons
resources.
•
 
Awards Exploration areas
.
•
 
E&P Contracts typically include failure to
comply with environmental regulations as
grounds for termination.
General Marine
Direction

(“Dimar”)
•
 
It is a part of the Ministry of Defense
focused on security and port issues.
•
 
Grants permits and concessions for the
temporary occupation of beaches and low
tide areas.
8
The contractor request the TOR
to the MAVDT to make the
environmental studies. The
TOR are negotiated with
MAVDT

The contractor must request the
MAVDT
if they require an
Assessment of Environmental
Alternatives (
AEA
).
Yes
No
The contractor must present the
AEA
that will be evaluated by
the
MAVD
.
The contract must present:
•
 
Filled out request form
•
 
Location map
•
 
Estimated cost of the
project
•
 
Proof of payment of the
analysis fee.
•
 
Certificate form the MIJ
and Incoder
•
 
Copy of the request for
the certification of the
ICAHN
•
 
Present the Environmental
Impact Study (EIS)
Writ initiating the process
issued by the
MAVDT

5
days

The
MAVDT
request
information to other
government agencies and will
request further information
from the applicant.
Writ declaring that the
information is complete
issued by the
MAVDT

Resolution issued by the
MAVDT
declaring that the
project is viable or not
25
days

Yes

MAVDT

grants the EL
No
Files the
request
Liability for Environmental
Damage

•
 
Law 1333 of 2009 establishes an
environmental liability regime that
presumes fault of the alleged offender.
•
 
Alleged offender has burden of proof.
9
Liability for Environmental
Damage

:
Penalties and Preventive Measures:
i.
 
Daily fines of maximum five thousand (5,000)
current minimum monthly legal wages (US
$1,500,000 approx.). Before 2009 it was 500
ii.
 
Definite or temporary closing of the business
establishment, building or service
iii.
 
Annulment or extinction of the environmental
license or permit;
iv.
 
Demolition of the construction or facilities,
among others.
Alvaro J. Rodriguez
Posse, Herrera & Ruiz Abogados
+ 571 3257320
alvaro.rodriguez@phrlegal.com