Evaluating the impact of international environmental laws on oil and gas - Essay Example

?M026LON C01: International Environmental Law Board Paper Paper Reference: ID No. Paper: DD/MM/YYYY Signature and Your full and date of board paper (DD/MM/YYYY) GEP-Oil and International Environmental Law Brief Synopsis of the Issue GEP-Oil is under attack from environment conservation agencies on its oil exploratory methods. This has led to the firm abandoning oil exploratory activities by GEP-Oil which has been operating in the Russian northern hemisphere. Oil exploration in the northern hemisphere is exceedingly complicated and an extremely expensive investment and GEP-Oil had entered into partnerships with investors from out of state in order to be able to explore for oil reserves in the arctic region. The effects of the attack by the environmental groups will mean that the firm cannot and will not be able to meet its obligations to its partners. On the other hand, GEP-Oil cannot ignore the issues that have been raised against it because it wants to be conformable to environmental protection practices and also wants good partnership and trust with the local community. This means that GEP-Oil must carefully and quickly address the situation to resume its oil exploration as soon as possible. Recommendation(s) GEP-Oil should be able to address the issue while involving the relevant stake holders in the process. This will mean that GEP-Oil will have to closely work with environmental groups in order to ensure that their issues and concerns are well addressed. This will also mean that GEP-Oil will need to involve the local communities in order to also ensure that their concerns are also taken care of. By doing this, GEP-Oil will be able to overcome the challengers posed by the situation as well as mintage any risk of the situation happening again. 1. Background of the issue The issue of environmental degradation caused by the oil exploration is one that every oil exploration firm should be able to look at carefully. GEP-Oil has found itself in the midst of the issue and this threatens to interfere with the operations and the success of the firm. GEP-Oil has being accused by environmental agencies of being careless in the way it carries out its exploratory activities. Because of this, GEP-Oil has been affected in the way it operates because it has stopped some of its operations in order to deal with the situation first. This scenario is threatening to kill the numerous employment opportunities that the firm affords the residents. GEP-Oil is also likely to lose its reputation because this has affected its ability to continue with its obligations which it owes its partners in business. On the other hand, GEP-Oil does not want to create the wrong impression within the community it operates and this has meant that the firm has to tread extremely carefully around the matter. In this paper, these issues are addressed in detail and alternatives to dealing with the situation are taken. 2. Impact of Oil/Gas Production on the Environment According to Mushkat (87) businesses are seen to promote environmental degradation by the very fact that they promote economic activity. The exploration and production of oil leads to a damage of the environment and this means that producers of oil will have to take necessary measures to mitigate the damage done to the environment. GEP-Oil will have to understand this in solving its current situation. There are a number of ways in which GEP-Oil can remedy the situation and convince environmental groups to accept that it needs to go on with oil production in the arctic region. One of this is sustainable development. As Beyerlin (2011, p. 84) says, sustainable development refers to the fact that natural resources should be exploited in a way that leaves no or little damage to the environment. This law is recognizant of the fact that exploitation of natural resources will have to be done in order for survival of human beings on the planet. This will be GEP-Oil’s biggest defence against the accusation. Oil is an immensely useful to the community and it is the main source of energy. However, the exploration, production and use of oil bring damage to the environment. For instance, oil exploration lead to earth being degraded as more holes are drilled in the crust of the earth when looking for oil. Drilling is one way that the exploration for oil leads to environmental degradation (Haller, 27). Furthermore, these drillings can interfere with the internal geology of the earth leading to destabilization of the geological plates which could then lead to destructive earthquakes. Production of oil is also damaging to the environment and can even be more harmful than exploration. Oil spills are the most common environmental problems that are caused by oil production. Oil spills lead to massive deaths of animals and can also cause serious health problems to human beings. If oil production is not managed properly, it can lead to release of carcinogenic substances into the environment which could lead to human beings getting cancer. Oil spills can also lead to acid rain which is extremely damaging to the environment. Acid rains caused by oil spills can lead to large forests dying because trees and other plant life cannot sustain themselves when left to the elements in the acid rain. More so, with regard to GEP-Oil’s case, it is even more crucial to understand that operation in the arctic region has far greater environmental consequences especially given the fact that the arctic region plays a vital role in the global environment. The arctic region has at least two fundamental contributions to the environment. On of these is the fact that the massive ice in the region produces cold air that is then blown southwards to cool the rest of the planet. Oil exploration and production in this region can interfere with this and this can lead to massive damage to the global environment. The other fundamental way in which the arctic region helps in maintaining good environment in the region is by producing fresh air through the many trees found ion the region. Definitely, production of oil in the region will carry with it the risk of most of these trees dying and thus denying the globe a supply of fresh oxygen that it gets from the arctic region. This can have massive impacts on the planets environment. 3. Oil/Gas Production and International Environmental Law There are a number of international laws that are geared towards protecting the environment. The Rio Declaration on Environment and Development for instance is one that many nations have decided to abide with. The second principle of the Rio declaration indicates that state have the sovereign power to manage exploits their resources (United Nations Environment Programme, 1992). However, these sates have to do this within regard of the protection of the environment (United Nations Convention on the Law of the Sea, 2011). Other international environmental laws such as the Stockholm declaration of 1972 are limited in the way they address the international issues (Sands, Peel, & MacKenzie, 602). These environmental laws apply to everybody and are particularly useful in creating a platform upon which stakeholders can act. The principle of the polluter –pays is one of the most coming principles of international environmental law (Sands, 279). With regard to this law, those who engage in activities that degrade the environment are supposed to bear the burden of paying for the cost of undoing the damage they cause to the environment. In this regard, firms like GEP-Oil are supposed to undo the destruction they cause to the environment and provide the funds that are enough to undo the damage cause by their activities. This principle is equivalent to social responsibility of businesses. The implication is of this principle of international environment law is that if the cost to of undoing the damage made to the environment exceeds the firms profit from the same activity that caused the damage, the firm will have to abandon the activity. In other words, whether the firm chooses to go on with such an activity and cater for the cost, or it decides to discontinue the activity, the environment will have been protected. The other fundamental principle of international environment laws is the principle of equal but differentiated responsibility. This principle does not necessarily address individual firms directly but is directed towards states. It states that all states in the world have equal responsibility in protecting the global environment but the responsibility should be shared among the states equitably rather than equally. In this principle, those nations which are more responsible for environmental degradation due tot heir industrial development should bear a much bigger responsibility in mitigating environmental degradation (Charles, 104). This principle is similar to the polluter-pays principle only that instead of being directed towards individual businesses like GEP-Oil, it is directed towards nations. However, this does not mean that firms like GEP-Oil are totally immune from this principle. Individual firms operate within a state and they are subject to this state and therefore any legal implication that affects the state also affects them because the state is the ultimate regulatory body. GEP-Oil owes it to the government of Russia to make sure that it does not give the government increased burden to cover this any obligations arising from this principle. The precautionary principle states that if an action is deemed or suspected to be harmful to the environment, the action will be considered to be harmful unless it is proven otherwise (Philippe et al, 200). At the same time, the precautionary principle places the burden of proof to the party intending to carry out the activity to prove that the activity is not harmful. In this regard, GEP-Oil will have to prove that its activities are not actually harmful to the environment or at least amount of harm caused by their activity is in line with the principle of sustainable development as explained above. According to (Buck, 76) substantive due process is more important in environmental law than in almost any other legal issues. 4. Critical Evaluation of the issue The above analysis means that GEP-Oil will have the burden of proving to the public as well as environmental protection organisations that its operations are in line with the environmental requirements. The firm will have to take considerations of the principles of international environmental laws. The first place that GEP-Oil will need to start from is identifying areas of concerns to. Unless and until GEP-Oil is able to involve the main stakeholders in the developing of a solution to the issue at hand, it will continue to have problems and may even lead to bankruptcy. GEP-Oil is under the impact of international environmental laws and it must be able to operate while abiding within these laws. At the same time, GEP-Oil will have to also take into considerations those misunderstandings between the firm and the stakeholders such as the community within which the firm operates of the environmental groups also play a role in bringing on such misunderstanding. This is why it is increasingly vital that GEP-Oil involves stakeholders in order to diffuse any misunderstandings. 5. Implementation of Recommendations To deal with the situation at hand, GEP-Oil will have to start by looking from the inside. In most cases, a firm can deviate from the set standards as time goes by. In this case, GEP-Oil will have to look and ensure that the accusations made about them are not substantial. GEP-Oil will have to carry out a policy audit to ensure that its policy on the book is upheld in reality at the operations of its activities. If the audit reveals that either the firms has deviated from the set standards or that the firm’s policies are not being held at the operational level, GEP-Oil should take immediate action to remedy the situation. This is where GEP-Oil should involve stakeholders. To involve the stake holders in this process, the audit committee should include at least one representative from all the stake holders such as environmentalist groups, the government and society. This will help in preventing any misunderstandings and help in bringing all the stake holders together to understand the situation. GEP-Oil should also involve the stakeholders in developing the remedy to the situation. In case the audit committee realizes that GEP-Oil is in compliance with international environmental laws and that the firm’s policies are being applied at the operational level, it will then give the firm an opportunity to make peace with the stakeholders and prevent any future misunderstandings. GEP-Oil will also have to devise a way to guarantee that this never recurs in the future. To achieve this, GEP-Oil will have to design a system that will ensure that the firm has the capability to comply with international environmental law standards and principles. GEP-Oil should update its environmental protection policy and its oils exploration policy in order to meet current international standards. Works Cited Beyerlin, U., & Marauhn, T. International Environmental Law. Oxford : Hart Publishers, 2011. Print Buck, J. S. Understanding Environmental Administration and Law, 3rd Edition. Washinton DC: Island Press, 2006. Print Charles, A. K & Shelton, D. Guide to International Environmental Law. Leiden: BRILL, 2007. Print Haller, T. Fossil Fuels, Oil Companies, and Indigenous Peoples: Strategies of Multinational Oil Companies, States, and Ethnic Minorities : Impact on Environment, Livelihoods, and Cultural Change. Zurich: LIT Verlag Munster, 2007. Print Mushkat, R. International Environmental Law And Asian Values: Legal Norms And Cultural Influences. London: UBC Press, 2005. Print Philippe Sands, Jacqueline Peel, Ruth MacKenzie. Principles of International Environmental Law. Cambridge, EN: Cambridge University Press, 2012. Print Programme, United Nations Environment. Rio Declaration on Environment and Development. 14 June 1992. 25 February 2013 Print Sands, P. Principles of International Environmental Law. Cambridge : Cambridge University Press,, 2003. Print Sands, P., Peel, J., & MacKenzie, R. Principles of International Environmental Law. Cambridge: Cambridge University Press, 2012. Print United Nations Convention On The Law Of The Sea.. United Nations Convention On The Law Of The Sea. 28 August 2011. 25 February 2013 . Print Read More