Greenpeace fails in petition for judicial review of oil field development decision

The Secretary of State for Business Energy and Industrial Strategy, the first respondent to the petition, granted consent to BP Exploration Operating Company Ltd for the development of the Vorlich field in August 2018. The field was first discovered in 2014 and is jointly owned by BP and Ithaca.

The petition was heard in the Outer House of the Court of Session by Lord Boyd of Ducansby.

Statutory appeal mechanism

The petitioner sought declarator that the Offshore Petroleum Production and Pipe-lines (Assessment of Environmental Effects) Regulations 1999 failed to fully transpose the EU Environmental Impact Assessment Directive, and reduction of the first respondent’s grant of consent for the development of the Vorlich field.

BP, which appeared as an interested party alongside Ithaca, held a licence to search and bore for and get petroleum from the Vorlich field from the Oil and Gas Authority, the second respondent. The licence was subject to a model clause requiring consent for the drilling of oil, which was granted by the OGA subject to the agreement of the first respondent.

The first respondent accepted that the 1999 Regulations failed to fully transpose the Directive and said that a comprehensive review of them was ongoing, with a consultation paper having already been published on the issue. However, they challenged the competency of the petition on the basis that there was a statutory appeal mechanism for consent decisions under Regulation 16 of the 1999 Regulations.

The petitioner stated that it was denied the opportunity to make a Regulation 16 challenge as a result of the failure to fully transpose the Directive. Regulation 16 did not mention the Directive, thus confining the court to considering the petitioner’s application in terms of the Regulations only.

Despite these averments, the petitioner had also brought a challenge under Regulation 16. This raised the dual issues of whether the Regulations failed to properly transpose the Directive, and whether a Regulation 16 appeal was confined to the grant of consent by the OGA and did not encompass the required agreement by the Secretary of State.

The position of the respondents on the second issue was that the court was confined to looking at the consent itself, and cannot look at the agreement, pointing out the way “consent” was interpreted in Regulation 3 was that it did not include the Secretary of State’s agreement.

Integral part of the process

In his decision note, Lord Boyd said he did not accept the petitioner’s proposition that the Regulations failed to transpose the Directive. He elaborated: “Insofar as the Regulations fail to implement the Directive the Directive has direct effect. There is nothing to prevent the petitioner submitting in the course of the Regulation 16 proceedings that the court should apply the terms of the Directive where these conflict with the Regulations.”

On whether a Regulation 16 appeal encompassed the consent of the Secretary of State, he said of the respondent’s arguments: “If that is right it seems to me to be a serious lacuna. It means that environmental issues which are of fundamental importance to the granting of a consent for the drilling of oil could not be the subject of an appeal under Regulation 16. The only issues that could be addressed are those for which the OGA has responsibility.”

He continued: “In my opinion, if that were correct it is a most unsatisfactory state of affairs. I also question whether such an interpretation would be consistent with the state’s obligations under article 9 [Access to Justice] of the Aarhus Convention.”

However, he said of this possibility: “I do not think such an interpretation is correct. Although [counsel for the first respondent] described the process of granting consent as a two stage process it is I think more appropriate to see the Secretary of State’s agreement as an integral part of the consenting process. It is a condition precedent to the OGA granting consent.”

Lord Boyd then considered the role of the Secretary of State in detail, saying: “What the Secretary of State is required to do is to reach a reasoned conclusion on the significant effects of the project on the environment and integrate that conclusion into his decision on whether he agrees to the grant of consent. The reference in Regulation 16 to [Regulations 5 and 5A], which concern the Secretary of State’s consideration of the environmental aspects of the application, puts it beyond doubt that the Secretary of State’s agreement as a condition precedent to the grant of consent can be examined in a Regulation 16 challenge.”

For these reasons, Lord Boyd concluded that the petition was incompetent due to the availability of another process by which a challenge could be made.

He added for clarification: “Had I held that the petitioner would be unable to review the Secretary of State’s agreement I would not have found the challenge in the petition to his agreement to be incompetent. To have done so would have denied the petitioner a remedy, though the issue of time bar and whether there was a reasonable prospect of success would still require to be addressed.”