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Energy Bill [HL]

My Lords, we are very sympathetic to the concern expressed behind the amendment and we have debated both in Committee and on Report the issue of compensation for oil pollution. The main concern in these debates was that arrangements should be in place to ensure that companies could meet any liability arising from oil pollution during their licensed operations. We explained in these debates that there are indeed appropriate requirements in the licences and that the industry has in response formed a voluntary liability pool, the Offshore Pollution Liability Association—OPOL. OPOL membership requires operators to demonstrate provision to meet clean-up costs and associated damages of up to $250 million on a basis of strict liability in the event of a pollution incident. OPOL also collectively provides a back-up mechanism that in the event of default by any operator, the other members will meet claims for clean-up and associated damages up to the same financial limits. That liability pool is unique to the North Sea, and we believe that it provides a very solid assurance that all pollution liabilities will in practice be met. I particularly stress the significance of the acceptance of strict liability by OPOL members, which means that anyone who has suffered loss as a result of pollution from an oil installation does not have to show that the operator is at fault. He or she merely has to establish that the damage or loss is a result of the pollution. As I have said, it is unique to the North Sea. Since Report, my noble friend Lord Marland has written to the noble Baroness, Lady Smith, with further details of this arrangement and I thank her for her very positive response to that correspondence. This amendment, however, addresses a slightly different point from the amendments tabled in Committee and on Report. We made the point that the amendments tabled then were unnecessary as appropriate requirements were already in place. The focus of this amendment is rather that the Secretary of State should publish a report on the arrangements in place, the amount of insurance cover provided, and so on. We are wholly sympathetic to the idea that more public information should be available on these matters. As the noble Baroness notes, further work is ongoing under the auspices of OSPRAG, in which government and industry are working together to review the industry’s practices in the light of what has been learnt from the Macondo disaster. One of the OSPRAG working groups is specifically addressing liability and indemnity issues. We are happy to undertake that the Government will make an appropriate statement in the House on the outcome of this work and any changes that may appear necessary or desirable. I hope that that reassures the noble Baroness. As for future developments, the department is committed to laying an annual statement before the House, and we will, of course, use that to report on any new developments or proposed new measures. In the light of those reassurances, I hope that the noble Baroness will feel able to withdraw her amendment.