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Symposium 2012

Proposal - Develop performance-based regulatory regimes

The Challenge

As temperatures rise with a changing climate, Arctic sea ice melts. As a consequence, the once ice-covered Arctic Ocean becomes increasingly accessible, with implications for various economic sectors. ...

As temperatures rise with a changing climate, Arctic sea ice melts. As a consequence, the once ice-covered Arctic Ocean becomes increasingly accessible, with implications for various economic sectors. In particular, the oil and gas resources below the seafloor have whetted the appetite of the littoral states—Canada, Denmark, Norway, Russia and the United States—as well as outsiders, such as China and the European Union, which are developing or rethinking their Arctic strategies.

Natural and operational conditions in various parts of the Arctic are far from homogenous. Regulations must relate to the actual challenges in each sub-region. All-encompassing regulations tend to be inflexible and conservative. Moreover, the industry is very dynamic. What is possible to regulate and what standards are realistic is constantly shifting. Regulators may simply not have the necessary knowledge to stay on top of developments, and an international regulatory framework might become inherently conservative or outdated. To ensure a dynamic process where environmental standards are constantly being raised, regulators should be encouraged to focus on establishing risk criteria and develop performance-based regulatory regimes.

A performance-based regime is designed to describe the level or function to be met. It will be the operator’s responsibility to select and document the solutions that meet these requirements in each specific case. This ensures clear responsibility for the operators to find the solutions, and thus to build up the necessary competence in technology, operations and risk understanding. The responsibility for developing new knowledge and improved solutions is transferred to the operators. The main intention behind a performance-based regime is to make the industry fully responsible for its activities, combined with various means for applying sanctions by the authorities.

The task of the authorities in a performance-based regime is to design and develop the regulations, and to see to it that the operators have work processes and management systems which can ensure that the objectives of the regulations are met. The operators will have a relatively high degree of freedom to develop their own solutions, as long as they can show that they manage the risks associated with their activity, and that the objectives and functional requirements in the regulations are complied with.

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