The Canadian Regulation of Offshore Installations

Vernon V. Kakoschke was a lawyer in the law department of Canadian Pacific.

This working paper reviews the Canadian laws and regulations that apply or might apply to offshore oil and gas installations such as drilling rigs. The paper concludes that there is a considerable void in the Canadian regulatory scheme when it comes to such installations. They stand somewhere between an island and a ship for legal classification purposes. Since neither classification really applies, the paper recommends the enactment of a new statute, the “Continental Shelf Act,” to fill the void.

The relevant areas of Canadian law that are considered in the paper are as follows: coastal state oil and gas regulatory law, maritime law, environmental law, and labor law. Each area is examined in considerable detail with a view to determining to what extent it may be applicable to offshore installations.

In the environmental pollution area, for example, the author analyzes the Oil and Gas Production and Conservation Act, the Arctic Waters Pollution Prevention Act, the Ocean Dumping Control Act, the Fisheries Act, and the Canada Shipping Act. These statutes are essentially either traditional shipping pollution laws or regulatory laws in respect of the oil and gas industry. Depending upon the characterization of an installation, different parties could be liable to differing degrees. In order to clarify the law, the paper recommends that the shipping legislation be amended so that it does not apply to oil and gas related installations.

This well-researched paper highlights certain uncertainties and ambiguities in Canadian law as it applies to offshore installations, and it makes some valuable recommendations that, it is hoped, will not go unheeded by the legislators.