§ Order for Second Reading read.
§ 3.50 p.m.
§ The Minister of Power (Mr. F. J. Erroll)
I beg to move, That the Bill be now read a Second time.
The Bill comes before the House primarily because of the exciting possibility that oil and natural gas may be found under the North Sea. Not very long ago, such a development would have seemed most improbable. But the search for new sources of energy the world over is unremitting, and in recent years it has brought about remarkable advances in oil technology, particularly in drilling in submarine areas. Today, more than 20 oil companies of international reputation are concerned in surveys of the North Sea, which are costing substantial sums of money.
More important, we know that many of these companies are interested to go further and secure as soon as possible the right to begin drilling. Surveys, however promising, can do no more than indicate the existence of geological structures that might contain oil or natural gas; only drilling can determine whether oil or natural gas is actually present. But drilling, particularly under the sea, is a very expensive proposition. It may cost hundreds of thousands of pounds for just one hole, and the experience of oil companies in many parts of the world shows how often holes are drilled and found to be dry. At this point the companies have very reasonably turned to the Government and asked that their operations and investments shall have the protection of a proper system of law. This is something which only Parliament can provide.
Fortunately, the basis already exists in international law for setting up the necessary legal framework. There was a conference on the Law of the Sea in Geneva in 1958, and this resulted in the signing by this country and others of four conventions. Two of these conventions, the Continental Shelf Convention and the High Seas Convention, concern the Bill. Of these two the Continental Shelf Convention is much the more important for our present purposes and for the moment I will concentrate on that. The 219 Continental Shelf is usually understood as being bounded by the line where the water is 200 metres deep. The definition in the Continental Shelf Convention goes further and includes the seabed under deeper water provided its natural resources can be developed. I shall use the term "Continental Shelf" in this wider sense.
Broadly speaking, the Convention deals with the division of the shelf between neighbouring States, and with the sovereign rights of each State to explore its part of the shelf and to exploit the natural resources there. If the Bill is passed, the Government will of course ratify the Continental Shelf Convention. Twenty-one States have already ratified it, and only one more ratification is needed to bring it into force.
As regards the North Sea, which is the main area of interest to us at present, the result will be that this country will have rights over any resources up to a line half-way across to Holland, Belgium and the other coastal States, subject to any adjustments which may be agreed with those countries. This is an area comparable in size with the United Kingdom itself, and the areas which may fall to us in other directions could be larger still. Such an extension of our national interest is clearly of prime importance, but before asserting our rights and assuming our obligations in international law, the law of this country needs to be adapted to the new developments. That is the main purpose of the Bill.
At this point I ask the House to consider what the results might be of finding oil or natural gas on that part of the Continental Shelf which will thus fall to the United Kingdom. We all know that modern economic development must have secure and abundant supplies of energy at competitive prices. This country led the Industrial Revolution because at that time we had such energy in the form of coal readily available. But, more recently, we have not been so fortunate. Oil and natural gas have been found in vast quantities elsewhere in the world and have become the basis for industrial developments which are entirely dependent on them.
Our own country, despite methodical searches, has so far yielded very little 220 of these riches. Our present indigenous production provides no more than one five-hundredth of the oil we need, and our natural gas production is insignificant. We cannot do without petroleum, as we all realise, and we have to import ever increasing quantities from the Middle East and elsewhere. Britain's oil bill thus becomes bigger each year. In 1963, retained oil imports were valued at about £440 million, which represents over 9 per cent. of all our imports.
In these circumstances, I am sure that the House will feel, as I do, that if oil or natural gas could be found in quantity close at hand, and under our own control, it would be a matter of great good fortune. A substantial supply of indigenous natural gas would be something new for our economy, but experience in the United States and elsewhere has shown how valuable it could be for fuel and other industrial purposes.
I must, however, sound a note of warning. No oil or gas has yet been found. As I have pointed out, none can be positively located until drilling has taken place. This is the next stage after the geological surveys which are now being evaluated. We must guard against being too sanguine, but there is no reason why we should not allow ourselves to hope for success. But if we fail to legislate and that is the duty of Parliament we shall be standing in the way of the initiative and enterprise being shown.
I have said much about oil and natural gas, but I must also mention coal and other minerals. There are possibilities of finding these in useful quantities, and the National Coal Board is already concerned in developments in the North Sea.
Where possible, we are applying existing statutes, particularly the Petroleum (Production) Act, 1934, amending them where necessary. Rather more elaborate provisions are needed to deal with all the incidental matters which may arise when activities of great technical complexity and commercial importance take place far out at sea. Much of the Bill is, therefore, concerned with what might be described as provision for law and order, and the interests of many Government Departments are concerned.
221 I now turn to Clause 1, which Clause deals directly with the oil and other natural resources that I have been talking about. I should like hon. Members to have a clear understanding of the legal position. It is rather complicated and I want to get it right. I must emphasise that the United Kingdom's rights in this matter do not amount to full sovereignty. The sea areas concerned are not added to the United Kingdom. If they were, we might not need the Bill at all, since our existing laws would automatically apply to our part of the Shelf, and they might well be enough. International law, however, preserves the legal status of the waters above the Shelf as high seas and the legal status of the air space above those waters. The United Kingdom's rights under the Continental Shelf Convention are, in fact, defined as sovereign rights for the purpose of exploring the Shelf and exploiting its natural resources.
The rights in international law, do, however, accrue to the United Kingdom as a state, and it seems to the Government proper to begin the Bill by putting it beyond doubt that these rights are vested in the Crown, or, in the case of coal, in the National Coal Board as the appropriate public body. This is done in subsections (1) and (2). We must also determine conclusively, for the purposes of our national law, which, I believe the international lawyers call municipal law, the areas within which the rights are exercisable, and to which most of the provisions of the Bill will apply. Under subsection (5) this is to be done by Order in Council, and the areas concerned are referred to as designated areas. I hope that the House will bear this term in mind, as it will occur frequently in our further consideration of the Bill.
The Convention provides a basis on which neighbouring States will seek agreement with each other over common boundaries on the shelf. We must expect that much detailed work will have to be done and that negotiations with our neighbours will take time. The Government will, therefore, seek to begin these negotiations at an early date, regardless of whether the other country concerned has or has not signed or ratified the Convention. Meanwhile, the position in international law is clear 222 enough for us to identify large areas of the shelf which undoubtedly appertain to the United Kingdom, and these we shall designate as soon as may be after the Bill becomes law.
We intend that the rights in respect of petroleum shall be exercised under licence from the Minister of Power, and not by the Crown direct. The Petroleum (Production) Act, 1934, governs similar operations on the land and within territorial waters, and appropriate sections of that Act are extended to the designated areas by subsection (3) of the Clause. The Minister of Power will thereby have power to make regulations and grant licences to prospective developers, and these licences will govern the way in which operations are conducted.
A system of control and inspection is well established under the 1934 Act. But it will need adaptation to the special circumstances of submarine work on the shelf, and I should not like the House to suppose that the present regulations under that Act will necessarily provide a suitable pattern. In any case, I am glad to reassure the House that the regulations are required to be laid before Parliament and will be subject to negative Resolution of either House.
I particularly welcome the initiative of the Institute of Petroleum in undertaking a revision of its code of safe practice to take account of the expected developments on the Continental Shelf, and I intend to make compliance with the code a condition of the licences to be issued.
Subsection (2) of this Clause, dealing with coal, follows the precedent of the Coal Industry Nationalisation Act, 1946. The Board's operations in the designated areas are to be subject to the Minister of Power's consent.
The next important provision is in Clause 3 and concerns the extension of criminal and civil law to the United Kingdom part of the Shelf. The effect of subsection (1) is to give the protection of the criminal law of each part of the United Kingdom to people working on installations and in the waters within 500 yards of them. As hon. Members probably realise, these installations are often large and many men 223 will live and work on them for several days at a time.
The criminal offences mainly aimed at are offences against the person or against property. But the subsection is not confined to such offences. It has been drawn in such a way as to export, if I may use such a term in relation to the law, those parts of our Statute Book which are exportable.
I should like to mention in this context, very briefly, the provisions of Clause 9. These deal with the prosecution of persons who have committed offences on the Shelf and, among other things, extend the powers and privileges of constables to the installations.
As to the civil law, subsection (2) provides for its extension to the whole of the designated areas. An Order in Council made under this subsection will also confer jurisdiction on courts in a specified part of the United Kingdom. I should emphasise here that it is the Government's intention to make such Orders in Council to cover the whole of the designated areas as soon as these have been designated under Clause 1(5), and certainly before any licences are issued for such areas. This will ensure—and I think that this is important—that there will be legal protection available before operations actually begin in these areas.
Clauses 2 and 4 enable the Ministers of Power and Transport to provide for the safety of shipping and installations. In administering these provisions we intend to have the fullest regard to the interests of the fishing industry, and to ensure that there is proper and timely consultation so that all these activities can be conducted so as to interfere as little as possible with one another. Shipping will be kept fully informed by means of notices to mariners issued by the Admiralty.
Clause 6 is the concern of the Postmaster-General, and Clause 8 deals with the status of men employed on installations in regard to National Insurance. The remaining Clauses, 5 and 7, give effect to the obligations we undertook when we ratified the High Seas Convention.
Clause 5 deals with the discharge of oil from pipelines and installations. Some apprehension was expressed, when 224 the Bill was discussed in another place, about the possibility of serious pollution of the sea arising from what are known as blow-outs, and it may help hon. Members if I say a word or two about this. In modern oilfield practice, escapes of oil are uncommon and elaborate precautions are taken against them, involving, among other things, the use of what are known as blow-out preventers. I am confident that the operators who will, we hope, soon be engaged in drilling activities on our part of the Shelf, will have taken note of the views already expressed in another place and will do all in their power to prevent any pollution arising.
I want to be realistic. It would be foolish to ignore the fact that these operators will be dealing with natural forces, under the sea, sometimes involving great pressures. There can be no absolute certainty, despite the taking of all possible precautions, that no pollution will be caused. It is in recognition of this that the Clause provides for a person charged with an offence to plead that he acted with reasonable care and took prompt and reasonable action to stop or reduce the escape.
Clause 7 extends the protection of the Submarine Telegraph Act of 1885 to all submarine cables and pipelines. It deals, among other things, with compensation for the sacrifice of anchors, nets and other fishing gear to avoid injuring cables and pipelines.
The main purpose of the Bill, in despite of the many incidental provisions, is to enable the natural resources of the Continental Shelf to be exploited for the benefit of all concerned. I hope that the House will agree that this is highly desirable and urgent, and give the Bill its Second Reading.
§ 4.10 p.m.
§ Mr. Thomas Fraser (Hamilton)
I congratulate the Minister on bringing forward the Bill, because we on this side of the House appreciate its urgency. I think that we might well have had it a little earlier. The Convention was signed in 1958, and the prospecting companies for oil and natural gas have been busy these last two years and more. It is understandable that they could not put down a drill at all until an authority was created to grant a concession to 225 proceed with their rather expensive operations. However, now that the Bill is here, we welcome it.
I congratulate the right hon. Gentleman, also, on having introduced a Bill which so extends public ownership without, so far, a murmur of protest from any corner of the House. I should be interested to know whether any hon. Member opposite intends to protest at the Minister's efforts as one of the great nationalisers.
In his speech, the right hon. Gentleman said that he was bringing into public ownership the resources of an area of the sea bed and the subsoil only a part of which was equal to the size of the United Kingdom. This is about 90,000 square miles of resources which are being nationalised and brought into public ownership, yet the Minister hardly paused to mention this aspect of the matter. Apparently, he does not expect the difficulty which one of his predecessors had when he only wanted to nationalise the production and distribution of town gas in this country.
§ Mr. Fraser
I am delighted that the hon. Member for Willesden, East (Mr. Skeet) is now joining the nationalisers.
The resources of the Continental Shelf, particularly under the North Sea, in which the Minister is now interested are oil and natural gas. We on this side are most anxious that, if resources of oil or natural gas can be found under the North Sea or anywhere else on our Continental Shelf, they should be exploited to the full in the interests of the nation. Because we are so concerned about the exploitation of all the natural resources at our command, we have for a long time been urging the Minister and his predecessors to work out a fuel policy for the whole country. This is why we have from time to time been anxious to ensure that we were making the best use of our main indigenous resource, our coal.
In the past, when we have urged this upon Ministers, they have always rejected our argument that the import of large quantities of oil placed a strain upon our balance of payments. Today, on the other hand, the Minister called attention to the great advantages we might derive from the discovery of oil 226 and natural gas under the North Sea, and he told us that, last year, if I heard him aright, retained oil imports—I emphasise the word "retained"—were valued at over £440 million, representing, he said, over 9 per cent. of all our imports. I am delighted that the Minister recognises that the nation, with all the difficulties we have in paying our way on the world, would derive great advantage from reducing its dependence on imports of oil.
Thinking as we do, we wish the prospecting companies good luck in the searches which they are now making and will proceed to make, at very great expense to themselves, when the Bill becomes law. The Bill, however, vests in Her Majesty all the natural resources of the sea bed and the subsoil, and, as one will appreciate from a reading of the Convention, the possibilities there are incalculable, not being limited to oil and natural gas. Oil, gas and coal are the three with which we are principally concerned now, but I believe that the possibilities in discovering worth-while resources in the sea bed and subsoil are beyond calculation at present.
I am a little surprised to find that oil and natural gas are both to be subject to the same licensing procedure and conditions, that is, the provisions of Sections 2, 4 and 6—and, to some extent, Section 5—of the Petroleum (Production) Act, 1934. Section 4 provides:It shall be lawful for any person holding a licence under this Act, if so authorised by the Board of Trade, to supply to any premises natural gas gotten by him in pursuance of the licence:Provided that where the premises to be supplied with the gas are situated within the authorised limits of supply of any undertakers within the meaning of the Gas Regulation Act, 1920, the Board of Trade shall not give their authority unless they are satisfied that those undertakers have been given an opportunity of purchasing the gas at a reasonable price and that the gas is to be supplied to those premises for industrial purposes only.I think it a little odd that we should be asked to apply that Section of the 1934 Act, bringing in, as it does, the Gas Regulation Act, 1920, and completely ignore the passage of the Gas Act, 1948. I realise that the Gas Act supersedes many of these previous enactments, but this seems all the more reason to 227 recognise the difference which exists at present between oil and natural gas. [Interruption.] The hon. Member for Willesden, East never manages to listen to anything at all without constant interruption. If he would listen, he would appreciate that oil industry is in private ownership and that the gas industry is run by the Gas Council and the area boards.
I am sure that the Minister has not in mind allowing a company which gets a licence under the Bill, if it is successful in locating natural gas under the North Sea, to capture the gas and bring it to this country by pipeline and then sell it in competition with the Gas Council and the area boards. Of course, he has no such thought in mind, and, indeed, I think that the Gas Act, 1948, would make it impossible or illegal for any company to do so. But this ought to have been recognised in the body of the Bill, and I suggest that an Amendment may well be desirable so that the law and the intention of the Government, as it must be, may be made a little clearer than they would be from a reading of this Bill and the appropriate Sections of the other statutes referred to.
For both oil and natural gas, licensing and regulation are clearly essential for ordinary search and development. Could the Minister tell us whether he expects the possibility of having to select between or among competitors for permission to search in any one areas? If he has to adjudicate, can he tell us how he will select the competitor to whom he will grant a licence? I am wondering particularly whether he will have in mind to give preference to British companies against companies registered in foreign countries.
May we be told whether a licence to search will include a licence to exploit? I should have thought—I do not think that the point is made clear from reading the Bill—that there should be separate licences. This would enable conditions to be attached to a licence to exploit which might be unnecessary or superfluous in the case of a licence only to search. Perhaps the Parliamentary Secretary will tell us what the Government have in mind about that.
I assume that licences to exploit would contain permission and authorisations 228 regarding pipelines and shore installations. It seems hardly credible that a licence to exploit would be granted without, at the same time, providing the other authorisations. The licences to exploit would relate to the designated area on the Continental Shelf beyond the territorial waters. There would not be much use getting a licence to capture gas and recover it in an area beyond that point unless certain conditions and authorisations existed regarding the laying of pipelines and the construction and erection of the necessary shore installations. That would appear obvious. But I think that we should be given some assurance. This would seem to make clear that the licence to search and the licence to exploit are two different things.
The Minister called attention to Clause 2, which relates to the designated area for the protection of installations. One would read this Clause together with the Convention. The area to be protected will extend to 500 metres round the installations as the Convention provides. Clause 3 deals with the application of the criminal and civil law. The area to which the law of the coastal parts of the United Kingdom will apply is to be one of 500 yards round the installation. It seems odd that we should draw a circle round the installations with a radius of 500 metres and describe that as the protected area into which vessels may not enter without the approval of the Minister, and that then we should draw a slightly narrower circle within which the criminal and civil laws will apply.
There does not seem much point in having a narrow no-man's-land between the area in which the law applies and the area which is protected under the provisions of Clause 2. In any case, as we use the metric system for determining what is the Continental Shelf and for the protected area there would seem no point in departing from that system in Clause 3. In some cases we may be dealing with people who are not British nationals and it would make sense to use the metric system in Clause 3, also, and refer to 500 metres.
There would appear to be omitted from the Bill any power to make regulations concerning the safety, health and welfare of the workers employed on the installations. The Minister said that the 229 Institute of Petroleum had drawn up a code of practice. I have not seen it, and I do not know whether it is concerned with the way in which the installations are constructed and may later be operated, or whether it extends to cover the safety, health and welfare regulations applicable to the workers. I think that very likely it would relate only to the first and not both.
It would seem that the general powers of the Minister are inadequate to provide proper safeguards for those occupied in the construction or the operation of the installations. The Convention makes clear that these installations are not islands and have no territorial waters of their own. The persons operating them would be subject to the same civil and criminal law as on the mainland. I should have thought that that would include the safety, health and welfare of the workers and that these provisions would apply as in the case of an island. I think that the Minister would do well to arm himself by means of a further Clause with regulation-making powers of the kind we should all want him to possess in order to protect the lives of those engaged in what may, I think, be described as a more than usually hazardous occupation.
Subject to the comments which, as the Minister will appreciate, are all intended to be constructive, we on this side of the House extend a warm welcome to the Bill. We look forward to an interesting Committee stage. This Bill deals with what is constitutional law and perhaps it would be as well that we should discuss it in Committee on the Floor of the House rather than in a Standing Committee. I should like the Minister to tell us what he has in mind. In any case, soon after his reply we shall find out what are the Government's intentions, because if the Committee stage is to be taken on the Floor of the House a Motion must be put forward straight away. I regret that I have not had the opportunity to put this point privately to the Minister. But he should find it easy to decide, with the consent of his right hon. Friend the Leader of the House, to discuss the Bill on the Floor of the House.
I should like to join with the Minister in expressing the hope that once the Bill has become law, and licences have been granted, those who take them may, when 230 they engage in their risky operations and involve themselves in heavy expenditure in the search for oil and natural gas, be successful in their efforts, because to the extent that they are it will be of great benefit to this country.
§ 4.29 p.m.
§ Colonel C. G. Lancaster (South Fylde)
When I first read the Bill and the debate on it in another place, as when listening to my right hon. Friend the Minister developing its purpose, I was not under any impression that this was a contentious Measure. The hon. Member for Hamilton (Mr. T. Fraser) rather ingeniously injected a slight political slant to it, but the words with which he finished his speech made me feel that his heart was as much in this Measure as is that of everybody else who is here today to discuss it.
As my right hon. Friend said, the purpose of the Bill is to enable our legislation to be brought into line with that of other nations so that the Convention on the High Seas can be ratified at the earliest moment. I sympathise with the hon. Member for Hamilton in his view that ratification has been somewhat delayed, but we now have the Bill before us and it is to be hoped that we will add no further delays to it.
This is a matter of considerable importance. As my right hon. Friend the Minister said, we do not yet know whether there is either oil or natural gas on the Continental Shelf, but it is to be assumed that all the oil companies which concern themselves in this matter have a fairly shrewd suspicion that these resources may well be there. I have a feeling that some of their seismic explorations may have given them ground for believing that there is a real chance of their finding either natural gas or oil. Certainly, if we were to find natural gas in comparable quantities to what has recently been found in Holland, in particular, it would have a massive effect on the country's economy. It is to be hoped that success will attend these efforts.
I decided to try to catch your eye, Mr. Deputy-Speaker, because I have a little experience, mostly vicarious, of what has been happening in offshore boring since 1955. As has been mentioned, the National Coal Board has been 231 boring for coal, and I have been associated with the undertaking which has been doing the work first, in the Firth of Forth and recently off the coast of Durham. This work has been highly successful. Coal in considerable quantities has been found right down the coast as well as in the Forth, and a great deal of knowledge and experience of the effect of sea and weather at fair distances from the shore—the rig is at present working over 4½ miles offshore—has been gained which may be of considerable value to the oil companies if they find either oil or natural gas and proceed to bore for it.
We also have extended experience, to which the hon. Member for Hamilton referred, of the safety, health and welfare of men working on the towers, because the work has been going on for some time. The existing regulations have worked very satisfactorily. It may be necessary under the Bill to make additional provision, but in eight or nine years' work in all weathers, with a fair number of men working on the rigs for fairly long periods, often for as long as three weeks before coming back ashore, the regulations have worked well. Fortunately, the question of crime has never arisen, so the provisions as affecting the crime code have not yet needed to be brought into use.
Obviously, this is a big and important experiment. Whether or not natural gas is found on our side of the Shelf or on the other side, we do not yet know, but I join the hon. Member for Hamilton in hoping very much that British oil companies will be given their fair crack of the whip in the designation of the areas. I would hope very much that it would be a British company which was fortunate enough to find these natural resources and I assume that when allocating the right to work in the designated areas my right hon. Friend the Minister itends to bear the British oil companies very much in mind.
Having said that, I have nothing more to add other than to join my voice in hoping that this great experiment will prove to be successful.
§ 4.35 p.m.
§ Mr. E. L. Mallalieu (Brigg)
The hon. and gallant Member for South Fylde (Colonel Lancaster) was fearful lest 232 British companies who have undertaken this admirable work under the seas should not have their fair share of the rewards, but he need not worry very much. This whole matter is likely to be in the hands of the British Government, who are not likely to give away favours to foreigners. I am entirely with the hon. and gallant Member in thinking that those who have done great work and run great risks to explore and find out whether there is additional wealth should have their rewards.
I very much regret, however, that this question should ever arise. It is a sad thing that in this century, national Governments should be discussing the wealth of the world. Judging by what they say—indeed, the Minister today had no other thought in mind—their main interest is to see how much they can grab for their own nation. I do not blame the Minister any more than any other statesman throughout the world, but what a tragedy it is that this relic of the past, this offshoot of the national State, should be with us today when the very objects for which the national State was formed are manifestly incapable of being handed over to those who support the national State. It is a tragedy that something better and wider, something more on a world scale, could not have been thought up to deal with this situation.
I give the Bill the same cautious welcome as my hon. Friend the Member for Hamilton (Mr. T. Fraser) gave it. Caution is necessary, not so much because of what is in the Bill as because of what is not in it, and also because of doubts about the efficacy of the Bill to do what it sets out to achieve. I welcome it tremendously, of course, on the ground that it is evidence of the United Nations doing its stuff.
One of the important objects of the United Nations is to develop and to codify international law. Here is the United Nations doing this very thing to no small tune, and it is to no small tune when it has the British Government—the British Conservative Government—toddling meekly after it and saying, "Yes, yes, this is good." This is a wonderful thing from the point of view of those who watch the United Nations and its success or failure.
When we speak of the United Nations, we think either of the nation States 233 of which it is composed or of the machinery, its Secretariat. We think of the nation States as either, at least, abiding by the Charter or not going directly contrary to it, and we say that they are doing right by the United Nations, and we think of an energetic and efficient Secretariat when we say that the United Nations is doing its stuff well. Credit can be given to both sides.
This Convention of the High Seas had its origin in the unilateral declaration by President Truman that he, on behalf of the United States, took the right, I think in 1945, to the United States to exploit a considerable part of the waters adjacent to its territory. As we have heard, Conventions, one of which we are dealing with in the Bill, came into being in 1958. All these years have lapsed before Her Majesty's Government have come, and then in rather a hurry to judge from what happened in another place, to ask Parliament to pass this immensely important Bill.
The Minister talked about the North Sea and what would happen there, but that is not the end of the story by any means. Every part of the world can be involved in a very short time, if not today. It will not be only the North Sea, because there is a definition in the Convention, for which I do not suppose Her Majesty's Government were solely responsible, which gives rise to considerable fears about what may happen in the future. I am sorry that the Government have been so sluggish once more in a United Nations matter.
Why is it that the Government are so chary and so unwilling to come to school, so to speak, to learn the facts of this century in connection with the United Nations? Many other nations have recognised that a sovereign State is now a complete anachronism and that everything, more and more, must be in the direction of world institutions and of a more sensible rationalisation of world affairs rather than having them dealt with, or attempted to be dealt with, in little bits parcelled throughout the world. The Government, however have come rather unwillingly to school and we congratulate them.
There are many points in the Bill, which will be dealt with in Committee, on which it will be fair to doubt whether the Bill is doing what it sets out to do. There will be a good deal of 234 clean fun on the part of the legal profession dealing with the Bill and I warn Scotsmen that if they are not careful they will have their jurisdiction ousted on these installations. It is true that power is given to accord Scottish jurisdiction full rights on these installations, but that jurisdiction can be given by Order in Council to any part of the United Kingdom, though I do not suppose that with a Scottish Prime Minister that will be done at present. I have no doubt that Scottish installations off the Scottish coast should have Scottish jurisdiction applicable to them, but it is not certain that they will have.
There is also the question, for example, of the law applying to the consumption of liquor. We are dealing here with the criminal law. Apparently, it is intended that the law applicable in any part of the United Kingdom may be applicable here. Does that mean that if Mr. A. wants to drink at a certain time on a certain day, on, above or underneath an installation, that a law applicable to certain remote parts of Wales might be made applicable to him when he is drinking on the North Sea, or on the Atlantic? These points should be cleared up. We have embarked on an immense undertaking in the Bill. There are all sorts of details which we shall have to look at with great care in Committee.
I have no doubt that the Bill should be given a Second Reading, but it would be wrong if we allowed ourselves to be in any way complacent merely because there is a prospect of considerable riches coming to our nation as a result of these activities, as indeed to other nations that have access to continental shelves. It is with this definition of the continental shelf that I am most concerned. It may have been a good definition in 1958, but I doubt whether it is more than a very general description now.
I remind hon. Members that, according to the definition, the Continental Shelf, in effect, goesto a depth of 200 metres, or beyond that limit to where the depth of the superjacent waters admits of the exploitation of the natural resources of the said area".Who now can put his finger on the map on a place where in 20 years' time the bottom of the ocean would not come within that definition? Yet we talk here 235 about the North Sea. It is rather flippant of the Minister to give the House the impression that the Bill is to do with a little puddle, the North Sea, when it has to do with all the oceans.
We are obviously in for a first-class scramble. Thanks to the Government's delays in this matter we shall be lucky if we get out of our present embroilment in the North Sea with our friends and allies. Do not let us forget "Operation Mohole", which is operating at 4,000 ft. under the sea. Here we are going along glibly thinking that all this can be dealt with by the old-fashioned machinery of catch-as-catch-can or scramble, exactly as the Powers behaved in Africa in the last century.
The Bill should have a Second Reading, but we must improve it as far as we can. The Government must not forget the threshold on which they stand in this matter. Let them have the imagination to act now with a view to seeing that this immense development is not subject to haggling between the soveriegn Powers. Let this thing be done on behalf of the world by the United Nations, which is the machinery we have set up. Most of us pay lip-service to it but I am afraid that there is more than a little hostility to it in certain places on the benches opposite.
§ 4.48 p.m.
§ Sir William Robson Brown (Esher)
It seems apparent that the Bill will receive a Second Reading with the full approval of the whole House. It is inevitable, because of the exciting, challenging prospects which lie before us with this Measure. If any form of success is achieved it will be greatly to the benefit of our nation by way of natural resources. This is a startling demonstration of the technological and scientific development about which we make so many passionate speeches nowadays. Here in the debate are Front Bench speakers on both sides of the House wishing the exploiters of these drillings all success.
There is no question that the exploiters run all the risks and that the nation will reap the benefit. In saying that, I ask for an assurance from the Government that these resources will be treated and regarded as British indigenous oil and 236 gas and that this will apply for taxation purposes.
Another aspect was touched upon by the hon. Member for Hamilton (Mr. T. Fraser), who always seems to put his finger on the pertinent points. This will not be a drilling operation only; land site installations will be needed to take away the product when it has been found and piped off. I hope that the Government will give the developers national protection so that they will be able to acquire such installation sites as they need at a fair and proper price, and will not be held up to ransom by anyone who happens by chance to be on the spot at the time but who has made no sort of contribution to the work. I refer here to the ancillary rights.
Some very expensive equipment will have to be brought to these drilling sites, and I consider that such plant will be on British soil, so to speak. It will, therefore, be liable to British import taxation if it has to be brought from other countries, but I should like the developers to be confident that if they have entered into a guarantee bond, if and when they send that machinery abroad—perhaps to develop in some other part—they can enjoy 100 per cent. drawback of duty. Such things are most vital to those who have to spend this sort of money.
The hon. Member for Hamilton referred to the Gas Act. As I understand, it is the Government's purpose to require the exploiters to make any natural gas available to the Gas Board. No one can quarrel with that, but I would enter the caveat that where the developers wish to dispose of gas for purposes other than those of the Gas Board—for the chemical industry, or for consumption on their own sites, or for industrial and domestic purposes—they should be able to do so without restriction. Otherwise, we shall have complications of disposal that really need not enter into account at all. I feel sure that the Minister is well seized of that point.
It seems clear that this Bill will get its Second Reading without much disputation, and I hope that in Committee the points I mention will be dealt with so that, in the end, we have a piece of legislation which is comprehensive in character, and will meet Government interests and the needs of the exploiters—the oil companies that will have to 237 take up this terrific challenge. It must be remembered that we can drill, but do not always strike. We can drill again and again, and still not strike. Sometimes we never strike at all. In this case, I hope that the strike will be of great value to the country.
§ 4.54 pm.
§ Mr. Norman Pentland (Chester-le-Street)
I have not been able to devote the time and attention to the ramifications and technicalities of the Bill that would enable me to understand it—particularly the legal aspects, which I hope will be dealt with by my right hon. and learned Friend the Member for Newport (Sir F. Soskice). I want to draw attention to one or two matters relating to those operating the installations out at sea on the Continental Shelf, and to get from the Government far more clarification than we have so far had.
First, I want to reinforce what has been said by my hon. Friend the Member for Hamilton (Mr. T. Fraser) and by my hon. and learned Friend the Member for Brigg (Mr. E. L. Mallalieu). It is hard to understand why the Bill has been so long delayed. We get it quite suddenly from another place. Everyone this afternoon has agreed that exploration for oil and gas in the North Sea has been going on for a considerable time, and that there has been major British investigation into the issues involved for this country for the last few years.
The Minister of Power has indicated, as did the noble Lord, Lord Derwent, in another place, when the Bill had its Second Reading there on 3rd December, that the Bill has its origins in the Conference on the Law of the Sea which was held in Geneva in 1958. That conference resulted in the signing by this country and other countries of the four Conventions mentioned by the right hon. Gentleman. It was also explained in another place that 21 countries had already ratified this Convention, which now awaits our ratification before it can be put into effect. We are, therefore, entitled to ask the Government why there has been this delay in bringing forward this Measure. There may be a simple and obvious explanation.
238 I recognise that, whether we like it or not, exploration for oil in the North Sea will continue, so that the need for legislation on and clarification of our position is vitally needed. I agree with my hon. and learned Friend the Member for Brigg that it is an amazing economic phenomenon that most Governments and countries are prepared to gamble in oil exploration. They all think it well worth while, and there are few, if any, other economic sectors to which capital can be attracted so easily as it can be to oil exploration. It seems as though every country, large and small, is prepared to devote a large part of its financial resources to this end. It would be interesting to know now many millions of pounds have been spent in this way by countries that can ill afford it, only to find that the result for them is a trickle of oil and a puff of gas. It would be also interesting to know how successful British development has been.
Most hon. Members will realise that as I have the best interests of the British coalfields at heart, I am hypersensitive about British participation in oil exploration. I can assure the right hon. Gentleman that when the Bill goes to Committee many of us will be watching these developments very carefully. However, exploration for oil will continue, and my concern is to see that adequate protection is given to those who are employed in drilling operations. I have no idea of the number of people who will be employed in this work, but, taking the whole field of operations into consideration, in the final analysis the number who could be employed must be fairly considerable. In those circumstances, can the right hon. Gentleman say whether, at any stage, consultations have taken place with the Trades Union Congress about the Bill? Was its advice requested before the final drafting of the Bill?
An interesting thought crosses my mind in connection with the application of trade union regulations and understandings. Let us suppose that a strike takes place many miles out at sea, on the Continental Shelf, and that deadlock is reached between management and men. If the men request their trade union representatives to see what conditions are like on the spot, so as to be able to understand the various aspects 239 of the problem that has arisen, will the Government provide a ship or helicopter to take them from the mainland to the Shelf?
If not, are we to take it that the Government will not recognise this as being strike action, and that this action would go down in the annals of British history as the first mutiny on the Continental Shelf? Is that what we are to understand from the failure to take the T.U.C. into consultation. I hope that in his winding-up speech the Parliamentary Secretary will tell us whether any consultation has taken place with the T.U.C.
I now turn to the more serious aspects of the Bill, concerning the safety and well-being of the men. I would like an assurance that every possible safeguard is embodied in the Bill. At the moment, I am far from happy about the position. In the debates in another place many noble Lords suggested that the Bill was being pushed through with undue haste and that, as a consequence, many of the questions posed to the Government by the noble Lords, especially those on the Labour benches, were being left unanswered. Great concern was expressed about the lack of information on the legal aspects. Again, I suppose that my right hon. and learned Friend will refer to these in his winding-up speech for the Opposition.
Doubt was also expressed about the extent to which the provisions in the Factories Acts would apply to these installations. This aspect was debated very forcibly by Lord Shackleton, Lord Lindgren and Lord Champion in Committee on the Bill in another place on 17th December last. Replying to the arguments put forward by the noble Lords in the Third Reading debate on 19th December, Lord Derwent, addressing his remarks particularly to Lord Shackleton, said:The Acts that the noble Lord mentions, such as the Factories Acts, and so on, where they apply, can be made to apply to an installation on the shelf. They will apply in exactly the same way as they would apply in the United Kingdom. That is not to say, for instance, that the whole of the Factories Acts would necessarily apply to something on the shelf, because they might not be applicable."—[OFFICIAL, REPORT, House of Lords, 7th December, 1963; Vol. 254, c. 393–4.]240 To my mind, that leaves many questions still unanswered. It may be that the whole of the provisions of the Factories Acts do not apply to these installations, but who is to determine what parts of those Acts should apply and what parts should not? Again, I ask whether the trade union movement will be consulted on such issues. According to the noble Lord's interpretation of the way in which the Factories Acts might apply, trade union questions could be involved. This is important, because on my reading of the Bill—and I have admitted that it has been skimpy—there appears to be a need for far more clarification of the way in which these Acts would apply.
I should imagine that in a drilling operation for oil, far out at sea, many aspects of the relations between management and men ought to be covered by legislation, but the more I look at the Bill the more convinced I am that the Government are prepared to rely to a greater extent upon voluntary arrangements than upon the application of new legislation.
That is not good enough. According to The Times this morning, the T.U.C. met the Minister of Labour yesterday to discuss the extension of safety regulations concerning the fencing of machinery. The outcome of these talks could be relevant to the Bill. I understand that these discussions are to continue. I should like more clarification about the way in which the safety regulations will be drawn up and applied on the Continental Shelf, especially in relation to the fencing of machinery and the different types of machinery which will have to be used in these installations.
I say this because it would be disastrous if a man were to be seriously injured or killed while working on such an operation, because of an unguarded piece of machinery and if, when a subsequent claim was made by the man or his widow in our civil courts it was found that, although there had been negligence on the part of the employers, the claim was lost purely and simply because the whole of the Factories Acts or a part of them were not included in the Bill.
Those are the main points that I wanted to draw to the attention of the 241 House. They can be developed in Committee, but I hope that something will be said about them in the Parliamentary Secretary's winding-up speech. I admit that I may be too pessimistic about the conditions laid down in the Bill, but we are now legislating for people who will be working in circumstances which are entirely new to them, and who will be doing jobs which are entirely different from the type of employment that they have had in the past.
Men in the North-East and Scotland who are now unemployed could probably be taken into employment in these operations. I have worked long enough in industry to realise that a good deal of the injustice and hardship that sometimes arises can be avoided if every safeguard is laid down in a Bill such as this, rather than if we rely entirely upon voluntary arrangements. I hope that the issues that I have raised and the doubts that I have expressed will be examined carefully before the Bill becomes law.
§ 5.10 p.m.
§ Mr. Peter Emery (Reading)
I am surprised that so little publicity or significance has been given to the Bill or to this debate. When one considers the amount of work that is being done in exploration in the North Sea, one must realise that new fuel discoveries would entirely revolutionise our domestic economy. It would provide a new source of domestic power in a manner which most of us have never dreamed could, would, or did exist as domestic fuel in the United Kingdom.
At this point, I should declare an interest, because I occasionally advise an oil company. It is for this reason that I see immense significance in the possibility of our being able to bring to the shores of this island our own oil or our own natural gas. Not only is it a matter of economy; it goes very much further than that if the discoveries should be of a major character.
I do not think that anyone is giving anything away in saying that there is every preliminary indication at the moment, from the geographical structure which exists under the sea, that the present exploration will bring forth some results. If that is so, not only domestic policy, but a matter of foreign policy will be affected. Then we shall cease 242 to be completely and utterly reliant for our supply of hydrocarbons upon either the Middle East or America. That is something which could have a major effect on our ability to hold a varying policy in foreign affairs from that which we are holding at the moment.
Following the hon. Member for Chester-le-Street (Mr. Pentland) and the hon. and learned Member for Brigg (Mr. E. L. Mallalieu), there are one or two points I wish to take up. I do not think that the hon. Member for Chester-le-Street has had much experience of an oil well. Not many people are employed on the rig. Once the rig is set up the actual pumping employs no one except a few maintenance men to check how much gallonage is going through. So I do not see many major problems of dispute between a trade union and an oil company, although perhaps the hon. Member would like his own helicopter to flit around in. I gathered that from his speech.
§ Mr. Pentland
I agree that there would be few men working on the plant, but there would be men working for two or three days at a time on the Continental Shelf and they would have to be supplied by those in ancillary employment engaged in carrying out the work of developing the installation.
§ Mr. Emery
There is no doubt that there would be the question of supply on the maritime side. If anything came to fruition, the seamen necessary to maintain those supplies would be in much the same position as those maintaining lightships. It would be more that kind of operation than one of men working on the site.
Another point I take up with the hon. and learned Member for Brigg is that when he began his speech he was talking about catch-as-catch can. The whole point of the Bill is stop catch-as-catch can and to bring some sense of order into what will be done in the drilling and of the licences which can be given so that there should not be a general hurly-burly, with everyone trying to put down wells in any given situation.
I was somewhat worried when the hon. and learned Member for Brigg spoke of the Bill as "good, clean fun" for the legal profession. That always terrifies me. I believe that there are too many 243 lawyers in this House and that they have too much good, clean fun. There seemed to be an indication that massive fees may be earned in discovering what or what may not be the outcome of the Bill. I hope that we can get away from that situation.
Turning to the Bill itself, there are a number of points which are of specific importance. I wish to underline the point made by my hon. Friend the Member for Esher (Sir W. Robson Brown) on duties and tariffs if we find oil under the North Sea. Surely this must be treated as a domestic natural supply. It would be quite wrong if anyone had to pay import duty on what he brought in to this country from the North Sea.
Another point of specific significance is that it seems to many of us more likely that natural gas rather than oil will be found under the North Sea. The exercise of rights under the Continental Shelf Bill to explore and exploit all the deposits of oil and gas are based on existing legislation. That is the Petroleum (Production) Act, 1934, but we realise that that legislation was enacted a long time ago when the use of petroleum and natural gas was in its early stages of development in this country.
Since then there have been remarkable advances in the utilisation of oil and gas. In addition, natural gas, as well as being used basically as a fuel, is a most valuable raw material in the chemical industry. Does not the Minister think that the provisions of that Act require modernisation in the light of these new developments? Does he not think it important to provide that those interested in exploring for and developing gas deposits on the Shelf should receive full encouragement and, in particular, the ability to use what they discover as freely as possible in their operations and in those of their subsidiaries?
The reason I specifically asked that question is that if natural gas is brought to this country we have to consider the position of the gas boards as the monopoly suppliers of gas throughout the country. What is to be the position of a company which has discovered this specific deposit? It will have very little 244 to compete with other than the gas boards and perhaps nowhere else to sell. It seems that there should be some guarantee of reasonable prices to that producer so that he can get a fair and proper price for the product he has discovered.
§ Mr. Emery
I am obliged to my hon. Friend. It seems that it would be our wish to see the exploitation of these fuels made predominantly for use in Great Britain. If there is enough for us also to export, well and good, but let us, first, get the main benefit at home. It is for this reason that everything should be done to ensure that a proper and fair market is available in this country.
What criteria will apply in the granting of licences, for this is not mentioned in the Bill? What area is envisaged by my right hon. Friend to be taken into account by the licences? The Press has suggested an area of between 200 and 2,000 square miles. One would be too small while the other would be too large. I would have thought that the industry would be happy with a figure of about 500 to 700 square miles.
Has my right hon. Friend considered the policies followed in Canada, California and Texas for the geographical positioning of these sort of licences? He must need a certain measure of control, though I appreciate that stimulation as well as control must be involved; some action must be taken by his own Department, while a degree of encouragement must be given to the oil companies which will be spending the money.
I hear that a large number of oil companies are interested in one or two areas. If this is true, how does the Minister envisage the breaking-up of these areas? I hope that he will ensure that no one company, British or not, will be given a complete monopoly position in the better areas, because the nation will be benefited if one oil company must compete with another to ensure that the maximum number of wells are sunk.
245 As much as I wish to see British companies able to obtain and reap the fruits of this operation, I hope that nothing will be done by the Government to discourage everybody—French, German, American, Middle East, or other interests—from having a say in this matter. It is of the greatest importance for Britain that as many wells as possible are drilled. If this is to be achieved, there must be encouragement to all who are in a position to sink boreholes. I hope that my right hon. Friend will make clear, during the passage of the Bill, the criteria to be adopted in the granting of licences.
I hope that my right hon. Friend is not interested purely in the fees which are offered for specific areas. I am not suggesting that his Department should not be paid or that a fair price should not be received. It is important that the companies being granted licences should be in a position to sink boreholes immediately rather than for licences to be granted in such a way that only one or two wells will be sunk, remembering that it often takes a number of shafts to be drilled before a strike is made.
In the same way, I hope that my right hon. Friend has considered, along with the licensing procedure, the method by which there will be a reversion to his Department within a short time, perhaps within three or five years, of any licences so that other companies are able to re-bid for the areas concerned. Time and again in the oil industry one finds that although a company has relinquished a right, another company has gone in and, lo and behold, has found oil many years after the area had supposedly been worked dry by the former company.
I hope that my right hon. Friend will also consider the criminal aspect of the trespass or piracy of the sinking of wells. I have one experience in mind. In a certain fairly major city in Texas two competing oil companies had licences extending to a certain part of the town. Company A believed that the other company's licence was for an area better than its own. Thus, Company A proceeded to sink a shaft that was not straight—for it is possible to sink a shaft on one's own top-soil and bend it into the strata of the area of another company—and began pumping oil from Company B's area. Company B, mean- 246 while, had the same belief and sunk a similar shaft so that, in time, each company thought that it was doing the other down; A was taking B's oil and B was taking A's oil.
§ Mr. Pentland
The hon. Member could draw the same comparison with coal owners in years gone by. In the old days of private enterprise much the same thing happened, with one owner taking coal from another owner's area, and vice versa.
§ Mr. Emery
The hon. Member may live in the past. I am trying to think about the future, as are most of my hon. Friends. We must ensure that this sort of trespass or piracy is considered by my right hon. Friend. It is not likely to happen often and it will happen less often if the matter is considered now and we anticipate the taking of action should it happen.
Can my right hon. Friend state specifically what will be the area in the North Sea? We have heard about a line half way across to Belgium and Holland. I am not associated with the profession which marks out territory, but that seems such a general statement of a line of deviation or boundary that it would be advantageous if my right hon. Friend could give us the longitude and latitude. I am not sure, even if I am given those figures, that I will understand what the area is to be, but we would be certain that a number of people would have the position clarified to their understanding.
I welcome the Bill and will do all I can to support it on Second Reading. It has not come too early. A number of problems remain, but they will be worked out. It is a good thing that my right hon. Friend has been able to bring it forward this Session and I hope that all hon. Members will co-operate in getting it on the Statute Book as quickly as possible.
§ 5.29 p.m.
§ Mr. Leslie Hale (Oldham, West)
We are told that the Continental Shelf Convention has been printed in five languages—in Russian, Chinese, English, French, and Spanish—and that each version is of equal authenticity. I am reminded of the accused person who, when asked why he had given several different explanations of his movements 247 on the night of the crime, said that he had done it to avoid any possibility of error.
I do not wish to be critical. This is an important Bill; indeed, it might prove to be very important. We do not yet know. The discovery of substantial oil deposits in the Continental Shelf could alter not only our economic position, but our foreign policy, and alter it a good deal for the better.
Whatever views the hon. Member for Reading (Mr. Peter Emery) has about lawyers—and he seems to share those of Jack Cade—he has overlooked the part that they have played in our law reform. It is important that this House should know what it is doing. The only thing that has clearly emerged from the debate in this House and in another place is that not only do we not know what we are doing, but nobody knows what is to be done.
I do no criticise that too much. This is an enabling Bill and I appreciate that the Government and the Parliamentary draftsmen are faced with a dilemma of serious proportions. Why not embody the Convention in the Bill? The answer was given in another place. I cannot quote the precise words of one of our most distinguished international lawyers who had previous experience of maritime tribunals, but he opined that the Convention was not put in the Bill because it would be interpreted differently by the different courts of the different countries who were party to it, and that is inevitable. The American judge who, in the Columbia Law Review, said that maritime law is a thing of beauty and an exact science would hardly say that today. There is no unanimous definition of territorial waters. Each country applies its own interpretation.
There are conflicting decisions of the courts as to who has jurisdiction. There is the famous case of the ship that was below the waters in the Garonne. A British court said that it had jurisdiction because it was a British ship, while the French courts said that they had jurisdiction because it was in waters in municipal France. This is a matter of the highest controversy.
Some of the speakers assumed that we were nationalising the subsoil. If I am right—and I speak subject to correction 248 on every word that I say about this, despite having read the Bill a good many times—it is clear that we are not doing that. I think that the reason is that rather hinted at by the right hon. Gentleman in his speech, in which he tried to be helpful and give all the information that he could. I do not believe that the Government know how this will operate at all. It was clearly indicated in the right hon. Gentleman's reference to Clause 3 of the Covention that the waters will remain part of the high seas, and the high seas are still subject largely to the law as outlined by Grotius, who was not really a maritime lawyer.
Grotius wrote on the morals of law. He was a man of great learning and of great ability, and sort of Pico della Mirandola of his time, but his single published chapter on the law of the sea was really a reiteration of the general principles enunciated by Queen Elizabeth. The international law was founded by our own Lord Stowell in a series of decisions accepted also in the United States, and we have had some recent responsibility in a series of Conventions for making that law uncertain.
We have special conventions about taking sponges off the Tunisian shore and about searching for pearls in the south-eastern seas, and so on, and during the last few years we have seen many countries endeavouring to protect their fishing or coastal rights by demanding the extension of territorial waters by declaring a varied area for their territorial waters, from three miles from an undefined coastline, which in the case of Norway is difficult to define, and rising up to twelve miles in the case of Iceland.
In another place it was rather suggested that the line would be drawn on a map, not by putting in the lobster pots or buoys, but by a cartological division. At the moment one has difficulty even in defining the boundaries of territorial waters because coastlines are notoriously never straight. One only has to imagine, for example, the coastline of co-adjacent France, Holland and Belgium to see their aspects towards the sea in quite different directions and to see why we have evolved the practice of saying that one draws a circle of three miles diameter and where the circles of the two segments intersect the tangent 249 of those two circles should be the boundary of the territorial water.
Where do we go from there? We are now to draw a line which is to be equidistant from the broad semicircular line of the Kent coast and the undulating diagonal line of the Continental coast, which of course, is impossible. The matter was raised in another place. The right hon. Gentleman, in a somewhat unfortunate example, said that we would start negotiations again and would go and see the Belgians, or they would come and see us, and we would be able to decide on a line. But the Belgians did not sign the Convention, and they have not ratified the Treaty.
Nor has France, yet in another place we were told that the President of France would operate the Treaty and that everything would be all right; that there would be no difficulty about getting agreement with France. But that has not been the experience of Her Majesty's Ministers in the past. We have had little ups and downs with France in the last few years, and this proposal covers the whole line of the Channel.
I think that the right hon. Gentleman put his definition more correctly. As defined by the Bill, what we seem to be doing is merely nationalising undiscovered mineral rights as from the time when they are discovered. We do not take over anything but the right to exploit—I think that "exploit" is the word used in the Bill—but the right hon. Gentleman went on to say that we accept that, under Clause 3 of the Convention, this area is still part of the high seas, and international waters, with freedom of access, and of course, with special laws.
Most national laws end in territorial waters, even if they apply there, and in this area to which international maritime laws apply with special provision about the right of hot pursuit from territorial waters, and so on.
When we come to the North Sea, we come to another difficult problem, because from our coast of Scotland we are presumably measuring a half-way line with Norway, and Norway is not on the Continental Shelf. Its coastal waters run to 400 to 500 fathoms. It is unlikely that Norway will have any possi- 250 bility of developing rights on this Shelf unless she is allowed to claim that part of the Continental Shelf which is not contiguous to our shore, but contiguous to the dividing line.
I am not trying to create difficulties. The right hon. Gentleman knows that they exist and we sympathise with him in the difficulty he faces in defining a Convention which my hon. and learned Friend the Member for Brigg (Mr. E. L. Mallalieu) said was a masterly demonstration of international amity, but which, perhaps, rather exemplified the difficulty of detailed definition in an international convention. A world government which lays down principles without being able to apply them in detail would not be a very effective form of world government.
If all that we have done is to take over the right to exploit—and in this connection I think that the reference to the National Coal Board is a little surprising—I wonder whether it was put in rather as a piece of orange pip in the sugar beet drink to indicate that it is genuine orangeade. The history of the coal mines in the sea and in territorial waters has not been a happy one. It has been associated with some great disasters.
I cannot imagine that if coal is found at 200 fathoms in the Continental Shelf, it can be exploited. The most that it seems to offer is the right to approach it by tunnels, and that method is fantastically expensive and tremendously dangerous. It may be right to put it in, and it may be wise of the Parliamentary draftsmen to say that in 50 years' time things may alter, but if an oil company sinks a shaft for oil and finds coal, what happens? Do they hand it over to the Coal Board? I am not trying to raise fractious points. I merely think that this is an important matter.
I do not wish to over-dramatise this, but I recall that, in the few days before 1914, when Sir Edward Grey was charged with the responsibility of trying to avert war, he used words which were imprinted on my memory. He said, "My predominant preoccupation was the hideous thought that France and Russia might go to war relying on support when such support was not forthcoming". All this was due to the fact that the French had a copy of a treaty which, in their view, said "will" and we had a copy of the same treaty which, in our view, said 251 "may". The French thought that we were under an imperative obligation. We thought that we were under honourable commitments which had to be reviewed in the light of circumstances. A harsh decision was made which had its imprint on the events of the time. The House is entitled to know what will be done in this matter.
We are now saying that we shall permit installations. If someone discovers oil, he must get it out. We shall have a sort of little Lake Maracaibo in the North Sea. I do not worry about that. I do not think that all the difficulties about fishing, shipping, and so on, will have nearly as many repercussions as occurred when the Russian fleet arrived on the Dogger Bank.
We are still subject to the law of the high seas, yet the right hon. Gentleman says that ownership in this matter will pass to the Crown and that ownership of the right to exploit is vested in the Crown. That I cannot understand, because the only result apparently is that the matter comes under the jurisdiction of the Crown Commissioners. I should have thought that if any body was unsuitable to take over a substantial and important area of the industrial planning of our future it was surely the Crown Commissioners, who are mostly excellent gentlemen doing, no doubt, their job very well, but it is nothing to do with this matter—unless one found an oil gusher at Balmoral by mistake. So far as I can see, trying to find an explanation of this, it is rather based on a harp-back to the old theory that ownership of the country's land rests with the Crown, that a fee simple was a tenancy and not, as now, a freehold, and that was abolished in 1925.
So we now have a right to exploit the subsoil of the sea as part of the Crown estates. What law applies? The Bill says that we shall delegate to the Privy Council the right to make Orders in Council—here the words are vague, and the explanation vaguer; I do not say that discourteously—applying the law of some part of the United Kingdom or some part of the law. The House should know what will be done. If we are to have oil installations, employment of considerable danger will be involved. We shall have a type of employment which is substantially new. We may have to 252 make special regulations for the safety of workers beyond those embodied in our Factories Acts.
The Bill talks about our criminal law and civil law. We do not really have a criminal law and a civil law. It is true that people write books about the criminal law. As a matter of convenience, they write books about civil law. The common law is a mixture of both. If a worker in these installations at sea has a fatal accident criminal questions and questions about failure to comply with obligations may arise. There will be wide questions of responsibility for compensation for the workers. Not only the question of National Insurance, but the right to damages must be protected. The right to damages is usually called a right to damages at common law.
I hope to have the privilege of hearing my right hon. and learned Friend the Member for Newport (Sir F. Soskice) on the question whether one can delegate to the Privy Council the right to make an Order in Council in respect of certain installations outside territorial waters applying a whole set of laws, or cutting some out, or altering them, or limiting them, and so on. I do not believe that it can be done. We may find that the powers given by the Bill are not effective to this extent. I cannot understand why the Bill does not provide that the law relating to injury, damage and so on, shall apply to works being carried on under licences by the Crown Commissioners or by Her Majesty's Government. That could be done by statute. But even if that happened problems would be created because the conflict in international law would still be unresolved.
Perhaps the hon. Member for Reading is right in saying that that this Measure probably can be worked only by a wide measure of mutual agreement. He referred to the possibility of conflict between the oil companies. I confess that for some years I have been preoccupied by the power of many large international companies. We know that the power behind the throne in many countries is very often a large firm. I give as examples British Guiana, Venezuela, where two large undertakings are concerned, Liberia and Sierra Leone. Many of these great industrial concerns behave very well, but they 253 exercise power almost equal to that of Governments. The next war might be between Shell Mex and Esso.
It may well be that, if international rivalries are being developed in international waters, any Government endeavouring to operate this Bill may be confronted with problems of the greatest possible difficulty. I am not sure that this is avoidable. I think that the Bill could have been more forthcoming and specific, but, unhappily, I still wonder what is the sort of property right in a concept of an area with a radius of 500 yards in an outer radius of 500 metres to be booked from—what, the centre of the installation or from each installation? That is an area over which there is no ownership. It is an area of the high seas in which we intend to operate our municipal law. It will not be easy, and I am glad that the responsibility for operating it is not on me—I almost said, on the right hon. Gentleman, but perhaps that may not happen. I should be going further than I intended if I said that.
The noble Lord who spoke on behalf of the Government in another place talked about the mid-Atlantic as one of the visions of the future. The Mohole operations are already at 4,000 metres. It is true that the rapid advance of science makes major miracles possible. I was brought up on the simple proposition cujus est solum, ejus usque ad coelum est ed ad infera—that is, the owner of the soil had everything up to heaven or down to hell, or whatever it was beneath. Unhappily, although we do not know much about where heaven is, we know now a good deal more about where it is not. In an expanding universe, it is difficult to preserve that concept inviolate.
It is a strange concept to say that we do not own the marine subsoil, but that we own the right to exploit it, with, strangely enough—although the Bill does not seem to embody this part of the Convention—a right to gather those forms of crustacea which have a more or less pedestrian motion. A passion for limpets is almost a reversion to type by the Tory Party.
We have the right to exploit and then we have an installation and then we have a circle drawn on the high seas to which we apply a whole series of laws about 254 security from accidents and rights of employment and, I hope, special provision for safety. It is not easy. I hope that it may be possible, in Committee, to revert to some of these questions and to go into them in much more detail.
§ 5.50 p.m.
§ Mr. T. H. H. Skeet (Willesden, East)
I do not envisage many of the difficulties to which the hon. Member for Oldham, West (Mr. Hale) has referred. Article 6 of the 1958 Convention on the Continental Shelf provides for the drawing of the medium line between neighbouring States and one can envisage having a number of indentures in various territorial waters; but in Europe already there are joint zones between West Germany and Holland where difficulties would have been likely to arise. I would have thought that the law as outlined by that Convention is perfectly clear at this stage, and I suppose that in the near future—the naval boundary will be subject to negotiations between neighbouring States. My right hon. Friend should come out of this remarkably well, as a very large part of the acreage of the North Sea lies inside our province.
My right hon. Friends have been chided for not having taken action in time. The hon. and learned Member for Brigg (Mr. E. L. Mallalieu) spoke of the Truman Declaration of 1945, but I think that he meant the Truman Declaration of 1949. That cuts the time by four years. We have not been asleep on this matter. Matters like this normally arise in the House only when it is necessary to take appropriate action. Hon. Members will recollect the Sarawak (Alteration of Boundaries) Order in Council, 1954, which provided for a Continental Shelf delineation in that part of the world and that this was followed in 1958 by the North Borneo (Definition of Boundaries) Order in Council.
Much of the exploration which has gone on in the North Sea has arisen from the fact that very substantial reserves of natural gas, to the tune of 1 million million cubic metres, have been discovered in North Holland, very much larger than other deposits found in Europe, larger than those in South-West France and to some extent rivalling some of the big deposits in the United 255 States of America. When it became apparent that the reserves in North Holland were very large, it was thought possible that similar formations extended into the North Sea. It became important that something should be done, before concessions would be granted seismic and other surveys had to be carried out. Last year I threatened to introduce a Ten Minute Rule Bill on this subject, but decided against this course on an assurance that a Bill would be brought. I do not think that my right hon. Friend and his predecessors have been out of touch. Appropriate action has been taken as occasion has demanded.
There is one feature of the debate which I regret. The hon. Member for Hamilton (Mr. T. Fraser) brought in the political element and tried to make party capital out of the Bill. He exercised a certain ingenuity and specious argument, but he did not do himself justice. He said that I did not listen to his argument but I castigate him for not having read his documents. Section 1 of the Petroleum (Production) Act, 1934, vests the property of petroleum in the United Kingdom in the Crown, so that there is complete nationalisation of petroleum lying in situ. The position offshore is entirely different. With the Continental Shelf the convention has conceded only the right to "explore and exploit" and the installations themselves do not carry the status of islands, although the civil law applies to them. Thus less nationalisation than the 1934 Act.
It is rather interesting when one follows this up to find that as oil on the Continental Shelf does not vest in the Crown, it is captive and therefore the property of the person who discovers it and brings it to the surface. If it is outside the three-mile limit, it is then opened to the oil company concerned, if he choses not brought within the three-mile limit, to export it to the most appropriate market or, if it is natural gas, to market it overseas. The American Overseas Petroleum Company is contemplating drilling off Borkum Island near Western German coast, and, if it is successful in its strike, it may contemplate marketing the gas in Western Germany.
256 It is only fair to say that the oil companies in the United Kingdom are very responsible bodies and that the first matter which they would wish to take into account would be the public interest. It is of course a very nice calculation to decide what are the United Kingdom's requirements of oil and natural gas, but a fair allocation would be made available for local consumption. This is the responsible attitude likely to be adopted by all the companies concerned.
However, the legal position is, in my view perfectly clear and is that unless the product is brought within the territorial waters, it is open to the developer to sell the oil or natural gas wherever he will according to the marketing conditions and proximity of consumers concerned. If natural gas is brought within territorial waters, it comes within the ambit of the various Gas Acts and would then be marketed by the gas industry of the United Kingdom. These things are very important and we should take note of them.
While the Bill provides certain civil and criminal penalties for acts of omission on installations, there is nothing to protect the oil or the resources of the shelf itself. There is no provision in the Bill which will attach a criminal penalty for any unlawful intervention, exploration or removal.
§ Mr. Skeet
My hon. Friend suggests piracy and in that one word he is making a substantial point. At present, off Western Germany and outside territorial waters a consortium of ten companies has obtained a provisional concession. The Amoseas—the American Overseas Petroleum Company—has decided to bore its first well within 21 miles of Borkum Island. That is within nine miles of the location chosen by the consortium for an initial well. The bores will probably be on the same structure and this may prove a case of international poaching. All that I am saying is that my right hon. Friend will fall into the same difficulty unless he takes adequate powers and gives Her Majesty's ships the right to enforce the law which would have to be stated in this Bill.
257 My hon. Friend the Member for Reading (Mr. Peter Emery) has mentioned angular drills. It would be rather amusing if after a large structure had been located on the shelf a number of companies enjoyed the fruits of their researches. I am delighted to hear from the hon. and learned Member for Brigg that where there is a large investment, the companies or interests should be entitled to a fair reward. Perhaps this is something which should be passed on to his right hon. Friend the Member for Huyton (Mr. H. Wilson).
I stress the point of criminal sanctions. There is no provision in the Bill. Although Clause 3(2) appears to cover them, it does not do so. My right hon. Friend might receive a certain mental stimulation by referring to Public Law 212 of the 83rd Congress of the United States of America. American experience of drilling goes back to 1910 when initial drilling occurred on Lake Louisiana. Perhaps I should say that about 20,000 million tons of oil are likely to be located under the sea of which one-third is likely to be in the Persian Gulf. Of the free world daily production of 12.3 million barrels in 1962, approximately 22 per cent. came from under the water. Underwater drilling though new to us is not to others.
The Americans have been looking into this matter for many years and have provided in Public Law 212, Section 4: