§ Order of the Day for the Second Reading read.
§ 3.14 p.m.
§ LORD DERWENT
My Lords, this Bill has its origin in the Conference on the Law of the Sea, which was held at Geneva in 1958. That Conference resulted in the signing, by this country and others, of four Conventions, and two of those Conventions concern us to-day, the Continental Shelf Convention and the High Seas Convention. The Continental Shelf Convention clarified international law regarding those large submarine areas outside the territorial seas where the depth of the water allows the natural resources of the seabed and subsoil to be exploited. If this Bill is passed by your Lordships, and eventually becomes law, the Government intend to ratify the Continental Shelf Convention. 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. Before asserting our rights and assuming our obligations in international law, however, the law of this country needs to be brought into line, and that is the main purpose of the Bill.
The exploitation of the continental shelf is a new development in most parts of the world, and certainly around the British Isles. Though it presents obvious technical difficulties not encountered on dry land, it offers the opportunities and challenge of the unknown. For this country, with its limited indigenous resources, it offers in particular the attractive possibility of finding oil and natural gas close at hand and under our own control. Our present indigenous production is meagre: one part in five hundred of our oil requirements and a negligible quantity of natural gas. The economy is becoming increasingly dependent on oil and the cost of oil imports rises year by year, both absolutely and relatively to other imports. Last year retained oil imports were valued at about £420 million, which was over 9 per cent. of all imports. A substantial home production would offer prospects of savings in foreign exchange and in 912 fuel costs: and it would lessen our dependence on foreign supplies.
As regards the North Sea, which is the main area of interest at the moment under this Bill, this country will have rights over any deposits up to a line half-way across to Holland, Belgium and the other coastal States, subject to any adjustments agreed with those countries. I cannot, of course, tell your Lordships at present what the resources in that area will amount to, but the Government are much encouraged by the interest shown by about twenty major oil companies of international standing, and by their willingness to spend substantial sums on seismic and other surveys. Before proceeding to the drilling of exploration wells, which is the next stage, and a very expensive one, the companies reasonably require the legal protection given by exclusive licences, which the Minister of Power will be able to issue under this Bill. There are also possibilities of finding coal and other minerals in useful quantities. The National Coal Board, of course, are already concerned in developments in the North Sea.
I now turn to the main provisions of the Bill. Having by subsections (1) and (2) of Clause 1 vested our rights under International Law in the Crown or the National Coal Board, we provide by subsection (5) of that clause for the designation of areas over which those rights are exercisable. These areas are referred to in the Bill as "designated areas" and will be established by Orders in Council. In passing, I would remind your Lordships that our rights under International Law do not amount to full sovereignty, which would be inconsistent with the legal status of the waters above the shelf as high seas and of the air space above those waters.
When we have ratified the Continental Shelf Convention we intend to undertake negotiations with neighbouring States to settle our common boundaries on the shelf. That has not been done in detail at the moment, but only approximately to the half-way line. These negotiations will take time, but meanwhile the position in International Law is clear enough for us to identify large areas of the shelf which undoubtedly appertain to the United Kingdom. These we shall designate as soon as may be after the Bill becomes law, so that prospective 913 developers of oil and natural gas may proceed. In other words, there are certain areas which are obviously not going to be in dispute as to the actual boundaries between countries, and these areas will be designated at once because we will not eventually have to negotiate them. The means of regulating the activities of oil companies and the National Coal Board within these areas is provided for in subsections (2), (3) and (4) of Clause 1.
As regards the search for petroleum and natural gas, the extension of the relevant sections of the Petroleum (Production) Act, 1934, will enable the Minister of Power to make regulations and grant licences to prospective developers to govern the way in which these developers will conduct their operations on the continental shelf. This system of control is well established under the 1934 Act as regards the land and territorial waters and we shall draw on experience under that Act, and experience in other parts of the world, in adapting the control to the special circumstances of underwater development on the continental shelf. The statutory regulations will be subject to Negative Resolution of either House of Parliament. Rights in respect of coal are vested in the National Coal Board. This follows the precedent of the Coal Industry Nationalisation Act, 1946, as regards coal in Great Britain, but the Board's operations on the shelf are to be subjected to Ministerial consent. The reason for this is to enable the Minister of Power to exercise his co-ordinating powers to ensure that the exploitation of any coal, oil or natural gas resources that may exist in close proximity is controlled in the national interest.
The natural resources of the shelf, apart from oil, natural gas and coal, will be managed by the Crown Estate Commissioners by virtue of powers derived from Section 1 of the Crown Estate Act, 1961. These other resources include such things as gravel and other non-living resources of the sea-bed and subsoil, and living organisms belonging to sedentary species. They do not include fish.
The next important provision is in Clause 3 and concerns the extension of criminal and civil law to the United 914 Kingdom part of the shelf. The protection of criminal law of each part of the United Kingdom is extended to installations and to waters within five hundred yards of them by subsection (1) of Clause 3. At this juncture it may we helpful to your Lordships if I say a few words by way of explanation about the term "installation". In this Bill the term is used generically and includes such things as drilling platforms situated above the surface of the sea and connected to the sea-bed by legs, and also barges which are anchored to the seabed and from which drilling operations are carried out, either over the stern or through the barge bottom. These installations are often large and many men may live and work on them for long periods. It is therefore necessary to ensure that law and order are maintained. Clause 9 deals with questions concerning the prosecution of offences committed on the shelf and amongst other things, extends the powers and privileges of constables to installations on the shelf.
Subsection (2) of Clause 3 provides for the extension of civil law to the whole of the designated areas in so far as it is necessary to deal with questions arising out of acts or omissions taking place in connection with exploration and exploitation of the natural resources of the shelf. An Order in Council made under this subsection will also confer jurisdiction on courts in a specified part of the United Kingdom. Orders in Council so made will be subject to Negative Resolution of either House of Parliament.
By virtue of Clause 4 the Minister of Transport will be able to ensure that installations are sited at locations where they will not interfere with shipping using recognised sea lanes, and under Clause 2 the Minister of Power will be able to protect these installations by prohibiting ships from entering specified areas surrounding them. This protection will not necessarily be needed to the same extent in all cases, and each will be judged on its merits to determine the degree of protection, and interference with shipping, which can be justified. We shall, of course, observe the maximum distance laid down in the Continental Shelf Convention, which is five hundred metres from the installation.
915 The Postmaster General, by virtue of powers granted under Clause 6, will be able to control the use of wireless on or near installations. The question of the status of men employed on installations in relation to the National Insurance Acts is dealt with in Clause 8 which will enable the Minister of Pensions and National Insurance to extend insurance cover to such persons and to modify the Acts as necessary.
The remaining clauses, Clause 5, which relates to the discharge of oil from pipe-lines and installations, and Clause 7, which provides for the protection of submarine cables and pipe-lines, give effect to the obligations undertaken by the United Kingdom in ratifying the High Seas Convention. The legal issues raised in bringing our municipal law into line with international instruments such as these two Conventions are necessarily difficult, and it may well be that some of these issues will need to be clarified during the passage of the Bill. I would ask your Lordships, however, to bear in mind the main purpose of the Bill, which is to enable the natural resources of the continental shelf to be exploited for the benefit of all concerned. The Government believe that this is a highly desirable object, and I hope your Lordships will agree.
My Lords, before the noble Lord sits down, what he has said does not make quite clear the demarcation line between different countries. Can he explain how it will be managed between the North coast of Shetland and the coast of Norway—like Fladder?
§ LORD DERWENT
My Lords, under the Convention there is an agreement of a rough half-way line. At so where the actual border comes will be dealt with by negotiations between the countries concerned. If we are negotiating the half-way line between ourselves and Holland it may affect Belgium but it may not affect Norway. These things will have to be negotiated individually. For the purpose of the Convention, there is a rough half-way line. Anything on our side of the half-way line—and it must have been negotiated—we can get busy with at once. I beg to move that the Bill be now read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Derwent.)916
§ 3.27 p.m.
§ LORD SHACKLETON
My Lords, it would help us all a great deal if the Minister were to put in the Library a map showing what the continental shelf is. Indeed, I think it might even have helped the noble Lord to answer the question put by the noble Lord, Lord Saltoun, because I personally thought that he gave the wrong answer, and I shall be interested to press this particular point. The noble Lord has not said much about it, but I have always understood the continental shelf to end roughly at the 100-fathom line, which is, in fact, consistent with the Convention. Of course, all the enclosed waters and the North Sea are really a part of the continental shelf, and it is not until you get down to the West of Ireland that you suddenly come to that gigantic cliff and down it goes. It is an interesting phenomenon. Odd things happen on the edge of the continental shelf. I remember that during the war we were very mystified by strange foam lines, which we at first thought were "Snorkling" submarines; but there were too many of them. One gets odd ASDIC echoes as well.
I am not absolutely clear (perhaps I may deal with this point before coming on to the Bill) about the interpretation by the Minister of the provisions of the Convention which relate to the median line between two States. I thought the question the Minister was asked related particularly to Norway. As the Minister knows, the continental shelf comes to an abrupt end about 50 miles, or a little more, off the coast of Norway, and there is then a great deep. I should have thought that the British area extended right up to that deep, and that Norway, which none the less seems to have signed the Convention, would virtually have no continental shelf at all. It is rather important, when we are debating a matter which involves great national interests and an extraordinary departure from previous law (and it is fortunate that we are also to have the noble and learned Lord, Lord McNair, to comment on some of the international aspects) to know what we are talking about.
As I understand it, also, this Convention has not yet been brought into effect. We are a laggard, and this Bill is laggardly in coming in. The 21 other 917 countries have already ratified, and ratification by us, the 22nd, will in fact make it possible for the Convention to come into force. But there are certain countries that certainly did not sign the Convention at the time. Belgium did not sign; and, more important, France did not sign. It would be helpful to know whether France has yet signed, because there is also a median line running down the Channel. If France has signed and has ratified, the position is clear. As I understand it, until they have done so, they will still be able to dispute our claims in areas which the noble Lord said were so clearly ours. They are clearly ours so far as those other countries who have ratified the Convention are concerned, but I am doubtful whether they will be ours so far as France and Belgium (who signed the High Seas Convention, but did not at the time sign the Continental Shelf Convention) are concerned.
It would be helpful if, before the Committee stage comes along, we could have a map, preferably in colour, because it is much easier to see the lines. Also, when the Minister comes to reply, perhaps he could answer this question about the Norwegian deep, and whether or not the median line runs where the continental shelf, within the definition of the Convention, is not adjacent to one of the countries. I would argue that the North Sea continental shelf in relation to the question is not adjacent to Norway and will, in fact, be decided by other countries that do not have this deep. However, I may be wrong, and it will be interesting to have an answer on this point.
There is no doubt that there is an urgency for this legislation. Exploration for oil and gas in the North Sea is now going on fast. We are entering the third year, I believe, of a major British investigation, and it is obviously important that the position should be clarified. This Bill, of course, also gives effect to certain provisions of the Convention on the High Seas. I know that it has sometimes been the practice in the past, when ratifying certain Conventions, or when passing Bills which subsequently make it possible for the Government to ratify, to attach the relevant Conventions as an Appendix to the Bill. I should have thought that, in so far as the Bill also gives effect 918 to the Convention on the Continental Shelf, the long Title of the Bill should have included some reference to it.
If I may (and I apologise for it), I should like to make a certain number of points which are, in a sense, Committee points, but which it may be helpful to get out of the way to-day. Or, if we cannot deal with them to-day, the Minister can consider them before we come to the Committee stage. If I could now look at some of the clauses in the Bill, it is clear that the rights in the case of coal will be exercised by the Coal Board. All other rights will be vested in Her Majesty; and this is, of course, part of the public domain, if that is the right term. Certainly no private property rights exist. Presumably, both under the Petroleum Production Act, 1934, and under this Bill, it will be possible for the Government, in licensing the oil companies, to make proper provision for the payment of royalties. After all, we pay pretty heavy royalties—and rightly so—to certain other countries whose territory we exploit. This is territory which belongs to no one, and I take it, therefore, that suitable arrangements will be made.
At the same time, one has to recognise that it will be a most prodigiously expensive undertaking, and that the building of merely a drilling rig, let alone the equipment, if the oil well comes into production, will be prodigiously expensive. I think it is technically possible. I believe that wells have been put down at depths comparable to those which might be put down in the areas at present under investigation. We should therefore like to know how the Government intend to interpret the application of the Petroleum Production Act, 1934, in this wholly different context.
I take it that a number of Government Departments will be involved in administering this Bill. In some cases, it may be the Minister of Power, but in this question of the rights that belong to the Crown Commissioners and the living organisms to which he referred (this, I take it, could apply to under-sea farming of some kind; and although this may appear very futuristic, it is not so futuristic as all that), I presume that the Minister of Agriculture, Fisheries and Food also will be involved, and I hope he does not use some of his noxious 919 toxic chemicals under the sea. But perhaps that is less likely. I should like to know what these animals are—these organisms that are either mobile or under the seabed; or unable to move except in constant physical contact with the seabed or the subsoil—it sounds rather like a description of an outgoing Government. But clearly since they are included something must be in the Government's mind (I take it that we are not referring to lobsters because they swim—at least I think they do) in making provision for this in drafting the Bill giving effect to the Convention.
I should like to turn to Clause 2, the power of the Minister to designate areas which are closed to shipping. This again gives effect to the provisions in the Convention on the Continental Shelf. It is, of course, a most radical departure from previous practice with regard to the high seas, and it would be interesting to know whether the Government can throw any more light on how they propose to give effect to this. I suppose it will be published in a Notice to Mariners, and that in due course these installations, which do not rank as islands, will appear on the charts and maps. How big is the area? Is it, in fact, the safety zone of 500 metres mentioned in Article 5? If so, why have the Government, in their present non-European mood, preferred to use the term "500 yards"? I admit that 500 yards is less than 500 metres; I reckon it is about 40 yards less. Is there not something to be said for having the word "metres" in the Bill, since it is used in the Convention; or is there some deep significance in referring to yards rather than metres? We should like an explanation of this. It may even cause anxiety, I would say, to foreign shipping, who may not have a conversion table and may feel that yards are longer than metres. I do not press this point seriously, but it would be interesting to know why there is this small difference.
When we come to Clause 3, which the Minister says is to ensure that the criminal law and the civil law apply, I must say that I am not quite clear about the civil law. I hope it may be that the noble Lord, Lord McNair, or the Minister himself will be able to answer this question. I should have thought that any criminal act could 920 be taken care of, and there is provision elsewhere in the Bill for the application of certain measures, such as the National Insurance (Industrial Injuries) Act and other National Insurance Acts, to people working at these particular installations. But what about all the other legislation which governs the safety of British citizens?—the Factories Act, the Young Persons Acts and provisions with regard to health. Are they to be applied? If so, how are they to be applied? Ought there not to be a general enabling power? There may be a simple answer, but I have asked a distinguished international lawyer on this point and he thought I had better ask the Minister as he was not quite sure of it himself.
There are, of course, provisions for inspections. It may be that the 1934 Petroleum Production Act, which has certain provisions for inspection—at least, if I recall aright, it does—covers this. Are those to be applied? Because safety considerations will be important. We have a huge area of legislation which operates well in this country, and the Government have churned out quite a lot lately, some of which is very valuable, and we should like to know whether this will be applied. These installations may in time become very big, and if there are big oil fields one will almost get a town of oil wells. Whether people will be living each on their separate little island I do not know. The safety provisions and controls with regard to shipping will presumably not apply to these.
Clause 5, which requires the particular owner of the pipeline to prevent any escape of oil, is a little worrying. It seems to me that an escape of oil from an oil well at sea is potentially very much more serious than it is on land, and I am wondering about the part of this clause which says that in the case of an escape it shall be a defencethat he took all reasonable care to prevent it and that as soon as practicable after it was discovered all reasonable steps were taken for stopping or reducing it.Blow-outs are fairly unusual these days but they do occasionally happen, and it would be particularly serious if one occurred at sea. I am wondering whether this particular clause is strong enough. It would be intolerable if oil, which is already spoiling so much of life around 921 our seashore, were to be added to by the product of a new oil well.
There is one other question I should like to ask. Is it possible, and is it proposed either publicly or secretly, to use these installations for defensive purposes? I suspect that they will look something like some of those strange forts we see in the Solent and elsewhere. Are there likely to be radar installations on them? It may be that this is not an appropriate subject to pursue now but one can see that they are liable to become very interesting and unusual places. Will it be possible, therefore, for them to be so controlled that people will not be able to visit them on sightseeing holidays? Is it possible also that such installations might be set up for any purposes other than those already visualised? I take it that the Government will have power to control the building of a casino outside the three-mile limit but within the controlled areas. But that is only a very small point.
This is really a significant piece of legislation. It is a difficult one to understand, and I think it is important to stress that our sovereignty, if that is the right word, as such applies only at the seabed level—I believe I am right—and even though we have an oil-well coming out on the surface, this is in a different category and the general provisions for the high seas still apply.
With those certain hesitations and one or two criticisms, we are inclined to welcome the Bill. It is clearly a Bill that will need as quick passage as possible. I fully accept that it is urgent. But, equally, it is a Bill which raises much wider issues than at first appear, and, therefore, we ought to have a very careful look at the various provisions.