Energy Bill (HL Bill 56)

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CHAPTER 5 Sanctions

Power to give sanction notices

37 Power of OGA to give sanction notices

(1) If the OGA considers that a person has failed to comply with a petroleum-
5related requirement imposed on the person, it may give the person a sanction
notice in respect of that failure.

(2) If the OGA considers that there has a been a failure to comply with a
petroleum-related requirement imposed jointly on two or more persons, it may
give a sanction notice in respect of that failure—

(a) 10to one only of those persons,

(b) jointly to two or more of them, or

(c) jointly to all of them,

but it may not give separate sanction notices to each of them in respect of the
failure.

(3) 15In this Chapter “petroleum-related requirement” means—

(a) a duty imposed under section 9C of the Petroleum Act 1998 to act in
accordance with the current strategy or strategies produced under
section 9A(2) of that Act for enabling the principal objective to be met,

(b) a term or condition of an offshore licence, or

(c) 20a requirement imposed on a person by or under a provision of this Act
which, by virtue of the provision, is sanctionable in accordance with
this Chapter.

(4) In this Chapter “sanction notice” means—

(a) an enforcement notice (see section 38),

(b) 25a financial penalty notice (see sections 39 to 41),

(c) a revocation notice (see section 42), or

(d) an operator removal notice (see section 43).

(5) Sanction notices, other than enforcement notices, may be given in respect of a
failure to comply with a petroleum-related requirement even if, at the time the
30notice is given, the failure to comply has already been remedied.

(6) Where the OGA gives a sanction notice to a person in respect of a particular
failure to comply with a petroleum-related requirement—

(a) it may, at the same time, give another type of sanction notice to the
person in respect of that failure to comply;

(b) 35it may give subsequent sanction notices in respect of that failure only in
accordance with section 49 (subsequent sanction notices).

(7) The OGA’s power to give sanction notices under this section is subject to
section 44 (duty of OGA to give sanction warning notices).

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Sanction notices

38 Enforcement notices

(1) This section contains provision about enforcement notices which may be given
under section 37 (failure to comply with a petroleum-related requirement).

(2) 5An enforcement notice is a notice which—

(a) specifies the petroleum-related requirement in question,

(b) gives details of the failure to comply with the requirement,

(c) informs the person or persons to whom the notice is given that the
person or persons must comply with—

(i) 10the petroleum-related requirement, and

(ii) any directions included in the notice as mentioned in subsection
(3),

before the end of the period specified in the notice.

(3) The notice may include directions as to the measures to be taken for the
15purposes of compliance with the petroleum-related requirement.

(4) Directions included in an enforcement notice as mentioned in subsection (3)
are sanctionable in accordance with this Chapter.

39 Financial penalty notices

(1) This section and sections 40 and 41 contain provision about financial penalty
20notices which may be given under section 37 (failure to comply with a
petroleum-related requirement).

(2) A financial penalty notice is notice which—

(a) specifies the petroleum-related requirement in question,

(b) gives details of the failure to comply with the requirement,

(c) 25informs the person or persons to whom the notice is given that the
person or persons must—

(i) comply with the petroleum-related requirement before the end
of a period specified in the notice (if the failure to comply with
the requirement has not already been remedied at the time the
30notice is given), and

(ii) pay the OGA a financial penalty of the amount specified in the
notice before the end of a period specified in the notice.

(3) The period specified under subsection (2)(c)(ii) must not end earlier than the
period within which an appeal may be brought in relation to the financial
35penalty notice (see section 45(2)).

40 Amount of financial penalty

(1) The financial penalty payable under a financial penalty notice in respect of a
failure to comply with a petroleum-related requirement (whether payable by
one person, or jointly by two or more persons) must not exceed £1 million.

(2) 40The OGA must—

(a) issue guidance as to the matters to which it will have regard when
determining the amount of the financial penalty to be imposed by a
financial penalty notice, and

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(b) have regard to the guidance when determining the amount of the
penalty in any particular case.

(3) The OGA may from time to time review the guidance and, if it considers
appropriate, revise it.

(4) 5Before issuing or revising guidance under this section, the OGA must consult
such persons as it considers appropriate.

(5) The OGA must publish any guidance issued under this section, and any
revision of it, in such manner as the OGA considers appropriate.

(6) The Secretary of State may by regulations amend subsection (1) to change the
10amount specified to an amount not exceeding £5 million.

41 Payment of financial penalty

(1) If a financial penalty notice is given jointly to two or more persons, those
persons are jointly and severally liable to pay the financial penalty under it.

(2) A financial penalty payable under a financial penalty notice is to be recoverable
15as a civil debt if it is not paid before the end of the period specified under
section 39(2)(c)(ii).

(3) Money received by the OGA under a financial penalty notice must be paid into
the Consolidated Fund.

42 Revocation notices

(1) 20This section contains provision about revocation notices which may be given
under section 37 (failure to comply with a petroleum-related requirement).

(2) A revocation notice may be given only to a licensee.

(3) Where two or more persons are the licensee in respect of a petroleum licence,
the revocation notice may be given jointly to some or all of those persons.

(4) 25A revocation notice is a notice which—

(a) specifies the petroleum-related requirement in question,

(b) gives details of the failure to comply with the requirement,

(c) informs the person or persons to whom the notice is given that the
petroleum licence held by that person or those persons is to be revoked
30in relation to that person, or those persons, on the date specified in the
notice (“the revocation date”).

(5) The revocation date must not be earlier than the end of the period within which
an appeal may be brought in relation to the revocation notice (see section
45(2)).

(6) 35Where a licence is revoked in relation to a person in accordance with a
revocation notice, the rights granted to the person by the licence cease on the
revocation date.

(7) The cessation of rights mentioned in subsection (6) does not affect any
obligation or liability incurred by or imposed on the person under the terms
40and conditions of the licence.

(8) Where two or more persons are the licensee in respect of a petroleum licence
and a revocation notice is given in relation to some of those persons, but not in

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relation to others (the “continuing licence holders”), the OGA must inform the
continuing licence holders that—

(a) the revocation notice has been given, and

(b) the licence will continue to have effect in respect of them following the
5revocation date.

43 Operator removal notices

(1) This section contains provision about operator removal notices which may be
given under section 37 (failure to comply with a petroleum-related
requirement).

(2) 10An operator removal notice may be given only to an operator under a
petroleum licence.

(3) An operator removal notice is a notice which—

(a) specifies the petroleum-related requirement;

(b) gives details of the failure to comply with the requirement;

(c) 15informs the operator to whom it is given that, with effect from a date
specified in the notice (“the removal date”), the licensee under whose
licence the operator operates (“the relevant licensee”) is to be required
to remove the operator (see subsection (5)).

(4) The OGA must—

(a) 20give a copy of the operator removal notice to the relevant licensee, and

(b) require the relevant licensee to remove the operator with effect from the
removal date.

(5) Where a licensee is required to remove an operator from a specified date, the
licensee must ensure that, with effect from that date, the operator does not
25exercise any function of organising or supervising any of the operations of
searching for, boring for, or getting petroleum in pursuance of the licensee’s
petroleum licence.

(6) The removal date must not be earlier than the end of the period within which
an appeal may be brought in relation to the operator removal notice (see
30section 45(2)).

(7) A requirement imposed on a licensee under subsection (4)(b) is sanctionable in
accordance with this Chapter.

(8) In this Chapter, “operator under a petroleum licence” has the same meaning as
in Part 1A of the Petroleum Act 1998 (see section 9I of that Act).

35Sanction warning notices

44 Duty of OGA to give sanction warning notices

(1) This section applies where the OGA proposes to give a sanction notice in
respect of a failure to comply with a petroleum-related requirement.

(2) The OGA must give a sanction warning notice in respect of the petroleum-
40related requirement to—

(a) the person or persons to whom it proposes to give a sanction notice,
and

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(b) where it proposes to give an operator removal notice, the relevant
licensee (see section 43(3)(c)).

(3) A sanction warning notice, in respect of a petroleum-related requirement, is a
notice which—

(a) 5specifies the petroleum-related requirement,

(b) informs the person or persons to whom it is given that the OGA
proposes to give a sanction notice in respect of a failure to comply with
the requirement,

(c) gives details of the failure to comply with the petroleum-related
10requirement,

(d) informs the person or persons to whom it is given that the person or
persons may, within the period specified in the notice (“the
representations period”), make representations to the OGA in relation
to the matters dealt with in the notice.

(4) 15The representations period is to be such period as the OGA considers
appropriate in the circumstances.

(5) Subsections (6) and (7) apply where the OGA gives a sanction warning notice
to a person or persons in respect of a petroleum-related requirement.

(6) The OGA must not give a sanction notice to the person or persons in respect of
20a failure to comply with the requirement until after the end of the
representations period specified in the sanction warning notice.

(7) Having regard to representations made during the representations period
specified in the sanction warning notice, the OGA may decide—

(a) to give the person or persons a sanction notice in respect of the failure
25to comply with the requirement detailed in the sanction warning notice
under subsection (3)(c),

(b) to give the person or persons a sanction notice in respect of a failure to
comply with the requirement which differs from the failure detailed in
the sanction warning notice under subsection (3)(c), or

(c) 30not to give the person or persons a sanction notice in respect of a failure
to comply with the requirement.

Appeals

45 Appeals in relation to sanction notices

(1) Where a sanction notice is given under this Chapter in respect of a failure to
35comply with a petroleum-related requirement, an appeal may be made—

(a) under section 46 (on the grounds that there was no such failure to
comply);

(b) under section 47 (against the sanction imposed by the notice).

(2) An appeal in relation to a sanction notice must be made before the end of the
40period of 28 days beginning with the day on which the notice was given.

(3) Where an appeal is made in relation to a sanction notice, the notice ceases to
have effect until a decision is made by the Tribunal in respect of the appeal.

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46 Appeals against finding of failure to comply

(1) This section applies where a sanction notice is given in respect of a failure to
comply with a petroleum-related requirement.

(2) An appeal may be made to the Tribunal by the person, or by any of the persons,
5to whom the notice was given, on the grounds that the person, or persons, did
not fail to comply with a petroleum-related requirement.

(3) On an appeal under this section, the Tribunal may confirm or cancel the
sanction notice.

(4) Where sanction notices are given on more than one occasion in respect of the
10same failure to comply with a petroleum-related requirement—

(a) an appeal under this section may be made only in relation to the
sanction notice, or any of the sanction notices, given on the first of those
occasions, and

(b) appeals in relation to sanction notices given on subsequent occasions in
15respect of that failure to comply may be made only under section 47
(appeals against sanction imposed).

47 Appeals against sanction imposed

(1) This section applies where a sanction notice is given in respect of a failure to
comply with a petroleum-related requirement.

(2) 20An appeal may be made to the Tribunal—

(a) by the person, or by any of the persons, to whom the notice was given,
and

(b) in the case of an operator removal notice under section 43, by the
licensee under whose licence the operator operates,

25against any of the decisions of the OGA mentioned in subsection (3) (as to the
sanction imposed by the notice) on the grounds mentioned in subsection (4).

(3) Those decisions are—

(a) in a case where an enforcement notice has been given, the decision as
to—

(i) 30the measures that are required to be taken for the purposes of
compliance with the petroleum-related requirement, or

(ii) the period for compliance with the petroleum-related
requirement;

(b) in a case where a financial penalty notice has been given, the decision—

(i) 35to impose a financial penalty, or

(ii) as to the amount of the financial penalty imposed;

(c) in a case where a revocation of licence notice has been given, the
decision to revoke the licence, whether in relation to some or all of the
persons to whom it was granted;

(d) 40in a case where an operator removal notice has been given, the decision
to require the removal of the operator.

(4) The grounds are that the decision of the OGA—

(a) was unreasonable, or

(b) was not within the powers of the OGA.

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(5) On an appeal under this section against a decision made in relation to an
enforcement notice, the Tribunal may—

(a) confirm or quash the decision, in the case of a decision as mentioned in
subsection (3)(a)(i) (remedial action), or

(b) 5confirm or vary the decision, in the case of a decision as mentioned in
subsection (3)(a)(ii) (period for compliance),

and confirm, vary or cancel the enforcement notice accordingly

(6) On an appeal under this section against a decision made in relation to a
financial penalty notice, the Tribunal may—

(a) 10confirm or quash the decision, in the case of a decision as mentioned in
subsection (3)(b)(i) (imposition of penalty), or

(b) confirm or vary the decision, in the case of a decision as mentioned in
subsection (3)(b)(ii) (amount of penalty),

and confirm, vary or cancel the financial penalty notice accordingly.

(7) 15The Tribunal must have regard to any guidance issued by the OGA under
section 40(2)(a) when deciding whether to confirm or vary a decision as to the
amount of a financial penalty under subsection (6)(b).

(8) On an appeal under this section against a decision—

(a) to revoke a licence, or

(b) 20to require the removal of an operator,

the Tribunal may confirm, vary or quash the decision, and confirm, vary or
cancel the sanction notice in question accordingly.

(9) Where a decision is quashed under subsection (5)(a), (6)(a) or (8), the Tribunal
may remit the decision to the OGA for reconsideration with such directions (if
25any) as the Tribunal considers appropriate.

Supplementary

48 Publication of details of sanctions

(1) The OGA may publish details of any sanction notice given in accordance with
this Chapter.

(2) 30But the OGA may not publish anything that, in the OGA’s opinion—

(a) is commercially sensitive,

(b) is not in the public interest to publish, or

(c) is otherwise not appropriate for publication.

(3) If, after details of a sanction notice are published by the OGA, the sanction
35notice is—

(a) cancelled on appeal, or

(b) withdrawn under section 50,

the OGA must publish details of the cancellation or withdrawal.

49 Subsequent sanction notices

(1) 40This section applies where the OGA gives a sanction notice in respect of a
particular failure to comply with a petroleum-related requirement (whether
the notice is given alone or at the same time as another type of sanction notice).

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(2) If the sanction notice given is a revocation notice or an operator removal notice,
no further sanction notices may be given in respect of the failure to comply.

(3) Subsection (4) applies if the sanction notice given is an enforcement notice or a
financial penalty notice.

(4) 5No further sanction notices may be given in respect of the failure to comply
before the end of the period specified under section 38(2)(c) or 39(2)(c)(i), as the
case may be (period for compliance with petroleum-related requirement).

50 Withdrawal of sanction notices

(1) The OGA may, at any time after giving a sanction notice, withdraw the
10sanction notice.

(2) If a sanction notice is withdrawn by the OGA—

(a) the notice ceases to have effect, and

(b) the OGA must notify the following persons of the withdrawal of the
notice—

(i) 15the person or persons to whom the notice was given,

(ii) in the case of a revocation notice, the persons who were
required to be informed of the giving of the revocation notice
under section 42(8), and

(iii) in the case of an operator removal notice, the licensee under
20whose licence the operator operates.

51 Alternative means of enforcement

(1) Where the OGA gives a sanction notice to an offshore licensee in respect of a
failure to comply with a petroleum-related requirement, the matter is to be
dealt with in accordance with this Chapter.

(2) 25Any requirement under the licensee’s licence to deal with the matter in a
certain way (including by arbitration) does not apply in respect of that failure
to comply.

Information

52 Sanctions: information powers

(1) 30This section applies for the purposes of an investigation by the OGA which—

(a) concerns whether a person has failed to comply with a petroleum-
related requirement, and

(b) is carried out for the purpose of enabling the OGA to decide whether to
give the person a sanction notice, or on what terms a sanction notice
35should be given to the person.

(2) The OGA may by notice in writing, for the purposes of that investigation,
require the person to provide specified documents or other information.

(3) A requirement under subsection (2) only applies to the extent that the
documents or information requested are—

(a) 40documents that are in the person’s possession or control, or

(b) other information that is in the person’s possession or control.

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(4) A requirement imposed by a notice under subsection (2) is sanctionable in
accordance with this Chapter.

(5) The documents or information requested—

(a) may include documents or information held in any form (including in
5electronic form);

(b) may include documents or information that may be regarded as
commercially sensitive;

(c) may not include items that are subject to legal privilege.

(6) The notice must specify—

(a) 10to whom the information is to be provided;

(b) where it is to be provided;

(c) when it is to be provided;

(d) the form and manner in which it is to be provided.

(7) In this section, “specified” in a notice, means specified, or of a description
15specified, in the notice.

53 Appeals against information requests

(1) A person to whom a notice is given under section 52 may appeal against it to
the Tribunal on the grounds that—

(a) the giving of the notice is not within the powers of the OGA, or

(b) 20the length of time given to comply with the notice is unreasonable.

(2) On an appeal under this section the Tribunal may—

(a) confirm, vary or cancel the notice, or

(b) remit the matter under appeal to the OGA for reconsideration with
such directions (if any) as the Tribunal considers appropriate.

54 25Sanctions: disclosure

The OGA may disclose any information obtained by it under this Chapter only
if—

(a) the person by whom or on whose behalf the information was provided
consents to the disclosure,

(b) 30the disclosure is required by virtue of an obligation imposed on the
OGA by or under any Act, or

(c) the disclosure is made in the exercise of the OGA’s powers under
section 48 (publication of details of sanctions).

The OGA’s procedures

55 35Procedure for enforcement decisions

(1) The OGA must determine the procedure that it proposes to follow in relation
to enforcement decisions.

(2) That procedure must be designed to secure, among other things, that an
enforcement decision is taken—

(a) 40by a person falling within subsection (3), or

(b) by two or more persons, each of whom falls within subsection (3).

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(3) A person falls within this subsection if the person was not directly involved in
establishing the evidence on which the enforcement decision is based.

(4) The OGA must issue a statement of its proposals.

(5) The statement must be published in a way appearing to the OGA to be best
5calculated to bring the statement to the attention of the public.

(6) When the OGA takes an enforcement decision, the OGA must follow its stated
procedure.

(7) If the OGA changes its procedure in a material way, it must publish a revised
statement.

(8) 10A failure of the OGA in a particular case to follow its procedure as set out in
the latest published statement does not affect the validity of an enforcement
decision taken in that case.

(9) But subsection (8) does not prevent the Tribunal from taking into account any
such failure in considering an appeal under section 46 or 47 in relation to a
15sanction notice.

(10) In this section “enforcement decision” means either of the following—

(a) a decision to give a sanction notice in respect of a failure to comply with
a petroleum-related requirement;

(b) a decision as to the details of the sanction to be imposed by the notice.

20Interpretation

56 Sanctions: interpretation

In this Chapter—

  • “operator under a petroleum licence” has the meaning given in section
    43(8);

  • 25“petroleum-related requirement” has the meaning given in section 37(3);

  • “sanction notice” has the meaning given in section 37(4).

Part 3 Fees

57 Powers to charge fees

(1) 30In Part 4A of the Energy Act 2008 (works detrimental to navigation: oil, gas,
carbon dioxide and pipelines), before section 82P insert—

82OA Fees

(1) The Secretary of State may charge fees in connection with carrying out
functions under this Part.

(2) 35The fees are to be determined by or in accordance with regulations
made by the Secretary of State.

(3) The regulations may authorise the fees to be determined by or in
accordance with a scheme made by the Secretary of State.”