18th January

Irish citizens finally have enforceable rights under environmental directive

Citizens finally have access to information about the environment. Photo Gillian Mills/Inshore Ireland

Citizens finally have access to information about the environment. Photo Gillian Mills/Inshore Ireland

The Aarhus Convention has entered into force in Ireland, signifying an important step forward for environmental democracy in this country.

Formally known as the Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters, Ireland signed up in 1998 but took until June 20 this year to ratify.

The Convention upholds the right of every person to have access to information about the environment; the right to participate in decision-making, and the right of access to justice in environmental matters. 

It also sets minimum standards in these areas, and by becoming a party to the Convention, Irish authorities are now legally bound to respect these standards.

 

How we got here

1971: 
Marathon Oil discovers gas off Kinsale, Co Cork. Gas was extracted under a once-off deal made in 1973 between the government and Marathon Oil. Senior civil servants argued that the deal was weighted too heavily in favour of the industry. A public outcry became an issue in the 1973 general election. As a result, Resources Protection Campaign was set up to apply further pressure.

1975: 
The Minister for Industry and Commerce, Justin Keating introduces new terms, influenced by Norway’s hugely successful creation of an indigenous oil and gas industry.

These include:

  • a 50% maximum State stake in any commercial fund
  • production royalties of 8% to 16% and
  • production bonuses on significant finds.
  • application of a standard corporation tax of 50%

Companies were required to drill at least one exploratory well within three years and to surrender 50% of the original licensed area they were granted within four years. Crucially, the State would gain a ‘carried interest’ by taking a share of the project after a discovery and thus would not have to bear the costs of exploration.

The terms envisaged the formation of a State oil company similar to Norway’s Statoil, if significant finds were made. They also ensured that the government would have full access to the exploration data, allowing it to make independent decisions about the likely success of any potential development.

When oil was discovered in Norway in the 1960s, the energy companies played down the find. However, the Norwegian State drove a tough bargain with them, taking up to 90% of the profits, established Statoil and forced the industry to share its knowledge and technical expertise with Statoil.

1977:
Fine Gael/Labour coalition loses power. Keating’s successor, Fianna Fáil’s Des O’Malley, was ideologically opposed to creating a State-owned oil company.

1979:
With the onset of the international oil crisis, O’Malley reluctantly establishes Irish National Petroleum Corporation (NPC) in response to pressure from some oil-producing countries which would only sell their oil to a State company.

The INPC was precluded from engaging in exploration or production. As a result, the Irish State did not develop expertise as the Norwegians had done. Instead, the Petroleum Affairs Division (PAD) of the Department of Industry and Commerce became the ad-hoc administrative centre for the oil and gas industry in Ireland.

1970s-1980s
Oil and gas finds in Irish waters were regarded as commercially unviable. However people in the industry knew that ‘uneconomic’ or ‘sub-economic’ fields can become economic through improvements in technology and rising energy prices.

1987& 1992
Energy Minister Ray Burke and finance minister Bertie Ahern make substantial changes to the 1975 terms. The new fiscal terms included:

  • abolition of royalty payments
  • 100% tax write-off against profits on capital expenditure for exploration, development and production extending back 25 years before the state of production
  • abolition of all other State participation in oil and gas development

 

Questions were raised by several TDs in 1987, described by Labour’s Dick Spring as ‘an act of economic treason.’ Burke defended the changes saying existing licensing terms were unattractive to the exploration companies and added he was ‘gravely concerned’ that exploration might disappear from Irish waters altogether.

1992
Finance minister Bertie Ahern introduces new terms within the 1992 Finance Act, cutting oil industry corporation tax from 50% to 25%. The terms allowed oil and gas to be delivered at ‘market prices’ unlike the 1975 terms which allowed prior approval by the Minster of all contracts for the sale of gas, and gave the Minister powers to require delivery of petroleum to specified purchasers to satisfy national requirements.

The 1975 terms also gave the Minister control, during emergencies, over supplies of petroleum. These safeguards were removed with the onset of the 1992 terms. This means that the State will have to pay full price for all oil and gas from its own waters, and will have no control over supply, even in emergencies.

Moreover the new licences allow companies to hold onto leases on their licensed terms for up to 30 years in the event of a commercial find. Companies are entitled to rely on their own data and their own plans in assessing commerciality, and the Minister must grant the lease if requested.

With the discovery of the Corrib gas field by Enterprise Oil, the industry intensified its lobbying. Enterprise bought a table at the Fianna Fail tent at the Galway Races and made large contributions to that party.

Fianna Fáil Minister for Marine and Natural Resources, Michael Woods, supported Enterprise’s decision not to hire Irish workers (who were unionised) on its Petrolia rig, overturning an earlier minister’s insistence that Enterprise hire Irish workers or lose tax breaks.

In this way, the energy companies gained control over exploration data, petroleum pricing and supply, and even whether to sell the oil and gas in Ireland or to export it.

Ireland’s oil and gas reserves have been effectively ceded to energy corporations into the distant future – or until such time as the Irish people reclaim their property and renegotiate the terms, as has been done in many other countries.

Liquid Assets – Ireland's oil and gas resources and how they could be managed for the people’s benefit. www.shelltosea.com/booklet

Rights upheld in law
“In a democracy, people have the right to know and should have easy access to information,” commented Michael Ewing, Coordinator of the Environmental Pillar.

“You might be looking for information about a development activity in your area, or trying to participate in a planning decision-making process, or simply trying to find out if the river you swim in every summer is polluted. The great news is that your right to access relevant information and to participate is now upheld in law.

He added that public participation helps make decision-makers more accountable and environmental decision-making more transparent.

“In the past, this was often denied or avoided in the interest of economic, political and sometimes social policies. Becoming a party to the Convention is a very important step in removing that veil of secrecy,” he added.

“I congratulate the government for taking the necessary steps to ratify. Now we must raise public awareness and train staff in public authorities for the Convention to be effectively implemented,” he stressed.

Exploitation of fossil fuels
Meanwhile within days of this milestone, a report was launched in Dublin on Ireland’s oil and gas resources and how they could be managed for the people’s benefit.

Liquid Assets aims to provide an alternative source of “reliable, referenced information”against a backdrop of “myths and misinformation mostly created by the oil industry and successive governments” remarked Criostóir MacCuric of the Shell to Sea campaign. 

Invited speaker Paul Murphy MEP, referred to the report as “extremely valuable.
“Because of campaigns such as Shell to Sea, there is now relatively widespread awareness that at the very least, the terms in which Irish oil and gas were given away were indeed generous.”

He added that the report detailed in a very “backed up way” the extent of that generosity. “What is revealed is an absolute scandal,” he said.

Sharing the wealth
Dr Andy Storey, lecture in development studies and political economics in UCD, said the report’s principle contribution was it explains how the wealth of this country “could be and should be shared”.

“It begs the question how can global justice best be advanced, and how can we balance national claims against global responsibilities?”

Regardless of how that is answered, he said the report makes the extremely valuable point that leaving the resource in the hands of private corporations “gets us nowhere”.

“We need to assume public ownership of those resources and then decide how best to make use of them.”

Study findings
The report challenges the argument that Ireland’s terms can be changed later, once any potential has been proven.

Unfortunately the government is rapidly awarding licences for the remaining blocks that are likely to contain commercial quantities of oil and gas. As the map shows, [see page 9] companies are accumulating scores of prospects, waiting for international commodity prices to increase and the technology to extract to improve.’

The authors contend that across the world, governments are redrafting their exploration licensing terms  ‘and in some cases are revoking or renegotiating existing contracts with oil companies on the basis that these deals represented a corrupt transfer of sovereign assets to private companies.

They add that Ireland is ‘out of step with these global developments’ but that it is not too late to take action.

Licences already offered can be changed, but only with considerable political will and some risk. In reality, future Irish governments will be extremely reluctant to do so. Unless the terms are changed now, all or most of the areas likely to contain oil and gas will have been licensed exclusively to companies for decades to come.’

 

 

 

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