Highlights
On August 15, 2012, the Bureau of Safety and Environmental Enforcement ("BSEE") took two significant actions that further entrench the agency's claims to extend its enforcement jurisdiction over previously unregulated service companies operating in federal waters.
- First, BSEE issued an Interim Policy Statement announcing an internal policy that it would hold service companies jointly and severally liable with the lease operator for violations when those companies perform any activity that is subject to the BSEE's regulations.
- The Interim Policy Statement sets forth standards and procedures for applying the enforcement policy, but the standards are essentially subjective and discretionary, not objective.
- Second, BSEE issued a Final Rule that finalized previously issued reforms to strengthen safety requirements for offshore equipment, systems and practices in light of the Macondo oil spill. In its Final Rule, BSEE also reiterated its claim to extend its enforcement jurisdiction to service companies operating in federal waters, thus significantly entrenching its claim.
- Unless the new policy is overturned, service companies operating in OCS waters should consider the impact that being subject to regulatory enforcement by BSEE will have on all facets of operations, including securities filings, insurance coverage, compliance plans and financing covenants
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