Country
Assessment
Article 51 on fines in the Regulation on Petroleum Operations, 2009 , includes provisions on applicable monetary fines. If a monetary correction is needed, the penalty must be assessed under the terms of the Tax Correction Unit in force.
There are civil penalties for noncompliance with the requirements of the OPGGS Act and the associated regulations. For example, a titleholder undertaking an activity without an environment plan is fined 80 penalty units. Similarly, 30- to 80-penalty-unit fines are imposed for not complying with the environment plan, not reporting incidents, not storing records per regulations, and other violations of the OPGGS (Environment) Regulations, 2009 . Violations of the field development plan provisions of the OPGGS (Resource Management and Administration) Regulations, 2011, can attract a 60- to 80-penalty-unit fine. These penalties are enforceable under Part 4 of the Regulator Powers (Standard Provisions) Act, 2014. A penalty unit is currently set at $A 275 in the latest version of the Crimes Act, 1914. (Please note that Australia’s jurisdictions have assigned penalty units at different amounts.) In Queensland, according to the Petroleum and Gas (Production and Safety) Act, 2004 , operators are fined 500 penalty units for noncompliance with measurement obligations, including the measurement of any flared or vented petroleum (Section 801). In chapter 8, specific penalties ranging from 100 to 500 penalty units are assigned for noncompliance with various measurement requirements and regulatory notices. The penalty unit is set based on the Penalties and Sentences Act, 1992, and was increased to $A 154.80 as of July 2023. In Western Australia, the Petroleum and Geothermal Energy Resources (Environment) Regulations, 2012 , specifies a penalty of $A 10,000 for noncompliance with the environmental plan requirements (Part 2) and $A 5,500 for noncompliance with monitoring and reporting requirements (Regulation 34). In New South Wales, penalties can be imposed under various legislation governing the petroleum sector. These are referenced in Schedule 2A of the POEO Act . According to Section 78A of the Petroleum (Onshore) Act, 1991 , breach of environmental requirements can attract a 10,000-penalty-unit fine for corporations and a 2,000-penalty-unit fine for natural persons, with a 10 percent additional penalty for each day of continuing offense. In the latest edition of New South Wales’ Crimes (Sentencing Procedure) Act, 1999, the penalty unit is $A 110. In Victoria, noncompliance with various requirements of the petroleum production development plan attracts a 240-penalty-unit fine, according to Division 6 of the Petroleum Act, 1998 . As of July 2023, the penalty unit is $A 192.31. In South Australia, Part 11 of the Environment Protection Act, 1993 , allows the Environment Protection Authority to impose civil penalties. Under Part 12 (Environment Protection) of the Petroleum and Geothermal Energy Act, 2000 , a penalty of $A 120,000 is imposed for noncompliance with environmental requirements.
According to the ANP’s interpretation of Article 2 of Law 9847/1999 and subsequent decisions, infractions involving flaring or venting are subject to fines or nonmonetary sanctions. Article 3 states that the monetary penalty ranges from R$5,000 to R$2,000,000 (about US$960–US$3,800 as of September 2021). The ANP determines the monetary penalty for flaring or venting according to the seriousness of the infringement and the operator’s previous infraction history under ANP Ordinance 397/2018. Article 13 provides for the right to appeal. Decree 2953/1999 sets forth the administrative procedure for applying penalties for infractions committed in activities related to the oil industry and the national supply of fuels. Administrative sanctions may take the form of fines and nonmonetary sanctions (see the next section). According to Article 26, the fine should be paid within 30 days of the date of acknowledging the infraction. Failure to pay the fine within the specified period will subject the offender to a default interest rate of 1 percent and a late payment penalty of 2 percent a month or a fraction thereof. Section 3 of Resolution 806/2020 states that the operator is subject to a sanction each month the volume of gas flared or vented exceeds the level authorized in the most recently approved PAP. Articles 1 and 2 of Resolution 774/2019 allow operators to make the penalty payment in up to 60 monthly installments, in accordance with the conditions to be negotiated with the ANP. Data on fines imposed by the ANP during 2011–15 are available for download on the ANP website; information on fines for flaring and venting after 2015 has not been posted. During 2011–15, 177 fines were imposed, of which 94 were for flaring gas in volumes higher than authorized. These fines totaled R$121,700,000 (about US$23 million). The fines applied from 2016 onward have been published, but there is no specific information on flaring and venting during that period. In October 2014, the ANP fined Petrobras a total of R$6 million (about US$1.1 million as of September 2021) for flaring violations committed in the production of the onshore field of Fazenda Santa Luzia in the north of the Espirito Santo state. According to the ANP, Petrobras flared associated gas in April, May, September, October, and November 2010 in an amount higher than provided for in the Annual Production Plan. The company asked for the suspension of fines. On October 15, 2020, the courts upheld the fine imposed by the ANP. In another action, Petrobras requested the suspension of the collection of fines, totaling about R$16 million, for irregularities found in the measurement system of the Zephir I Platform in the Santos Basin. The irregularities were detected during an inspection by the ANP in March 2012.
AER Manual 013: Compliance and Enforcement Program, 2020 , states that flaring, incinerating, and venting audits are required to ensure that flare systems are designed and operated appropriately and in accordance with approved conditions. The manual outlines the various tools available to the AER, including fees and monetary penalties. A schedule of fees can be found in Alberta Regulation 151/71: Oil and Gas Conservation Rules, 1971 . According to 244/18: Alberta Methane Emission Reductions Regulation, 2018 , an operator that violates venting limits, reporting requirements, or any other obligations imposed by the AER (mainly via Directive 060; see footnote 1) faces a maximum fine of Can$50,000 (about US$39,500 as of September 2021) for an individual and Can$500,000 (about US$395,000 as of September 2021) for a corporation. The Alberta Administrative Penalty Regulation, 2003, is an implementing regulation of the Environmental Protection and Enhancement Act, 2000 . The maximum administrative penalty that environmental regulators may impose is Can$5,000 (about US$3,950 as of September 2021) for each contravention or each day or part of a day on which the contravention occurs and continues.
The Administrative Penalties Regulation, 2011 , establishes that a person who contravenes various responsibilities related to flaring and venting (Sections 42–44 of the Drilling and Production Regulation, 2010; see footnote 19) is subject to fines ranging from Can$20,000 (about US$16,000 as of September 2021) to Can$250,000 (about US$200,000 as of September 2021).
Section 122 of the Oil and Gas Conservation Regulations, 2012 , provides that the minister may issue administrative penalties if an operator fails to comply with the regulations, including flaring and venting limits, and requirements outlined in Section 51. The operator may apply to the minister within 45 days of receipt of invoice. Failure to submit the required information can be subject to a penalty of Can$100 per day or up to Can$1,000 a month, depending on the violation. Submission of false declaration is penalized up to Can$250,000 per incident. Failure to comply with the minister’s orders is subject to a penalty of Can$5,000 per day, up to a maximum of Can$200,000. Section 13 of Directive PNG076: Enhanced Production Audit Program, 2016 , states that if a declaration is not submitted via Petrinex, the Petrinex error EPP001 will trigger a penalty in accordance with the Oil and Gas Conservation Regulations, 2012. The Oil and Gas Emissions Management Regulations, 2019 , set out the penalties for excess emissions. Section 10 states that the minister may impose a penalty on a company whose oil facilities produce, in any year, combined emissions that exceed the limit determined in the regulations calculated using the formula AP = EE ´ D, where AP is the administrative penalty to be paid; EE is the amount by which the combined emissions exceed the combined emissions limit, expressed in tCO2e and calculated for the year in accordance with Section 9; and D is the dollar amount per tonne of excess emissions set out in Table 3 of the regulations’ Appendix. The penalty per tCO2e increases every year until 2024, when the unit penalty is fixed in nominal terms at Can$50. If a correction results in a change in the combined emissions for a licensee on December 31 of the year for which the combined emissions are calculated, the licensee is required to pay, within the period specified by the minister, a penalty on any amount by which the combined emissions at the oil facilities exceed the limit on combined emissions, calculated in accordance with Section 9, plus interest, calculated, at a rate of 10 percent a year. This payment is in addition to any penalty already paid for that year.
MME Resolution 181495/2009 establishes fines specific to gas flaring and venting. According to Article 52, operators must pay royalties on flared, vented, or otherwise wasted gas unless an exception was obtained from the ANH. Article 64 imposes a fine of up to US$5,000 on any violation, in accordance with Article 67 of the Petroleum Code . Article 82 in MME Resolution 40066/2022 confirms that the sanctions for infringement of its rules are those in Article 21 of the Petroleum Code and Article 67 of Decree 1056/1953 . Article 26 of Law 1753/2015 states that the MME may impose fines of 2,000–100,000 times the legal monthly minimum wage for each breach of the obligations established in the Petroleum Code. The ANH may impose fines in case of a breach of any of the contracts it oversees, up to the value of the unfulfilled activity if the obligations have associated monetary values. If they do not, the ANH can impose a fine of up to US$50,000 for the first breach. Each subsequent breach will result in a fine up to the smaller of twice the amount initially imposed or the value of the contract’s guarantee.
According to Article 4 of the 2021 proposal , the competent authority (or authorities) is (are) responsible for the enforcement of the regulation (see section 6 of this case study). Article 30, Paragraph 1, delegates to the EU Member States the authority to set the rules on the penalties applicable to infringements and to take all required measures to implement the penalties, “including the polluter pays principle.” Article 30, Paragraph 2, requires penalties to be effective, proportionate, and dissuasive. Article 30, Paragraph 3, states that the key areas of infringement subject to penalties should be the failure of operators to carry out LDAR programs, assist the authorities, and submit emissions and LDAR progress reports. Venting outside the preauthorized environment, including the related reporting obligations, and routine flaring also constitutes an infringement subject to penalties (see sections 9 and 10 of this case study). EP amendments add similar requirements for importers.
Law No. 002/2019 sets a series of sanctions, including penalties for contractors that fail to submit required studies and reports for their upstream activities, gas-flaring violations, and noncompliance with regard to flaring-reduction plans or flaring thresholds. Article 265 doubles the penalties in the event of a repeated offense. Article 266 provides that future regulations will determine the methods for the payment of penalties. Article 269 of section 2 imposes a penalty of CFAF 50 million–CFAF 2.5 billion (about US$89,000–US$4.5 million as of September 2021) on any contractor that violates the prohibition on routine gas flaring. The same penalty applies if the contractor does not execute the flaring reduction plan or comply with the flaring thresholds set by the regulation. Article 278 imposes a penalty of CFAF 10–CFAF 100 million (about US$18,000–US$180,000 as of September 2021) on any contractor that deters inspections by the DGH. Article 280 imposes a penalty of CFAF 1–CFAF 2.5 billion (about US$1.8 million–US$4.5 million as of September 2021) on any contractor that violates the provisions relating to measuring or metering oil and gas, including system calibration.
Both hydrocarbon and environmental regulators can impose penalties, the former for violating a flaring permit and the latter for violating an emissions permit. Penalties for violation of emission permits are more common. Article 175 of the Environmental Code, 2021 , authorizes MEGNR to assign daily monetary penalties. Interest is charged if payments are delayed or the offending party does not bring the operation into compliance within the specified time. According to Article 356 of the Code on Administrative Infractions, 2014, failure to perform the environmental requirements during subsoil use entails fines, the level of which depends on the size and income of the operator. In addition, environmental taxes are paid on all emissions, even when emissions are below the limits granted in permits. The penalties and taxes for stationary sources are paid to the local government at the location of the emission source, according to Article 577 of the Tax Code, 2017. Article 133 of the Law on Subsoil and Subsoil Use, 2017 , authorizes the Ministry of Energy to penalize violators of subsoil use contract terms unless operators bring the operation into compliance within the designated period (up to six months depending on the violation). Subsoil use contracts capture approved project documents such as field development plans that must have gas utilization scope and flares. Paying penalties does not negate the obligation to bring the operation into compliance. The operator has the right to ask for an extension of the specified period for compliance, which must be approved by the Ministry of Energy after an expert review. According to Article 356 of the Code on Administrative Infractions, 2014, flaring without a permit, except when allowed by law, or violation of permit conditions “shall entail a fine on subjects of small entrepreneurship in amount of 250, on subjects of medium entrepreneurship in the amount of 500, on subjects of large entrepreneurship in the amount of 2,000 monthly calculation indices.” Article 356 also lists penalties for hydrocarbon extraction without using and processing raw gas, violations of requirements in approved project documents, and environmental requirements. No evidence of penalties by the Ministry of Energy under these articles for violation of flare permits could be found.