Faculty fears conflict of interest in new oil and gas regulator
A planned new Aberdeen-based regulator of the UK’s oil and gas reserves could face conflicts of interest in its work, according to the Faculty of Advocates.
In its response to a call for evidence on proposals by the Department of Energy & Climate Change to set up the Oil & Gas Authority (OGA), the Faculty says that "robust" measures will be needed to eliminate the risk of conflict.
Faculty believes that, given the broad remit envisaged for the OGA, there is scope for the OGA itself to be a party to disputes while at the same time having a dispute resolution function. It could be in dispute with A over a matter, and resolving a dispute between A and B over another matter.
Also, the proposals include a general power for the OGA to attend all industry meetings which could impact on the strategy, MER UK (Maximising Economic Recovery UK). In this respect the Faculty does not oppose such a power, but raises a concern over the need for "robust and effective management of the potential for conflicts of interest to arise".
It states: “The issue arises where a meeting relates to matters which may subsequently engage OGA’s dispute resolution function, and a fortiori where a meeting relates to matters which currently engage OGA’s dispute resolution function. It seems to us that it would very seldom, if ever, be appropriate for a dispute resolver to have the right to have 'private' access to the deliberations of the parties to a dispute which it is resolving or may be called upon to resolve. Indeed we wonder how such a power could properly be exercised in practice.
“It seems to us that the power proposed may give rise to conflicts of interest (or at least the potential for conflicts of interest), may breach the principles of natural justice and may have human rights implications.”
The Faculty added that there were potentially real difficulties “which must be considered in articulating not only the dispute resolution arrangements but also the powers of the OGA.”