Analysis of the Legal Framework for the Management of Decommissioning Fund in Oil and Gas Industry for Effective Environmental Protection in South Sudan

Abstract

In the business of exploration and exploitation of oil and gas, the environment is inevitably negatively impacted, which calls for measures to minimise the negative impacts of environmental degradation on society. Decommissioning is a vital aspect of a project cycle for the protection of the environment. It involves the removal of industrial installations and structures, including the restoration of project sites, filling of holes dug at the project sites, and treatment of polluted river sites back to their original form before exploration and exploitation. This is usually a capital-intensive activity which oil companies may tend to circumvent, thus necessitating laid down legal rules for application of earmarked funds to ensure proper implementation. In South Sudan, despite provisions under the Petroleum Act, 2012, for setting aside a Decommissioning Fund by oil companies for the purpose of carrying out decommissioning to protect the environment, this has remained largely notional, leaving an environment pockmarked by relics of oil production. This calls for an analysis of the effectiveness of the decommissioning fund legal and regulatory frameworks in South Sudan for an enhanced environmental protection regime.  Applying a doctrinal method of research, this study analysed the key statutory rules relating to the management of decommissioning funds in South Sudan as well as the challenges associated with decommissioning as an element of environmental protection. The study further applied an analytical approach and the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) Outline, encompassing the systematic assembling of resource materials for doctrinal legal analysis. The study’s findings point to statutory deficiencies in that although there are legal provisions for setting up a decommissioning fund, there are no provisions for its application and management, which creates a lacuna for improper, haphazard and poor management and application of the funds. This negates the underlying aim of environmental protection in the decommissioning exercise. There is therefore a need to amend the Petroleum Act, create enabling regulations and empower regulatory bodies to ensure proper and adequate application and management of the decommissioning fund to safeguard effective environmental protection of South Sudan.

Keywords: Decommissioning, Decommissioning fund, Environmental protection, Petroleum Act.