INFORMATION DOCUMENT ON THE APPLICATION OF SECTION 28 OF THE PETROLEUM RESOURCES ACT (ESTABLISHMENT OF MONITORING COMMITTEES)

Transcription

1 INFORMATION DOCUMENT ON THE APPLICATION OF SECTION 28 OF THE PETROLEUM RESOURCES ACT (ESTABLISHMENT OF MONITORING COMMITTEES) INFORMATION DOCUMENT ON OBLIGATIONS UNDER THE: PETROLEUM RESOURCES ACT REGULATION RESPECTING PETROLEUM EXPLORATION, PRODUCTION AND STORAGE LICENCES AND PIPELINE CONSTRUCTION OR USE AUTHORIZATION November 2018

2 Note to readers This information document is intended for information purposes only. In case of any discrepancy between this document and the current regulation, the regulation prevails. Prepared by Direction du bureau des hydrocarbures Secteur de l énergie 5700, 4 e Avenue Ouest, bureau A 422 Québec (Québec) G1H 6R1 Telephone: [comitedesuivihydrocarbure@mern.gouv.qc.ca] Distribution This publication is only available online at: mern.gouv.qc.ca/energie/hydrocarbures/mesures-transitoires Gouvernement du Québec Legal Deposit Bibliothèque et Archives nationales du Québec, 2018 ISBN (PDF)

3 Table of Contents Table of Contents... III 1. Background Introduction Objective and mandate of the monitoring committee Provisions of the Act and its regulations... 3 Time limits for establishing a monitoring committee...3 Holders of licences for adjacent territories...3 Transfer of licence...3 Legal requirements Particulars Relating to Monitoring Committees Committee composition and independence of members Information the holder must provide to committee members... 5 Documents to provide...5 Technical support for the committee MONITORING COMMITTEE OPERATIONS... 6 Website...6 Meeting frequency...7 Requests for additional information...7 Committee expenses...7 Communication plan...8 Annual report...9 Awarding of licence Transitional Provisions and Non-compliance with the Regulations Transitional provisions Non-compliance with regulations Conclusion Frequently Asked Questions APPENDIX

4 1. Background 1.1 Introduction The Petroleum Resources Act (chapter H-4.2), which was passed in December 2016 and came into force on September 20, 2018, establishes a new legal and regulatory framework for the petroleum industry in Québec. The framework is implemented by the Petroleum Resources Act (the Act ) and three regulations: Regulation respecting petroleum exploration, production and storage licences and pipeline construction or use authorization (the Regulation ) Regulation respecting petroleum exploration, production and storage on land Regulation respecting petroleum exploration, production and storage in a body of water. In addition to this framework, the Ministère de l énergie et des Ressources ( MERN ) has produced in collaboration with other departments and organizations a series of information documents and guides on the following subjects 1 : 1) Tendering Process Application Guide 2) Admissible Work Application Guide 3) Information Document on the Application of Section 28 of the Petroleum Resources Act (Establishment of Monitoring Committees) 4) Petroleum Production and Storage Project Application Guide 5) Pipeline Construction or Use Project Application Guide 6) Technical Environmental Assessment Preparation Guide 7) Guide on obligations to property owners or tenants, local municipalities and regional county municipalities. This information document, Information Document on the Application of Section 28 of the Petroleum Resources Act (Establishment of Monitoring Committees), is limited to the obligations of petroleum exploration, production or storage licence holders to establish and ensure the proper functioning of a monitoring committee. Note that this document will be integrated into a departmental guide on monitoring committees, which will be published in winter Objective and mandate of the monitoring committee The Act provides that monitoring committees must be created to foster the local community s involvement. The overall aim is to involve representatives of local communities from a project s very first steps. By doing so, licence holders will be able to take into consideration the concerns expressed by a certain number of community representatives. Neither the Act nor its regulations specify a mandate for monitoring committees. However, it is expected to be directly related to the specific objectives determined by the committee members. 1. The availability, titles and contents of the guides and information documents may evolve over time. 2

5 1.3 Provisions of the Act and its regulations TIME LIMITS FOR ESTABLISHING A MONITORING COMMITTEE The Act requires all petroleum exploration, production or storage licence holders to establish a monitoring committee for each licence it holds. This monitoring committee must be established within 30 days after the licence is awarded and must be maintained throughout the term of the licence. To that end, sections 28 and 55 of the Act provide as follows: 28. An exploration licence holder must establish a monitoring committee to foster the local community s involvement in the exploration project as a whole. The committee must be established within 30 days after the licence is awarded and must be maintained, as the case may be, throughout the term of the licence or, in the case provided for in the second paragraph of section 97, until all the work required under the permanent well or reservoir closure and site restoration plan has been completed. [ ] 55. If a monitoring committee has not already been established, the production or storage licence holder must establish one to foster the local community s involvement in the production project as a whole. Section 28 applies, with the necessary modifications. It is important to note that the Act also sets out transitional provisions. The deadline for establishing a monitoring committee is 90 days following the Act s coming into force for all holders of petroleum exploration, production or storage licences who were, on the date of the coming into force of the Act, holders of a licence to explore for petroleum, natural gas and underground reservoirs, a lease to produce petroleum and natural gas or a lease to operate an underground reservoir, as applicable, issued under the Mining Act (chapter M-13.1). Section 279 of the Act sets out the following obligation: 279. The holder of an exploration, production or storage licence referred to in any of sections 269 to 271 must, within 90 days after September 20, 2018, establish the monitoring committee required under section 28. In other words, since the Act came into force on September 20, 2018, the deadline for establishing a monitoring committee is December 19, Holders of licences for adjacent territories While holders are required to establish a monitoring committee for each licence, they have the option of establishing a single committee if they hold licences for adjacent territories, for up to five licences. To that end, section 16 of the Regulation reads as follows: 16. The holder of a licence who is awarded another licence is not required to establish a new monitoring committee if the territories subject to the licences are adjacent. [...] The first paragraph applies up to a maximum of 5 licences. This is illustrated in Appendix 1 with fictitious sample maps that show how licences can be grouped under a single monitoring committee. Transfer of licence When a holder transfers their licence, the Regulation provides that if the new holder wishes to modify the process for appointing monitoring committee members, they must first submit it to the Minister of Energy and Natural Resources for approval: 3

6 114. A transferee who wishes to modify the process for the appointment of the members of the monitoring committee must first submit a new process to the Minister for approval. Legal requirements The Act sets out that the recruiting process for monitoring committee members is determined by the licence holder. However, this process must be approved in advance by the Minister of Energy and Natural Resources. In addition, the Act specifies minimum requirements for the composition of the monitoring committee: 28. [...] The committee members are chosen in accordance with the process determined by the licence holder and approved by the Minister. The licence holder also determines the number of members who are to sit on the committee. However, the committee must include at least one member representing the municipal sector, one member representing the economic sector, one member representing the agriculture sector, one member of the public and, if applicable, one member representing a Native community consulted by the Government with respect to the project. A majority of the committee members must be independent from the licence holder. All must be from the region in which the territory subject to the licence is situated. [...] The Act also provides that the government determines, by regulation, the particulars relating to the committee. 28. [...] The Government determines, by regulation, the particulars relating to the committee with respect to such matters as the independence of committee members, the information and documents a licence holder must provide to the committee, the nature of the costs that are reimbursed to committee members by the licence holder, the minimum number of meetings the committee must hold each year and the production of an annual report by the committee. The Government determines, in the same manner, the cases in which and the conditions on which a licence holder to whom another exploration licence is awarded is not required to establish a new monitoring committee. The Government may determine, by regulation, other particulars relating to consultations that are applicable to an exploration licence holder. The particulars for committees are defined in the Regulation, Chapter I, Division II. These obligations are summarized and explained in Section 2 of this document. 2. Particulars Relating to Monitoring Committees 2.1 Committee composition and independence of members As mentioned above, under section 28 of the Act, the licence holder establishes the monitoring committee and determines the number of committee members. The committee must include at least one member representing the municipal sector, one member representing the economic sector, one member representing the agriculture sector, one member of the public and, if applicable, one member representing a Native community. A majority of the committee members must be independent from the licence holder. All must be from the region in which the territory subject to the licence is situated. Section 7 of the Regulation sets out the cases where a member is deemed not to be independent. Section 8 of the Regulation specifies that the term of a committee member is 2 years and is renewable. Before establishing the monitoring committee and within the prescribed timeframe, the licence holder must provide to the Minister of Energy and Natural Resources the process for appointing committee members for approval. The text box below provides a link to a form the licence holder may complete and send to minister to adequately meet this obligation. This form is compatible with the latest versions of Google Chrome, Mozilla, Safari and Microsoft Edge. 4

7 Using this form, the licence holder must explain how they intend to meet the requirements of section 28 of the Act regarding the minimum number of committee members, the independence of the majority of its members and region of its members. The licence holder must provide the steps they plan to establish the monitoring committee (e.g., communication tools they will use and the public participation approaches they intend to adopt). They must explain how they plan to establish the committee and the steps they will use to do so. They must also explain how they will ensure the majority is independent and how they will confirm their region (forms, questionnaires, discussion, etc.). Once the committee has been established, the licence holder may provide the minister with the list of members, their independence from the licence holder, as applicable. The link in the text box also provides access to a second form that licence holders may use for the purposes of proving the minister with this information. FORMS AND QUESTIONS The two forms to complete on the committee members appointment process and provide the list of members are found on the page: mern.gouv.qc.ca/energie/hydrocarbures/mesures-transitoires. If you have questions about monitoring committees, write to: comitedesuivihydrocarbure@mern.gouv.qc.ca. 2.2 Information the holder must provide to committee members Documents to provide The Regulation sets out the documents the licence holder must provide to all monitoring committee members. The documents may be provided in electronic or paper form. They are listed in section 9 of the Regulation: 9. The holder must provide to the committee a copy of (1) the holder s licence and, where applicable, acts relating to its renewal, transfer, surrender, suspension, revocation or expiry; (2) in the case of an exploration licence, the summary of the work planned during the term of the licence provided to the Minister in accordance with paragraph 4 of section 33; (3) in the case of a production or storage licence, the petroleum production or storage plan; (4) the acts and documents referred to in subparagraphs 2 to 4 of the first paragraph of section 150 of the Act and any other act or document registered in the public register of real and immovable petroleum rights; (5) a summary of the safety and community involvement programs provided for in the Regulation respecting petroleum exploration, production and storage on land, made by Order in Council , dated August 17, 2018, and in the Regulation respecting petroleum exploration, production and storage in a body of water, made by Order in Council dated August 17, 2018, as applicable; (6) the notices sent under sections 29 and 57 of the Act; 5

8 (7) the notices sent under sections 63, 67, 89, 93 and, if applicable, those sent under sections 119 and 123; (8) the authorizations, permits and certificates obtained by the holder and issued by an authority other than the Minister; (9) a summary of the incident notices sent to the Minister pursuant to section 24 of the Regulation respecting hydrocarbon exploration, production and storage on land and section 26 of the Regulation respecting hydrocarbon exploration, production and storage in a body of water, and planned mitigating measures, if applicable. The points below provide details regarding the documents required by section 9 of the Regulation. The copy of the licence (mentioned in paragraph 1) means a photocopy of the exploration, production or storage licence issued by the MERN. The production or storage plan (mentioned in paragraph 3) is the plan filed with the Régie de l Énergie as part of a production or storage licence application. Details on what this plan must contain regarding the production licence are found in subparagraph 4 of the first paragraph of section 62 of the Regulation, and regarding the storage licence in subparagraph 4 of the first paragraph of section 88 of the Regulation. The contents of a safety and community involvement program (of which a summary must be produced, as specified in subparagraph 5) are set out in section 29 of the Regulation respecting hydrocarbon exploration, production and storage on land and in section 31 of the Regulation respecting hydrocarbon exploration, production and storage in a body of water, as applicable. The notices sent for the purposes of sections 29 and 57 of the Act (as referenced in subparagraph 6) are the written notices the licence holder must send to the owner or lessee, to local municipality and the regional county municipality upon obtaining an exploration, production or storage licence. Examples of the authorizations, permits and certificates obtained by the holder that are issued by an authority other than the Minister of Energy and Natural Resources (referred to in subparagraph 8) include: A timber cutting permit issued by the Ministère des Forêts, de la Faune et des Parcs An environmental authorization for work issued by the Ministère de l Environnement et de la Lutte contre les changements climatiques. Technical support for the committee Section 10 of the Regulation stipulates that the licence holder must provide the technical support needed by the committee, including external expertise where required. 2.3 MONITORING COMMITTEE OPERATIONS Website Section 10 of the Regulation provides that the holder must put at the disposal of the monitoring committee a website reserved for committee activities. The website may also be a reserved section in the licence holder s existing website. At a minimum, this dedicated website must present the: project that is the subject of the licence minutes of the committee meetings annual report of the committee s activities and expenses, based on the holder s fiscal year. 6

9 Meeting frequency Section 11 of the Regulation stipulates that the committee must hold at least one meeting a year. The committee may choose to meet more often, based on project activities and issues. The monitoring committee must produce minutes of each of its meetings. These minutes must be sent to the holder, who will in turn publish them on the committee s website. Section 11 of the Regulation reads provides that: 11. The committee must meet at least once a year. Not later than 15 days after each meeting, the committee sends a report of the meeting to the holder. The holder publishes the report on the website within 15 working days following its receipt. Requests for additional information Section 12 of the Regulation specifies that: 12. Every request for information or documents by the committee to the holder must be made in writing and must concern data needed by the committee to fulfill its mandate. Within 15 days following the receipt of the request, the holder must provide the information and documents or give reasons for refusal to do so. Committee expenses Section 13 of the Regulation makes the following provisions: 13. All expenses related to the operation of the committee are assumed by the holder. At the request of the committee and on presentation of vouchers, the holder reimburses the travel and accommodation expenses of the committee members. Hence, the holder must pay the expenses related to implementing and maintaining the dedicated website. It must also reimburse travel and accommodation expenses for committee members for the purposes of attending committee meetings. The expenses must be justified, needed, incurred and reasonable. MERN considers that the guidelines for reasonable expenses should be like those set out by the Conseil du trésor du Québec for travel by civil servants, which stem from the Directive sur les frais remboursables lors d un déplacement et autres frais inhérents [directive on reimbursable travel and other associated expenses; in French only] 2. The April 3, 2018 version 3 of the directive specifies the following: To be reimbursable, travel expenses must be needed, reasonable and incurred. Supporting documents appropriate to the circumstances of the travel must be provided. Travel costs. The use of public transportation is favoured and fully reimbursed. The use of a personal motor vehicle for travel needs is reimbursed at a rate of $0.440/km. If applicable, parking costs incurred during the travel are reimbursed. Meal costs. For every complete day of travel, a fixed allowance of $46.25, including tips and taxes, is reimbursed. If the travel involves at least three consecutive meals, meal costs incurred are reimbursed, upon presentation of one or more appropriate supporting documents, up to the following maximum amounts, including tips and taxes: 2. [ 3. Note that this directive may change and that amounts may be indexed annually. 7

10 a) Breakfast: $10.40 b) Lunch: $14.30 c) Dinner: $21.55 Accommodation costs. Accommodation costs for a hotel or other establishment, such as an outfitter, are reimbursed, up to the maximum amounts shown in the table below. These maximum amounts do not include the goods and services tax (GST), Québec Sales Tax (QST) or lodging tax, which, if applied, must be reimbursed separately. Low season (November 1 to May 31) High season (June 1 to October 31) Hotel establishments on the territory of the Ville de Montréal Hotel establishments on the territory of the Ville de Québec Hotel establishments in the cities of Laval, Gatineau, Longueuil, Lac- Beauport and Lac-Delage Hotel establishments elsewhere in Québec $126 $138 $106 $106 $102 $110 $83 $87 Any other establishment $79 $79 Operating expenses may also include hiring a facilitator, coordinator or secretary, as well as material and logistics costs associated with holding the committee meetings. Communication plan Section 29 of the Regulation respecting hydrocarbon exploration, production and storage on land and section 31 of the Regulation respecting hydrocarbon exploration, production and storage in a body of water, provide that the holder must prepare a safety and community involvement program. One element of this program is a plan for communication with the local communities, which must be revised by the monitoring committee. Section 14 of the Regulation reiterates this obligation: 14. The committee must in particular revise the holder s plan for communication with local communities. A communication plan is generally a document that sets out how the holder intends to: inform the community of their project and its relevance, past and planned work, and the impact they will have distribute and make information accessible, and determine methods and tools they will use to do so raise public awareness about the particular aspects of the project. A communication plan is therefore a tool that can be simple to produce and will structure information distribution and dialogue with community members. Generally, the plan should evolve as the project progresses. 8

11 Annual report Annual report of monitoring committee activities and expenses Section 15 of the Regulation reads provides that: 15. The holder must publish an annual report of the committee s activities and expenses on the website and send it to the Minister before June 30 of each year. The committee must draw up the portion of the report concerning its activities and send it to the holder at least 15 working days before the deadline for publishing the report. The holder must produce the other portion of the report concerning the committee s expenses. The annual report must summarize the committee s activities over the year. It can present the number of meetings held and discuss the type of issues it addressed. The holder must prepare a section that summarizes the committee s expenses that will be included in the report. The holder may break down the expenses in the manner they deem the most suitable. The committee and the holder must agree to combine their respective sections into a single combined document. This combined document must then be published on the website and sent to the minister. Licence holder s annual report Separately from the report mentioned above, section 64 of the Act provides that the holder must prepare an annual report of all its activities. Sections 72 and 102 of the Regulation provide that this annual report must include information on the monitoring committee s activities. 72. The annual report, provided for in section 64 of the Act must include, in particular: [...] (2) a summary of [...] c) the activities of the monitoring committee The annual report, provided for in section 67 of the Act must include, in particular: [...] (2) a summary of [...] c) the activities of the monitoring committee. MERN considers that the information on the activities of the monitoring committee that must be included in this annual report could be the same as or a summary of the annual report of the committee s activities and expenses required by section 15 of the Regulation and referred to in the preceding section of this document. Awarding of licence In the licence awarding process, the Regulation provides that successful bidder must provide the Minister of Energy and Natural resources the process for appointing the members of the monitoring committee. 33. Not later than 45 days after having been informed of the selection, the successful bidder must provide to the Minister [...] (3) the process for appointing members of the monitoring committee or, if the bidder is not required to establish a new committee under section 16, identify the monitoring committee that will be consulted for that licence 57. Not later than 45 days after having received the last authorization or favourable decision provided for in section 48 of the Act, the successful bidder or, as the case may be, the bidder having submitted the second highest bid must [...] (4) provide the process for appointing the members of the monitoring committee or, if the bidder is not required to establish a new monitoring committee under the first paragraph of section 16, identify the monitoring committee that will be consulted for that licence. 83. Not later than 45 days after receiving the last authorization or favourable decision provided for in section 48 of the Act, the successful bidder or, where applicable, the bidder having submitted the second highest bid, must (4) provide the process for appointing the members of the monitoring committee or, if the bidder is not required to establish a new monitoring 9

12 committee under the first paragraph of section 16, identify the monitoring committee that will be consulted for that licence. 3. Transitional Provisions and Non-compliance with the Regulations 3.1 Transitional provisions The requirement for all petroleum exploration, production or storage licence holders to establish a monitoring committee for each licence it holds is a new obligation under the Act. It did not exist in the past under the Mining Act or the Regulation respecting petroleum, natural gas and underground reservoirs (chapter M-13.1, r. 1). As mentioned in section 1 of this document, it is provided that all exploration, production and storage licence holders will have 90 days following the coming into force of the Act to establish the monitoring committee required under section 28 of the Act. Aside from this transitional provision of 90 days (instead of 30 days for any new licence holder), no other transitional provisions are related to the particulars of monitoring committees. 3.2 Non-compliance with regulations Under section 279 of the Act, the failure to comply with the requirement to establish a monitoring committee within 90 days following the coming into force of the Act, sections 188 and 200 of the Act will apply. Sections 188 and 200 read as follows: 188. A monetary administrative penalty of $500 in the case of a natural person and $2,500 in any other case may be imposed on any person who contravenes section 28, [...] Anyone who contravenes section 28 [...] is guilty of an offence and is liable to a fine of $2,500 to $250,000 in the case of a natural person and $7,500 to $1,500,000 in any other case. 10

13 Conclusion The new legal regime for the petroleum industry in Québec is forward-looking and was inspired by best practices from around the world. Its regulatory framework may evolve over time as new trends, environmental standards technologies emerge, and the preoccupations of society change. Similarly, this information document, entitled Petroleum Resources Act Information Document on the Application of Section 28 of the Petroleum Resources Act (Establishment of Monitoring Committees), could be updated and evolve. 11

14 Frequently Asked Questions Questions 1) Can a licence holder provide a lump sum annual budget to the monitoring committee, and can the monitoring committee be made responsible for managing its expenses, rather than reimbursing expenses one at a time upon presentation of supporting documents as set out in the regulation? Answer: Section 13 of the Regulation respecting petroleum exploration, production and storage licences provides for the reimbursement of monitoring committee expenses upon request and presentation of supporting documents. However, the licence holder and the monitoring committee may come to an agreement on the terms of the reimbursement of valid expenses under this provision. Section 2.3 (COMMITTEE EXPENSES) of this information document provides information on the allowable terms for reimbursing the committee s expenses. Question 2) What happens if the holder refuses to reimburse an expense the monitoring committee considers valid? Will the MERN make the final decision? Answer: The MERN recommends that the monitoring committee obtain approval for expenses before they are incurred. It is the responsibility of the licence holder and the monitoring committee to negotiate valid expenses in good faith. The MERN does not have the responsibility to make a final decision. In all cases, allowable expenses must be related to the committee s mandate. Note as well that section 177 of the Regulation provides that a monetary penalty of the amount provided for in section 187 of the Act may be imposed on any licence holder who fails to reimburse costs related to the travel and accommodation of committee members. Question 3) What happens if the holder fails to establish a monitoring committee? Answer: Legally, the licence holder is required to establish a monitoring committee. 12

15 APPENDIX 1 Examples of Adjacent Licences Example 1 Allowable grouping of licences under a single monitoring committee (Licences in yellow are adjacent) Example 2 Nonallowable grouping of licences under a single monitoring committee (licences in yellow are not adjacent, therefore at least two monitoring committee must be established) 13

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