Environmental liability for damage caused by pipelines and storage terminal operations

Industry changes
NOM-009
Environmental liability

In view of recent policy changes relating to hydrocarbons and gasoline distribution via pipelines, liability for the remediation of soil and water contamination derived from hydrocarbon spills and leaks at storage terminals and pipelines has become a hot topic.

Industry changes

In most cases, responsibility for the remediation of hydrocarbon spills or leaks has been attributed primarily to Petroleos Mexicanos (Pemex), the state-owned company which oversees the production and distribution of gasoline in Mexico. Until recently, Pemex was the main administrator of most of the country's pipeline and hydrocarbon distribution operations.

However, there have been a number of recent policy changes largely aimed at tackling criminal activities which have contributed to soil and water contamination, such as fuel and hydrocarbon theft. In this regard, the Supreme Court of Justice found that Pemex cannot be held responsible for spills and their consequent remediation when they derive from criminal activities. In the case at hand, the spills were considered to be a consequence of force majeure events.(1)

The 2013 energy reform opened up the hydrocarbons industry and, as such, Pemex is no longer the sole operator of pipelines and storage terminals. Therefore, new industry actors should consider the applicable obligations regarding safety and accident prevention, such as those provided for under the Federal Environmental Liability Law (for further details please see "Environmental liability in the hydrocarbons sector"). They should also consider their responsibilities regarding remediation when such accident prevention obligations prove unsuccessful.

NOM-009

The most recent regulation applicable to hydrocarbon-related pipelines operations is Official Standard NOM-009-ASEA – Administration of the integrity of collection, transport and distribution pipelines for hydrocarbons and petrochemicals (NOM-009). NOM-009 governs the following activities:

• recollection of hydrocarbons;
• petroleum and natural gas transport;
• petrochemical transport (the pipelines for which are linked to the processing of natural gas and oil refining); and
• natural gas and oil distribution.

Such activities must comply with the obligations set out under NOM-009, which aims to ensure an 'administration of integrity'. This is defined as a process of continuous betterment, which includes:

• the collection, revision, integration and analysis of data;
• risk assessment;
• inspection and integrity assessment; and
• maintenance and mitigation activities.

It also includes the evaluation of the success of the administration of integrity process.

Thus, NOM-009 is primarily aimed at data gathering and inspection.

NOM-009 also sets out a series of reporting obligations. All of the information gathered must be filed with the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector (ASEA) within the following periods:

• Information derived from the collection, revision, integration and analysis of data, and risk assessment activities must be filed annually.
• Information concerning inspection and integrity assessments must be filed every three, five or 10 years, depending on the specific characteristics of the related facility.
• Information concerning maintenance and mitigation activities must be filed every five years (at a minimum).
• Information on the evaluation of the administration of integrity process must be filed annually.

Notably, these reports are independent to those mandated under other hydrocarbon and environment-related regulations (as issued by the ASEA or other authorities), such as those regarding environmental impact authorisations.

NOM-009 will come into force on 24 July 2019 and will revoke NOM-027-SESH-2010. Facilities that are operational on that date must comply with Sections 4 and 8 of NOM-009 and may have to update their risk assessment before the standard comes into force.

Environmental liability

Under the Federal Environmental Liability Law, environmental liability is claimed against individuals or legal entities that directly or indirectly cause environmental damages through their action or omission. Liable parties must repair any such damage or, if that is impossible, compensate for such damage.

Further, the Federal Environmental Liability Law requires any person or entity with a legal obligation (ie, duty of care) to avoid causing environmental damage to repair or compensate for such damage. This legal obligation can be derived from applicable laws and regulations, including NOM-009.

For further information on this topic please contact Brenda A Rogel Salgado, Jeanett Trad Nacif, Mario Jorge Yanez or Javier Camacho at Hogan Lovells BSTL, SC by telephone (+52 55 5091 0000) or email (brenda.rogel@hoganlovells.com, jeanett.trad@hoganlovells.com, jorge.yanez@hoganlovells.com or javier.camacho@hoganlovells.com). The Hogan Lovells BSTL, SC website can be accessed at www.hoganlovells.com.

Endnotes

(1) Amparo Ruling 47/2017.