With law shall the land be built

18.05.2015
Much would have looked different today had Norway failed to take possession of its offshore resources 50 years ago. Ownership was proclaimed with a special Act penned by Carl August Fleischer.
  • Astri Sivertsen and Sverre Christian Jarild (photos)

Carl August Fleischer
“… and it says the following here …” Fleischer refers to the note he wrote in 1962, which formed the basis for the Act passed the following year.

 

“Farsighted? This wasn’t about being farsighted,” Fleischer snorts. He points to a newspaper article on Jens Evensen, and says the hero status accorded to his old boss and Norway’s first and last law-of-the-sea minister is exaggerated.

   The former civil servant sits with a bundle of newspaper cuttings and documents from the 1960s one floor above the law faculty library at the University of Oslo - an impressive mid-19th century building with the exalted name of Domus Bibliotheca.

   Fleischer wants to correct errors in the presentation of events where he played a key role after joining the legal department of the Ministry of Foreign Affairs as a 24-year-old law graduate in November 1960.

   Evensen became a director general in the ministry the following year, and by 1962 the legal department understood that something was brewing.

 

Carl August Fleischer

Norway’s sovereignty over the continental shelf has never been in doubt, says Carl August Fleischer.

 

   Division head Einar-Fredrik Ofstad had a meeting in late October with US oil independent Phillips Petroleum, which presented plans to hunt for oil in the North Sea.

   During the winter and spring, similar approaches were received from several other oil companies. Five permits to conduct seismic surveys, for instance, were awarded in this period.

   “It was clear, of course, that doing nothing to safeguard Norwegian interests would be nothing less than a dereliction of duty,” says Fleischer.

   Together with Ofstad and Evensen, he began on drafting a Bill to regulate petroleum operations in the NCS – not because Norwegian sovereignty was in doubt, but to prevent what he calls “unfortunate dispositions” and to give the government a management tool in this area.

   Where the sovereignty issue is concerned, Fleischer sharply criticises an assertion in a 1992 history of Norwegian oil – which has since become received wisdom – that the continental shelf was not under national jurisdiction.

   “That’s completely wrong,” he says. “I can’t think who the authors can have talked to.”

   He points out that the UN’s Geneva conference on the law of the sea in 1958 made it unequivocally clear that the coastal state has sole rights to the continental shelf.

   Nobody else can conduct activities there without the coastal state’s consent. And no formal proclamation of sovereignty is necessary.

   “But if you’re going to forbid somebody to do something in Norway, you have to have enabling legislation,” Fleischer explains.

   Although nobody could know whether oil existed in the sub-surface off Norway, he says that was not reason enough to refrain from safeguarding the country’s national interests.

   “The probability was relatively high, or at least sufficiently high, that it was worth passing a law.”

Carl August Fleischer   According to Fleischer, there was no reason to underestimate the oil industry. Several companies had already begun to prepare seismic surveys covering parts of Norway’s North Sea sector.

   The country ran the risk that these players might take matters into their own hands, make discoveries, install platforms and claim ownership of discoveries in the area.

   So getting an Act in place was a matter of urgency. Fleischer observes that work on a piece of legislation in Norway can take 20 years or more, and neither the justice nor the industry ministries were moving fast enough to satisfy Evensen’s team.

   The industry ministry had its hands full anyway, in part because of the Kings Bay mining disaster which occurred in Svalbard during November 1962.

   This meant that the job of drafting the legislation devolved on the foreign ministry – for the first and last time in its history.

   “Evensen’s dynamism and efficiency were a key reason why it was accepted that we should prepare the text, rather than waiting for the other ministries to do lengthy studies,” says Fleischer.

   The legal framework was in place less than seven months after the first meeting with Phillips, mainly and in all modesty penned by Fleischer.

   This Act no 12 of 21 June 1963 on exploration for and exploitation of submarine resources served as enabling legislation and remained in force until the first Petroleum Act of 1985.

   It declared that resources on and beneath the seabed off Norway were state property, and that it was for the Crown to decide who could pursue offshore operations.

   Such an outcome was by no means given. Denmark, for example, chose a completely different model, giving shipowner A P Møller a sole licence to produce oil along with Gulf and Shell.

   Phillips had sought a similar solution in Norway, but failed to achieve it – something Norwegians and tomorrow’s pensioners have every reason to be pleased about.

   After the Act had been unanimously passed by the Storting (parliament) on 21 June 1963, administrative responsibility for the oil business returned the industry ministry, its natural home.

   “But it was the legal department of the foreign ministry which changed Norway,” comments Fleischer

Unclarified

The Act might have been passed, but some unclarified issues remained to be tackled by the foreign ministry’s lawyers – including undefined boundaries with the other North Sea states.

   Problems might have arisen here – not least because of the Norwegian Trench, a submarine valley up to 100 kilometres wide which hugs Norway’s south-west coast.

   This feature descends to depths of more that 700 metres. Had the boundary been drawn on the Norwegian side of it, the country’s oil adventure would never have happened.

   Fleischer joined the ministry in 1960 to work on one of the biggest and most difficult foreign policy issues of the day – extending Norway’s fishing limits from four to 12 nautical miles.

   Experience from these negotiations, and the knowledge gained about international law and politics, proved very useful when the offshore boundaries with Britain and Denmark came to be drawn.

   The Geneva convention on the continental shelf built on the median line principle for establishing offshore boundaries between two states.

   However, it also contained a formulation that continental shelf jurisdiction was limited to waters less than 200 metres deep unless resources could feasibly be recovered from greater depths – but in any event not beyond the median line with other states.

   “The median line was approved almost unanimously at the 1958 Geneva conference,” says Fleischer. “When oil was later found, however, a number of states discovered it didn’t pay for them.”

   According to Norway, this principle should apply without reservations. And it maintained that the Norwegian Trench had no significance.

   “But we ran the risk of somebody pushing the opposite argument,” Fleischer points out, and says that the result could have been lengthy legal disputes.

   “And if you do end up in court, you basically never know how things will turn out.” One lesson he is happy to pass on is never to become involved with the international legal system.

   Fortunately, the UK representative at the Geneva conference had stated openly that a chance depression like the Norwegian Trench should not play any role.

   In reality, therefore, the median line negotiations with Britain presented no difficulties, says Fleischer, who had a special responsibility for them as acting head of division.

   A boundary line treaty was signed by the two countries on 10 March 1965, just a year after the UK had contacted Norway to secure a clarification of this issue.

   The British had sent maps to the foreign ministry, which were validated by Norwegian mapping experts. Fleischer remembers “as if it were yesterday” lying on the floor of his fine office and studying the maps with colleague Leif Terje Løddesøl.

   They could find no fault with them, but Fleischer had heard that paper could shrink and cause distortions. For safety’s sake, he wanted the Geographical Survey of Norway to do an extra check.

   The geodesy specialists at the latter said that the UK had sent over maps based on the Mercator projection without correcting for the fact that the Earth is actually spherical.

   This meant that the boundary line was displaced closer to the Norwegian coast, and would in other words give the British a bigger area than they were entitled to.

   Although it only involved a few kilometres, Fleischer says the deviation could have cost “some of the minor things around Ekofisk.” But the error was discovered and the boundary corrected.

   The Danes were next in line, and negotiations with them were more complicated since, according to Fleischer, they tried their hand at double-dealing.

   They sought an agreement on the median line with a secret clause which would allow any deal to be renegotiated if this principle was not accepted by other North Sea states.

   A story has circulated among the Danes in later years that they “lost” Ekofisk to Norway because of the Danish foreign minister’s irresponsible relationship with alcohol.

   Fleischer rejects this tale as pure myth. Had the request for a secret clause been accepted by the Norwegian negotiators, however, Ekofisk could well have ended up in Denmark’s sector.

   The distance from this major field to the boundary with the Danes is not great, so a relatively minor adjustment might have put it on the other side.

   “If we hadn’t found a solution in 1965, we might have had to continue talks with Denmark,” Fleischer concedes. “And, depending on how weak our negotiators were, a different solution in our disfavour might obviously have been possible.”

   In the end, the Danes yielded and a treaty based on the median line principle and without secret clauses was finally signed on 8 December 1965.

   That occurred, in other words, after the first-round licences had been awarded. Because of the unclear position, Norway held back from including some blocks along the proposed boundary.

Rotating

Fleischer is no ivory-tower theorist, but has spent 55 years rotating between the foreign ministry – where he remains a special adviser on international legal issues – and the University of Oslo. He is now a professor emeritus in jurisprudence.

   His professional career has thereby been a combination of academia and practical foreign policy. Over the years, he has negotiated with other governments on pipelines, tax rules and unitisation of shared offshore petroleum deposits.

   “Among other things, I helped to make Statoil a big company,” he observes.

   Under the unitisation agreement on Statfjord with the UK government, which he helped to negotiate, Statoil was to take over as operator of this field from USA’s Mobil after ten years.

   The British nevertheless asserted that they could demand the retention of Mobil. But Fleischer was unbending – consent for a change of operator was already enshrined in the original deal.

   He maintains that the Norwegian government was initially ready to yield to the UK view. But its resolve stiffened after he had provided Knut Dæhlin, the senior industry ministry official leading the negotiations, with legal arguments.

   The government refused to allow Mobil to continue, and Statoil could thereby move into the driving seat for the North Sea’s biggest oil field in 1987.

   “When things get too difficult, we usually turn Fleischer loose on them,” Dæhlin is alleged by a central source in Norway’s oil administration to have said. “Them” in this case was the UK.

   Fleischer has not been involved in active negotiations during the present century, but is much in demand by the foreign ministry as an adviser.

   He looks back on the events of more than 50 years ago, and characterises the 1963 Act as Norway’s “most extensive law on property ever in geographical terms.”

And he concludes:“We must admit in retrospect that we were pretty farsighted and pretty smart.”

 

Carl August Fleischer

Fleischer has alternated during his long working life between academia and practical foreign policy.