The backdrop is that the Norwegian governmental authorities awarded ten production licenses in the southern and south-eastern Barents Sea in the 23rd license round in 2016. The plaintiffs are Greenpeace Nordic Association and Natur og Ungdom (jointly, the "NGOs").

While a decision in favour of the NGOs will have significant negative repercussions, at least for the industry players, the prevailing view is that the NGOs will not succeed with their claim and that the purpose of the claim is to raise public attention.

The NGOs present two main lines of argument. First, the NGOs claim that the decision to award the production licenses in the 23rd license round is unconstitutional as it breaches section 112 of the Norwegian Constitution which inter alia states that:

"Every person has a right to an environment that is conducive to health and to a natural environment whose productivity and diversity are maintained. Natural resources should be managed on the basis of comprehensive long-term considerations whereby this right will be safeguarded for future generations as well.
(…)
The authorities of the state shall take measures for the implementation of these principles."

 

Second, the NGOs also argue that the license awards are invalid on procedural grounds, i.e. that the environmental impacts of the licensing decision had not been adequately analysed prior to award. The main basis for this invalidity claim appears to be the strict environmental requirements set out in section 112 of the Norwegian Constitution.

Based on the arguments presented by the NGOs in the writ of summons, we do not think they will succeed with their claim that the awards in the 23rd license round are invalid. In our opinion, the Attorney General is correct in that the NGOs are adopting a wider interpretation of section 112 of the Norwegian Constitution than the legal sources give basis for, both in terms of whether the provision constitutes a material limit for the licensing decision, and its procedural impact.

However, in the very unlikely event that the Supreme Court, after appeal rounds, rules that the award of production licenses in the 23rd license round was in fact unconstitutional, this could in the worst case scenario prevent future decisions to award new production licenses and approvals of plans for development and operation on the Norwegian Continental Shelf ("NCS"). This would naturally have a huge impact on the Norwegian political and legal system as well as the oil and gas industry and its players.

Also, in the unlikely event the license awards are considered invalid for procedural reasons, the licensing process will probably have to be adapted in accordance with the ruling, inter alia to include further environmental assessments. Although this would also have an unprecedented and significant impact at least on the 23rd license round, the consequences will likely be less far-reaching than under the other avenue of argument, as a ruling based on this line of argument will probably not in itself prevent future license award decisions and approvals of plans for development and operation on the NCS.

In summary, we consider it unlikely that the case will have any material impact on licensing rounds, but it provides an interesting illustration of how environmental activists are attempting to transform political issues into legal ones.