Part of Oil Security Toolkit
IEA (2020), Netherlands' legislation on oil security, IEA, Paris https://www.iea.org/articles/netherlands-legislation-on-oil-security
The Netherlands utilises a multi-layered legislative approach to oil supply emergencies. While the 2012 Law on Stockpiling Petroleum Products (LSPP) provides the primary legislative framework, further details are spelled out by the 1979 Law on the Implementation of the International Energy Programme (LIEP), the 1939 Distribution Law (DL), the 1990 Regulation on Traffic Rules and Transport (RTRT) and by the 1950 Law on Economic Offences (LEO).
Article 2(1) LIEP allows for the Dutch emergency response system to be activated when the IEA’s emergency provisions have been activated. Article 2(4) LIEP further allows for the triggering of the Dutch emergency response system by decisions of the European Union.
According to article 7(1) LSPP, it is the Minister responsible for energy policies who decides whether or not circumstances exist that trigger the provisions of the Dutch LSPP. Articles 2(1) and 2(4) LIEP appear to delegate the decision-making competence to the International Energy Agency (IEA) and the European Union (EU) respectively.
The addressees of the Dutch stockholding obligation are both held by commercial entities (under obligation) and the Dutch Central Stockholding Entity (CSE). At present, obligated industry stocks account for ca. 20% of Dutch strategic reserves while the Dutch CSE maintains the remaining emergency stocks.
The Dutch Central Stockholding Entity is Centraal Orgaan Voorraadvorming Aardolieproducten (COVA) (article 1(5) LLSP). COVA is authorised to purchase, maintain and sell oil stocks. By default, COVA is obliged to create and maintain emergency stocks of such a quantity that the discrepancy between the Dutch overall stockholding obligation and the stocks held by commercial operators is overcome (article 5(4) LLSP). In emergency situations, the Dutch Minister responsible for energy policies may order COVA to increase its reserves (article 6 LSPP).
According to article 3 LSPP, the overall volume of the Dutch emergency stocks should correspond to the greater of the 90 day average imports or 61 days of domestic consumption in the previous year. The specific quantities to be held by individual addressees of the stockholding obligation, as well as by COVA, are determined on an annual basis by the Minister responsible for energy policies (article 4(1) LSPP).
Availability of stocks
According to article 12(1) LSPP, only stocks that are ‘actually available’ may be counted as emergency stocks.
In principle, all Dutch emergency stocks must be located in the Netherlands or in the territory of an EU Member State (article 8(1) LSPP).
Sale of excess stocks
In the event of an oil supply disruption, the Dutch Minister responsible for energy policies is authorised to decree both the release of emergency stocks and the taking of demand restraint measures.
Dutch emergency stocks may be released by commercial entities and COVA in response to an oil crisis or an imminent oil crisis (article 7(1)(A) LSPP). Additionally, the Dutch Minister responsible for energy policies may, at times of emergency, decree that any emergency stocks held abroad are to be transported back to the Netherlands (article 7(1)(B) LSPP, see also article 3(1) LIEP).
Moreover, a release of emergency stocks may be possible within the framework of the Dutch DL.
According to article 7(2) LSPP, the Dutch Minister may, at times of emergency, decree that the use or release of certain petroleum products be restricted. Likewise, article 2(3) LIEP, in combination with article 24(2) DL, facilitates the taking of demand restraint measures when the emergency provisions of the International Energy Programme (IEP) have been activated.
Specifically related to the traffic sector, article 86a(1) RTRT authorises the Minister responsible for energy policies to stipulate that, in the event of a serious oil supply disruption, motor vehicles may not drive faster than 90km/h.
Relaxations of Road Traffic and Transport Laws
In addition there are measures to; ban driving on Sundays, increase carpooling or to reduce commuting. Demand restraint measures can be taken on the grounds of article 6 DL. The Distribution Law enters into force by Royal Decree taken on the recommendation of the Prime Minister. Once the DL has entered into force, the Minister of Economic Affairs and Climate can, by ministerial decree, initiate the Sunday Driving Ban regulation, like the oil crisis in 1973.
The Dutch emergency regime is monitored and enforced on the domestic, regional and international level. Each will be considered in turn.
According to article 16(2) LSPP, the addressees of the Dutch stockholding obligation must submit to the Dutch Minister responsible for energy policies regular reports detailing the quantity and composition of their emergency stocks (see also article 10(1) LIEP). Similarly, COVA is obliged to grant the Dutch Minister responsible for energy policies access to its files and records (article 22(3) LSPP).
According to article 24 LSPP, the Dutch Minister responsible for energy policies may enforce the provisions of the LSPP against the obligated industry if the obligated industry fails to comply with the provisions of the LSPP. Articles 1, 2 and 6 of the LEO provide for fines.
Additionally, article 31 LSPP obliges Dutch officials to provide assistance to inspectors of the European Commission if required and article 12 LIEP obliges the Dutch Minister to cooperate with the IEA.
In the demand restraint context, article 92 RTRT stipulates that the violation of the RTRT’s demand restraint measures is a criminal offense.
As a Member State of the European Union, Council Directive 2009/119/EC obliges the Netherlands to maintain a minimum volume of emergency oil stocks corresponding to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. The Directive also imposes strict requirements concerning the composition and location of the emergency oil stocks, so as to guarantee their availability and accessibility in case of need, among other provisions.
The Netherlands’ compliance with the provisions of the directive is monitored and enforced by the European Commission. If a Member State is deemed not to be compliant with the EU Directive, the Commission might decide to initiate an infringement procedure, which might ultimately lead to refer the case to the Court of Justice of the European Union (articles 258-259, Treaty on the Functioning of the European Union).
As a Member of the IEA, the Netherlands is obliged, pursuant to article 2 IEP, to maintain oil reserves equal to 90 days of net imports of the previous year. IEA Members are obliged to submit information concerning their emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis and the IEA monitors Member countries’ compliance with the IEP. The IEP does not, however, make any provision for the enforcement of any obligations imposed by the IEP.