The Council,
Having regard to Article 5(a) of the Convention on the Organisation for Economic Co-operation and Development of 14th December, 1960;
Having regard to the Recommendation of the Council of the O.E.E.C. of 6th May, 1960, concerning the Apportionment of Oil Supplies in an Emergency, approved by the Council on 30th September, 1961 [C(60)83(Final), 0ECD/C(61)57;
Considering that, at its meeting on 28th July. 1960, the Council of the O.E.E.C. approved the Report by the Oil Committee of 11th July, 1960, on the Apportionment of Oil Supplies in an Emergency, approved by the Council on 30th September, 1961 [C(60)153, C/M(60)20(Final), Item 177, 0ECD/C(61)5];
Having regard to the Resolutions of the Council of 27th June, 1967 and 26th March, 1968 concerning an International Industry Advisory Body [C(67)67. C/M(68)4 Annex(Final), Item 51 (b)];
Having regard to the Report by the Oil Committee of 23rd June, 1972 on the Apportionment of Oil Supplies in an Emergency in the O.E.C.D. European Area [C(72)135];
I. REAFFIRMS the principle that in view of the necessity for safeguarding supplies, distribution and use of oil in the European Member countries, in the event of a shortage of oil supplies, the burden should be shared on a fair and equitable basis.
II. ADOPTS the procedures set forth in the Report by the Oil Committee, referred to above, on the Apportionment of Oil Supplies in an Emergency in the O.E.C.D. European Area and which are the subject of the Annex hereto which forms an integral part of this Decision.
III. DECIDES that for the implementation of the procedure for apportionment among Member countries of the supplies subject to special allocation, special allocation decisions may be taken by a two-thirds majority vote of the Oil Committee, subject to the right of any Member country not having agreed to the decision of the 0il Committee to request the Council to review the decision. Pending the Decision of the Council, the supplies subject to the special allocation decision shall be allocated as provided in paragraph 3(b)(i) of the Annex to this Decision. The Decision of the Council may provide for appropriate adjustments in subsequent allocations.
IV. AGREES that, if the Council decides that oil supplies should be apportioned, the International Industry Advisory Body shall:
(a) advise the Oil Committee on matters relating to the availability of oil for O.E.C.D. Europe and
(b) assist the implementation of the Oil Committee's recommendations for the apportionment of available oil supplies.
V. RECOMMENDS that the Governments of the European Member countries:
(a) prepare, in advance, plans that will enable them to introduce prompt and effective reductions in consumption of petroleum products if an oil supply emergency should arise
(b) set up or maintain committees representing the oil industry at national level.
VI. INSTRUCTS the Oil Committee to review, when appropriate, this Decision and to make proposals to the Council thereon.
VII. The Recommendation of the O.E.E.C. Council of 6th May, 1960, and the Resolution of the O.E.E.C. Council of 28th July, 1960, as approved by the Council on 30th September 1961. referred to above, are hereby repealed.
annex
APPORTIONMENT OF OIL SUPPLIES
IF AN EMERGENCY
1 Should an oil supply emergency arise or appear imminent, the Chairman of the Oil Committee, in consultation with the secretary-General, would convene a meeting of the Oil Committee to make appropriate recommendations to the Council.
2. The Council could decide to put into operation, in whole or in part, the emergency procedures set forth hereunder.
I. Apportionment Principles and Criteria
3. Should oil supplies be apportioned, the following principles and criteria should be applied:
(a) bunker requirements in Europe for ocean-going vessels and air transport should be met in full, after effecting all possible economies;
(b) the remaining available supplies of each oil product in short supply should be apportioned as follows:
(i) 90 per cent of such supplies should be automatically allocated to Member countries in the same proportion as each Member country's normal consumption of the product to that of all the European Member countries; and
(ii) 10 per cent of supplies should be subject to special allocation in such amounts and in such proportions as the Oil Committee may from time to time determine in view of the conditions existing when the allocations are made any portion of such supplies not specially allocated should become subject to allocation under sub-paragraph (i) above.
(c) Member countries requesting a special allocation would be expected to have taken reasonable measures to optimize substitution by other forms of energy;
(d) in determining the amount to be allocated to individual Member countries under (b)(ii) above, the Oil Committee should give special consideration to the existence of any or all of the following factors:
(i) serious economic difficulties due to the lack of oil, especially in Member countries in course of economic development;
(ii) climatic difficulties and seasonal factors;
(iii) unexpected delays or losses of supplies (e.g. as a consequence of strikes or the interruption of other sources of energy);
(e) imports and exports of oil products between Member countries should be maintained at their normal ratio to available supplies; normal trade in the other forms of energy between Member countries should also be maintained.
II. Supplies subject to Apportionment
4. Supplies subject to apportionment by the Oil Committee under the procedures provided above should comprise:
(a) all products made from crude oil and other refinery feedstocks entering or produced in the O.E.C.D. European Area(1) after the start of an emergency;
(b) all imports of products into the O.E.C.D. European Area(1) after the start of an emergency.
5. Stocks accumulated by Member countries before an emergency should be excluded from apportionment. Member countries should, however, inform the oil Committee at the start of an emergency of all stocks of crude oil and products over which Member countries can exercise control in an emergency.
6. Crude oil and other refinery feedstocks should be excluded from the scope of the apportionment scheme, which should be based on products Provided the optimum overall yield of products for the O.E.C.D. European Area(l) as a whole is secured, crude oil supplies to refineries of Member countries should be on as equitable and balanced a pattern as possible, taking into account that the characteristics of crude oils vary widely and that many refineries are designed to operate most effectively on specific crude oils or combinations of crude oils. In cases where the supply of crude oil cannot be arranged directly between a Member country and its suppliers, the Oil Committee should intervene to promote a satisfactory solution.
III Functions of the International Industry Advisory Body
7. Section IV of the Decision provides that in an emergency the International Industry Advisory Body (Ι.Ι.A.Β.) shall advise the oil Committee on Matters relating to the availability of oil for O.E.C.D. Europe and shall assist in the implementation of the Oil Committee's recommendations for the apportionment of available oil supplies. The I.I.A.B. should also assist the Oil Committee in assessing the overall deficit in supplies as compared with the estimated level of consumption in Member countries.
8. The Oil Committee should decide, in the light of the circumstances at the time, the products in short supply which would be subject to apportionment and should also decide after consultation with the I.I.A.B., the period of time for which each apportionment will be made. An estimate of the supplies actually available for each apportionment period should be made by the I.I.A.B. and submitted to the Oil Committee. Member countries, supported by their national oil committees, should give such assistance as may be needed to ensure that the information available to the Oil Committee and the I.I.A.B. about oil supply and demand is as complete as possible.
9 The Oil Committee and the I.I.A.B· should set up working groups or joint working groups as necessary to prepare information for the Oil Committee and the I.I.A.B.
IV. Procedure for Agreements on Special Allocations
10. The apportionment among European Member countries(2) of the supplies subject to special allocation should be agreed by Member countries with reasonable promptitude during each allocation period. To expedite special allocations and to avoid dislocation in the programming of supplies, the Oil Committee may take, in the conditions provided for in Section III of the above Decision of the Council, decisions concerning special allocations.
11. The I.I.A.B. should be advised of the decisions reached by the Oil Committee concerning the special allocation of supplies so that these decisions can then be implemented by the oil companies.