Petroleum Business Review

Abstract This article examines public liability and administrative accountability for environmental and climate risks and harms in Iran’s oil and gas sector. It explains how recurrent harms, including oil pollution, industrial accidents, and chronic air-quality crises, are intensified by regulatory omissions and fragmented institutional mandates. The study clarifies when governmental bodies and state-owned operators may bear responsibility not only for polluting conduct, but also for failures of prevention, supervision, and timely response. Using doctrinal legal analysis combined with institutional governance analysis, it maps the interaction between constitutional and statutory environmental duties, civil and criminal liability tools, and administrative-law mechanisms for challenging unlawful inaction. The findings suggest that Iran’s framework contains significant formal safeguards, yet accountability is often weakened by overlapping competences, under-enforcement, and evidentiary barriers in proving omission-based causation and attribution. Judicial review of administrative inaction provides an important corrective, but it rarely suffices to internalize environmental costs or deter systematic negligence. Drawing brief comparative insights, the article argues that effective governance requires clearer allocation of duties, enforceable standards of diligence for public authorities, and credible oversight capable of triggering corrective action before harm becomes irreversible. It proposes targeted reforms, notably codifying a “public duty of care,” strengthening coordination and transparency, widening access to remedies against manifest non-performance, and establishing an independent oversight function to reduce blame-shifting and improve compliance. To avoid conceptual overbreadth, the article distinguishes direct oil-and-gas environmental incidents from air-pollution and climate-related harms, using the latter only where they illuminate the common problem of omission-based public accountability.

Abstract One of the main challenges for the regulators of oil contracts in Iran is the financial and taxation system and the auditing procedures of oil contracts. This issue has, even after the Islamic Revolution and until today, always been one of the concerns of oil stakeholders, especially in Iran. Nowadays with the selection of the service contract format as the only approved contractual template in upstream oil operations, oil companies, acting as contractors, carry out the investment in oil operations and, if the contractual objectives are achieved, are entitled not only to the reimbursement of costs but also to receive fees. Based on the principle of “no profit, no loss” and in order to prevent the contractor from unjustly benefiting by overstating incurred expenses, the parties classify the costs and, using accounting and auditing principles, stipulate the definitions, instances, and calculations methods of the costs, and so forth. Given Iran’s growing need to conclude Joint Operating Agreements (JOAs) aimed at facilitating technology transfer through enhanced reservoir recovery by assigning operational responsibilities to an Iranian operating company while maintaining the contractor’s overall responsibility it is essential to revise and adapt Iran’s accounting and auditing procedures to align with the specific requirements of such agreements. In this regard, the model accounting procedures published by international petroleum associations can serve as effective and practical benchmarks for reform.

Abstract International oil and gas investment disputes constitute an important part of investor-state dispute settlement (ISDS) system. Investment arbitration which is regarded as a prevalent dispute settlement mechanism in this area has come under severe criticism since it creates huge costs, lengthens the process, and devastates the parties’ long-term investment relationship. In recent years, the possibility of applying alternative dispute resolution (ADR) and hybrid dispute settlement mechanisms has largely been discussed. Mediation-arbitration (Med-Arb) is one of the hybrid integrated dispute settlement mechanisms which embodies flexibility, nonjudicial, and negotiate-oriented benefits of mediation and the finality advantage of arbitration simultaneously in a single process. In this method, mediation is first attempted by the parties before arbitration could be started; if settlement is not reached during the mediation phase, the appointed neutral or mediator will then act as (an) independent arbitrator(s), will continue the case under the arbitration process, and will render a binding arbitration award. In this method, if parties reach an agreement during the first phase (mediation process), they will not incur huge costs of lengthy investment arbitration. In this method, even if the first stage (mediation process) fails, since it has further clarified and narrowed down the disputes, then the arbitration process will be less lengthy and proceed more efficiently. Moreover, both investors and host states in oil and gas investment area do have strong ambitions to maintain the investment relationships. These goals are achieved better via adopting Med-Arb proceedings. The most noted concerns in this method relates to the issue of the impartiality of the neutral (mediator in the first stage) who acts as an arbitrator at the next stage. In other words, it may be argued that the confidential information learned by the neutral from the parties in the mediation stage may seriously impact on his/her impartiality in the arbitration stage. This issue can be responded in light of respecting party autonomy principle which selects the Med-Arb clearly and correctly for dispute settlement. This approach is affirmed and proposed by the UNCITRAL model law on international commercial conciliation (2002) as well. Also, concerns regarding the enforcement of international agreements resulting from mediation have already been addressed in the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention on Mediation), which has attained international acceptance by 51 state members so far.