Cost Recovery by the OMAR Partnership

The two partners in the Offshore Major Accident Regulator (OMAR) competent authority, OPRED and HSE, recover costs for various aspects of regulatory work. HSE and OPRED both recover costs according to time spent on a particular cost recoverable activity multiplied by predetermined hourly rates. The HSE and OPRED hourly rates are different because the costs that can be recovered are determined by different pieces of legislation. HSE has one 'all inclusive' rate, whereas OPRED has two rates covering 'specialist', and 'non-specialist work'. The different basis for cost recovery in OPRED and HSE can lead to questions from stakeholders about how OMAR recovers costs.

OMAR is not a legal entity, so cost recovery for its activities must be made separately by OPRED and HSE according to the separate legislation. HSE recovers costs using a single, predetermined hourly rate for time spent by HSE Operational Staff on particular activities. The rate is reviewed periodically and amended if necessary. It includes elements associated with the activity in the following headings:

• Gross salaries of direct staff,
• Gross salaries of operational management and strategy,
• General administrative expenditure
• Corporate services
• Capital charges
• Indirect costs

A guide to HSE's offshore cost recovery for activities, including the current fee, can be found on the HSE website.

OPRED recovers costs using two predetermined hourly rates. One is for time spent by OPRED Inspectors and Environmental Managers (specialist staff), on particular cost recoverable activities. The other is for time spent by administrative (non-specialist) officers on particular cost recoverable activities. The rates are reviewed annually and amended if necessary. The fee for a particular cost recoverable activity is the total of the hours spent x the applicable rate. In summary the rate includes costs in the following headings:

• Gross salaries of direct staff – staff carrying out the work, their line managers and support staff
• General administrative expenditure
• Corporate services

Further details of OPRED's Offshore Environment cost recovery for offshore functions, including the current fees, can be found on the OPRED website.