Former head of the Environmental Protection Agency (EPA) Dr Vincent Adams yesterday slammed the government’s intention to file an appeal against Justice Sandil Kissoon’s ruling that the EPA failed to enforce the liability clause in the permits issued to ExxonMobil Guyana for its offshore oil operations.
Adams, an Alliance for Change (AFC) executive member, said the party welcomed the landmark decision and questioned the grounds on which the government is preparing to appeal it. He said he was somewhat surprised at the move coming from the government and not ExxonMobil’s Esso Exploration and Production Guyana Limited (EEPGL).
“It proves how close the PPP/C government is with the oil industry… I could understand Exxon appealing,” AFC Leader Khemraj Ramjattan interjected. Fellow AFC member and shadow Minister of Natural Resources David Patterson expressed similar views.
According to Patterson, the government’s move to file an appeal is a clear indication that it was fearful of more citizens moving to the courts to challenge decisions and policies. He said he had expected the government to adhere to the court’s ruling and take it as a win for the people.
“The ruling is purely based on the facts and there are some important things which the judge said. The judge said the Environmental Protection Agency refused to give any documents or confirmation in its defence regarding insurance coverage from Exxon. He also said that Exxon and EPA in their defence, said citizens have no locus standi,” Patterson underscored.
“Any other reasonable government would have taken it as a win. Tell the oil company we have an independent judiciary, let us all follow the rule of law. This has nothing to do with future business…”
Patterson went on to state that the government should explain where the judge’s interpretation of the law is bad for business and why the company is scared to put up unlimited liability coverage for operations it has been involved in for decades. The former government minister questioned the difficulty in providing unlimited coverage when the operators boasted that their floating production storage and offloading vessels have been operating at a standard.
The former EPA ahead agreed with Patterson and he too questioned the difficulty given that operators have done so in the United States. “Why should it be different for Guyana?” he added.
Adams said the ruling sends a very strong message to Exxon and its partners, putting them on notice and that the people of Guyana “will not sit idly by while they overlook and attempt to evade their responsibilities to follow the rule of law in Guyana – responsibilities which they uphold in other territories.”
Attorney General Anil Nandlall had said that the ruling could have “profound ramifications and grave economic and other impacts on the public interest and national development”.
He said that both the government and EPA are of the considered view that the environmental permit “imposes no obligation” on the permit holder to provide an unlimited Parent Company Guarantee Agreement and/or Affiliate Company Guarantee Agreement.
Justice Kissoon, in his ruling on Wednesday, described the protective environmental regulator as “submissive” adding that it had abdicated its responsibilities “…thereby putting this nation and its people in grave potential danger of calamitous disaster,” in its failure to enforce the liability clause.
The judge bluntly said that the circumstances giving rise to the action disclosed the existence of an “egregious state of affairs that has engulfed the Environmental Protection Agency in a quagmire of its own making.
“It has abdicated the exclusive statutory responsibilities entrusted to it by Parliament under the Environmental Protection Act 1996 and the Environmental Protection Regulations 2000 to ensure due compliance by Esso Exploration and Production Guyana Limited [EEPGL.”
Adams said the judge had drawn a line that said: ‘no more!’ He reminded that former country manager of EEPGL Rod Henson had announced that the company would only be responsible for “reasonable, credible, and acceptable” damage resulting from an oil spill.
“… But most distressingly, the government and EPA have callously chosen to parrot these same words, even putting them into the recently issued Uaru Permit. Thankfully, Judge Kissoon’s ruling has found the EEPGL position to be unreasonable, incredible and unacceptable,” said Adams.
He said the detrimental effects of an oil spill cannot be overstated. Countries that had the misfortune of experiencing such a disaster, feel the ill-effects for decades later, and some have never fully recovered.
The former EPA head said the ruling was also an indictment on the operations of the EPA. Since the change of administration, he pointed out, the agency, which is mandated to be the country’s protector against all environmental hazards, has ceded its responsibility to the oil industry.
“This is the second major ruling that has been levelled against the EPA [the first being its unlawful decision to waive the granting of an EIA for the storage of radioactive materials in a residential zone], which clearly demonstrates that the management of this agency is inadequate and lacks the necessary qualifications to carry out its important functions,” he said.
Adams added that the time has arrived to address the running of the agency.
“Equally under the microscope, is the PPPC’s stewardship of this blossoming oil and gas sector. In their quest to maximise revenues at all costs, they have allowed the nation to be treated as a guinea pig and dumping ground of the oil companies,” he posited.
President of the Transparency Institute of Guyana Inc (TIGI) Fredericks Collins and another Guyanese citizen, Godfrey Whyte, had moved to the court last year to get the EPA to enforce the liability clause in the permits issued to ExxonMobil Guyana for its offshore oil operations.
The litigants had said that the resort to the court was to make sure that the company took full financial responsibility in case of harm, loss and damage to the environment. ExxonMobil’s local affiliate, EEPGL, has agreed in the permit to provide insurance and an unlimited parent company indemnity to cover all environmental loss and damage that might result from a well blowout, oil spill or other failures in the Liza 1 Development Project in Guyana’s Stabroek Block.
The duo, through their battery of attorneys led by Senior Counsel Seenath Jairam, had told the court that “…the agency, through its human minds, including its officers, has failed or omitted to carry out or to show that it has carried out its legal duties and or obligations thereby amounting to misfeasance in public office… and by failing or omitting to act, has acted unreasonably, irregularly or improperly and or has abused its power.”
As he delivered his ruling, Justice Kissoon specifically declared that EEPGL had failed to comply with its financial assurance obligation, and further that Condition 14 imposes on EEPGL, “unlimited and uncapped liability for all costs associated with clean up, restoration and compensation for all damage caused by any discharge of any contaminant arising from its exploration, development and petroleum production activities within the Stabroek Block.”
The judge ordered the EPA to issue an Enforcement Notice pursuant to Section 26 (1) and (2) of the Environmental Protection Act, no later than next Tuesday, directing EEPGL to perform its obligations under the permit and to provide, within 30 days thereafter, the unlimited liability Parent Company Guarantee Agreement and/or unlimited liability Affiliate Company Guarantee to indemnify and keep indemnified the Government of Guyana and the agency against all such environmental obligations of Esso and its co-venturers within the Stabroek block, together with environmental liability insurance as is customary in the international petroleum industry in accordance with the Conditions 14 from an insurance company standing and repute that equates to Grade A Plus as envisaged by Condition 14.
Failure to comply with the order, the judge said, will result in the permit being suspended.
In addition to Senior Counsel Jairam, the applicants were represented by attorneys Melinda Janki and Abiola Wong-Inniss.
The EPA was represented by attorneys Francis Carryl, Shareefah Parks and Naiomi Alsopp.
Meanwhile, EEPGL was represented by Senior Counsel Edward Luckhoo and Andrew Pollard along with Eleanor Luckhoo.
