Renegotiating the ExxonMobil Agreement may be Difficult but there are Other Options.

Feb 09, 2021 Letters

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Dear Editor,

Kaieteur News – I have decided to write this letter in response to Kaieteur News publisher Mr. Glenn Lall’s appeal for professionals to get involve in influencing the direction of our oil and gas industry. I had decided to stay out of the public space and discussions on oil and gas for two reasons: one, I wanted to give the government a fair chance to roll out their plans for oil and gas, and the second reason is that I felt the space was a bit busy.
In 2019, I was awarded a scholarship from a university to study, however, it required residing abroad for a few months. I did not have enough financial resources to live abroad while studying and my only means of getting the additional G$3M that was needed was to sell my home which I had owned for fifteen years. It was indeed a high price to pay to pursue a dream, but I thought that it was worth it. It was an opportunity to further invest in my education, also I wanted to focus my research on an area in oil and gas and the extractive industries, so that I could contribute to the development of the oil and gas sector in Guyana.
So, I took no-paid leave and went abroad and studied. I did my thesis/project on ‘Development Preparedness: Strengthening Cross-sectoral Governance in Foreign Direct Investment (FDI) to Maximise Opportunities for Maintaining Rule of Law as Guyana Transitions into an Oil and Gas Society’. Other research work which I did during the programme included: ‘Integrating Human Rights, Gender and Conflict Management into Foreign Direct Investment (FDI) Engagements in the Oil and Gas Industry in Guyana’; ‘An Examination of the Legal Systems and International Obligations (Global Regulations) for Countries of Investors and Businesses Currently Engaged in the Oil and Gas Sector in Guyana’; and an ‘Assessment of Reforms in the Mexican Legal Framework in the Energy Sector Since 2013 and Development of Recommendations as to What Further Related or Follow-on Reforms can be Considered which would Benefit the Largest Number of Low-Income Mexican Citizens’.
I got an ‘A’ Grade in my thesis and my review professors were of the view that the project was highly implementable. In the research for my thesis, I also examined the World Bank funded ‘Guyana Petroleum Resources Governance and Management Project’, which commenced in 2019, and identified some of the gaps and incorporated them into my project as a way of bridging those gaps.

I also did extensive research on how Guyana can address the issues relative to the International Investment Agreements. I researched what some of the resourced-rich countries, such as the USA, Canada, Botswana, some Gulf countries, and others, are doing in terms of investment treaties and agreements. Therefore, while these agreements are extremely difficult, almost impossible to renegotiate, I was hoping to work with the Government on a programme similar to reforms that was done in Mexico. One of my recommendations to the government would have been to reform the judiciary, criminal justice system, law enforcement, etc. so that investors would develop more confidence in the independence of the judicial and law enforcement systems, in an effort to strengthen Guyana’s negotiation ability. One aspect of negotiation could then be for investors to agree for at least a clause to be included in investment agreements for certain matters to be resolved in our local courts.

Foreign investors are protected under International Investment Laws, and one of the reasons why both the APNU+AFC and the PPP/C governments have been relatively silent on the renegotiation of the ExxonMobil agreement is because they are aware of this. These are international contractual agreements that have serious contractual obligations attached to them. Which brings into the discussion, international mechanisms for ‘Investor-State Dispute Resolutions/Settlements’. There are specific mechanisms internationally for foreign investors and states to settle disputes, which is another reason why both the APNU+AFC and the PPP/C government are almost silent on the renegotiation of the agreement in question.

For example, it is very difficult for Third parties to join international dispute resolution cases, therefore if Guyana reforms its judicial system and investors’ confidence in the independence and professionalism of the local judicial system increases, our new model for agreements could include that in some areas, for example, on environmental and human rights matters, third parties would be allowed to bring these matters against foreign investors, before the local courts. For example, if there is some kind of pollution in the waterways in an Amerindian community, representations from those communities would be able to seek redress in the local courts.
Yours truly,

Audreyanna Thomas

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