Latest update March 28th, 2024 12:59 AM
Mar 18, 2022 News
Kaieteur News – An analytical review of Guyana’s legislative framework for the oil sector has unearthed concerning instances of disharmony which could work against the interest of the State.
Specifically, experts at the Inter-American Development Bank have said such friction exists in the Petroleum (Exploration and Production) Act 1986 (PEPA), the Environmental Protection Agency Act 1996, and the Maritime Zones Act 2010.
In a technical report titled: Traversing a Slippery Slope: Guyana’s Oil Opportunity the consultants highlighted that these three pieces of legislation not only have overlapping duties which could cause confusion, but also contain vague language regarding environmental standards, which ultimately, could allow oil operators enough scope to escape penalties for negligence.
Elaborating on the web of discord uncovered, the IDB consultants said one must first understand the powers of the Environmental Protection Agency (EPA). The EPA is a semi-autonomous body corporate, governed by the Environmental Protection Act of 1996. That law brings under its jurisdiction, functions concerning Guyana’s natural environment and includes all land, water, sea, seabed, marine and coastal areas, and natural resources.
The EPA therefore plays a coordinating role in the preparation and implementation of cross-sectoral programmes of environmental contents and to perform such other functions pertaining to the protection of the environment as may be assigned to it by the subject Minister by or under the Act or any other written law. Thus, IDB consultants said it would be impossible to underestimate the EPA’s authority over any environmental matter in Guyana, including areas of the sea where oil companies operate and that are claimed by Guyana and to which – under the Maritime Zones Act – its law extends.
Further to this, the IDB consultants noted that the EPA Act’s plenary authority over environmental matters is complex with certain key elements of the Act and its regulations fundamental to the regulation of the oil and gas sector. In this regard, it was noted that the EPA Act prohibits any public authority from giving any development consent in any matter where an environmental authorization is required.
The EPA’s issuance of an environmental authorization is also a sine qua non (essential condition) for the Minister’s ability to issue a license under the PEPA and the President’s ability to issue a prospecting or production license or letter of authority under the Maritime Zones Act.
It is here that the consultants pointed out that the Minister’s regulatory powers under the EPA Act, clearly overlap with those ascribed to the official who would be empowered to act under the Maritime Zones Act. They noted that while the Minister under the Maritime Zones Act is obligated to consult with the Minister with responsibility for the environment before making regulations, the potential for overlapping regulations is clear.
Additionally, it was highlighted that the regulatory powers of the EPA subject Minister also overlap with those of the subject Minister under the PEPA, and – unlike the Maritime Zones Act – there is no obligation for the Petroleum Minister to consult with the EPA Minister before making regulations under the Petroleum Act. The IDB experts stated that as an example of this fact, the petroleum regulations include environment-related provisions that are quite ambiguous when compared with the standards set forth in the EPA Act and the applicable regulations subsequently made under it.
In this regard, they explained that the EPA Act and regulations made under it establish detailed principles and requirements for the protection of the environment that apply to any entity falling under the Act’s jurisdiction, and an environmental permit issued under the EPA Act shall be subject to conditions which are reasonably necessary to protect human health and the environment. In addition, the IDB consultants said an environmental permit shall contain an implied condition that the developer shall have an obligation to use the most appropriate technology and to restore and rehabilitate the environment.
The EPA, they pointed out, is also prohibited from issuing an environmental permit unless it is satisfied that the developer can pay compensation for any loss or damage, which may arise from the project or breach of any term or condition of the environmental permit.
The IDB consultants said therefore, that there is significant overlap between the EPA Act, regulations and environmental authorizations issued under it, and the EPA’s authority, on the one hand, and on the other hand the environment-related authority of both the Oil and Gas Minister under the PEPA and Petroleum Regulations and the Minister under the Maritime Zones Act, in setting the requisite air-tight environmental standards applicable to petroleum prospecting and production.
The IDB consultant said, “A real risk of disharmony exists between these principles and standards of the EPA Act and the standards in the PEPA and Petroleum Regulations. Specifically, the standard applicable to licensees under the PEPA is mere good oilfield practices, which is defined as all those things that are generally accepted as good, safe and efficient in the carrying on of prospecting for petroleum or, as the case may be, operations for the production of petroleum.”
The experts warned however that it is obvious to all observers that the term “good oilfield practices” may not equate to the principles established in the EPA Act and regulations made under it, as its ambiguity allows enough room for interpretation and legal challenge.
They also concluded that the overlapping functions in the laws with respect to the environment not only lead to possible confusion and unhelpful confusion among government entities but more importantly, the disharmonies standards for safe environmental practices “are potentially disastrous for Guyana, particularly (but not only) if an oil spill were to occur.”
THIS IDIOT TELLING GUYANA WE HAVE NO SAY IN THE 50% PROFIT SHARING AGREEMENT WE HAVE WITH EXXON.
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