Govt. vows to fight judge’s ruling ordering ExxonM to fully compensate Guyana for oil spill

May 05, 2023 News

– Opposition says appeal is an unpatriotic move

Kaieteur News – While the Government’s has vowed to appeal the High Court ruling ordering the Environmental Protection Agency, (EPA) to issue an Enforcement Notice to Esso Exploration and Production Guyana Limited (EEPGL) and its parent company, Exxon Mobil to ensure it provides unlimited insurance coverage to safeguard Guyana against the devastating effects of an oil spill, the move is being viewed by the opposition as most unpatriotic and backward.

Attorney General, Anil Nandlall

The opposition charged that it is a sad day when a government can take such action against the interest of the nation and its people. Members from both the A Partnership for National Unity (APNU) and the Alliance For Change (AFC) opposition parties at separate press conferences, shared this view while lambasting the government for safeguarding the interest of the oil companies rather than the citizens of Guyana.

Economic and Youth Policy advisor attached to the Office of the Opposition Leader, Elson Low at a press briefing on Thursday described the government’s attitude regarding insurance for oil and gas activities as “totally unacceptable and frankly unpatriotic.”

He noted: “even, where the country has legitimate rights to ensure unlimited insurance coverage from a parent company that should put Guyana in a position where we can be comfortable if there is an oil spill that the country would be fully taken care of, the government refuses to enforce these provisions. And it is frankly sad that it has come to a court order and court action to get the government to comply with its own provisions.”

Economic advisor, Elson Low

Low said that the government has adopted this posture of non-compliance as it relates to many other issues in the oil and gas sector. He explained that “this attitude we’ve seen with many other issues whether it comes to the audit of offshore expenses…it’s an attitude we have seen across the board, where the government is unwilling to enforce the legitimate rights of Guyanese when it comes to our offshore oil and gas industry.” He stressed that in the instance of the oil and gas sector the government should not accept limited insurance coverage given that in the event of an oil spill, it would cost the country tens of billions of US dollars to clean up.

“We believe that the government should not appeal this decision but it should ensure that the rights of Guyanese are properly emphasised and that we see full insurance coverage, Low said. “We need to ensure we have adequate coverage. In fact, if we have a major spill in Guyana, it can easily wipe out our entire natural resources fund and treasury, just trying to deal with the expenses associated with the clean up after a spill … So the government should change its attitude, it is disappointing that it should take this stance, the government should really just take care of Guyana’s patrimony and not engage in any lawsuits that are not called for.”

AFC Executive  David Patterson

For their part, AFC Executive Member David Patterson at a press conference noted the government is showing its true colours. “I have never seen a government appeal its own law that they themselves set it is normally the oil companies that do their own bidding. In my opinion, the government should take this as a win for Guyana since it cannot be blamed for a decision of the court. Instead, they are fighting to allow the oil companies to have its way, which shows that the government has at heart any but the interest of Guyanese,” Patterson said.

Moments after the ruling was handed down on Wednesday, the Government signaled its intention to appeal the High Court decision. Justice Sandil Kissoon had granted an order for the EPA to issue an EEPGL and its parent company, Exxon Mobil to ensure it provides unlimited insurance coverage to safeguard Guyana against the devastating effects of an oil spill within the next thirty days.

In a statement the Attorney General, Anil Nandlall said the Government of Guyana as a major stakeholder notes the ruling by Justice Kissoon and the several declarations granted therein that the EPA breached its statutory duty by failing to enforce compliance by Esso Exploration and Production Guyana Limited (EEPGL) of its Financial Assurance obligations to provide an unlimited Parent Company Guarantee Agreement and/or Affiliate Company Guarantee Agreement to indemnify and keep indemnified the EPA and the Government of Guyana against all environmental obligations of the Permit Holder and Co-Venturers within the Stabroek Block, Offshore Guyana. “The EPA and the Government of Guyana 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. In this regard, we hold the respectful opinion that the Learned Judge fell into error in his findings. This ruling can have profound ramifications and grave economic and other impacts on the public interest and national development,” the attorney general said.

“As a result, the decision of the Learned Judge will be appealed and orders will be sought to stay its effect until the hearing and determination of the appeal,” Nandlall asserted.

He said the EPA and EEPGL spent almost a year negotiating a Parent Guarantee and Indemnity Agreement to the tune of US$2 billion in liability coverage in compliance with EEPGL’s financial assurance obligations under the Environmental Permit and the Environmental Protection Act.  “These negotiations only concluded last week. These negotiations and their material details were placed before the Court for its consideration, but unfortunately to no avail,” Nandlall said.

• government to comply with its own provisions, Guyana, issue an Enforcement Notice, Production Guyana Limited