EPA served Exxon with notice for unlimited parent guarantee since May 9 – Attorney-at-Law, Sanjeev Datadin

Jun 01, 2023 News

Kaieteur News – Attorney-at-Law, Sanjeev Datadin told the Appellate Court yesterday that the Environmental Protection Agency (EPA) has issued an order to ExxonMobil Guyana requiring the provision of an unlimited parent and/or affiliate company guarantee for oil spills in the Stabroek Block.

Attorney-at-law, Sanjeev Datadin.

Datadin confirmed with Kaieteur News that the order was issued on May 9, 2023 as expressly stated by the order issued in the ruling by Justice Sandil Kissoon.  The order states that the EPA must issue an enforcement notice to Esso Exploration and Production Guyana Limited (EEPGL) to provide the “unlimited liability parent company guarantee 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 from an insurance company with standing and repute that equates to Grade A Plus”, failing which the Liza Phase One permit would be suspended.

While the notice has been issued, the EPA has also filed an appeal against the entire judgment by Justice Kissoon. Submissions pertaining to an application by the EPA to stay the parent guarantee order until the full case is heard was presented to Appellate Court Judge, Justice Rishi Persaud yesterday.

Datadin who represented the agency, said the case before the court boils down to a matter of interpretation of the financial assurance obligations in the environmental permit for the Liza Phase One Project. While it is the ruling of the High Court Judge, Justice Sandil Kisson that the permit requires an unlimited parent and/or affiliate company guarantee for oil spills, Datadin said there are other clauses in the permit which prove this to be an unrealistic demand. He noted that clause 14 of the permit does say the permit holder is responsible for all costs associated with a spill, in keeping with the polluter pays principle.

Datadin said however that the parameters of those costs are outlined by Condition 14.3 of the permit which states, “The forms of financial assurance shall be guided by an estimate of the sum of the reasonably credible costs, expenses and liabilities that may arise from any breaches of this permit. Liabilities are considered to include costs associated with responding to an incident, clean-up and remediation and monitoring.”

The clause further notes that, “the estimation is not expected to address unidentifiable or inestimable costs which may be associated with compensation for loss and ongoing damage to other parties which are able to be pursued through civil action.” Datadin said, “To say unlimited guarantee makes a mockery of the clear words…” After hearing the arguments presented by Datadin and other lawyers representing EEPGL, and respondents, Godfrey Whyte and Frederick Collins, Justice Persaud said his decision on the application for a stay would be issued before June 7, 2023.

• Attorney-at-Law, EEPGL, Exxon, Godfrey Whyte, Justice Sandil Kissoon, Sanjeev Datadin