Guyana: Government to appeal ruling

CMC – The government of Guyana has served notice it will appeal Wednesday’s High Court ruling against the state-run Environmental Protection Agency (EPA), with Attorney General Anil Nandlall saying the judgment could have “grave economic and other impacts” on the country.

On Wednesday, Justice Sandil Kissoon ordered the EPA to compel Esso Exploration and Production Guyana Limited (EEPGL), a subsidiary of US oil giant ExxonMobil, to take out an unlimited parent company guarantee and/or unlimited liability affiliate company guarantee to finance the cost of any chemical pollution.

The judge, who found that both the EPA and the oil company breached their obligations under the reviewed Environmental Permit, gave the EPA until June 10 to comply. Failing that, the Environmental Permit would be suspended.

However, Nandlall said in a statement that the government and the EPA were of the 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,” he 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.”

The Attorney General pointed out that 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 EPA.

“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,” he added.

In his ruling on a case brought by President of the Transparency Institute of Guyana Inc (TIGI) Fredericks Collins and another Guyanese citizen, Godfrey Whyte, to get the EPA to enforce the liability clause in the permits issued to ExxonMobil Guyana for its offshore oil operations., Justice Kissoon said the EPA was in an egregious state and had abdicated its exclusive statutory responsibilities to ensure due compliance by EEPGL with Condition 14 of the renewed Environmental Permit.

“The EPA has relegated itself to state of laxity of enforcement and condonation compounded by a lack of vigilance thereby putting this nation and its people in grave potential danger of calamitous disaster,” the judge said.

Further, said Justice Kissoon, EEPGL sought to dilute its liabilities and settled obligations stipulated in the Environmental Permit while simultaneously optimizing production at the Liza Phase 1 Petroleum Production Project in the Stabroek Block offshore Guyana.

“Esso Exploration and Production Guyana Limited engaged in a course of action made permissible only by the omissions of a derelict, pliant and submissive Environmental Protection Agency,” the judge said, adding that the oil company was never in doubt as to what its liabilities were under Condition 14 of the Environmental Permit for the Liza Phase 1 Petroleum Production facility.

He insisted that EEPGL is obligated to finance clean-up after pollution.

“Equally, the concomitant financial assurance obligations imposed on ESSO by Condition 14:10 of the Permit (Renewed) in the form of environmental liability insurance together with an unlimited parent company guarantee agreement are but the legitimate corollary flowing from its uncapped and unlimited liabilities arising from an event and pollution as encapsulated in the permit, to provide such financial assurance, in the form of insurance and unlimited parent company, guarantees to cover its liabilities,” Justice Kissoon said.

He noted that before the filing of the proceedings, the EPA had refused to disclose any information as to the status of compliance by Esso with its financial insurance obligations for pollution damage as set out in the permit.

Given the significant breaches and violations recorded, the judge ruled that the EPA is in breach of its statutory duty by its failure and or omission to enforce compliance by EEPGL of its Financial Assurance obligations as outlined under the Environmental Permit.

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