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Regardless of the company, regulate without fear or favour – Mexican Regulator
Executive Director of ASEA, Carlos De Regules Ruiz-Funes
By Kiana Wilburg
When it comes to the regulation of the oil sector, there are two key things Guyana must do. The nation must make it mandatory for companies to operate under safety and environmental management systems. It must also make it obligatory for oil operators to prove they have financial coverage to cover an oil spill.
This salient piece of advice was provided by Executive Director of the Agency for Security, Energy and the Environment (ASEA) of Mexico, Carlos De Regules Ruiz-Funes.
By adhering to the recommended steps, the Executive Director said that Guyana would be ensuring that it prevents certain accidents from occurring while securing environmental accountability.
He said that this approach is taken in Mexico and there have been great results.
The ASEA Head stated, “In Mexico, we published two pieces of regulations on this (matter). They are the Safety and Environmental Regulations and one for financial responsibility. With the first, you have the preventative approach and with the second, you make sure they are financially ready to respond to pollution and accidents. If they can’t pass (or comply with) those two, then they are not allowed to operate, regardless of who they are and the investment brought.”
Ruiz-Funes said his advice to Guyana would be to regulate its sector without fear or favour, irrespective of the company. He stressed that companies such as ExxonMobil, Shell and Chevron are accustomed to working in environments that demand only the optimum in international best practices.
There are many examples where the governments of nations ensure that oil companies are tied to strict environmental provisions in their contracts. Unfortunately, Guyana is not one of those nations.
In the Production Sharing Agreement (PSA) signed between the Government of Guyana and USA oil giant, ExxonMobil, there are vague terms for compliance with environmental protection standards. There is also no provision for insurance to compensate for any adverse effects of an oil spill.
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