Self-Insurance: the devil in disguise

Jan 10, 2023 Editorial

Kaieteur News – Self-Insurance should bring home to all Guyanese how ExxonMobil does not miss a beat where making money is concerned. When ExxonMobil decides on self-insurance it saves huge sums of money, while leaving the citizens of this country wondering how protected they are. How protected Guyanese are in the event of a massive oil spill, or other catastrophic development, to which we are totally vulnerable, but have no idea regarding what and how much insurance ExxonMobil has taken out for its Guyana operations.

This is a poor country now experiencing some tiny droplets from its immense oil wealth. ExxonMobil’s criminal 2016 contract has seen to that with an array of terms and conditions that devastate this nation’s economic potential, degrade it financially, and leaves Guyana hurting badly. Self-Insurance is another costly area in which this country is being taken advantage of, and exposed to dangers of which we are still to grasp. The insurance coverages that ExxonMobil should get, and from which our laws mandate that Guyanese participate, are just not happening because approval was given by the previous APNU+AFC Coalition Government to the company to pursue self-insurance. ExxonMobil arranges insurance with close relationships (possibly affiliates), share or save in the multimillion-dollar premiums. It is yet another scheme where this predatory American company makes another killing from Guyana’s oil.

Our local insurance companies lose rich business opportunities, and the national treasury collects no taxes. But there is an infinitely worse consideration that is frightening to contemplate. When ExxonMobil engages in Self-Insurance, the company determines how much coverage and for what specifically, and about which Guyana has absolutely no say. ExxonMobil retains the associated risks for itself, which raises the question about why any Government of this country, any National Leader, would be comfortable with such an arrangement, permit it to continue. ExxonMobil has been the worst partner that this country ever could have found to explore, develop, and exploit its oil wealth. To have the insurance risks, liability requirements (ceilings) all in the hands of ExxonMobil has to be more than unwise, it is the madness to excess.

For example, the insurance coverage that ExxonMobil takes out could be woefully short in helping to defray the possibly billions (US) of dollars in damages done by an oil spill. Considering the sprawling nature of deep-water oil spills, the unimaginable in terms of environmental destruction could be inflicted on not only Guyana’s shoreline and Guyanese livelihoods, but in other countries in the region and their economies and way of life. To have ExxonMobil, therefore, be responsible, the sole decision maker, as to what constitutes proper liability coverage is the equivalent of signing away our life, this nation’s prosperity, and giving the company the deed. It is tantamount to giving a serial sex offender custody of one’s children, and never looking back to determine what is happening.

All this is in the hands of ExxonMobil because one Government after the other has allowed this abomination to continue unaddressed, unchecked, and unchanged. The APNU+AFC Coalition failed this country by essentially clearing the way for ExxonMobil to obtain Self-Insurance for its operations in Guyana’s oil sector. Since the PPPC has returned to power, it has made no move to correct this grave danger, and what amounts to billions in lost revenue to this country’s businesses and coffers. ExxonMobil and Partners continue monopolizing all components related to risk, losses, liability, and damages in their offshore operations.

This can be nothing but total insanity, and inexcusable leadership frailty and impotency. Which self-respecting Government would want for ExxonMobil to have any involvement in matters of money (insurance, liability, damages), after the ugly, criminal record it has compiled where dealing fairly with this country is concerned? ExxonMobil has proven that there is no company that is as tightfisted when millions are on the table. The fact that ExxonMobil worked overtime and doggedly behind the scenes to wrest self-insurance for itself is an indication of how scheming and calculating this American company can be. To the PPPC Government, we urge that a stop be put to this Self-Insurance fraud. Let us benefit from the rich components that are part of the insurance that Article 20.2 of the 2016 Production Sharing Agreement requires.