Companies, investors face significant risks in Guyana as Govt. flouts own environmental laws – Environmentalist warns

Feb 14, 2023 News

---

Kaieteur News – Environmentalist Simone Mangal-Joly, also known for her work promoting free and fair elections through citizens participation in elections observation, has written to the President of Guyana about a break down in democratic environmental governance in Guyana and the risks this poses to investors.

In a letter dated February 12, she pointed out the neglect of the country’s environmental protection institutions, resulting in no legally constituted Board of Directors for the Environmental Protection Agency (EPA) or an Environmental Assessment Board (EAB), as well as no Environmental Appeals Tribunal in place, some seven years after Guyana has entered oil and gas production with international companies and investors. She also raised the matter of conflicts of interest and the unfair handling of complaints before previous Environmental Assessment Boards.

In an invited comment, Mangal-Joly told this newspaper that, “A government that will not uphold its own laws is not a reliable investment partner. Companies and investors face legal and regulatory risks in Guyana from what is evidently systemic breaches of the Environmental Protection Act by the EPA, a lack of independence, and neglect of environmental protection institutions.  The present Environmental and Social Governance (ESG) investment climate lacks predictability and stability, with companies open to legal and financial risks, as well as political risks due to community conflicts, and reputational risks. Investors, companies, and the government need to take these risks seriously.”

Mangal-Joly said that the evidence of government presently not managing ESG risks is “indelible in ink”, citing a long list of breach of legal procedures as set out in the Environmental Protection Act for assessing and granting environmental permits for offshore oil and gas production, the gas to shore pipeline and energy project, and onshore supportive services.

She explained that ExxonMobil’s violation of its environmental permits in such areas of safe oil production limits and full liability insurance coupled with the government’s disinclination to enforce the terms of such permits, EPA’s systemic disregard for the public’s rights in the granting of environmental permits, failure to prove protection of our health, natural resources, and other marine industries such as fisheries in Environmental Impact Assessments, and the EPA’s failure to date to produce independently verified environmental monitoring reports are all indicators of the governance breakdown.

Mangal-Joly also pointed out that companies have been harming their own interests by further weakening Guyana’s already fragile environmental management system. She said that she had participated in environmental permitting processes in which companies and the government were alerted of legal procedural breaches in good faith, but they chose not to address deficiencies and illegalities.

According to environmental advocate, “We cannot lay blame solely at the feet of the Government. Companies have a responsibility to know the requirements of the Environmental Protection Act and see that they gain permits through lawful processes, and they have not all been doing this.”

She observed that several companies, including ExxonMobil, appear happy to accept and run off with environmental permits knowing their “ill-begotten means”. She argued that this is not only irresponsible towards Guyanese but also their investors. “They (companies and investors) need to resist the instinct for expediency and avoidance of accountability and recognize that a government that enables the cutting of corners with weak environmental governance is a liability not an asset. For their part, government needs to understand that effective environmental governance is a necessary part of genuine development and that it needs to clean up its act if it is to function as a dependable partner in the world economy,” she reasoned.

Mangal-Joly further pointed out that foreign direct investment is not resulting in the benefits that are often preached.

According to her, “The promise of foreign investors raising standards has not materialized in the environmental arena. Instead, we have witnessed a race to the bottom. Guyana has the notoriety of being the only country where all the facilities handling toxic oil production waste from offshore were set up without Environmental Impact Assessments and host community knowledge of the risks. In fact, none of the companies were even granted environmental permits in legal compliance with the requirements of the Environmental Protection Act. Schlumberger was only the tip of the iceberg; the rest are all currently sitting ducks with gaping liabilities.”

Schlumberger lost its environmental permit to operate a hazardous radioactive waste treatment facility at Houston, East Bank Demerara, after the EPA lost a Judicial Review case brought by a group of Guyanese citizens.  It was reported that on January 19, 2022, the EPA without any notice given to the public, granted Schlumberger permission to use, store and possess radioactive materials at its facility located at Houston.

Justice Nareshwar Harnanan ruled on December 19, 2022 that the EPA breached its statutory duties when it made the decision to waive the requirement of an EIA to Schlumberger in relation to granting an environmental permit for the construction of the facility. In fact, the Judge declared that EPA’s decision to not conduct an EIA into the effects of the construction of the facility was illegal, ultra vires, unreasonable, and irrational since it breached the Environmental Protection Act, Cap.20:05.

Justice Harnanan granted an Order of Certiorari issued and directed to the EPA quashing its decision on June 9, 2021 to award an environmental authorisation to Schlumberger to construct a radioactive substances and material storage and calibration facility.

Further, the Judge issued an injunction against Schlumberger, restraining it from continuing the possession, use and storage of radioactive chemicals at its Houston facility, unless and until it is in receipt of a lawfully issued permit pursuant to the provisions of the EPA Act.

---

• environmental, investor, Permit, risks, Simone Mangal-Joly

---