VP Jagdeo dodging insurance responsibility by shifting it to EPA - Christopher Ram

VP Jagdeo dodging insurance responsibility by shifting it to EPA – Christopher Ram

Mar 06, 2023 News

Kaieteur News – Attorney-at-Law and Chartered Accountant, Christopher Ram believes Vice President Bharrat Jagdeo, who has overall responsibility for the petroleum sector, is dodging that responsibility by placing the onus on the Environmental Protection Agency (EPA) for ensuring that ExxonMobil complies with its insurance obligations.

The Attorney told this newspaper that the Petroleum Exploration and Production Act grants to the Minister responsible for petroleum the power to issue Production Licences subject to such conditions as he thinks fit. The role of the Environmental Protection Agency is to consider the impact of any project on the environment and as part of the approval process, it is the responsibility of the Minister to take account of any recommendations by the EPA, he explained.

While the Licence may have been signed by Minister Vickram Bharrat, it is the Vice President who is assigned overall responsibility for petroleum.

Ram is convinced that Jagdeo’s response during his press conference on Friday to the Publisher of this Newspaper, Mr. Glenn Lall was a deliberate attempt to mislead the public. Lall had asked the VP whether Guyana has acquired full liability coverage from ExxonMobil, when Jagdeo explained, “I told the EPA to get (it), they have to get the parent company guarantee.”

In this regard, Ram pointed out that “the ultimate responsibility falls on the Vice President to ensure that ESSO honours the terms and conditions of its Licence. It is misleading and disingenuous for the VP to send Mr. Lall in the wrong direction. It is Jagdeo who must do it because he is the person delegated by President Ali to oversee the petroleum sector,” the Attorney explained.

The 2016 Production Sharing Agreement (PSA) signed between the Government of Guyana and ExxonMobil states at Article 20.2 (a) “The Contractor shall effect at all times during the terms of this Agreement, insurance as required by applicable laws, rules, and regulations and of such type and in such amount as is customary in the international petroleum industry in accordance with good oil field practice appropriate for Petroleum Operations in progress…”

Article 20.2 (b) of the Petroleum Agreement makes it clear that the insurance provisions must be approved by the Minister of Natural Resources. It states, “Subject to the Minister’s approval, which shall not be unreasonably withheld, the Contractor, notwithstanding the provisions of Article 20.2(a), shall have the right to self-insure all or part of the aforementioned insurances in Article 20.2(a).”

Ram noted that self-insurance has been taken off the table and replaced with full insurance supported by the guarantees from the parent company and affiliates of the Stabroek Block.

When asked how Guyanese can get the elected leaders to play their part in safeguarding the environment, the Attorney said that this may very well be an issue which Lall may want to have adjudicated by the Court. According to Ram, the Natural Resources Ministry for which the VP bears responsibility, ought to have stepped in a long time ago. In fact, the Ministry should not have allowed any production to begin until all the conditions were met.

“Ultimately, it’s very unfortunate that President Irfaan Ali is not stepping up to the plate when it comes to protecting Guyana and the Caribbean. The fact is that an oil spill is not going to affect Guyana alone. An oil spill can affect all neighbouring countries and the good relationship his Administration enjoys with them” he explained, in pointing to the urgent need for such critical mechanisms be put in place.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News