EPA’s slackness puts nation in grave danger

May 04, 2023 Court Stories, ExxonMobil, Features / Columnists, News, Oil & Gas

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…High Court Judge flags body for breaching statutory duty again

By Renay Sambach

Kaieteur News – “The Environmental Protection Agency (EPA) has relegated itself to a 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,” those were the words of High Court Judge, Justice Sandil Kissoon, when he handed down his ruling in a monumental case against Guyana’s Environmental Protection Agency (EPA) and ‘ExxonMobil Guyana,’ Esso Exploration and Production Guyana Limited (EEPGL).

Two citizens, President of the Transparency Institute of Guyana Inc. (TIGI) Frederick Collins and Godfrey Whyte, through their lawyers, Mr. Seenath Jairam, SC, and Ms. Melinda Janki, had approached the court to get the EPA to enforce a critical clause, Condition 14 in the Liza Phase 1 Environmental Permit (Renewed) issued on May 31, 2022 to EEPGL. That provision says ExxonMobil Corporation, the parent company for EEPGL, must cover costs for all environmental loss and damage that might result from a well blowout, oil spill or other failure in the Liza Phase One Development Project in Guyana’s Stabroek Block.

Guyana’s Environmental body mandate is to “Promote, facilitate and coordinate effective environmental management and protection; and the sustainable use of Guyana natural resources.” However, yesterday’s ruling like a similar case involving the EPA in December 2022, painted the State agency in a grim light for breaching its statutory duties thereby putting the nation and its people at risk to grave danger in the event of an oil spill offshore Guyana.

Justice Kissoon pointed out that the antecedent circumstances that were raised in the proceedings have exposed the existence of an egregious state of affairs that has engulfed the EPA, “in a quagmire of its own making.”

The judge added that the EPA has abandoned its exclusive statutory responsibilities entrusted to it by the National Assembly to ensure due compliance by ExxonMobil Guyana with Condition 14 in the renewed environmental permit.

The judge added that the court found that EEPGL was engaged in a disingenuous attempt which was calculated to deceive, when it sought to dilute its liabilities stipulated and expressed in clear terms at Condition 14 of the renewed environmental permit, while simultaneously increasing production at the Liza Phase 1 project offshore Guyana. To this, Justice Kissoon underscored that EEPGL was engaged in a course of action that was made permissible only by the omissions of a derelict, pliant and submissive EPA.

Further, it was highlighted that the EPA refused to disclose any information during the court proceedings as to the status of compliance by EEPGL with its financial obligations in accordance with Condition 14 of the renewed permit and whether or not the oil company has complied with the critical clause. On the two substantive issues, the judge said that the agency sought refuge in silence, avoidance, concealment and secrecy, and also turned a blind eye, notwithstanding the grave potential danger and consequences to the country and citizens if an event occurred at the Liza Phase 1 project – especially that the oil company has been ramping up production there.

On the issue of whether the EPA has acted in breach of its statutory duty, unreasonably, and also allowing EEPGL to carry out petroleum operations in the absence of the compliance with Condition 14, Justice Kissoon underscored that at every juncture from the day the renewed permit was issued to EEPGL to date, the EPA engaged in a course of action to undermine and erode the terms and conditions of its own environmental permit.

It was highlighted in the court document that the agency carrying out public law functions, notwithstanding that EEPGL’s activities are of significant impact, failed several aspects of its duties.

The EPA failed and omitted to mandate compliance by EPPGL with its financial assurance obligations of environmental liability insurance together with an unlimited parent company guarantee; the EPA also failed to take any meaningful step of any step whatsoever to assess what was provided to it by the oil company purportedly as the environmental liability insurance when it was not in fact in keeping with Condition 14 of the renewed permit. Importantly, it was also stated that despite failing to do the aforementioned, the EPA also failed to suspend/ cancel EEPGL’s renewed environmental permit even though the oil company made public pronouncements, communicating its intention to increase production levels.

To this, Justice Kissoon said, “The Agency has, in the circumstances, by its decision and omission, committed an illegality, acted unlawfully, ultra vires, unreasonably in the Wednesbury context of unreasonableness, in defiance of logic, irrationally and without any jurisdiction.”

The judge granted a declaration that the EPA is in breach of its statutory duty by its failure/ omissions to enforce compliance by the oil company with its financial assurance obligations as stipulated by clause 14, to provide an unlimited parent company agreement and/ or affiliate company guarantee agreement to indemnify and keep indemnified the agency and the government against all environmental obligations of the EEPGL and its partners in the Stabroek Block.

Another declaration was granted that EPA is in breach of its statutory duty by its failure/ omission to enforce compliance by EEPGL to provide environmental liability insurance of a type and nature stipulated as stipulated by the renewed environmental permit and to have an independent insurance consultant retained by the Agency to review and examine the insurance package to ensure its conformity with said permit.

Moreover, an Order of Mandamus was granted directed to the EPA to issue an Enforcement Notice pursuant to Section 26(1) and (2) of the Environmental Protection Act, on or before May 9, 2023, directed to EEPGL to perform its obligations under condition 14 of the renewed environmental permit and to provide, within 30 days thereafter, on or before June 10, 2023 the unlimited liability Parent Company Guarantee Agreement and/or unlimited liability Affiliate Company Guarantee to indemnify and keep indemnified the Government of Guyana and the Agency against all such environmental obligations of  the oil companies operating in the Stabroek Block, together with Environmental liability insurance as is customary in international petroleum industry.

BREACHED STATUTORY DUTY (SCHLUMBERGER CASE)

In December 2022, in an historic case, High Court Judge, Justice Nareshwar Harnanan had ruled that Guyana’s Environmental body breached its statutory duty in the case against the EPA and US based Company, Schlumberger Guyana Inc. (SGI).

Justice Harnanan ruled that the EPA breached its statutory duty by not publishing reasons/adequate reasons as to why it waived the requirement for an Environmental Impact Assessment (EIA) for Schlumberger to build a radioactive facility at Houston, East Bank Demerara.

The High Court judge had issued several administrative orders on December 16, 2022. Those orders dealt with the issue of the EPA failing to publish the reasons why it did not require an EIA for the construction and operation of a source storage/calibration building, in accordance with Section 11 (2) of the Environmental Protection Act, Cap.20:05, Laws of Guyana.

The ruling was as a result of a legal challenge filed by three Environmental Activists and residents who live nearby the facility, Vanda Radzik, Danuta Radzik, and Raphael Singh, through their Lawyers: Marlene Alleyne, Siand Dhurjon, and Ronald Burch-Smith. The lawsuit was filed on February 14, 2022.

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. Notably, the public was also not given any notice that any such permit was under consideration by the EPA. After seeing the EPA’s notice to waiver the EIA for Schlumberger, several residents formally objected to the decision stating that radioactive materials should not be used or stored in close proximity to schools, neighbourhood, or the Demerara River. This later led to the matter being brought before the High Court judge.

Justice Nareshwar Harnanan in his judgment declared, “That the EPA’s decision to waive the requirement of an Environmental Impact Assessment with respect to Schlumberger Guyana Inc. (SGI)’s application for environmental authorization for the construction of the said facility is in breach of the EPAs statutory duty for failure to provide reasons for the wavier as mandated under section 11(2) of 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 on the ground that the decision is ultra vires and breached the EPA’s statutory duty set out under section 11 (2) of the EPA Act.

A second Order of Certiorari, was issued and directed to the EPA quashing its decision made in January 2022, that permitted Schlumberger to operate its radioactive substances and materials storage and calibration facility and to possess, use and store radioactive materials, on the ground that the decision was in breach of the EPA statutory duty set out under Section 11 (1) and (2) of the EPA Act.

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.

Section 11 of EPA Act, stipulates that any project that may significantly affects the environment requires an EIA and such an assessment requires publication in the newspapers of the intended project as well as consultations with the public.

The Judge also said during his ruling that, “This court is of the view that the EPA’s decision to waive the requirement or EIA cannot be found to be lawful as it directly contravenes [section] 11 (2) of the [EPA] Act, the court also finds that no adequate reasons were contained in the notice published by the EPA…”

Justice Harnanan highlighted too that while the EPA contended that by granting a permit to Schlumberger to construct the facility it does not guarantee storage of the radioactive sources at the facility – the EPA Act explains – that the agency should not issue a construction or operation permit unless the agency includes in the permit conditions that are reasonably necessary to protect the environment.

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• Environmental Protection Agency (EPA), Frederick Collins, High Court Judge, Justice Sandil Kissoon, statutory

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