High Court Judge rules EPA acted illegally by failing to suspend/cancel Liza 1 Permit in view of Exxon’s 11 months of non-compliance on insurance

May 06, 2023 News

– Agency told the court oil giant was compliant when this was not so

Kaieteur News – A recent High Court judgment has revealed that ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL) is in breach of its Liza Phase One Permit, specifically as it pertains to those clauses that call for the provision of insurance.

According to the ruling handed down by Justice Sandil Kissoon, Guyanese authorities should have had in their possession, two forms of insurance coverage: a parent guarantee from Exxon that has no cap or limit and an insurance package from EEPGL from an independent firm.

Justice Kissoon ruled that EEPGL and its parent, ExxonMobil, are in breach of Condition 14 of the Liza Phase One Permit which speaks to insurance coverage for 11 months. The Judge also ruled that the regulator’s failure to ensure compliance was fully and effectively met constituted an illegality.

From the time the Liza Phase One Permit was modified and issued on May 31, 2022, Justice Kissoon stated that the EPA, at every juncture thereafter, engaged in a course of action that undermined and eroded the strict terms and conditions of the very Environmental Permit it issued.

Justice Kissoon said too that the Agency in its filings before the Court, through its Officer, deposed on oath that EEPGL was indeed compliant with obligations outlined at Condition 14 of the Permit. However, despite the oath, Justice Kissoon said, “This was not in fact so.”

The Judicial Officer said the Agency, a public authority, carrying out public law functions, failed and omitted to mandate compliance by the Permit Holder with its Financial Assurance obligations of environmental liability insurance together with an unlimited parent company guarantee.

He said, “The agency failed to take any meaningful step or any step whatsoever to assess what was provided to it by Esso, the Permit Holder, purportedly as environmental liability insurance when it was not in fact in keeping with Condition 14:05.”

“This is notwithstanding that the Permit Holder has, through its public pronouncements, communicated its intention to increase production levels in its petroleum production facilities,” the judge said.

Justice Kissoon added that the EPA also “failed to suspend and/or cancel the Environmental Permit (Renewed) notwithstanding the potential catastrophic consequences to the environment, citizens and the State.”

The Judge further noted that Condition 14:17 of the Permit states that, “Should the Permit Holder contravene or be likely to contravene any condition of this Permit, the Agency may issue an Enforcement Notice in accordance with Section 26 of the Act”.

He said there is no evidence that any Enforcement Notice was issued to EEPGL notwithstanding its prolonged non-compliance over 11 months. Justice Kissoon said too that there is no evidence that the agency took any step whatsoever in relation to the Permit Holder’s compliance.

Citing Regulation 15(1) of the EPA Act, Justice Kissoon said it provides that “Where an Environmental Authorisation is in force it shall be the duty of the Agency to take the steps needed- (b) For the purpose of ensuring that the conditions of the Environmental Authorisation are complied with.”

Section 13(1) of the Act also provides that, “……….each environmental permit shall contain the following implied condition: (a) The Agency shall have the right to cancel or suspend the Environmental permit if any of the terms or conditions of the Environmental permit are breached.”

Section 25 of the Act also sets out the procedure under the Act for cancellation, evocation and/or suspension of the Permit by the Agency in the public interest.

In all of the circumstances, based on the evidence, the Court found that in accordance with the Judicial Review Act, Chapter 3:06, the Agency is, by its acts and omissions, in breach of its statutory duty.

Justice Kissoon said the EPA has, in the circumstances, and 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 has given the EPA until June 10 to ensure EEPGL is compliant with the insurance provisions of its permit. Failure to do so will see the permit being suspended.

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High Court Judge rules EPA acted illegally by failing to suspend/cancel Liza 1 Permit in view of Exxon’s 11 months of non-compliance on insurance

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High Court Judge rules EPA acted illegally by failing to suspend/cancel Liza 1 Permit in view of Exxon’s 11 months of non-compliance on insurance

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