Guyana has responsibility to ensure activities in jurisdiction do not damage environment of other states - UN

Guyana has responsibility to ensure activities in jurisdiction do not damage environment of other states – UN

Jun 15, 2023 Court Stories, ExxonMobil, Features / Columnists, News, Oil & Gas

…Bulkhan says Gov’t. will be held liable for US-billions in damage without parent guarantee from ExxonMobil

Kaieteur News – A governing principle of the United Nations (UN), of which Guyana became a member in September 1966 states that while countries have a sovereign right to develop their resources, they have a responsibility to ensure that these activities, within their jurisdiction, do not cause damage to the environment of other states.

This point has been restated by prominent environmental activist, Dr. Janette Bulkhan in a letter to this publication. Bulkan holds a doctorate from Yale University School of Forestry and Environmental Studies. She is also member of the Oil and Gas Governance Network (OGGN) and has been advocating for good management of the country’s newfound oil resources.

Environmental Activist, Dr. Janette Bulkhan

In her missive, Bulkhan said she observed an opinion piece published by Stabroek News in which the author attempted to persuade the public that the government will not be held liable for an oil spill disaster, since it is not the owner of the assets operating offshore.

The blogger wrote, “Ms. Bulkan is fully aware that the Gov’t. of Guyana does not own, operate or is in custody of any offshore oil well in our EEZ. Also, the GoG, neither owns, operate, control or is in custody of any oil field vessel or oil tanker. Therefore, Guyana will not be liable to any third party in the event of a well blow-out or any spill from tankers and vessels. Guyana bears absolutely no vicarious liability exposure, here. I am not sure what this highly educated lady is speaking about.”

That writer was responding to Dr. Bulkhan’s letter, published on June 13, 2023, in which she warned that Guyana could foot costs close to US$29 billion to compensate 10 Caribbean states for losses accrued as a result of oiled beaches and therefore a severe hit to their tourism industry. She was keen to note that further costs may be required for damages to the fisheries’ sectors of these affected islands as well.

In a bid to shed light on Guyana’s true responsibilities, the activist quoted ‘Principle 21’ from Declaration of the United Nations Conference on the Human Environment at Stockholm in June 1972. It notes, “States have, in accordance with the Charter of the United Nations and the principles of international law, the sovereign right to exploit their own resources pursuant to their own environmental policies, and the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other states or of areas beyond the limits of national jurisdiction.”

Dr. Bulkhan therefore made the point that it is Guyana who is mandated to ensure its activities do not cause harm to the environment of others, rather than an operator. She explained, “It is not relevant that the State of Guyana does not own directly the infrastructure for oil extraction installed in the Exclusive Economic Zone. Guyana has international responsibility.”

To this end, she indicated that Guyana can be sued by its Caribbean neighbours for damages caused by the activities of Esso Exploration and Production Guyana Limited (EEPGL)- the operator of the Stabroek Block. For this reason, she has been lobbying for the company to provide a parent company guarantee that compensates for any damages caused by an oil spill.

In further making her point, Bulkhan pointed out that internationally, countries were held liable for environmental damage caused to other states. She explained, “The first major case was about the poisonous fumes from a privately-owned metal smelter in a community named ‘Trail’ in British Columbia, Canada. The sulphur dioxide fumes drifted south across the border into the State of Washington, USA. In 1935 the USA made a successful legal claim for damages to crops and trees. In 1941, the arbitration Tribunal formulated the seminal Principle of customary international law, that ‘No State has the right to use or permit the use of its territory in such a manner as to cause injury … in or to the territory of another [State] or the properties of persons therein, when the case is of serious consequence…”.

The advocate highlighted that both the President and Vice President of Guyana have repeatedly asserted that the petroleum in discovered in the country’s offshore basin belongs to Guyana. She noted that while ExxonMobil and its its co-venturers, Hess Corporation and CNOOC, have the right under the 2016 Production Sharing Agreement (PSA) to explore for, extract, and sell the oil and gas, Guyana has ownership responsibilities which cannot be disclaimed by the PSA. She was keen to, “It is required in the EPA’s environmental operating permit that EEPGL and co-venturers provide complete liability cover for those damages…EEPGL has provided that assurance orally. The EPA permit requires that assurance in writing.”

The activist is adamant that ExxonMobil must provide unlimited liability coverage for its operations in Guyana.

Unlimited parent company guarantee

ExxonMobil Guyana, the Government of Guyana (GoG) and the Environmental Protection Agency (EPA) has appealed a ruling by the High Court for the oil company to provide an unlimited parent company guarantee to cover the costs associated with an oil spill. The ruling came months after President of the Transparency Institute of Guyana Inc (TIGI), Frederick Collins and another citizen, Godfrey Whyte, took the EPA to court to enforce a critical clause in the Liza Phase One renewed permit, issued to EEPGL.

The citizens had filed the matter and won the case through their Lawyers, Seenath Jairam, SC, Melinda Janki, and Abiola Wong-Inniss.

Mr. Collins, a former insurance professional said, “an oil spill would be devastating for our country and Region as many Guyanese and Caribbean peoples depend on the ocean for their livelihoods. That is why we have decided that the time has come to take matters to the court for relief.” The litigants said that their resort to the court is to make sure that the company takes full financial responsibility in case of harm, loss and damage to the environment.

High Court Judge, Justice Sandil Kissoon, had ordered the company to provide the parent guarantee by June 10, 2023 however the Appeal Court granted a stay of the order and has in the meantime directed Exxon to supply the EPA with the US$2 billion parent guarantee. The matter is still ongoing in the Appeal Court.