Polluter pays principle; transboundary responsibility

Jun 15, 2023 Letters

Dear Editor,

A blogger on the SN website made the following response to my letter ‘Complete liability coverage for oil spills to indemnify our Caribbean Island neighbours’ which you published in KN on 13 June:

“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.”

The President and Vice-President have repeatedly asserted that the petroleum in the deep offshore fields belongs to Guyana. EEPGL, and its co-venturers (Hess Corporation (USA) and CNOOC), have the right under the 2016 Production Sharing Agreement to explore for, extract, and sell the oil and gas, leaving a “small piece” of royalty and shared profit for the owner. Ownership carries responsibilities which cannot be disclaimed because of the PSA.

Suppose that you own a house with a garden. You have trees on or near the fence line, which overhang your neighbour’s property. You hire a contractor to prune the trees. Accidentally, the contractor drops a tree branch onto the neighbour’s house and causes damage to the guest rooms which the neighbour rents out. The neighbour demands compensation for the damage to his house and for the loss of income from his rented rooms. Acting sensibly, you have protected yourself with house insurance and you have required the pruning contractor also to carry insurance. The damage was done but the insurance has covered the cost of repair and for the neighbour’s temporary loss of income. This is a parallel with the hazard to the beach-based tourism of the Caribbean Islands, demonstrated graphically in EEPGL’s own environmental impact assessments.

This homely example is paralleled internationally. 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 suphur 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 …’ I can provide examples of international legal cases where this Principle [transboundary responsibility of the sovereign state; polluter pays] was cited in judgments.

A second major example is ‘Principle 21’ from the Declaration coming from the United Nations Conference on the Human Environment at Stockholm in June 1972: ‘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.’

So, in response to the blogger, 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. Guyana can be sued by its Caribbean Island neighbours for damages cause by the activities of EEPGL. It is required in the EPA’s environmental (operating) permit that EEPGL and co-venturers provide complete liability cover for those damages. As I quoted in my letter published by KN, EEPGL has provided that assurance orally. The EPA permit requires that assurance in writing. What is the problem for EEPGL, which prides itself on world-leading technology and safety precautions? – see the impressive short videos on the ExxonMobil Corporation’s website.

Regards,

Janette Bulkan

Janette Bulkan, liability, Polluter, spills, transboundary

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