Govt. joins Exxon in fight against Guyanese in three court cases

Jun 18, 2023 Court Stories, ExxonMobil, Features / Columnists, News, Oil & Gas

Kaieteur News – The Government of Guyana (GoG), in three consecutive Court matters, filed by citizens challenging ExxonMobil, has joined the proceedings to throw its support behind the multinational oil and gas corporation.

The citizens instituted the legal proceedings against the oil giant for “robbing” the nation of its taxes, depriving it of adequate protection against potentially devastating spills and more recently, operating contrary to the environmental regulations governing its activities.

While the move by the state to throw its support behind the oil company took many Guyanese by surprise, some activists believe that the government is now revealing its true colours.

Initially, businessman and newspaper Publisher, Glenn Lall moved to the High Court in what was described a “historic move” challenging the extensive tax waivers being granted to Exxon and its partners through the 2016 Production Sharing Agreement (PSA) signed with government.

Lall was fighting for companies other than the Stabroek Block licensees to pay its fair share of taxes, but the Attorney General, Anil Nandlall submitted strong arguments justifying the tax holidays.

The case which was prepared and filed by his Attorney-at-Law, Mohamed R. Ali, outlined that many of the provisions listed under Article 15.1 of the Petroleum Agreement, dated June 27, 2016 between the Guyana Government and the oil companies, grants exemptions to persons other than licensees, which violate the Petroleum Exploration and Production Act (PEPA), the Financial Administration (and Audit) Act, the Prevention of Discrimination Act, and the Constitution.

In light of this, Lall through his lawyer, contended that the provisions are unlawful, null and void, and of no legal effect. The businessman lost the case in February of this year.

In his ruling, High Court Justice Nareshwar Harnanan said the minister is vested with the power under Section 51 of the PEPA and the Petroleum (Exploration and Production) (Tax laws) to grant EEPGL, CNOOC Nexen Petroleum Guyana Limited, and Hess Guyana Exploration Limited, all companies that are parties to the case, concessions of extensive tax exemptions.

Further, he added that “the exemption applies directly and indirectly to the licensee and anyone else in relation to their dealing with the licensee.”

The High Court

In a second matter filed by two citizens, Frederick Collins and Godfrey Whyte, for the oil giant to adhere to the requirements of the Liza One Permit and provide the nation with an unlimited parent company guarantee to pay for damages relating to an oil spill, the government again fought against the citizens, taking the side of Exxon.

The High Court in a ruling on May 3, 2023 ruled that the company must provide the parent guarantee within 30 days. It wasn’t long after that the regulatory body; Environmental Protection Agency (EPA) filed an appeal against the full liability coverage, ordered by Justice Sandil Kissoon. The government later joined the case with Exxon to fight against the Guyanese citizens.

The appeal by government was a surprise to a wide cross section of the population, who in the pages of this newspaper wrote several letters for weeks describing the action as “unpatriotic” and “uncaring” among others. The question was even asked why Exxon was not leading the appeal instead of the state, since the government should have a vested interest in protecting itself and Caribbean neighbours, who can also be impacted by a massive spill.

The ruling on the outcome of this matter is still pending in the Appeal Court.

In a third matter, Guyanese learnt this week that the government has again teamed up with Exxon against two citizens, who have challenged the legality of the Gas-to-Energy (GTE) Permit, issued to Esso Exploration and Production Guyana Limited (EEPGL)- the subsidiary of ExxonMobil Corporation.

That case was filed by Vanda Radzik and Elizabeth Hughes in the High Court back in March this year. They have asked the Court to quash the Permit since Exxon had no evidence that it owned the land through which the GTE pipeline will pass through, when it applied to the EPA seeking approval for the initiative.

In their application to the Court, Radzik and Deane-Hughes stated that Pursuant to Regulation 17 (2)(c)(iii) of the Environmental Protection (Authorisation) Regulations, an application for an environmental authorization must contain “proof that the applicant either owns the facility or has a lease or other agreement with the landowner or occupier to enable the applicant to conduct the activity without the consent of the landowner or occupier.”

Government applied to the Court to join the matter and was approved as a second respondent this past week. It is actively challenging the Guyanese women in the matter. The High Court is expected to hand down its decision on the alleged breach of the rule of law in September this year.