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Attorney General says Guyana will have full protection from any oil spill but fighting against unlimited parent company guarantee from ExxonM
Attorney General (AG) and Legal Affairs Minister, Anil Nandlall, S.C.
Kaieteur News – The Government of Guyana (GoG) is adamant that there is no such “animal” as an unlimited parent company guarantee and is fighting tooth and nail to defend this position. It however also believes that in the absence of this legal document that ExxonMobil, the operator of Guyana’s oil rich Stabroek Block will stand all costs should a spill occur.
Attorney General (AG) and Legal Affairs Minister, Anil Nandlall during his weekly programme ‘Issues in the News’ addressed the trending subject of government’s approach to the Caribbean Court of Justice (CCJ) to appeal a ruling that prevents it from joining a case that seeks an unlimited parent company guarantee from Exxon.
Given the current rate of oil production, pegged at approximately 645,000 barrels per day (bpd) and the government’s intention to increase oil output to as much as 1.2M bpd by 2027, two citizens went to the High Court and successfully secured a ruling that required Exxon to provide an unlimited parent guarantee that explicitly states it would be liable for all costs associated with cleanup and compensation should a spill occurs.
In a startling turn of events, the ruling was appealed by the regulator of the sector, the Environmental Protection Agency (EPA). ExxonMobil also lodged an appeal of the Court’s decision, handed down on May 3, 2023 by Justice Sandil Kissoon. The government was prevented from joining the matter but not satisfied with the Appeal Court’s decision it has turned to the CCJ for a hearing of its contention.
Nandlall on Tuesday evening made it clear that the GoG expects the oil company to cover all costs associated with a spill. He said there is a misconception that the country will only have US$2B at its disposal. The US$2B he referenced is the affiliate guarantee that has been lodged by ExxonMobil Guyana Limited (EMGL). The two Guyanese that are fighting for the unlimited guarantee, Godfrey Whyte and Frederick Collins have specifically asked for the parent company of EMGL to provide the unlimited guarantee, since this company is a mere subsidiary and would not be able to sufficiently handle the costs associated with such a peril and could leave Guyana liable in such an event, which has the potential to even impact 12 of this country’s Caribbean neighbours.
The Attorney General however explained that even in the absence of the unlimited guarantee, Exxon would still be required to provide full compensation in the event of a spill. He said, “This assurance doesn’t mean, this is only an assurance, this is not the amount necessarily that the government or the country would be entitled to if there is some disaster, not at all! This is simply a sum that is being lodged as an assurance.”
The AG argued that the Law of Negligence and the polluter pays principle state that the polluter must pay for all the damage he or she causes. Consequently, he reasoned, “If it is US$100B then that is what we are entitled to. It is not limited in any form or fashion by this assurance. That is the kind of misconception and misunderstanding that is being pushed in certain quarters of the press.” The AG’s statement would therefore pose the question ‘If the government expects Exxon to take full responsibility for oil spill costs, why is it against a signed parent company guarantee that states precisely that?’
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