Jagdeo refuses to say whether new oil spill law will address full liability coverage

Apr 21, 2024 ExxonMobil, News, Oil & Gas

Kaieteur News – Vice President (VP) Bharrat Jagdeo has refused to state whether the new oil spill legislation will address full liability coverage from oil spills.

Vice President, Dr. Bharrat Jagdeo

At his Thursday press conference held at Freedom House, Kaieteur News asked, “Can you say if the new legislation will seek to cap how much coverage Guyana gets in the event of an oil spill?”

In response, the Vice President said, “The legislation is being developed, it will speak about responsibility. It’s just being drafted now and looking at the experience around the world. So once that’s done, you will know about it.”

“But I hope that you praise the government a little bit for passing legislation of this nature, very few countries have that. I hope you can say something positive about that,” Jagdeo added.

According to reports, on March 24, 1989, an oil tanker owned by ExxonMobil Corporation and dubbed the “Exxon Valdez” ran aground in a body of water in the Gulf of Alaska. It was heading to Long Beach, California with over 50 million barrels of oil but had hit a well-known navigation hazard in Alaska’s waters.

The impact of the collision tore open the ship’s hull, causing some 11 million gallons of crude oil to spill into the ecologically sensitive location. At the time, it was the largest single oil spill in U.S. waters. Initial attempts to contain the oil failed, and in the months that followed, the oil slick spread, eventually blackening about 1,300 miles of Alaska’s coastline. It was, and still is, regarded as one of the largest environmental disasters in U.S. history.

At a previous press conference, Jagdeo had outlined the key components of the proposed legislation, including delineating responsibilities, liabilities, and compensation mechanisms in the event of an oil spill.

“So we have been working at this for a while now, looking at how we strengthen legislatively, so we can have clear legislation on how to tackle these things, there is no ambiguity, just in case these things happen,” the Vice President said.

He underscored the importance of clarity and fairness, stressing the need for independent mechanism to resolve disputes regarding compensation for spills. He noted, “Often oil companies argue if the government comes up with a figure for compensation…they will argue (for) a different figure. So an independent fair mechanism for all of those things.”

Jagdeo further explained that the Government’s aim is to strengthen the law governing any situation in the event of an oil spill.

“We will determine responsibilities both from the states side and from the parties causing the spill, we will determine liabilities in the act who will be liable for what, we would have to have a mechanism that allows us to immediately tackle the consequences of the spill but also a mechanism that could lead to resolution to things like compensation etcetera,” Jagdeo told reporters.

The Vice President also addressed the complexities surrounding liability in cases involving vessels hired by oil companies, highlighting the gaps in existing regulations. He said the new law will cater for spills that occur during the transport of petroleum products.

Jagdeo said, “So if a vessel were to have a blowout, one of these big vessels transporting oil and gas…they may not be associated with Exxon, this is a company that they hire. So who is liable in that instance? And how do we enforce the liability? All of these are questions that we would look at in the legislation.”

Speaking on the Petroleum Commission, Jagdeo said the government is still to decide on the implementation of the independent body. Outside of that, he said the Government has fulfilled its policy agenda for the oil and gas sector, with new things to come on stream.

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Conference, Jagdeo, legislation, liability, oil

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