Oil spill provisions in 6th project spell doomsday for Guyana – Ramjattan

Apr 23, 2024 ExxonMobil, News, Oil & Gas

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Kaieteur News – The Alliance For Change (AFC) is warning of a doomsday that awaits this country as the Government of Guyana (GoG) continues to make strategic moves against full protection from oil spill costs.

ExxonMobil, the operator of Guyana’s prolific Stabroek Block was granted a Permit for a sixth deep-water development, Whiptail, on April 10, 2024 which includes a provision that will force Guyanese to fight for compensation from a spill in the Courts.

The Whiptail Permit makes it clear that the insurance and financial assurance provided by Exxon shall be “guided by an estimate of the sum of the reasonably credible costs, expenses, and liabilities that may arise from any breach of the Act and this Permit.” This means that the assurance will not be a signed “unlimited guarantee” but will be capped at a specific sum. Section 14.3 of the document goes on to note, “Liabilities are considered to include costs associated with responding to an incident, clean-up and remediation and monitoring. Such cumulative amount required is not expected to include costs which may be associated with compensation for loss and ongoing damage to other parties, and which are able to be pursued through civil proceedings.”

Former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams believes the inclusion of this clause in the Permit is part of a grand scheme by the government to overturn a ruling by the High Court for an unlimited parent company guarantee.

Dr. Adams, a Petroleum and Environmental Engineer during an AFC press conference last week reasoned, “There should be no limit. You can’t tell me that a company is gonna come in here and make hundreds of billions of dollars and if they get an oil spill, they could walk away free. Now you tell me if that is reasonable.”

He continued, “You (government) talking about the reasonable and credible (cost) and whatever words they (Exxon) want to use. You want to tell me that they come here to exploit us to get rich off our patrimony and if an oil spill occurs, they are not wanting to commit and the government is agreeing with them. That’s the most egregious and disloyal thing that anybody, any reasonable person could see.”

The former EPA head therefore pointed out that he believes the clause in the Whiptail Permit will be inserted into the new oil spill legislation presently being drafted by the GoG to overturn the Court’s ruling for an unlimited parent company guarantee.

Dr. Adams was keen to note that Attorney General and Legal Affairs Minister, Anil Nandlall previously hinted that oil spill coverage should be determined by government rather than the courts when international lawyer, Melinda Janki argued otherwise in an extensive missive to this newspaper.

Doomsday

Meanwhile, Attorney-at-Law and Leader of the AFC, Khemraj Ramjattan explained that the lack of an unlimited parent company guarantee can spell doomsday for the citizens of this country in the event of an oil spill, since the government has made it mandatory for compensation to be sought through the Courts.

The Lawyer explained, “when you put in that citizens have the right to seek compensation…citizens will come up against a powerful company when they are seeking compensation and to (put) a small meagre unit called citizens against a transnational corporation called ExxonMobil to seek compensation is but a strategy literally really to not grant it.”

Ramjattan argued that government should have instead made it clear that an unlimited parent company guarantee is required to cover all damages including compensation to citizens since the public will now be left at the mercy of a limited liability company.

“When you say that the citizens have the right to seek compensation, where will they go and seek the compensation from? It is the local company which does not have any assets so it is pitiful thing that they are now propagandizing that the citizens got the right. It would be a right without any remedy quite frankly,” he pointed out.

Notably, Dr. Adams highlighted that multinational companies such as Exxon would establish limited liability companies such as EMGL to insulate the parent company from any liabilities. This therefore means that the country would only be able to seek limited compensation from the company.

How ExxonMobil fought against compensating citizens after an oil spill

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. The state of Alaska had sued Exxon over the spill, and the federal government indicted the company for violating the Clean Water Act. The oil company was forced to dish out US$1 billion in settlements to the state and federal governments, and US$300 million in voluntary settlements with private parties.

A lawsuit was also filed against ExxonMobil on behalf of more than 32,000 fishermen, native Alaskans and landowners, resulting in an award of US$5 billion in punitive damages. Exxon’s full strength in the courts was demonstrated here. In 2008, it appealed the case and got the judgment reduced to $507.5 million. (See link for article referenced: https://www.washingtonpost.com/lifestyle/magazine/the-exxon-valdez-oil-spill/2017/03/14/d131b630-f876-11e6-9845-576c69081518_story.html). Importantly, the case would drag out for 26 years, showing just how tedious and expensive environmental litigation is.

Read more about the story here: https://kaieteurnewsonline.com/2023/02/22/exxon-beat-down-us5b-court-judgment-for-fishermen-natives-landowners-to-us507m/

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• doomsday, oil, Permit, spill, Whiptail

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