Jagdeo defends changing permits to force citizens to fight for oil spill compensation in Court

Sep 16, 2024 News

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…says it’s a “positive”

Kaieteur News – Vice President, Bharrat Jagdeo has defended a move by the government to secretly modify the Liza One, Liza Two, and Payara Permits to force citizens to fight for oil spill compensation in Court.

Kaieteur News, in an article published on September 8, 2024 under the headline ‘Govt. secretly inserts provision in Liza 1, 2 and Payara Permits to shield ExxonMobil from all oil spill costs’ reported that this has removed the legal requirement for an unlimited parent company guarantee, holding the oil companies liable for all costs associated with such a disaster.

Kaieteur News understands that a provision was initially inserted into the Yellowtail Permit for the fourth deepwater development, dated March 2022. That Permit outlined new conditions with regard to oil spill protection for the country.

While Condition 14 of the Permit requires Exxon to provide a Parent Company/Affiliate (of Operator and Co- Venturers (CoVs)) guarantee, it is clear that the coverage for oil spill protection is not unlimited. In fact, citizens who suffer ongoing loss from such an event will have to take Exxon to Court for compensation.

Condition 14.3 of the Yellowtail Permit states, “The above individually or a combination shall at least be guided by an estimate of the sum of the reasonably credible costs, expenses, and liabilities that may arise from any breaches of this permit. Liabilities are considered to include costs associated with responding to an incident, clean-up, remediation and monitoring. The estimation is not expected to address unidentifiable or inestimable costs which may be associated with compensation for loss and ongoing damage to other parties, and which can be pursued through civil action.”

This means that citizens who suffer losses as a result of a spill will have to challenge Exxon is Court for compensation.

Notably, the government moved to secretly modify all of the previously issued Permits granted to Exxon, protecting the multinational corporation from all oil spill costs.

The first two Permits for the Liza One and Liza Two oil projects were approved by the previous Coalition government while the third project, Payara was approved by the PPP government. These Permits did not previously feature this provision.

During his Thursday press engagement, Jagdeo told reporters that this decision was a “positive”. He explained, “Somehow there was a feeling that the guarantee covered all the cost and what we have made clear here in this provision that it excludes, that they are still liable for, but it excludes cost associated with compensation. That the guarantees cover only clean-up cost. Now this is a positive. They made it look like it’s a negative.”

Jagdeo argued that though the provision was included in the Environmental Permits which are public documents, Kaieteur News reported that the provision was secretly inserted. Additionally, he noted that the government intends to soon pass oil spill legislation in the upcoming Parliament to hold all oil and gas companies to account. He said this would ensure even transporters are liable for all costs associated with any spill, including cost for compensation to those who suffer loss of economic activities.

Legal strength of ExxonMobil

While the government defends modifying the Permits, leaving citizens at the mercy of Exxon, it should be noted that Exxon has on multiple occasions refused to pay up costs ordered by the Court.

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.

It was reported that a lawsuit was 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. In fact, the case came to a close in October 2015 in a federal district court in downtown Anchorage, Alaska.

According to international media reports, the state and federal governments decided not to pursue a final US$100-million from ExxonMobil over its 1989 oil spill in Prince William Sound, as the process was simply too expensive.

The Valdez spill had immense impacts on fish and wildlife and their habitats, as well as for local industries and communities.

The oil killed an estimated 250,000 seabirds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, as many as 22 killer whales, and billions of salmon and herring eggs.

 

 

 

 

 

 

 

 

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• citizens, court, defends, modify, oil, Permit, spill

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