Chris Ram: Govt blocking citizens’ efforts to bring Exxon to heel

Dec 16, 2024 News

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—says rejection of referendum another puzzling, anti-nationalist approach to contract renegotiation

Kaieteur News- Chartered Accountant and lawyer Christopher Ram holds the view that the government’s rejection of a referendum, to look at the terms of the 2016 PSA and to get a better deal for the Guyanese, raises questions on their commitment to renegotiate the lopsided oil deal. And he also highlighted how government has sought to block citizens from holding ExxonMobil accountable.

In the December 13^th edition of his column in the Stabroek News titled ‘Every Man, Woman and Child in Guyana Must Become Oil Minded-Column 145, Referendum Rejection Raises About Government’s Commitment To Oil Contract Renegotiation,’ he said that the Vice President’s recent dismissal of a potential referendum on the renegotiation of the current oil deal with ExxonMobil and his ruling out of a referendum alongside the elections next year, which notably were made without a statement from the president, adds another layer to the “administration’s puzzling and anti-nationalist approach to contract renegotiation.”

Referencing the survey, he recently conducted to get the view of the public on the matter he highlighted that it, “showed that 94% of Guyanese support the renegotiation of the Stabroek Block PSA, presenting a compelling mandate for action. This overwhelming public sentiment has made the referendum question unavoidable, though it would not usually arise in relation to a matter of this nature.”

Ram explained that the call for a referendum “has gained oxygen only because the Government and Jagdeo have refused to do what they promised to do and what the 2016 Agreement expressly allows. Article 32.1 of the Production Sharing Agreement explicitly provides a mechanism for changes to the Agreement.”  However, after four years in office this administration is yet to take even a preliminary step to have the process initiated, Ram said.

Resistance

The lawyer went on to say that, the public resistance by the government goes beyond mere inaction. “The Attorney General, Vice President and the Minister of Natural Resources have managed to stymie the efforts of citizens to bring Exxon to heel. Instead, they have chosen to take the oil company’s side in any legal action brought against them against exploitation,” Ram noted.

The Government of Guyana (GoG), in three consecutive Court matters, filed by citizens in the past two years challenging ExxonMobil, had joined the proceedings to throw its support behind the multinational oil and gas corporation. Citizens had 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 also 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, Glenn Lall had 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.

Oil spill

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.

In a third matter, the government had again teamed up with Exxon against two citizens, who 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. They had 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.

Stark contrast

In light of these cases and other positions taken by the government on the issue of the oil sector, Ram said this stance now taken by the administration starkly contrasts the pre 2020 declarations of the Vice President where he said that “they sold us out to the foreigners” and his commitment “to renegotiate what he then termed a lopsided contract.” “What makes this situation particularly troubling is that such a consequential decision (referendum) about Guyana’s oil patrimony was announced not by President Ali, who holds constitutional authority over such matters, or by the Prime Minister, who is constitutionally the First Vice President, but by his Vice President. This irregular chain of command raises serious questions about who truly drives Guyana’s oil sector policy,” Ram underscored.

Furthermore, he said the President’s silence while his Vice President makes pronouncements on matters of supreme national importance represents a troubling abdication of executive responsibility. “The Constitution vests the President with executive authority to ensure clear, accountable leadership – not a ceremonial role,” Ram pointed out.  Despite numerous calls by civil society and the opposition parties for the referendum to be held before or alongside the 2025 elections, the Vice President has a different plan. A referendum is a general vote by the electorate on a single political question that has been referred to them for a direct decision.

(Chris Ram: Govt blocking citizens’ efforts to bring Exxon to heel)

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• Jagdeo, oil deal, Ram, referendum, rejection

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