Companies responsible for oil spill must pay Gov’t for loss of revenue- Proposed legislation

May 02, 2025 News

…can be fined up to $75M for failing to reimburse state

Kaieteur News- The Government of Guyana (GoG), in a proposed Oil Spill Legislation, has set a strict requirement for the cost of all damages to be paid by the responsible party. This includes the loss of revenue for the state as a result of the incident.

This is outlined in the proposed oil spill law which was tabled in the National Assembly on Tuesday. The Oil Pollution Prevention, Preparedness, Response And Responsibility Bill under Part 6 (17) states, “A responsible party is liable for all damages caused by an oil spill incident, removal and removal costs, and restoration of the environment as far as practicable, and for any costs arising therefrom or connected therewith.”

Section 18 explains that removal costs referred to above shall include all costs associated with removal action, in accordance with the National Oil Spill Contingency Plan, by any person or by the State or any agency of the State.

Meanwhile, the proposed legislation makes it explicit that companies will be liable for costs including damage to property and economic losses associated with the loss of taxes, royalties, rents, fees, or profit shares, loss of profits or impairment of earning capacity due to the injury, destruction, or loss of real or personal property, or natural resources. This condition is outlined in Section 19 (b).

Additionally, the responsible party will also be liable for other costs, including damage to the environment.

Meanwhile, the Bill makes provision for where two or more vessels are involved in an oil spill incident, the two shall be jointly and severally liable for all damage and removal costs.

Additionally, the proposed legislation states, “An indemnification or any like agreement shall be invalid for the purposes of transferring the liability of a responsible party under this Act.”

Moreover, the Bill makes it clear that any cost incurred by the state or any third party as a result of an oil spill shall be recoverable from the responsible party.

Failure by the responsible party to reimburse the State, in accordance with Section 22 of the proposed legislation, commits an offence and shall therefore be liable on conviction on indictment to the penalty prescribed by paragraph (b) of the Third Schedule and payment of removal costs and damages. Additionally, the company may be liable to forfeiture of their assets locally, up to the value of the amount to be reimbursed.

Paragraph (b) of the Third Schedule sets out penalties for various offences and requires a fine of not less than $15M but not more than $75M.

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cost, Law, loss, oil spill, penalty, revenue

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