Gov’t passes law protecting parent companies from paying for oil spill

May 18, 2025 News

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“So what they can do, if the oil spill is of a significant magnitude such that they are unable to cover it financially, they can file for bankruptcy, leaving Guyana to hold onto nothing.”- Shurwayne Holder

…Opposition MPs vote against passage of legislation

By: Davina Bagot

The Oil Pollution Prevention, Preparedness, Response and Responsibility Bill was passed on Friday evening in the National Assembly, shielding parent companies of petroleum operators from oil spill costs.

Following a four-hour-long debate at the Arthur Chung Conference Center, Lilliendaal, Georgetown, the government, with its one-seat majority, managed to push the Bill through despite calls from the opposition for the Bill to be sent to the Special Select Committee for refining.

Leading the debate on the opposition side, Shadow Minister of Natural Resources, Shurwayne Holder, pointed to the fact that the new law protects the ‘parent’ of oil companies from costs associated with a spill.

He cited Part VI (6) of the new law, which addresses liability or what he described as “the backbone of PPP’s deceit.” He quoted Clause 17 of the Law, which states, “A responsible party is liable for all damages caused by an oil spill incident, removal and removal costs, and restoration of environment as far as practicable, and for any costs arising therefrom or connected therewith.”

Holder pointed out that while this section sounds brilliant, the government waged war in and out of the courtroom against the people of Guyana for an unlimited Parent Company Guarantee. With elections now nearing, the Opposition MP said the government seems to have awakened from their slumber to champion full liability coverage. However, this is no more than a “hoax”.

Holder explained that the law establishes that the “responsible party” has full responsibility for any spill, even as he went on to describe who the responsible party is.

“In the case of the oil rigs, the responsible party, as established by this bill on page 9, is the operator of the facility or the holder of the exploration and production license. In other words, Mr. Speaker, it is the subsidiary of Exxon, a “Limited Liability Company” formerly called EEPGL, renamed ExxonMobil Guyana. It is a limited Liability Company with no real assets except those in its possession that are already owned by Guyana through the petroleum contract.”

Holder went further into the Act as he drew the Assembly’s attention to Clause 21, which makes it clear that there shall be “no transfer of liability”.

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

To this end, the MP told his colleagues that one may be persuaded to believe that this is exceptional; however, “this is where the con job is operationalized.”

Holder explained that ExxonMobil Guyana, as a limited liability subsidiary of the Parent Company Exxon Mobil Corporation, will now be shielded from liabilities, while the company that virtually owns nothing will be held responsible for costs.

He warned, “So what they can do, if the oil spill is of a significant magnitude such that they are unable to cover it financially, they can file for bankruptcy, leaving Guyana to hold onto nothing. This is how this government is deceiving this nation.”

MP David Patterson also highlighted similar concerns in his contribution to the debate. He told the National Assembly that if EMGL fails to cover the costs associated with an oil spill, then the parent company is completely off the hook, as companies are not allowed to transfer liabilities.

Limited time for claims

Moreover, Patterson highlighted Clause 23 of the new law, which limits citizens to one year to file for compensation after a spill.

It states at 23 (1) “Without prejudice to any other action with respect to the same matter which is lawfully available, a person affected by an oil spill incident to which this Act applies, may file a claim with the Oil Spill Incident Board of Inquiry in accordance with this Part.”

Section 23 (2), however, goes on to explain, “A claim under this section shall not be filed later than one year after the discovery of the oil spill incident or the discovery of the damage arising from the incident, whichever is first.”

To this end, Patterson questioned the limitation outlined in the Oil Spill law, especially when claims are still being filed more than a decade after a spill occurred in the United States Gulf of Mexico.

Regionally, he pointed out that fisherfolk in Tobago are still claiming losses, following a spill early last year.

As such, he pointed out, “You are asking our fisherfolk…the honourable AG (Attorney General) is saying that he has to carry the mighty Exxon to Court. In other countries, the time to file a claim is not so limited as here.”

The Parliamentarian called for the Bill to be sent to the Special Select Committee, but this was eventually voted against.

Notably, the Minister of Natural Resources, Vickram Bharrat, in his contribution to the debate, boasted that Guyana has been recognized by a number of reputable organizations for its management of the petroleum sector. These included the International Monetary Fund (IMF), the World Bank, Organization of American States, and the Extractive Industries Transparency Initiative validation report.

He also urged the Opposition MPs to look past the past and move on from topics such as oil spill insurance and guarantee, since the government was now making a greater move in the direction of a law to hold the responsible party to account for all costs.

The Minister also pointed to the steps implemented by the GoG to prevent an oil spill from occurring in the first place, to avoid a major catastrophic event. These include the installation of Blow Out Preventers (BoPs) at the wells, and one of 13 capping stacks around the world being in-country.

AG addresses concerns

Meanwhile, the Attorney General and Legal Affairs Minister, Anil Nandlall, addressed concerns previously raised by the Opposition MPs with regard to liability and the timeline to make a claim.

He explained that the broad term ‘responsible party’ includes any person owning, operating or chartering a vessel; for offshore or onshore facilities, it includes the operators or licencees; and even for abandoned or decommissioned facilities or vessels, it includes those who were responsible immediately prior to abandonment or decommissioning.

As such, Nandlall argued, “These are not ordinary provisions, but we made sure we inserted them there to ensure that there is a catchment of liability and liability is not eluded in a quick way.”

Shifting his attention to the limited period for compensation as flagged by Patterson, the AG said the Act does not limit claimants to one year.

He explained, “This thing says may be filed not later than one year after discovery. So you can discover 10 years after the incident. The damage that you suffered can occur 10 years after the spill, but when you discover it, you have one year to make a filing. That distinction is lost on the gentleman.”

Also contributing to the debate from the government side were Prime Minister, Mark Phillips, Minister within the Ministry of Public Works, Deodat Indar, and Minister of Public Security, Robson Benn. On the opposition side, Sherod Duncan also joined with Holder and Patterson to oppose the proposed legislation.

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• Law, Liabilities, oil spill, parent companies, passed, PROTECTING, transfer

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