A ledger of loopholes

May 24, 2025 Features / Columnists, Peeping Tom

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Peeping Tom…

Kaieteur News-  It is hard to reconcile the enormity of Guyana’s new-found oil wealth with the dry and stilted prose of its legislative instruments. “The Oil Pollution Prevention, Preparedness, Response and Responsibility Bill 2025” has a title whose length alone should raise suspicion.

The Bill, recently passed by the National Assembly, sets out to chart the country’s guardianship of its marine environment. This may appear to be a noble goal but it is one that is besieged by quiet betrayals cloaked in legalese. One reads the legislation not for pleasure but from necessity. And when finished, one leaves its forty-two pages neither relieved nor reassured.

At the heart of this bill, sticking out like a sore thumb is Section 17. This is a clause so astonishing in its subtle surrender that it seems to have been written by the oil companies themselves. Here, the law acknowledges that the licensee shall be liable for oil pollution. That, on its face, is acceptable. But then comes the sly insertion: “a licensee may obtain insurance or other financial security to meet any liability.” Such language is not unusual—until we encounter Section 21.

Section 21 is where the true ghost of indemnity is conjured. This section expressly prohibits the transfer of liability from the operator to any other person. But it does so in a manner that seems almost designed to prevent precisely what the nation needs most: a legal tether to the deep-pocketed parent companies that stand behind these local shells.

It was always presumed—certainly hoped, and perhaps whispered as a prayer—that if a major spill were to occur, and if the local operating subsidiary, a lean creature with assets too meager to mop up even a moderate disaster, were to falter under the weight of liability, then its parent company—ExxonMobil, Hess, CNOOC, or whichever multinational entity was behind the curtain—would be compelled to step in. But Section 21 quietly extinguishes that hope. The law now seals the liability within the confines of the licensee, and forbids, with legal finality, the assignment of that liability to any other party.

This is no mere technicality. In maritime law and environmental jurisprudence, it is often the case that responsibility flows upward—to the entity with the resources to bear it. That conduit is now clogged. The government has closed the sluice gate, and in doing so, made the Guyanese people the ultimate guarantors of oil spill cleanup.

One need not be an oracle to foresee the danger. Should an oil spill occur, and should the local operating company plead poverty—its balance sheet a paltry thing compared to the ecological devastation—it will be Guyana, and not the super majors, that pays. The seafront blackened, the fish dead, the livelihoods ruined—they may all be compensated by a trust fund that exists more in aspiration than in substance. This is a shell game where the oil company holds the shells and the Guyanese people provide the pea.

It is curious, and more than a little disheartening, that the bill contains no mechanism to pierce the corporate veil. The parent companies, who ultimately profit, bear no statutory obligation to cover liabilities that exceed the means of their subsidiaries. In a world increasingly aware of environmental fragility, this bill reads like a fossil—a relic of a time when pollution was considered a local inconvenience and not a regional catastrophe.

There are other troubling aspects, too. The bill is silent on the scale and enforceability of the financial security mentioned in Section 17. It does not prescribe a minimum coverage. It does not compel the financial security to be held in-country. Nor does it insist upon an independently verified risk assessment to determine the sufficiency of said coverage. One gets the sense that the drafters were so eager to please the oil men that they left the door not merely open but hanging from its hinges.

Worse still, there is a peculiar absence of citizen recourse. Nowhere does the bill make provision for affected communities to initiate legal proceedings in the event of pollution. Nor does it allow for civil society monitoring of compliance. The Environmental Protection Agency, that supposed bulwark of protection, is mentioned only in the periphery, and given no real teeth to enforce the rules. A law that cannot be enforced is a wish. A law that cannot be challenged is a threat.

One must also lament the missed opportunity. This bill could have established a sovereign environmental liability fund. It could have mandated that a percentage of oil revenues from the oil companies to be placed in escrow, specifically for pollution response. It could have demanded parent company guarantees, signed and sealed. It could have been a document of courage. Instead, it is a ledger of loopholes.

In the final reckoning, the Bill reads not like an environmental statute, but like an accommodation. It is a gesture to international investors that they may drill without fear of legal consequence beyond the reach of their subsidiaries. It is an insurance policy for the powerful, and a promissory note of risk handed to the powerless.

One thinks, unavoidably, of the fishes and fishermen, of the turtles and mangrove. They cannot read legislation, but they will suffer it. And when the oil comes ashore—not if, but when—it will be little consolation that we once had a bill that spoke of responsibility, but ensured that no one, truly, was responsible at all.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.) 

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