GUYANA | Forde Slams Nandlall for secretly engaging CCJ over Appeal Court decision compelling ExxonMobil to finance oil spill cleanup

GEORGETOWN,  Guyana, April 7, 2024 - Guyana’s Attorney General Anal Nandlall has come under fire from the Opposition’s Shadow Attorney General and spokesman on justice, Senior Counsel Roysdale Forde who said the government’s decision to approach the CCJ to reverse the Court of Appeal’s decision, compelling ExxonMobil to provide unlimited insurance coverage in the event of an oil spill,  proves it has no commitment to the Guyanese people and the prudent management of Guyana’s resources.

Forde said the Attorney General rather than being a protector of the people via the law, is using the state’s resources to oppress justice to favour a few. 

The senior counsel said if ExxonMobil feels aggrieved by the Court’s decision, it could take its grievance to the court of last resort, which is the CCJ. 

However, the Member of Parliament (MP) said what he finds “most disturbing is the government’s position of seeking to influence an outcome that could rob Guyanese the protection we need in the event of an oil spill.”   

He said Guyanese were surprised to learn the Government secretly approached the Caribbean Court of Justice (CCJ) to reverse the Court of Appeal’s decision disallowing the state from enjoining the case of ExxonMobil’s appeal of the decision to guarantee insurance coverage for oil spills.

The opposition MP observed that the Irfaan Ali administration is refusing to learn from the most recent disaster that occurred in Trinidad and Tobago.

An oil tanker laden with oil destined for Guyana,  sunk off the shore of Tobago resulting in serious environmental destruction that could adversely impact the islands’ quality of life for years to come. 

Forde advised: “we must learn from others’ experiences.” 

Last February the fuel tanker carrying hundreds of thousands of gallons of fuel capsized leaving the twin-island republic still grappling the consequences.

Most instructive, is the fact that ten years ago, on April 20, 2010 when a massive explosion killed 11 workers on a BP Deepwater Horizon drilling rig, spewing some three million barrels of oil from the Macondo well, located 70 miles off the coast of Louisiana. That was the largest offshore oil spill in U.S. history.

BP paid dearly for the reckless corporate culture of cost-cutting and excessive risk-taking that caused the spill: more than US$60 billion in criminal and civil penalties, natural resource damages, economic claims and cleanup costs. 

For three months BP struggled to contain the oil flow, and by the time it was permanently sealed in mid-September,  oil  had covered more than 1,000 miles of coastline in six states and covered over 40,000 square miles of the Gulf of Mexico. Studies indicate that it will take deep ocean ecosystems  decades to recover. We may never know the full extent of the ecological damage.

With the relatively new oil discoveries in Guyana, and drilling underway off the coast of Guyana by ExxonMobil, Hess and the Chinese company, CNOOC,  there are concerns over the increasing possibility of oil spills in the area.

There is now need for an unlimited guarantee agreement by ExxonMobil, in the event of an oil spill, which could do serious damage to the ecology of Guyana and possibly the wider Caribbean.

The matter of an unlimited guaranteed coverage by ExxonMobil becomes important to ensure that in the event of a disaster, there are sufficient funds available to perform a cleanup of the affected area as well as all attendant considerations.

This is in line with the order from the Guyana High Court last December which ruled in favour of Guyanese citizens Godfrey Whyte and Frederick Collins to have ExxonMobil provide unlimited liability coverage  in the event of an oil spill through their offshore oil exploration activities. 

On May 3, 2023, the High Court ordered the Environmental Protection Agency, EPA, to obtain from Exxon Guyana, environmental liability insurance as is customary in the petroleum industry and an unlimited parent company guarantee to cover all costs of an oil spill, in accordance with the environmental permit issued to Exxon Guyana.

In his judgment, Justice Kissoon was very clear and castigated the EPA for abdicating its statutory responsibilities stating that the EPA had “relegated itself to state of laxity of enforcement and condonation compounded by a lack of vigilance thereby putting this nation and its people in grave potential danger of calamitous disaster.”

Justice Kissoon also found in the evidence that Exxon Guyana, “was engaged in a disingenuous attempt which was calculated to deceive when it sought to dilute its liabilities and settled obligations stipulated and expressed in clear unambiguous terms” in its environmental permit.

However, Kaieteur News is reporting that the Government of Guyana has secretly made an application to the Caribbean Court of Justice (CCJ) in a bid to reverse a decision of the local Appeal Court which has ordered ExxonMobil to provide unlimited guarantee to clean up the environment in the event of an oil spill.

According to Kaieteur News, The application  for the CCJ to reverse the Appeal Court’s decision, was filed on February 29, 2024 by the Attorney General (AG) and Legal Affairs Minister of Guyana, Anil Nandlall. But It was only made known recently.

On 19th December 2023, the Court unanimously rejected Nandlall’s request to join the case of Godfrey Whyte and Frederick Collins to have ExxonMobil provide unlimited liability coverage. Collins and Whyte are represented by Seenath Jairam S.C and attorneys Melinda Janki and Abiola Wong-Innings.

Senior Counsel Forde said on the entire issue of managing oil and gas resources, the PPP has betrayed the Guyanese every step of the way.

He reminded that this began with the PPP's refusal to honour its 2020 campaign promise to renegotiate the oil contracts inspite support from the opposition and members of civil society, as well as the corrupting of the Natural Resource Fund, which gave the PPP unfettered access to withdraw money and spend recklessly.

The Shadow Attorney General also highlighted the disputed US$214 million in audited oil revenue, for period 1999-2017 which has been reduced to approximately US$ 3 million, denying Guyana in excess of US$200 million.

The shadow minister said he still awaits response from the Commissioner of Information Charles Ramson S.C who he wrote last October requesting information on Mr. Gopnauth ‘Bobby’ Gossai, Senior Petroleum Coordinator in the Ministry of Natural Resources.

In the meantime, the Environmental Protection Agency (EPA) has informed that it has engaged  the local Esso Exploration and Production Guyana Limited (EEPGL) on a proposed total guarantee of US$2-billion to complement the US$600 million insurance policies for Liza 1, Liza 2 and Payara permits.

The EPA explained that it is in receipt of insurance policies from EEPGL for all permits issued, namely Liza1, Liza 2, and Payara. However, it is awaiting the Yellowtail insurance policy.

“Each of these insurance policies have been executed and have coverage of a total of US$600 million per occurrence of a spill event.

This per occurrence value covers third party liabilities, clean up and well control,” the agency explained.

This however, has not found favour with former Head of the EPA, Dr. Vincent Adams, who has warned that should ExxonMobil be allowed to renege on signing an unlimited guarantee agreement, Guyana could be left to pay billions, should an oil spill occur.

Dr. Adams, described the US$600 million insurance policy as “pathetic.”

While explaining a long-held position that EEPGL had agreed to “unlimited coverage/full liability,” Dr. Adams pointed to Section 12 of the Liza 2 Permit which states that the permit holder shall have insurance.

He reminded that Section 12.6 states that the permit holder shall be strictly liable for any discharge or release of pollution, contaminant in any amount.

“What the above undoubtedly states and signed off by Mr. Henson of Exxon, are the unambiguous requirements for insurance by EEPGL, plus a written guarantee agreement from parent companies Exxon, CNOOC and Hess to cover all costs over and above the insurance value to pay for damages “in any amount…if EEPGL fails to do so”,” Dr. Adams said.

He said that “in any amount” meant “unlimited amount” and therefore, the insurance plus parent company guarantee would add up to unlimited/full coverage.

Dr. Adams said the EPA must now explain to the people of Guyana why it is allowing Exxon to renege on signing an unlimited guarantee agreement already enshrined in the permit and replacing it with a meagre total coverage of $2.6 Billion USD ($2 Billion parent company guarantee + $600 Million in insurance).

In making a case for full coverage, he pointed to the cost of the Macondo spill in the Gulf of Mexico which exceeded $60 Billion USD.

“This means that the EPA is accepting that if there occurs a Macondo size spill, Guyana would be left holding the bag to cover the remaining $68 Billion which is about 34 times our entire national budget, not to mention the long-lasting devastation and even bankruptcies of economies throughout the Caribbean.

Even a spill as little as one-tenth the size of the Macondo, would cost three times the total $2.6 Billion Exxon’s coverage that the EPA is so giddy about, and over three times Guyana’s entire national budget,” Dr. Adams explained.

He added: “It is therefore a most heinous act against not only the people of Guyana, but also against our Caribbean and South American neighbours, for the EPA to now be stooping to Exxon in cutting back the unlimited/full liability protection (in the Permit as shown above), down to their proposed cap of only $2.6 Billion USD.”

While refuting claims that the insurance policies provided have a US$2.5 billion coverage for oil spill, the EPA confirmed that it is engaging EEPGL on its proposed total guarantee of US$2billion from an affiliate company in the event EEPGL and its coventurers default.

However, ExxonMobil Guyana Spokesperson, Janelle Persaud, is maintaining that the former President of ExxonMobil Guyana,Rod Henson, never signed any document committing to ‘unlimited liability coverage consisting of insurance plus parent company guarantee’, as claimed by Dr. Adams. 

ExxonMobil Guyana, she said, maintains full insurance coverage that meets international industry standards for all of its petroleum activities in Guyana.

“As previously stated, our first priority for all operations is to prevent adverse events by utilising the best technologies, processes, and people in our operations. In the unlikely situation that an event occurs, we have established response personnel, procedures, and equipment aligned with the principles of the International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC), the Caribbean Island Oil Pollution Preparedness Response and Cooperation (OPRC), and the National Oil Spill Response Plan of Guyana,” Persaud insisted.

-30-