Kaieteur News Publisher Glenn Lall has filed an action against government, challenging its petroleum agreement with Esso Exploration and Production Guyana Limited, CNOOC NEXEN Petroleum Guyana Limited and Hess Guyana Exploration Limited, which he says contains a number of illegalities.
His complaints are primarily with Article 15 of the June 27th, 2016 agreement which he says among other things, grants exemptions to persons other than licensees in violation of Sections 10 and 51 of the Petroleum Exploration and Production Act.
This, he argues, is unlawful, null, void and of no legal effect; and is seeking related declarations.
In his fixed date application (FDA) which lists the Attorney General as respondent, Lall is asking the Supreme Court to grant a host of declarations, advancing among other things that Article 15.1 violates sub-sections 1A and B of Section 6 of the Financial Administration (and Audit) Act and is unlawful, null and void and of no legal effect.
He also wants the court to declare void, Section 49 of the Act which purports to authorize the Minister to remit any royalty payable by a licensee or to defer the payment of such royalty, as being in violation of sub-sections 1A and 1B of Section 6 of the Financial Administration Act.
Further, Lall (the Applicant), is asking the court to declare Article 15.12 of the agreement as being in violation of Article 149 of the Constitution which provides for protection from discrimination—and for also being in violation of Section 5 of the Prevention of Discrimination Act.
As an alternative to the many declarations being sought, Lall is hoping that the court would be inclined to make a declaration that to the extent that the Order bringing the agreement into force is declared valid, then that validity must apply only to licensees.
He is also seeking any further order the court may deem just to grant, as well as costs.
Lall’s main contention in his application is that provisions of the agreement violate the Petroleum Act, by purporting to extend production sharing concessions to persons other than those licensed.
Against this background, he argues that any exemptions referred to in Article 15 purporting to extend concessions to persons other than the licensees are not consistent with the provisions of Act.
The Applicant contends that “licensee” as defined by the Petroleum Act refers only to Esso Exploration and Production Guyana Limited, CNOOC NEXEN Petroleum Guyana Limited and Hess Guyana Exploration Limited and not to any other person.
On the issue of discrimination, Lall argues that the Agreement “is discriminatory to Guyanese employees by exempting from personal income tax income earned only by expatriate employees of the Contractor, Affiliated Companies or Non-Resident Sub-contractors who are physically present in Guyana for 183 days or less on a cumulative basis in the tax year of assessment.”
Meanwhile, on the issue of taxes, Lall notes that while Section 51 of the Petroleum Act authorises the minister responsible for finance to direct that any or all of the tax laws specified therein shall not apply to or in relation to a licensee who has entered into a production sharing agreement with the Government of Guyana, it however, does not empower the Minister to pay the taxes on behalf of any licensee.
Against this background, he argues Articles 15.4 and 15.5 of the petroleum agreement requiring the Minister responsible for Petroleum to pay taxes for and on behalf of the licensees and the Commissioner General to issue certificates to that effect is therefore a violation of the Petroleum Act.
Regarding the Order by which the agreement came into force, Lall has advanced through his attorney Mohamed Ali, that the order is not a tax act or other subsidiary legislation made under such act and is therefore null, void and of no legal effect.
It is for those outlined reasons that the Applicant is hoping the court will grant him the reliefs being sought.
