President of the Transparency Institute of Guyana Inc (TIGI) Fredericks Collins and another Guyanese citizen, Godfrey Whyte, have moved to the High Court to get the Environmental Protection Agency (EPA) to enforce the liability clause in the permits issued to ExxonMobil Guyana for its offshore oil operations.
The case was filed in the High Court on September 13 by attorneys Seenath Jairam SC, Melinda Janki and Abiola Wong-Inniss.
A statement from the litigants said that the resort to the courts is to make sure that the company takes full financial responsibility in case of harm, loss and damage to the environment. ExxonMobil’s local affiliate, Esso, has agreed in the permit to provide insurance and an unlimited parent company indemnity to cover all environmental loss and damage that might result from a well blowout, oil spill or other failures in the Liza 1 Development Project in Guyana’s Stabroek Block.
Any “accident” in its operations will affect not only Guyana and Guyanese but most of the Caribbean countries and possibly beyond the region, the statement noted. It added that Esso is registered off-shore and its financial position is unclear as it has been filing what it calls ‘branch’ accounts in Guyana. (In separate litigation, a Guyanese citizen has asked the court to order Esso to comply with Guyana’s company law and file full accounts.)
Under the law of the land at the moment, each company or corporation is a separate legal entity from its shareholders and creditors must look to the company/corporation to liquidate its liabilities, parlous as its financial state may be, and not to its billionaire shareholders.
“Communities in Guyana are taking lessons from major disasters like the BP Deep Water Horizon in 2010, which cost the company over 65 billion USD and destroyed the environment and livelihoods. Unlike the United States of America, Guyana has no experience in oil and no oil/gas experts, engineers and other necessary technical staff to run an oil sector.
Guyana also lacks the infrastructure to swiftly cap a well and mitigate the damage caused by a potential oil disaster. A World Bank project to build capacity has been downgraded to moderately unsatisfactory,” the litigants said in their statement.
According to their fixed date application, Collins and Whyte are asking the court for a declaration that the EPA as the sole authority competent under the Environmental Protection Act (EP-ACT) to enforce the provisions of the environmental permits issued to Esso Exploration and Production Guyana Limited (EEPGL).
They are asking the court for an order of mandamus directed at the EPA requiring it to immediately produce true copies of the insurance required under the environmental permit issued to EEPGL. They are requesting, particularly, a copy of the environmental liability insurance policies, a summary of the environmental liability policies; evidence that the insurer is authorised to provide insurance in Guyana; evidence of authorisation of the institution or parent (insurers) to provide insurance under the conditions outlined in the permit; evidence of the insurers’ financial strength; and evidence that the insurer has a grade A+ rating assigned to it by the Better Business Bureau under the conditions set out in the permit.
Additionally, the litigants are also asking the court to compel the EPA to hand over the true copies of the legally binding agreements set out in the permit. Those agreements include the unlimited financial undertaking by ExxonMobil Corporation, the ultimate parent company of Esso, to provide adequate financial resources for Esso to pay or satisfy its environmental obligations regarding the Stabroek Block, including its liabilities under condition 14.1 of the permit for all costs associated with clean up, restoration and damage caused by the discharge of any contaminant and its obligations to compensate all persons who suffer loss or damages.
They are also seeking to compel the EPA to tender the agreements with ExxonMobil Corporation which prove that it has taken unlimited indemnity as the parent company in addition to evidence of agreements to show that the parent company absorbs all responsibilities in the case of an environmental disaster.
Collins and Whyte are also asking the court to direct the EPA to “immediately file with the court true copies of the unlimited undertakings and indemnities required from the un-identified co-venturers under condition 14.10 of the permit; alternatively, an order of mandamus directed to the agency requiring it to immediately cancel the permit in accordance with condition 14.8; and an order of prohibition directed to the agency prohibiting the agency from granting any environmental permit to Esso (or its successors and assigns) which does not include the provisions for financial assurance and liability for pollution damage.“
They also want a declaration that unlimited liability is imposed on the parent company for costs associated with clean-up, restoration and compensation for pollution including the environmental obligations of the EPA and the state of Guyana.
They argue that the EPA has the legal obligation to cancel all permits issued to EEPGL if it has not met the requirements as set out in the document. They further submit that the EPA has breached its mandate by allowing EEPGL to operate without insurance as outlined in the permit.
The duo, through their lawyers, told the court “…the agency, through its human minds, including its officers has failed or omitted to carry out or to show that it has carried out its legal duties and or obligations thereby amounting to misfeasance in public office by them and by failing or omitting to act, has acted unreasonably, irregularly or improperly and or has abused its power.”
In his statement, Collins said “I can’t even drive my car without insurance. So it is incomprehensible that the government would allow Esso to operate without any form of insurance. An oil spill would be devastating for our country and region as many Guyanese and Caribbean peoples depend on the Ocean for their livelihoods. That is why we have decided that the time has come to take matters to the court for relief.”
There are currently six cases in court regarding the operations of ExxonMobil’s affiliate Esso in Guyana.
