ExxonMobil shareholders yesterday supported their Board of Directors and voted overwhelmingly to reject a proxy measure for additional disclosures on a worst-case scenario oil-spill response plan for the company’s Guyana operations.
Even as the company highlighted to its shareholders that Guyana has been one of its main revenue earners and its operations here were on target to ensure a solid balance sheet as projected, some 86.7 per cent of shareholders voted against an “Additional Report on Worst-case Spill and Response Plans” resolution.
Shareholders had requested that the Company issue a report evaluating the economic, human, and environmental impacts of a worst-case oil spill from its operations offshore of Guyana. The report should be prepared at reasonable expense, omit proprietary or privileged information, and clarify the extent of the Company’s cleanup response commitments given the potential for severe impact on Caribbean economies.
Against item 10: additional report on worst-case spill and response plans, the company said that “The requested information is already publicly available in published reports prepared by the Company and credible third-party experts. “This includes multiple Environmental Impact Assessments, the Oil Spill Response Plan for Guyana Operations (OSRP), and other publications and filings that are currently available on our website as well as the Guyana EPA website,” President of ExxonMobil Darren Woods told shareholders yesterday as he advised of the Board’s recommendation to vote against it.
“Before exploration began in Guyana, we developed detailed emergency preparedness and response plans, including the OSRP, covering a wide variety of potential scenarios. These plans are continuously updated as our project scope expands,” he added.
And where production increases are reflected at offshore operations here at above design capacity, Woods said it did not mean that it was pushing safety boundaries. We simply mean that the volume is above the investment basis, meaning its performance is exceeding expectations. The actual volume that is safe to produce is well above the design capacity. It in no way indicates that the asset is producing at an unsafe level,” he explained.
Mercy Investment Services had tendered an appeal to shareholders to vote for Ballot Item No 10 seeking a report on the costs and impact of a worst-case oil spill from Exxon’s operations in Guyana’s Atlantic waters.
Based on a document filed with the US Securities and Exchange Commission (SEC), Mary Minette, on behalf of Mercy Investment Services, had written to shareholders seeking support for the ballot measure.
She said: “Ballot Item Number 10 seeks disclosures that would allow investors to better evaluate the scope of potential liability associated with a worst-case spill.
“Asset managers and other fiduciaries that seek to exercise due diligence in managing portfolio risks would be well advised to vote in favor of this proposal, bringing into clearer transparency the potential costs and risks associated with a worst-case spill scenario in Guyana.”
Minette also adverted to Justice Sandil Kissoon’s landmark decision on ExxonMobil’s liability. “The judgment came from the Honorable Justice Sandil Kissoon of the Supreme Court of Judicature of Guyana in Collins v. EPA. Justice Kissoon determined that ExxonMobil has failed to comply with the Financial Assurance obligation stipulated in its environmental permit, and that within the next 30 days, ExxonMobil as the parent company of the Guyana subsidiary must provide unlimited insurance coverage to safeguard Guyana against the “grave potential danger and consequences to the State and citizens” of an oil spill occurring in the absence of such financial assurances. Failure to comply with the court order would result in the suspension of the Company’s environmental permit.
Minette had said in proxy measure: “For the Company to provide an unlimited Parent Company Guarantee Agreement to Guyana clarifies the scope of material liabilities that could fall upon ExxonMobil from these operations. For comparison, estimates suggest the BP Macondo oil spill has cost BP and its drilling partners at least (US) $71 billion to mitigate the disaster’s effects. Even this figure may continue to increase over time, as the company’s settlement with individuals who filed medical claims immediately after the accident could cost BP well into the future, with more recent lawsuits filed by hundreds of individuals with late-occurring health effects still pending”.
Meanwhile, shareholders yesterday only supported the company’s views on climate reports and strategies, rejecting proposals for a report on methane, greenhouse gas reporting and oil-spill preparations by a wide margin.
None of the proposals received more than 36 per cent of votes cast, according to early results at the online shareholder meeting. Several of the proposals won only low-double digit support.
ExxonMobil said that approximately 3.4 billion, or approximately 83.1% per cent, of the outstanding shares were represented at this year’s meeting.
The company informed that on average, 96.1 per cent of the votes were cast for the 12 persons nominated by the Board to serve as directors: Michael J. Angelakis, Susan K. Avery, Angela F. Braly, Gregory J. Goff, John D. Harris II, Kaisa H. Hietala, Joseph L. Hooley, Steven A. Kandarian, Alexander A. Karsner, Lawrence W. Kellner, Jeffrey W. Ubben, and Darren W. Woods.
The image below shows the voting distribution per proxy item.
