In a major decision, the High Court has ordered the Environmental Protection Agency (EPA) to issue an Enforcement Notice, directing Esso Exploration and Production Guyana Limited (EEPGL) which is a subsidiary of US-oil giant ExxonMobil, to provide the unlimited liability Parent Company Guarantee and the Environmental Liability Insurance within 30 days.
The Court found that both the EPA and the oil company breached their obligations under the reviewed Environmental Permit.
High Court Judge, Sandil Kissoon, did not mince words when he handed down his ruling.
According to the High Court Judge, the EPA is in an egregious state, and has abdicated its exclusive statutory responsibilities entrusted to it by Parliament under the Environmental Protection Act and the Environmental Protection Regulations to ensure due compliance by EEPGL with Condition 14 of the renewed Environmental Permit.
“The EPA has 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 said.
The Judge said during the course of the proceedings brought by Frederick Collins and Godfrey Whyte, the Esso Exploration and Production company engaged in a disingenuous attempt, which was calculated to deceive, when it sought to dilute its liabilities and settled obligations stipulated in the Environmental Permit while simultaneously optimizing production at the Liza Phase 1 Petroleum Production Project in the Stabroek Block offshore Guyana.
“Esso Exploration and Production Guyana Limited engaged in a course of action made permissible only by the omissions of a derelict, pliant and submissive Environmental Protection Agency,” the Judge said while adding that the oil company was never in doubt as to what its liabilities are as captioned under Condition 14 of the Environmental Permit for the Liza Phase 1 Petroleum Production facility.
“It was simply as a matter of law, fact, and consequence the norm that prevails which bound ESSO as singularly and exclusively responsible for all liabilities without restriction, implied or expressed, from its operations at the Liza Phase 1 Petroleum Production facilities, in the Stabroek Block offshore Guyana. It included all activities connected therewith as stipulated in condition 14 of the Environmental Permit (Renewed) extending to and inclusive of the transition to Petroleum Production Operations and all activities incidental thereto.
Equally, the concomitant financial assurance obligations imposed on ESSO by Condition 14:10 of the Permit ( Renewed) in the form of environmental liability insurance together with an unlimited parent company guarantee agreement are but the legitimate corollary flowing from its uncapped and unlimited liabilities arising from an event and pollution as encapsulated in the permit, to provide such financial assurance, in the form of insurance and unlimited parent company guarantees to cover its liabilities,” the Judge explained.
It was noted that before the filing of the proceedings, the EPA had refused to disclose any information as to the status of compliance by Esso with its financial insurance obligations for pollution damage as set out in the permit.
The judge said the agency, instead, sought refuge in silence, avoidance, concealment and secrecy notwithstanding the grave potential danger and consequences to the State and citizens.
Given the significant breaches and violations recorded, Justice Kissoon ruled that EPA is in breach of its statutory duty by its failure and or omission to enforce compliance by EEPGL of its Financial Assurance obligations as outlined under the Environmental Permit.
It was also declared that EEPGL has failed to comply with its Financial Assurance obligations, and that Condition 14 of the Environmental Permit imposes on the company, unlimited, uncapped liability for all costs associated with clean up, restoration, compensation for all damages caused by any discharge of any contaminant arising from its exploration, development and petroleum production activities within the Stabroek Block.
The Applicants were represented by Senior Counsel Seenath Jairam and Attorneys Melinda Janki and Abiola Wong-Inniss.
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