Guyana’s Environmental Protection Agency (EPA) on Tuesday appealed a court decision, which ruled that the agency and oil giant ExxonMobil breached obligations relating to its oil spill insurance policy, Reuters reports.
The appeal follows a ruling by a Guyanese court last week, in which high court justice Sandil Kissoon concluded that ExxonMobil ExxonMobil “engaged in a disingenuous attempt” to dilute its obligations under its environmental permit for its Liza One project, by not fully meeting insurance requirements relating to environmental protections.
Local Guyanese newspaper Stabroek News on Monday reported that anti-corruption organisation Transparency Institute Guyana Inc (TIGI) said in a statement: “The question is why a government would want to appeal such a decision. Would that not be a pyrrhic battle? Would not a government lose more support from the people than it gains even if it won the argument?”
Talking to Reuters, Frederick Collins, the president of the TIGI said: “The optics seem that there is a regulator that appears more interested in protecting the company that it is supposed to be regulating than the people of Guyana.”
“Fell into error”
The environmental permit for the Liza One unit, which is ExxonMobil’s first offshore oil project in Guyana, requires ExxonMobil to take responsibility for a range of potential outcomes. This includes an umbrella guarantee that commits the company to cover all damage costs, beyond a $600m penalty covered by its Liza One subsidiary, should the project spill its oil.
Kemraj Parsram, executive director of the EPA, said in the appeal that it was true that the permit issued to Exxon last May did require the company to cover costs not satisfied by its subsidiary unit in Guyana in the case of a spill. However, he said he did not agree with the court’s interpretation that the permit calls for such a guarantee to be unlimited, according to Reuters.
The court ruled that the EPA had allowed ExxonMobil to continue its oil exploration project, despite the company failing to provide the necessary insurance guarantees.
At the time of the ruling, the government said that it rejected the decision and would appeal. It argued that the court breached its statutory duty by failing to enforce compliance by Esso Exploration and Production Guyana, adding that Kissoon “fell into error in his findings”.
A spokesperson for Exxon said after the ruling that it was “disappointing that the court failed to appreciate and acknowledge the financial capabilities of ExxonMobil Guyana and its co-venturers to meet their obligations”.