Ruling on insurance coverage: Deadlines imposed by court being carefully observed – EPA Director

…as entity considers way forward

The Environmental Protection Agency (EPA), which was recently the subject of a court ruling that said the agency had to order ExxonMobil to provide an unlimited Parent Company Guarantee for its Stabroek operations, will carefully consider the way forward in light of the ruling.

This is according to EPA Executive Director Kemraj Parsaram, in an exclusive interview with this publication. According to Parsaram, the EPA has taken note of the ruling and will be considering its options.
“The ruling is what it is… we are considering our next steps, in terms of how we proceed with the orders of the court. And we note the deadlines placed in the orders,” Parsaram said. Outside of the ruling, however, Parsaram assured that the agency generally continues to execute its duties in a professional manner.
Attorney General and Legal Affairs Minister Anil Nandlall, SC, has already indicated the Government’s intention, as a major stakeholder, to move in the direction of an appeal. He had insisted that the Environmental Permit imposes no obligation on the Permit Holder to provide an unlimited Parent Company Guarantee Agreement and/or Affiliate Company Guarantee Agreement.
Hence, Nandlall had contended the Judge erred in his findings. The AG, too, pointed out that this ruling can have profound ramifications and grave economic as well as other impacts on the public interest and national development.
In September 2022, the President of the Transparency Institute of Guyana Inc (TIGI), Fredericks Collins, and Guyanese citizen Godfrey Whyte had moved to the court to get the EPA to implement the liability clause in the permit issued to ExxonMobil (Guyana) for its operations.

They wanted the court to ensure Esso Exploration and Production Guyana Limited (EEPGL) takes full financial accountability in the case of harm, loss, and damage to the environment from a well blowout, oil spill, or other failures in the Stabroek Block.
On the issue of whether the EPA acted in breach of its statutory duty and unreasonably permitted Esso to carry out petroleum production operations in the absence of compliance with the terms of the permit, Justice Sandil Kissoon ruled that the EPA has committed an illegality, acted unlawfully, ultra vires, unreasonably, in defiance of logic, irrationally, and without any jurisdiction.
Hence, the court ordered that the agency issues the Enforcement Notice to EEPGL on or before May 9 to provide an unlimited Parent Company Guarantee Agreement and/or unlimited liability Affiliate Company Guarantee, and failure to do so would result in the suspension of its Environmental Permit.
But during a press conference last week, Vice President Bharrat Jagdeo had maintained that EPA has to be able to professionally justify its work without any interference or any rush to complete its work within a set timeline that can pressure the agency.
In fact, he pointed out the EPA has been engaging the oil major over the past year on the parent guarantee. Those negotiations, according to the Vice President, were only concluded last week to the tune of US$2 billion in liability coverage in compliance with EEPGL’s financial assurance obligations under the Environmental Permit and the Environmental Protection Act.
“I’ve said about a month ago that it was close to finishing, and last week I said that the agreement has practically been settled for US$2 billion of the parent guarantee… But the EPA has been working… nobody wants this more. I would’ve loved for Exxon to give us a US$500 billion coverage but for them to offer us a guarantee, it has to be supported by money on their balance sheets too.”
“I think a lot of things were not understood clearly and sometimes it gets a bit complex. Here, this decision needs to be appealed by the EPA because it makes the EPA looks like it’s not doing its work. The EPA is staffed with professionals and it’s been doing its work, protecting the interest of the country.”
“My own thing is the Judiciary can interpret maybe several issues… But I think it’s threading on mirky waters when you start directing a regulatory agency as to how to do its own job and give them a timeframe to get it done in because you can’t supplant yourself and know what the challenges they face are,” VP Jagdeo had further posited. (G3)