The Environmental Protection Agency (EPA) has to come to the defence of its decision to appeal a High Court ruling demanding that ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited (EEPGL) furnish Guyana with an unlimited parent guarantee to cover all costs associated with an oil spill.
The EPA said that at no time did it have any doubts that the Permit Holder, that is to say EEPGL, was strictly and fully liable under the Environmental Protection Act Cap 20:05 (EP Act) and the Permit for any pollution or damage to the environment, including compensation of affected parties. The EPA said it has always maintained that the Permit Holder had full and strict liability to clean up, restore, remediate, and compensate for any harm caused by pollution whether wilfully or by accident.
It further noted that it reviewed the Insurance Policy provided to it since 2019 against typical insurance coverage across several jurisdictions, and it was found that the coverage related to oil spill liabilities of US$600 million was equivalent, and in some cases exceeded the typical coverage offered in some jurisdictions.
Regarding Financial Assurance from ExxonMobil, the EPA said it consulted oil spill liability regimes in the US, UK, China, and Brazil, and found that although there was a full liability for an oil spill on the part of operators, no jurisdiction had an unlimited/uncapped guarantee.
The EPA therefore maintained that it acted in accordance with the law and executed its statutory functions diligently and to the best of its abilities.
The recent High Court ruling by Justice Sandil Kissoon gives EEPGL and the EPA up to June 10 to provide an unlimited parent guarantee, the failure of which could lead to the Liza Phase 1 permit being suspended. As the EPA forges ahead with its appeal, there is much anticipation regarding what will occur with the case.
