Frances Carryl, the Legal Officer attached to the Environmental Protection Agency (EPA), has stepped forward to address some of the grave consequences that would ensue should the agency yield to the requests of some activists to cancel environmental permits issued to ExxonMobil and other operators.
This was explicitly outlined in a report she authored and had published by Oil, Gas & Energy Law Intelligence. The paper which she also posted on her LinkedIn Page examined the reasons why Guyanese stakeholders should exercise caution before advocating for permit cancellations. As a prelude to the report, Carryl said, “These days, it’s common to hear calls for the cancellation of Environmental Permits for petroleum development. These calls come through media articles, interviews and even lawsuits. Some say proper environmental assessments aren’t being done. Others contend that the Permits aren’t being enforced, and some blatantly demand that the oil be left in the ground in order to safeguard the environment.”
Carryl emphasized that due to this, decision-makers face the challenging task of balancing the socio-economic development and environmental sustainability needs of the citizens in accordance with the constitution, all while ensuring that Guyana’s obligations under international investment law are consistently upheld.
She cautioned also that quick press releases, interviews, or sound bites cannot fully encompass the multitude of implications that would arise from cancelling a permit as a response to activism that may be fueled by hidden agendas.
To illustrate these implications, Carryl in her report referred to the case of Tecmed vs. Mexico (1998), where Mexico’s EPA denied the renewal of Tecmed’s Environmental Permit and ordered the closure of their facility. Mexico justified these measures by stating that they were legitimate regulatory actions taken to protect the environment and public health, as Tecmed had breached earlier iterations of the permit by failing to relocate the facility and exceeding certain limits. However, the Tribunal ruled differently, stating that the breaches cited by Mexico did not compromise public health, impair ecological balance, hinder environmental protection, or cause any genuine social crisis.
It concluded that the breaches were too minor to justify depriving Tecmed of the commercial value of its investment by refusing to renew the permit and closing the facility and Mexico was ultimately ordered to pay Tecmed USD 5.5 million in damages for its actions.
Carryl also referenced the case of Bear Creek vs. Peru (2014) where the Peruvian government was required to pay Bear Creek Mining Corporation US$18,237,592 when it revoked Bear Creek’s mining concessions in response to political pressure and public outcry. Bear Creek had lawfully obtained authorization to acquire, own, and operate certain mining concessions for the development of the Santa Ana silver mine. However, due to opposition from local communities, the Peruvian government revoked Bear Creek’s authorization in 2011. In 2014, Bear Creek filed a claim against Peru under the Canada-Peru Free Trade Agreement (FTA), arguing that the revocation constituted indirect expropriation of its investment.
The Tribunal held a judgment in favor of Bear Creek, determining that the revocation disrupted the company’s reasonable expectations of development based on the express governmental authorization it had obtained.
With the foregoing in mind, the lawyer noted that Guyana has embraced the International Investment Law regime, agreeing to provide foreign investors with a certain degree of protection for their investments. She said therefore that actions such as canceling environmental permits may have implications similar to the cases mentioned earlier.
In addition, she was keen to note that although Guyana is rich in natural resources, like many other developing countries, it currently lacks the financial, infrastructural, and technical capacity necessary to fully exploit its vast petroleum resources. These capabilities, she said are provided by foreign investors who expect substantial returns on their investments in return.
